ATC180523: Report of the Portfolio Committee on Tourism on Second and Third Quarter Performance for the 2017/18 Financial Year, dated 23 May 2018

Tourism

REPORT OF THE PORTFOLIO COMMITTEE ON TOURISM ON SECOND AND THIRD QUARTER PERFORMANCE FOR THE 2017/18 FINANCIAL YEAR, DATED 23 MAY 2018

The Portfolio Committee on Tourism, having considered the 2017/18 Second and Third Quarter Performance (Q2) and (Q3) Reports of the National Department of Tourism and South African Tourism on the 7th March 2018, reports as follows:

  1. Introduction

This report presents the seconded and third quarter performance of both the National Department of Tourism, later referred to as the Department, and South African tourism, later referred to as SA Tourism, to provide a complete picture of financial and service delivery performance against Vote 33. SA Tourism receives 53 percent of the appropriated budget for Vote 33 and is therefore important in the overall assessment of the tourism portfolio. The Quarter 2 and Quarter 3 performance of the Department and SA Tourism are reported on just after Statistics South Africa released the 2017 tourism arrival statistics on the 21st February 2018. The statistics indicate that South Africa achieved 10.29 million foreign tourists, who are visitors that stayed overnight in 2017.  This is only a 2 percent increase from the 10 million arrivals achieved in 2016. This is a continuous disappointing tourism performance in the country given that the global average of tourist arrivals was at 7 percent in 2017. A closer analysis of the statistics reveals that the number of overseas tourists was at 2.7 million, which is up by 7 percent in 2017.  

 

This was due to good performance in the first half of the year. However, in the fourth quarter of 2017, the number of overseas tourists increased by only 4 percent, and this figure resulting from by an increase of less than 1 percent in December 2017. The decline in the UK arrivals is also a cause for concern given that this is one of the core markets for South Africa. The nature of overseas arrivals to South Africa is driven by packages, which normally include Cape Town. The decline towards the end of 2017 might be caused by the drought currently being experienced in Cape Town and its associated water restrictions. The Rand also strengthened in December after the 54th elective conference of the African National Congress and this might have caused the country to slightly lose its comparative advantage as a cheap destination. The continued strengthening of the Rand might result in decreased arrivals in the current financial year as well. This, coupled with the continued drought, might see the country experiencing sluggish growth, which is not favourable for the sector dubbed “sunrise sector” by the president in his State of the Nation Address.

 

  1. National Department of Tourism performance overview for Second Quarter (Q2) of 2017/18 financial year

In the second quarter of 2017/18, the Department had 73 targets. A total of 65 targets was achieved, accounting for 89.64 percent of service delivery performance. The Department was not able to achieve 8 of its targets, accounting for 10.36 percent underachievement in the quarter.

 

2.1        Programme performance:

The programme performance takes into account the financial expenditure against service delivery performance in the four programmes of the Department. Table 1 indicates the performance of the Department against the targets as stipulated in the Annual Performance Plan.

Table 1: Quarter 2 achievement of targets

 

Branch

No. of targets

Achieved

Percentage achieved

Not achieved

Percentage not achieved

Corporate Management

17

14

82.35%

3

17.65%

Tourism Policy and Planning

17

17

100%

0

0%

Destination Development

10

9

90%

1

10%

Tourism Sector Support Services

29

25

86.21%

4

13.79%

Total

73

65

89.64%

8

10.36%

Source: Adapted from NDT 2017/18 Quarter 2 Report

 

2.1.1     Programme 1 - Administration

This programme provides strategic leadership, management and support services to the Department.  The programme incurred an underspending in the second quarter of 2017/18 financial year. An amount of R107.1 million or 45 percent was spent against the total budget of R234.1 million budgeted for the second quarter. The slow spending was mainly due to cost containment measures implemented by the Department in compliance with National Treasury instructions. This included the reduced spending on Goods and Services and the abolishment of vacant posts to reduce the compensation of employees.   

2.1.2     Programme 2 -  Tourism Research, Policy and International Relations

The programme is meant to enhance the strategic policy environment, monitor tourism sector’s performance and enable stakeholder relations. This programme also incurred underspending in the second quarter of 2017/18 financial year. An amount of R857.4 million or 71.3 percent was spent against the total budget of R1.2 billion in the second quarter. The bulk of the saving in the programme was due to delays in the implementation of the Tourism Incentive Programme (TIP) project. The same project had also under spent in the first quarter of the financial year. This may culminate in the under spending at the end of the financial year. In 2016/17 financial year, the Department also incurred under spending on the TIP project.    

2.1.3     Programme 3 - Destination Development

The aim of this programme is to facilitate and coordinate tourism destination development. In this programme, the Department spent R106.4 million or 23.9 percent against the total budget of R444.9 million in the second quarter. The variance of R79.5 million or 42.8 percent between actual expenditure and projected expenditure within this programme relates to the Expanded Public Works Programme (EPWP). The programme had anticipated multiple projects to have progressed to the construction phase at this point in the year, but delays in the projects have resulted in further delays with disbursement of funds. The review of EPWP projects by the Government Technical Advisory Centre (GTAC) has also contributed to less spending within the programme as the department is still awaiting the outcome of the review to fund recommended projects. The programme anticipates funds to flow faster during the remainder of the financial year with there being no variance at year-end.

In the 2016/17 financial year, the Department incurred under spending in this programme, and in the first quarter of the current 2017/18 financial year. Under performance in this programme is likely to seriously affect the ability of the Department to create work opportunities through the EPWP programme. However, in the second quarter, Department surpassed its targeted 771 Full-Time Equivalent jobs by achieving 888 FTEs. The Department indicated that 7 new projects were approved, implemented and reported during the period under review.      

2.1.4     Programme 4 - Tourism Sector Support Services

The purpose of this programme is to enhance transformation of the sector, increase skill levels and support its development to ensure that South Africa is a competitive tourism destination. The Department also incurred underspending in the second quarter of 2017/18 financial year. In this Programme, the Department spent R110.8 million or 40.9 per cent against the total budget of R271.1 million in the second quarter. The variance (R33.8 or 23.4 per cent) between actual expenditure and projected expenditure within this programme relates to the Tourism Incentive Programme (TIP). Outstanding and incomplete documentation submitted by participants of the International Marketing and Support initiative have resulted in delays in the disbursement of funds. This points to poor coordination of the TIP programme.

On the other hand, the large construction projects linked to the Green Tourism Initiative (i.e. construction of solar panels at national parks) experienced delays resulting in the variance under both payments for capital assets as well as payments to the relevant contractors. The programme has also indicated that all funds will be disbursed by year-end as they overcome the obstacles delaying payments.  

 

2.2        Budget and Expenditure Review

In the second quarter of 2017/18 the Department had budgeted to spend the total amount of R1 294 930 billion. The actual expenditure at the end of quarter 2 was R1, 182,082,000 billion, accounting for 54.9 percent of the appropriated budget. The major virements included in the 2017 Adjusted Estimates of National Expenditure included an amount of R13 million from Goods and Services to Compensation of Employees to cover for the compensation shortfall. This was approved during the 2017 Adjusted Estimates of National Expenditure (AENE) process.

 

  1. National Department of Tourism performance overview for Third Quarter (Q3) of 2017/18 financial year

In the third quarter of 2017/18, the Department had 68 targets. A total of 54 targets was achieved, accounting for 79.4 percent of service delivery performance. The Department was not able to achieve 14 of its targets, accounting for 20.6 percent underachievement in the quarter. 

2.3.1   Programme performance

Table two presents the performance of the Department in Quarter 2 against the pre-determined objectives contained in the Annual Performance Plan.

Table 2: Quarter 3 achievement of targets

 

Branch

No. of targets

Achieved

Percentage achieved

Not achieved

Percentage not achieved

Corporate Management

16

12

75%

4

25%

Tourism Policy and Planning

16

15

93.8%

1

6.25%

Destination Development

8

7

87.5%

1

12.5%

Tourism Sector Support Services

28

20

71.4%

8

28.6%

Total

68

54

79.4%

14

20.6%

Source: Adapted from NDT 2018 Quarter 3 Report

 

2.3.1.1  Programme 1 - Administration

The Department incurred an over expenditure in Programme 3 in the third quarter of 2017/18. The Department has a budget of R219, 094,000 and had projected to spend R160 409,000. The actual expenditure was R172, 256,000 accounting for 79 percent. The over expenditure amounted to R11, 847,000 which accounts for 7.4 percent. The variance between actual expenditure and projected expenditure within this programme was attributable mainly to the overspending on compensation of employees.

2.3.1.2  Programme 2 - Tourism Research, Policy and International Relations

The Department has a total budget of R1,208,708,000 annual budget for Programme 2 in the 2017/18 financial year. An amount of R1,026,394,000 was projected for spending in the third quarter. The actual expenditure was at R1,024,666,000 with an under expenditure of R1,729,000 which accounted for 0.2 percent.

 

 

2.3.1.3  Programme 3 - Destination Development

The Department recorded another under expenditure in Programme 3 in the third quarter of 2017/18.  Programme 3 has an annual budget of R443, 953,000. An amount of R300 467,000 was projected for quarter 3. However, the actual expenditure was at R191 873,000 accounting for 36.1 under expenditure in the third quarter. The reasons for underspending were similar to those proffered in the second term. The variance between actual expenditure and projected expenditure within this programme relates to the underspending within the Expanded Public Works Programme (EPWP). The programme had anticipated multiple projects to have progressed to the construction phase at this point in the year, but unfortunately delays in the projects have resulted in delays with the disbursement of funds. The review of EPWP projects by the Government Technical Advisory Centre (GTAC) has also contributed to the underspending within the programme as the Department was awaiting the outcome of the review to fund recommended projects.

However, the GTAC review has been completed and report submitted for consideration. In addition, several projects have also been identified that will be fast-tracked and will improve expenditure. The programme anticipates spending its budget by the end of the fourth quarter of the financial year.

2.3.1.4  Programme 4 - Tourism Sector Support Services

The Department has a total budget of R268,401,000 in the 2017/18 financial year. An amount of R183,936,000 was projected for spending in the third quarter. However, a total of R170, 398,000 was spent, signifying an under spending of R13,538,000 million which accounts for 7.4 percent under expenditure. The variance between actual expenditure and projected expenditure within this programme relates to the underspending within the Tourism Incentive Programme (TIP). Large construction projects linked to the Green Tourism initiative (i.e. construction of solar panels at National Parks) has been met with delays resulting in the variance under both payments for capital assets as well as payments to the relevant contractors. These delayed projects are likely to proceed once the final site for Skukuza has been approved.

In addition, payments for the International Market Access Programme (IMASP) was lower than expected as claims still had to be submitted by participants. The programme anticipates spending its budget by the end of the fourth quarter of the financial year

 

2.4        Budget and Expenditure

The Department has a total budget of R2,140,156,000 in the 2017/18 financial year. At the end of the third term, the Department had spent R1,559,193,000 accounting for 73 percent of the annual budget. Ideally, the Department should have spent 75 percent of its budget, but during the period under review, there were indications of underspending. Underspending was mainly on the Tourism Incentive Programme (TIP) and Working for Tourism Programme. These are the two budget items which carry much of the Departmental budget. Therefore, underspending in these two items has a huge impact on the final expenditure by the Department. The under expenditure on these two items also seriously affect service delivery as these two budget items are responsible for transformation in the sector, and for job creation through Full-Time Equivalent jobs.

 

  1. South African Tourism performance results for 2nd and 3rd quarter of 2017/18

SA Tourism plays a vital role in the overall performance of the tourism sector. Underperformance of this entity will result in poorer performance in all economic indicators that show the socio-economic impact of the sector.

 

3.1        Programme performance

The performance results of the entity for the second and third quarter are as follows:

3.1.1     Programme 1 - Corporate Support

In quarter 2 and quarter 3, SA Tourism had two targets that were due for reporting and both were achieved, accounting for 100 percent performance. With regard to the percentage of staff migration from old to new structure, 98 percent permanent employees were directly or alternately placed in the new organisational structure. At the end of the quarter only three employees were in the talent pool; in quarter 3, about 99 percent permanent employees were directly or alternately placed in the new organisational structure. At the end of the quarter only two employees were in the talent pool during the period under review. Contract employees and internships were excluded from this process. This performance is commended given the complete overhaul and restructuring that has taken place at South African Tourism. With regard to achieving an unqualified audit, the target was achieved.

3.1.2     Programme 2 - Business Enablement

SA Tourism had five targets due for reporting in the second and third quarter. With regard to the implementation of the improvement plan, SA Tourism scored 3.9 on the stakeholder satisfaction survey in quarter 2 and did not achieve a target on the stakeholder AGM as provincial engagements and Roadshows were prioritised in lieu of a stakeholder AGM. On trade webinars conducted, SA Tourism achieved 100 percent performance as 3 webinars were hosted in quarter 2 and two were hosted in quarter 3 as planned. On the target of approved Tourism Growth Strategy, stakeholders were engaged through the Provincial Roadshows in quarter 2, and the Tourism Growth Strategy was already approved by the Board Lekgotla in quarter 1, achieving the third quarter targets.

SA Tourism also achieved 100 percent on the target of a number of strategic reports. In quarter 2, the first draft 2018/19 APP, Final 2016/17 Annual Report and Quarter 1 Performance Report were submitted by their respective statutory deadlines. In quarter 3, the second draft 2018/19 APP and Quarter 2 Performance Report were submitted by their respective statutory deadlines.

On a number of market intelligence reports produced, in quarter 2, the first draft 2018/19 APP, final 2016/17 Annual Report and Quarter 1 Performance Report were submitted by their respective statutory deadlines, and in quarter 3, the second draft 2018/19 APP, Final 2016/17 Annual Report and Quarter 2 Performance Report were submitted by their respective statutory deadlines. The November wave Brand Tracker report was delivered.

3.1.3     Programme 3 - Leisure Tourism Marketing

SA Tourism reported on both the calendar year and financial year on some targets in Programme 3 as agreed with the Committee and the office of the Auditor- General. SA Tourism had 10 targets due for reporting under Programme 3 in both quarters 2 and 3.  With regard to the number of international tourist arrivals achieved, SA Tourism failed to achieve the targets for quarter 2 and achieved a target for quarter 3 as planned. On a calendar year performance, a target of 2.9 million was set for quarter 2 and only 2.4 million was achieved. In quarter 3, a target of 2.5 million international tourist arrivals was set and achieved as planned. On a financial year performance, in quarter 2 a total of 2.7 million international visitors was targeted but only 2.5 million was achieved. In quarter 3, a total of 3 million was targeted, however, only 2.7 million was achieved. The 2 percent increase in the tourist arrivals in 2017 might get worse 2018 given the current performance of the sector.

On a calendar year performance, a quarter 2 target was not achieved on the Total Tourist Foreign Direct Spend (TTFDS) as R19.3 billion targeted but only R17.6 billion was achieved. However, a quarter 3 target was exceeded as R19.65 billion was targeted and R20 billion was achieved. On a financial year performance, quarter 2 was not achieved as R21.3 billion was targeted and only R20 billion was achieved. The financial year performance was not available at the time of reporting. The poor performance on the TTFDS is directly linked to arrivals. This will not improve unless arrivals pick up.

On a percentage geographic spread of international tourist arrivals achieved, in quarter 2 the internal stakeholder engagement was approved and SA Tourism has agreed with Provincial Tourism Agencies on their contribution to 5-in-5 by setting provincial targets. In quarter 3, the external stakeholder engagement was done through Provincial Roadshows in 2017.

With regard to setting the percentage improvement on the baseline on the percentage seasonality of international tourist arrivals achieved, both targets for quarter 2 and quarter 3 were not achieved. On a quarter 2 target, work was still underway to develop the methodology and the revised timeline for completion in quarter4, and quarter 3 target was not achieved as methodology development is being finalised.

On a number of total domestic trips achieved, SA Tourism was not able to achieve targets for both quarters 2 and 3. The quarter 2 was set at 4.9 million, however the performance was at 4.8 million for the calendar year.  The target for the financial year was set at 4.6 million, however the performance was at 2.7 million for the financial year. With regard to quarter 3, the target was set at 4.5 million, however the performance was at 2.7 million for the calendar year, and the target was set at 7.3 million for the financial year and the performance results were not yet available at the time of reporting.

On the target of a number of domestic holiday trips achieved, the target for quarter 2 was achieved, however, the  quarter 3 target was not achieved for the calendar year. A total of 573 247 was set for quarter 2, and was exceeded at 722 000, whilst 525 391 was set for quarter 3, and underachieved at 405 000 for the calendar year. For the financial year, a target of 500 000 was set and underachieved at 405 000, whilst 800 000 was targeted for quarter 3, of which the performance results are not yet available. SA Tourism has always cited economic conditions and affordability as a deterrent in achieving improved performance on domestic tourism. There seem to be no effective intervening strategies in this regard. If this continues, tourism will not make the necessary economic impact is expected to contribute towards the achievement of the National Development Plan aspirations.

The information on the total domestic direct spend (TTDS) submitted by SA Tourism was not clear and the Entity was requested to rectify the error. The Committee should pay attention on this matter when the presentation is made at the meeting.

With regard to the domestic holiday revenue, quarter 2 target was exceeded and quarter 3 target was not achieved under calendar year. The target for quarter 2 was set at R1.7 billion and achieved at R1.9 billion, whilst the target for quarter 3 was set at R2.1 billion and underachieved at R0.7 billion. This has a direct correlation to the number of domestic holiday trips and the prevailing economic conditions which led to poor performance. Poor performance on this target diminishes the socio-economic impact of tourism as it reduces the contribution of the sector to job creation and the national fiscus. On the financial year analysis, a target of R1.9 billion was targeted for quarter 2 and achieved at R1.9 billion as planned, whilst the target for quarter 3 was set at R2.3 billion and the performance results were not yet available at the time of reporting.

On the target of setting the percentage improvement on the baseline of the percentage geographic spread of domestic tourists achieved, there was no deviation in the planned performance. In quarter 2, SA Tourism agreed with Provincial Tourism Agencies on their contribution to 5-in-5 by setting provincial targets, whilst in quarter 3, external stakeholder engagement was done through Provincial Roadshows in 2017 as planned.

With regard to the target of setting the percentage improvement on the baseline of on the percentage on seasonality of domestic tourists achieved, SA Tourism failed to achieve the targets for both quarter 2 and quarter 3. In quarter 2, Work is still underway to develop the methodology and the revised timeline for completion is Q4, whilst in quarter 3 the target was not achieved as methodology development was being finalised.

3.1.4     Programme 4 - Business Events

SA Tourism had two targets due for reporting in quarter 2 and quarter 3. With regard to the number of bids supported for international and regional business events, SA Tourism overachieved in performance for quarter 2 and underachieved in the target for quarter 3. In quarter 2, a total 14 bids were targeted and was overachieved at 23, whilst in quarter 3, a total of 14 was targeted and underachieved at 9. It was, however, noted that SA Tourism had an annual target 58 which has already been reached by quarter 3. This is a commendable performance and SA Tourism is urged to work as hard in the rest of other programmes.

With regard to the number of international tourism market access platforms where South Africa participates, SA Tourism was able to achieve its targets for both quarter 2 and quarter 3. In quarter 2, SA Tourism participated in one platform at IBTM China, which took place in August 2017, and in quarter 3, SA Tourism participated in three platforms at IMEX America, WTM London, IBTM World (Barcelona, Spain) as planned.

3.1.5     Programme 5: Tourist Experience

SA Tourism had two targets due for reporting in the 2nd and 3rd quarter of 2017/18. On the number of graded accommodation establishments achieved, SA Tourism failed to meet targets for both quarters. In quarter 2, a total of 1 445 was set, however 1 171, whilst in quarter 3 a total of 1 517 was set but 1 218 was achieved. With regard to the number of graded rooms, SA Tourism did not achieve the targets set for both quarters. In quarter 2, a total of 31 382 target was set, however, only 29 777 achieved, whilst in quarter 3, a target of 32 952 was set, but 31 101 was achieved. The achievement of this target continues to be affected by the cancellations. It was noted that the Tourism Grading Council has failed to curb cancellations through effective engagements and strategies that entice establishments to stay in the grading systems. Failure to achieve this target compromises quality assurance in the country.

 

  1. Budget and Expenditure as at 31 December 2017

SA Tourism has a total of R1,373,064,000 in the adjusted Annual National Expenditure (AENE) budget. At the end of quarter 2, SA Tourism incurred an under expenditure as the amount of R764, 964,000 was spent against the projected budget of R794,240,000. This meant SA Tourism was at 56 percent in the expenditure of appropriated budget. The projected expenditure by quarter 3 was at R1,108,287,000 and actual expenditure was at R1,070,992,000 accounting for 78 percent expenditure on actual expenditure on the adjusted AENE budget, and 97 percent of expenditure on planned expenditure to date.

In the second quarter, SA Tourism expenditure on compensation of employee costs was within budgeted thresholds as R81,150,000 was spent against the projected R82,345,000 million. However, SA Tourism incurred a marked underspending at R112,831,000 instead of R141,344,000 projected for quarter 3 on compensation of employees. SA Tourism indicated that the 2017/18 employee costs provisions were still to be raised in quarter 4. This needs to be explained by the Entity.

 

3.4        Workforce profile

South African Tourisms workforce profile at the end of December 2017 was reflected as 184, against an approved headcount of 202. SA Tourism has achieved a vacancy rate of 15 percent due to the organisational redesign process through (Project Ignite). Internships and contract employees are used to ensure business continuity.  

 

  1. Committee observations

The Committee made a number of observations with regard to 2017/18 second and third quarter performance as follows:

4.1       Compensation of employees

The Committee observed that the Department had an over expenditure on the compensation of employees. It was observed that the variance between actual expenditure and the projected expenditure within Programme 1 was attributed to salary increases that were budgeted less than the awarded bargaining percentage increase for public servants.  This should be avoided in the future and the Department should consult with the National Treasury to make reasonable projections.

4.2       Vacancy rate

The Committee was concerned about the vacancy rate during the second quarter, which was at 14.4 percent.  This was due to staff migration into the new organogram. This also resulted in the Human Resources staff committing to work overtime to ensure a reasonable reduction of vacancy rate. The Department is commended for the work done in filling the posts in the new organogram as the vacancy rate dropped drastically in the third quarter. The Committee will monitor how the new organogram improves service delivery to improve tourism performance in the country.

4.3       Delays in introducing the Tourism Amendment Bill

The Committee was concerned that the submission of the draft Amendment Bill to Cabinet for approval was not done. The delays have prevented the Bill from being introduced to Parliament. It is understood that the delays were necessitated by the need to finalise the policy review and analysis, which informs the drafting of the Bill in the areas of sharing economy and professionalising of guiding. The Committee acknowledges that the drafting of the amendments has commenced and will be presented to the Ministry soon for approval.  However, the Committee is concerned about time-frames given the short time left for the 5th Parliament to process the Bill that has not yet been introduced to Parliament. The possibility is that the Tourism Amendment Bill may not be processed by the current Parliament.

4.4          Business events

The Committee was pleased with the performance of SA Tourism on business events. At the end of quarter 3 SA Tourism had already overarched the annual target on the number of bids supported. There was also a slight improvement in the geographical spread of business to smaller towns. The Committee has always been concerned about the dominance of Johannesburg, Durban, and Cape Town in business tourism. However, more work still needs to be done to include smaller towns in business tourism.

 

 

4.5          Quality assurance

The Committee was concerned that SA Tourism continued to perform badly on quality assurance of the tourism sector. The South African Tourism Grading Council experienced cancellations in both quarter 2 and quarter 3. It was noted that the Tourism Grading Council has failed to curb cancellations through effective engagements and strategies that entice establishments to stay in the grading systems. Failure to achieve this target compromises quality assurance in the country.

       4.6      Governance and remuneration of the Board

The Committee observed the increasing costs of running SA Tourism Board.  SA Tourism acknowledged that running a huge Board has cost implications and an innovations were needed to curb the costs. Consequently, the Board has decided to schedule two days of meetings. The first day is dedicated to Board committee meetings, and another for Board meetings. This arrangement is highly commendable as it reduces the costs of running the Board affairs. It must, however, be noted that the Committee respects and values the excellent work done by the current SA Tourism Board.

      4.7      VFR vs Leisure tourism

The Committee observed the continued dominance of Visiting Friends and Relatives (VFR) as opposed to domestic leisure tourism. This concern is that VFR does not necessary translate to domestic tourism spend. The Committee noted the commitment of SA Tourism to implementing two critical interventions. Firstly, there is a need to encourage a culture of travel amongst South Africans; and secondly, the trade needs to come on board and participate to develop affordable package. The Committee will continue its oversight on the improvements in the performance of domestic tourism.

 4.8   Support for emerging tourism enterprises

 The Committee reiterated the importance of supporting small and emerging tourism   businesses as a vital component of reinvigorating the local tourism economy. It was noted that SA Tourism has engaged provinces to involve municipalities in product development. It was also noted that SA Tourism has engaged the Department of Cooperative Government and Traditional Affairs (Cogta) and the South African Local Government Association (Salga). The Committee views this as a critical step forward in making a footprint at local level. The engagements should also incorporate township tourism which is already taking place in an informal manner around the country. SA Tourism was encouraged to include township tourism in their marketing work to include it in the mainstream tourism packages.

4.9    Airlift

 The Committee observed that the airlift remains a challenge in some sub-destinations around the country. It was observed that there are pockets of excellence in some provinces, with the Western Cape and KwaZulu-Natal having made progressive inroads in improving airlift. The Committee noted that airlift improves when provinces themselves play a leading and critical coordinating role. The Airports Company South Africa (ACSA) is a critical stakeholder in this regard and should be taken on board in all airlift initiatives.

4.10  Disaster Management

The Committee observed that there has been an increase in crimes committed against tourists and this has a potential to tarnish the South African brand image. The Committee noted the commitment by SA Tourism to intensify brand building efforts; implementing strategies targeting the global trade, international consumers and domestic tourists; and forging key collaborations and partnerships across the sector. The Committee emphasised the importance of continuously engaging and partnering with the tourism trade and the Department of International Relations and Cooperation (DIRCO) when communication messages about incidents that occur to international tourists to mitigate brand damage.

 

  1. Recommendations

Having considered the 2017/18 second and third quarter performance reports for both the National Department of Tourism and South African Tourism, and the current external factors, the Committee recommends the following:

5.1        It is recommended that the Department budgets appropriately for compensation of employees, including factoring in the salary increases, to avoid over expenditure in this item.

5.2        It is recommended that the Department expedites the Cabinet approval process of the Tourism Amendment Bill and advises the Committee on the expected time-frames of introducing the Bill to Parliament.

5.3        it is recommended that the South African Conventions Bureau continues to strive for improved geographical spread of business tourism.

5.4        It is recommended that SA Tourism improves quality assurance in the destination through effective measures implemented by the South African Tourism Grading Council to keep tourism establishments enrolled in the grading scheme.

5.5        It is recommended that South African Tourism conceptualises effective interventions to convert Visiting Friends and Relatives (VFR) segment of domestic tourism into domestic leisure trips.

5.6        It is recommended that the Department and South African Tourism promote the development of township tourism throughout the country and incorporate this niche market in tour packages.

5.7        It is recommended that South African Tourism engages provincial tourism Destination Management Organisations on improving airlift throughout the country.

5.8        It is recommended that SA Tourism works closely with the provincial Destination Management Organisations, the Department of International Relations and Cooperation (DICO), and South African Police Services (SAPS) to develop a Disaster Management Strategy to prevent crimes against tourists and mitigate impact when incidents have occurred.

  1. Conclusion

The Committee was generally satisfied with the performance of the Department and SA Tourism in their second and third quarter performances in the 2017/18 financial year. The challenges faced around delays in implementing projects should be dealt with expediently. The Department and SA Tourism should improve in their risk assessment at a strategic planning level to identify all possible hindrances that may lead to delays in implementation. The poor performance of SA Tourism is understood as the tourism sector is sensitive to external factors. However, the issues that are within the control of SA Tourism should be addressed effectively.

The committee recognises the growing importance of tourism as an economic sector in the economy of South Africa. This requires the Department and SA Tourism to be more innovative in executing their mandate to meet the growing expectations of the sector. The Committee recognises a number of external factors and the dependence of tourism on other government departments to fulfil its mandate. It is therefore imperative for the Department and SA Tourism to enhance stakeholder engagements and collaborations across the public and private sector partners.

 

Report to be considered.

 

 

Documents

No related documents