ATC200608: Report of the Portfolio Committee on Tourism for Budget Vote No. 38: Tourism, dated 02 June 2020

Tourism

Report of the Portfolio Committee on Tourism for Budget Vote No. 38: Tourism, dated 02June 2020

 

The Portfolio Committee on Tourism, having considered Budget Vote No. 38: Tourism, together with the Strategic Plans and Annual Performance Plans of the Department of Tourism (Department) and the South African Tourism (SA Tourism) reports as follows:

 

1. Introduction

The tourism sector is increasingly becoming a major player in country economies around the world. The significance of the tourism sector emanates from the myriad of socio-economic benefits that accrue any host country.The attributes of tourism in being labour intensive  and not havingstringent barriers to entry make it an attractive sector for many aspiring business entrepreneurs. If properly supported by both the public and private sectors, the tourism value chain can become a sector that contributes to local economic development, improve a country’s brand, and eradicate the triple challenge of poverty, unemployment and inequality.  Tourism therefore goes beyond the country just being an attractive destination, but is a catalyst for economic growth. This is confirmed by a number of tourism dependent cross sectoral economic activities such as the provision of accommodation for visitors; food and beverage serving activities; air passenger transport services; railway passenger transport; road passenger transport; water passenger transport; transport rental; travel agencies and other reservation services activities; cultural activities; sports and recreational activities; retail trade of country-specific tourism characteristic goods; and many other associated economic activities. It is in these vast economic opportunities that the government of South Africa has identified tourism as one of the key economic sectors and set a target of 21 million additional arrivals by 2030.

 

This Vote 38: Tourism budget report is presented at a time when the weaker domestic growth and greater fiscal risks have resulted in a downgrade by Moody’s credit rating agency and confirmation of a negative outlook by Fitch. Further to this sovereign credit rating downgrade, the corona virus pandemic (COVID-19) has caused the South African Reserve Bank to forecast that the GDP in 2020 will contract by 6.1 percent. At an international level, the United Nations World Tourism Organisation (UNWTO) has projected a decline of 290 to 440 million International Tourist Arrivals; 5 to 7 years lost in numbers of tourists; decline of 300 to 450 US$ billion in Tourism Exports (receipts); and 1/3 of 1.5 US$ trillion lost in Tourism Exports. For South Africa, this means a regression of tourist arrivals to 2013/14 figures. This presents additional economic challenges to South Africa, given the current unemployment rate of 29 percent, with more than 50 percent of that being youth unemployment.

 

As a result of the novel coronavirus disease 2019 (COVID-19) outbreak and its devastating impact on the travel and tourism sector, the Departmentof Tourism and South African Tourismhad to revise their planning. While some programmes had to be stopped completely in this financial year, others will only commence in the third and fourth quarter. New projects that respond to the novel corona virus also had to be introduced to mitigate and track the impact to the sector.The budget allocations provided in this report are therefore based on the National Estimates of Expenditure, as published by the National Treasury in February 2020. The allocations have not been revised to align with the revised APP for 2020/21. Financial revisions from the Department are still outstanding.

 

The purpose of this document, therefore, is to table the Committee report after close scrutiny of the budget allocated to Vote 38: Tourism in the 2020 Estimates of National Expenditure. This report also shows changes that have been made to aligned the budget to national prioritiesin addressing the immediate challenges imposed by COVID-19. This Budget Report  therefore, provides a comprehensive analysis of the Department’s allocated budget and also focuses on the alignment of the budget the 2020/21 – 2024/25 Medium Term ExpenditureFramework(MTEF) government forthe Department of Tourism (“the Department”), and its Entity, South African Tourism (SAT), and the 2020/21 Annual Performance Plan (APP).

 

1. The Committee Process

The Committee scrutinised the budget allocated to Vote 38: Tourism after the Minister of Finance tabled the National Expenditure (ENE) in Parliament in February 2020. The Department of Tourism tabled the 5-year Strategic Plan for 2020/21 -2024/25 and the Annual Performance Plan for the 2020/21 Financial year on the 18th March 2020. However, due to the impact of COVID-19 on the tourism sector, the Minister withdrew the Annual Performance Plans of both the Department and South African Tourism in the letter dated 8 May 2020 as published in the ATC No 51 – 2020. The Minister then tabled a revised Annual Performance Plan on the 20th May 2020. The Speaker of Parliament referred the 2020/21 – 2024/25 Strategic Plan and the 2020/21 Annual Performance Plans of the Department and SA Tourism to the Committee in line with Rule 338 of the National Assembly.  The Committee then carefully examined the Strategic Plan and the Annual Performance Plans with associated budgets in terms of Rule 339 of the National Assembly. Given the prevailing COVID-19 pandemic, the Committee initially held a Joint Committee Meeting with the Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, and Employment and Labour on the 4th May 2020 where the Minister of Tourism briefed the Committee on the impact of the pandemic on the tourism sector in South Africa and the mitigating measures developed and implemented by the Department and SA Tourism. This was meant to ascertain to what extent has the allocated budget been impacted and what should be considered when the Department and SA Tourism presented their budget for the Medium Term Expenditure Framework (MTEF) and the Medium Term Strategic Framework (MTSF). The Committee then held a budget Joint Meeting with the Select Committee on Trade and Industry, Economic Development, Small Business development, Tourism, and Employment and Labour for budget hearings with the Department on the 26th May 2020 and SA Tourism on the 27th May 2020 in terms of Rule 340 of the National Assembly.The Committee adopted the report on the 2ndJune2020.

 

1. Tourism impact on South Africa’s economy

It is important for the Committee to reflect on the impact of the tourism sector onthe economy of South Africa as a whole. The World Travel & Tourism Council’s (WTTC) annual review of the economic impact and social importance of the sector released on the 18th March 2019 revealed that tourism in South Africa contributed 1.5 million jobs and R425.8 billion to the economy in 2018. This makes South Africa the largest tourism economy in Africa. The WTTC compared the Travel & Tourism sector across 185 countries, and South Africa occupied the top spot in Africa.The important economic indicators revealed that tourism contributed R425.8 billion to the country’s economy, which represents 8.6 percent of all economic activity in South Africa. The employment spin offs were the total of 1.5 million direct and indirect tourism jobs, which account for 9.2 percent of total employment in the country. A total of 44 percent of the tourism spend was generated from international travellers whilst 56 percent came from domestic tourism. This presents interesting facts, particularly now with the COVID-19 ravishing the sector. Albeit all the positive contribution of international tourism,the Committee will work closely with the Department, SA Tourism, and the Tourism Business Council of South Africa (TBCSA) to maximise the contribution of domestic tourism to the economy.

 

1. Legislative and policy mandate

The Department and SA Tourism pursue the tourism mandate under the following legislative, policy, and strategic frameworks as set by government and the Constitution of the Republic of South Africa:

 

1. Constitutional mandate

Tourism is listed in Part A of Schedule 4 of the Constitution of the Republic of South Africa (Act 108 of 1996) as a functional area of concurrent national and provincial legislative competence, whilst Part B of Schedule 4 lists local tourism as a local government competency.  This classifies tourism as a concurrent function, and the Constitution enjoins the three spheres of government to perform specific functions to ensure tourism growth and development.

 

1. Legislative mandate

The Tourism Act of 2014 (Act No. 3 of 2014) is the current legislation governing tourism in South Africa. The Act enjoins the Minister of Tourism to perform specific tasks to drive tourism policy and strategic direction. The Act seeks to:

• promote the practising of responsible tourism for the benefit of the Republic and for the enjoyment of all its residents and  foreign visitors;
•  provide for the effective domestic and international marketing of South Africa as a tourist destination;
• promote quality tourism products and services;
• promote growth in and development of the tourism sector; and
• enhance cooperation and coordination between all spheres of government in developing and managing tourism.

 

 

1. Policy mandate

The Department derives is mandate from a myriad of policies set by the government at a national level. Below are some of the policies used by the Committee to conduct the oversight work over the Department:

 

1. The National Development Plan

The National Development Plan (NDP) serves as the blueprint of government, and recognises tourism as one of the main drivers of employment and economic growth. The target of the NDP is to create an additional 11 million jobs by 2030, and tourism is expected to contribute towards attaining that goal. The NDP envisions:

• tourism as a major source of revenue and employment for the country through investment in infrastructure, product and service development;
• rising employment, productivity and income as a way to ensure a long-term solution to achieving a reduction in inequality, an improvement in living standards, and ensuring a dignified existence for all South Africans.

 

1. The New Growth Path

The New Growth Path (NGP) recognises tourism as one of the six economic pillars of South Africa. Tourism is acknowledged as a labour-intensive sector, with a wide value chain that cuts across various economic sectors. The NGP intends to address unemployment, inequality and poverty in a strategy that is principally reliant on creating a significant increase in the number of new jobs in the economy. The NGP thus envisages tourism as a vehicle to expedite transformation and inclusive tourism growth that nurtures participation of all South Africans in the mainstream economy.

 

4.3.3     The White Paper on the Development and Promotion of Tourism in South Africa

The White Paper on the Development and Promotion of Tourism in South Africa (1996) provides the policy direction, framework and guidelines for tourism development in the country. The White Paper is a pioneering policy that has provided a strong base for other policies and the legislative framework in South Africa since the attainment of democracy in 1994. The White Paper recognises that tourism has been inadequately resourced and funded; a myopic private sector; limited integration of local communities and previously neglected groups into tourism; inadequate tourism education, training and awareness; inadequate protection of the environment; poor service; lack of infrastructure, particularly in rural areas; a ground transportation sector not geared to service tourists; lack of inclusive, effective national, provincial and local structures for the development, management and promotion of the tourism sector; and growing levels of crime and violence on visitors.  The White Paper comprehensively address sustainable tourism development in South Africa and there is no urgent need to overhaul it.

 

1. The National Tourism Sector Strategy

The revised National Tourism Sector Strategy spans a period of ten years (2016 - 2026) and is based on five strategic pillars, namely, effective marketing; facilitating ease of access; the visitor experience; destination management; and the broad-based benefits. The vision is to be a top world responsible tourism destination, a safe, rapidly and inclusively growing tourism economy that leverages South Africa’s competitive edge in nature, culture and heritage, underpinned by Ubuntu and supported by innovation and service excellence. The Committee has identified issues that require a legislative review process as they cannot be addressed at a strategy level.

 

1. The 2020/21 – 2024.25 Medium Term Strategic Framework

The 2020/21 financial year is the first financial year of the 6th Parliament in implementing the 2020/21 – 2025/25 Medium Term Strategic Framework. The government has adopted seven priorities for the MTEF period and the Department is pursuing three of the seven priorities.

In line with its vision of complementing the national priorities, the Department identified objectives that would accelerate the delivery of services in the tourism sector. In its efforts to accomplish the national priorities, the Department will be focusing on the following:

• improving its governance and accountability systems towards achieving an unqualified audit outcome;
• implementing the departmental integrity management programme to promote integrity and ethical conduct;
• in partnership with SA Tourism, implement measures and initiatives to increase the number of international tourist arrivals and domestic travellers; increase tourism’s contribution to employment creation and the gross domestic product; increase diversification of the country’s product offering; and improve transformation levels in the sector.

Outlined in Table 1 are the strategic outcomes of the Department, as stated in the 2020/21 – 2022/23 Strategic Plan, which correlate with Government’s Outcomes, namely:

Table 1: Strategic priorities for 2020/21

MTSF Priority	MTSF Outcome	MTSF Outcome
Priority 1: Building a capable, ethical and developmental State	Improved governance and accountability. Functional, efficient and integrated government.	Achieve good corporate and cooperative governance.
Priority 2: Economic Transformation and Job creation	Re-industrialisation of the economy and emergence of globally competitive sectors.	Increase the tourism sector’s contribution to inclusive economic growth.
Priority 7: A better Africa and world	Growth in tourism sector resulting in economic growth.	Increase the tourism sector’s contribution to inclusive economic growth.

Source: Department of Tourism Annual Performance Plan for 2020/21

The impact of the COVID-19 pandemic will, however, have an indelible impact in the pursuit of these strategic objectives as the Department had to remove a number of planned projects to accommodate the changing delivery environment.

 

1. The State of the Nation Address

The tone ofthe State of Nation Address (SONA) delivered by the President in February 202 was already set in the two SONAs delivered in 2019. The President had set a target of 21 million additional arrivals by 2030. The SONA delivered in February 2020 has various implications for the tourism sector, including inclusive tourism growth, tourist safety and security, linking the District Development Model to tourism development, building social compacts through partnerships and cooperation, leveraging on social capital for tourism growth, linking tourism growth to the Economic Recovery Plan developed by the National Treasury, leveraging financing for tourism development through the proposed State Bank, the impact of unstable State Owned Enterprises such as South African Airways and Eskom on tourism, tourism benefits from the Presidential Youth Employment Intervention, women participation in tourism economy, and the growth and significance of the digital economy to the future of tourism.

 

1. Institutional policy reviews

In the 2020/21 - 2024/25 MTEF, the Department will be conducting reviews of the following strategies and policies:

• White Paper on the Development and Promotion of Tourism in South Africa, 1996

• Tourism Act, No. 3 of 2014
• Tourism BEE Charter
• National Tourism Sector Strategy, 2016

The review of the White Paper and the legislation will determine which aspects of the departmental policies should be retained and which ones should be changed to enhance the tourism sector’s performance. The Committee will follow these strategies, policy, and legislationvery closely to steer the sector towards an inclusive trajectory.

 

1. The global tourism delivery and performance environment

According to the United Nations World Tourism Organisation (UNWTO), international tourist arrivals grew by 6 percent in 2018, totalling 1.4 billion. Growth in international tourist arrivals continued to outpace the world economy at +3.8 percent versus +3.0 percent. UNWTO reported 4 percent growth for the first six months of 2019, compared to the same period in 2018. Destinations worldwide received 671 million international tourist arrivals in the first half of 2019, about 29 million more than in the same period of 2018.  By the end of 2019, international tourist arrivals grew by 4 percent worldwide.  Estimates are that destinations received around 1.5 billion arrivals in 2019, which is about 54 million more than in the previous year. While 2019 was a year of strong growth for the industry, it was slower compared to 2017 (+7 percent) and 2018 (+6 percent). Performance was below the annual average of 5 percent of the last ten years (2009 – 2019).

The Middle East (+8 percent) and Asia and the Pacific (+5 percent) led growth. International arrivals in Africa and Europe (both +4 percent) grew in line with the world average, while the Americas (+2 percent) saw a more moderate increase. By sub-regions, North Africa (+9 percent), South-East Asia and South Asia (both +8 percent) showed the highest growth.  Demand was slower mainly in advanced economies and particularly in Europe. Uncertainty surrounding Brexit, geopolitical and trade tensions and the global economic slowdown, weighed on growth. The year 2019 was also one of major shifts in the sector with the collapse of Thomas Cook and several low-cost airlines in Europe.

While global numbers and outlook in terms of international tourist arrivals for the rest of the world were positive in 2019, South Africa saw a decrease of 2.3 percent, compared to the previous year. In 2018, international arrivals stood at 10.47 million and in 2019 that number decreased to 10.2 million arrivals.  This is 1.2 million less than the 11.4 million target set by SA Tourism for 2019. The required growth rate to reach the annual target is 8.3 percent. Markets that recorded growth during this period include Italy (1.4 percent), Austria (0.9 percent) and the United Kingdom (1.4 percent). The outbreak and spread of the COVID-19 will impact continued growth arrivals from these markets and numbers from the rest of the country’s source markets. The COVID-19 had affected 213 countries and territories around the world, with global confirmed cases of  5 910 720as of 29th May 2020. A total of 2 583 672 had recovered, whilst 362 124 had succumbed to the virus. In South Africa,27 403 cases were confirmed and 577 lives had been claimed by the pandemic.

SATourism reported that the numbers for the domestic market fared better in 2019 than in the previous year. The number of holiday trips grew by 170.6 percent from 2.6 million in 2018 to 7.1 million in 2019.  The special offer-driven campaigns had a big uptake in 2019, as all the months where there was a special promotion showed a spike in domestic travel.  This is indicative of the potential that lies in the domestic market, provided that dual pricing offerings are available to locals who view travel as too expensive.

The UNWTO initially forecast growth of 3 to 4 percent in international tourist arrivals worldwide in 2020.  This wasin line with Euromonitor’s 3.3 percent year-on-year global travel forecast.  According to Euromonitor, international arrivals wereexpected to amount to 1.8 billion trips by 2024. However, these growth forecasts have been affected by the outbreak of COVID-19. The UNWTO has revised its 2020 forecast, stating that any assessment of the impact of the virus on international tourism is not possible in the current situation.

 

1. Summary of budget expenditure (2019/20)

The Department’s 2019/20 budget allocation amounted to R2.39 billion, R1.86 billion (77.8 percent) of which was spent by 31 December 2019. The main appropriation for the Department for the financial year remained unchanged during the budget adjustment process. However, adjustments in allocations were made for the following economic classifications: an additional allocation of R243.30 million for current payments; a decrease of R119.96 million in the allocation for transfers and subsidies and a decrease of R123.33 million for payments of capital assets.

The Department allocated R334.4 million of its budget towards Compensation of Employees.  As at 31 December 2019, cumulative spending on compensation of employees amounted to R247.1 million, against projected spending of R249.2 million. This translates into a variance of R2.1 million or 0.8 percent. The underspending is linked to the level of attrition that took place, driven primarily by the exit of staff in middle and senior management. By the end of the third quarter of 2019, the Department reported a total of 477 posts; with a variance of six from the target of 471. The Department has aimed for a target of 471 posts by the 2021/22 financial period.

The top three key budget sub-programmes in the Tourism Vote for this medium term period were the transfer to South African Tourism (SAT), Working for Tourism and the Tourism Incentive Programme (TIP).

 

6.1Revised Annual Performance Planand MTEF Allocations (2020/21)

The Tourism Vote changed from being Vote 33 in the previous administration to Vote 38 in the 6th Administration. The purpose for Vote 38 is to promote and support the growth and development of an equitable, competitive and sustainable tourism sector, enhancing its contribution to national priorities. 

The Department was compelled by the COVID-19 outbreak to revise its Annual Performance Plan (APP).  The revised APP focuses on the back office planning work for the Department as it became unfeasible to undertake infrastructure rollout under the protocols of the Risk Adjusted Strategy, with the tourism industry mainly under Level 5 conditions.  This has necessitated the removal of some projects and addition of others in the Annual Performance Plan.

Table 2 depicts the budget allocated to Vote 38 as outlined in the 2020 Estimates of National Expenditure (ENE) issued by the National Treasury.

Table2: Overall Budget Allocation 2019/20 – 2022/23

Tourism   R million	Budget				Nominal Rand Change	Real Rand Change	Nominal percent Change	Real percent Change
Programme	2019/20	2020/21	2021/2022	2022/2023	2019/20 – 2020/21		2019/20 – 2020/21
Administration	295.9	308.6	327.0	340.5	12.7	-0.3	4.29%	-0.10%
Tourism Research, Policy and International Relations	1  331.1	1  391.4	1 465.8	1 522.7	60.3	1.7	4.53%	0.12%
Destination Development	463.3	485.9	519.1	537.6	22.6	2.1	4.88%	0.46%
Tourism Sector Support Services	302.4	295.1	274.3	287.0	-7.3	-19.7	-2.41%	-6.53%
TOTAL	2  392.7	2  481.0	2  586.2	2 687.8	88.3	-16.3	3.69%	-0.68%

Source: National Treasury ENE, 2020/21

 

The budget allocation in the Medium Term will grow from R2.48 billion in 2020/21 to R2. 58 billion in 2021/22 and R2.68 billion in 2022/23. The Tourism Vote has always been allocated abudget that does not allow the Department and SA Tourism to comprehensively fulfil the tourism mandate, and the Department and SA Tourism should find innovative ways to collaborate with other sector departments and the private sector in order to develop and grow tourism.

The Department organises its expenditure under four programmes, these are:

• Programme 1: Administration (R308.6 million);
• Programme 2: Tourism Research, Policy and International Relations (R1.39 billion);
• Programme 3: Destination Development (R485.9 million); and
• Programme 4: Tourism Sector Services (R295.1 million).

 

The main cost driver under this Vote is Programme 2, which consumes more than half (approximately 56.3 percent) of the total Vote allocation. This is mainly due to the significant transfer to the Department’s Entity, South African Tourism. The allocation to South African Tourism will be an average annual increase of 4.6 percent from R1.3 billion in 2019/20 to R1.5 billion in 2022/23. Two programmes experienced a decrease in real terms for the 2020/21 financial year, that is Programmes 1 and 4. At 6.53 percent, the decrease in Programme 4’s allocation is significant. This is a result of Cabinet’s reduction in the Department’s baseline, which it plans to mitigate through the realignment of allocations in the TIP sub-programme. Another major cost driver under this Vote is Programme 3, the bulk of whose allocation (R393.2 million) goes towards the Working for Tourism Expanded Public Works sub-programme. The programme allocations are aligned with the Department’s policy priorities aimed at marketing South Africa as a tourism destination, job creation, skills development, destination development and transformation of the sector.

 

Overall, when taking into account the impact of inflation, the budget allocation to the Department decreases by 0.68 percent from R2.39 billion in 2019/20 to R2.48 billion in 2020/21.  The nominal rand changein budget for the 2020/21 financial year is an additional R88.3 million, amounting to 3.69 per cent increase, whilst the real changefor the 2020/21 financial yearis a decrease by R16.3 million, amounting to a -0.68 per cent decline in the budget available to the Department of Tourism to pursue the tourism mandate.

 

6.2        Programme analysis

The information below provides budget analysis and associated activities in each Programme.

6.2.1     Programme 1: Administration

The purpose of this programme is to provide strategic leadership, management and support services to the Department. The Programme is allocated R308.6 million in the 2020/21 financial year, which equates to 12.4 percent of the overall departmental budget.

Programme 1 is responsible for the Ministry, Management, Corporate management, Financial Management and Office Accommodation. The budget allocation for this Programme increases by 4.3 percent in nominal terms from R295.9 million in 2019/20 to R308.6 million in 2020/21. Of this amount, R163.1 million (52.9 percent) is for Compensation of Employees. The Department has experienced challenges with regard to employment equity at a senior management level, with the new Ministry staff added to the establishment mainly being male. The Department has also experienced challenges in managing the budget allocated to Office Administration, particularly late payments for office accommodation. This always leads to poor quarterly reporting on expenditure and should be immediately addressed with the Department of Public Works and Infrastructure. The general corporate governance and internal controls in the purview of Programme 1 have led to negative audit findings. Table 3 reflects the allocation of funds per sub-programme:

Table 3: Programme 1 Budget Allocation 2019/20 – 2020/21

Administration	Budget		Nominal Increase/ Decrease in 2020/21	Real Increase/ Decrease in 2020/21	Nominal percent change in 2020/21	Real percent Change in 2020/21
R million	2019/20	2020/21
Ministry	30.8	38.2	7.4	5.8	24.03%	18.80%
Management	3.3	3.1	-0.2	-0.3	-6.06%	-10.02%
Corporate Management	180.7	172.7	-8.0	-15.3	-4.43%	-8.46%
Financial Management	40.1	51.4	11.3	9.1	28.18%	22.78%
Office Accommodation	41.0	43.2	2.2	0.4	5.37%	0.93%
TOTAL	295.9	308.6	12,7	-0.3	4.3%	-0.10%

Source:National Treasury ENE, 2020/21

 

The tabled strategic plan and annual performance plan outlines a number of corporate and financial management mechanisms which seem adequate to address the identified challenges. The Committee will conduct strict oversight over this Programme to ensure good governance, effective and efficient internal controls.

The revised changes under this programme include:

• Removal of Output Indicator 4, which focused on ‘develop mentorship and coaching framework and initiate pilot for the department’.
• Reduction of the number of initiatives under Output Indicator 9, from ten to eight initiatives to be implemented to promote reasonable access. In addition, implementation of some tasks under this output will only start in Quarter 2.

 

6.2.2     Programme 2: Tourism Research, Policy and International Relations

The purpose of this programme is to enhance the strategic policy environment, monitor the tourism sector’s performance and enable stakeholder relations. The sub-programmes in Programme 2 areTourism Research, Policy ad International Relations; Research and Knowledge Management; Policy Planning and Strategy; South African Tourism and International Relations and Cooperation. Table 4 depicts budget allocation to Programme 2.

Table 4: Programme 2 Budget Allocation 2019/20 – 2020/21

Tourism Research, Policy and International Relations	Budget		Nominal Increase/ Decrease in 2020/21	Real Increase/ Decrease in 2020/21	Nominal percent change in 2020/21	Real percent Change in 2020/21
R million	2019/20	2020/21
Tourism Research, Policy and International Relations Management	10.6	9.1	-1.5	-1.9	-14.15%	-17.77%
Research and Knowledge Management	28.1	34.5	6.4	4.9	22.78%	17.60%
Policy Planning and Strategy	12.9	14.6	1.7	1.1	13.18%	8.41%
South African Tourism	1  254.2	1  304.3	50.1	-4.9	3.99%	-0.39%
International Relations and Cooperation	25.3	28.8	3.5	2.3	13.83%	9.04%
TOTAL	1  331.1	1  391.3	60.2	1.6	4.5%	0.12%

Source:National Treasury ENE, 2020/21

 

The Programme receives a budget allocation of R1.39 billion for 2020/21, of which R1.30 billion is transferred to SATourism. The transfer to SA Tourism represents 93.7 percent of the Programme’s budget allocation. SA Tourism experiences a R19.1 million reduction in baseline allocation in 2020/21. The remaining allocation available for this Programme is R87.1 million, of which R57.0 million is allocated to Compensation of Employees. The allocation to Programme 2 shows a marginal growth of 0.12 percent in real terms from R1.33 billion in 2019/20 to R1.39 billion in 2020/21. The budget allocation to Sub-programme 1 decreased significantly by 17.77 percent in real terms, while the allocation to Sub-programme 2 increases by 17.60 percent in real terms.

The programme objectives entail the following:

• Monitor and evaluate tourism projects and initiatives by:

• Developing and publishing a report on the state of tourism annually;
• Developing quarterly reports on tourism performance, monthly analyses of tourist arrivals, the impact evaluation report on projects to build the Department’s capacity and resource efficiency, the report on the monitoring of a capacity-building programme, and the 2019/20 national tourism sector strategy implementation report over the medium term.

• Enhance understanding and awareness of the value of tourism and its opportunities by hosting an annual tourism research seminar in each year over the medium term
• Enhance participation and engagement in multilateral and bilateral processes over the medium term by:

• Coordinating participation in multilateral forums and strategic formations, such as the United Nations World Tourism Organisation and the Indian Ocean Rim Association, to advance South Africa’s tourism priorities.
• Hosting a workshop targeted at African countries that have tourism engagements with South Africa to share best practices.
• Developing a report on leveraging bilateral tourism relations to advance national priorities.

• Improve public entity performance and compliance by developing four South AfricanTourism oversight reports by March 2021.
• Form strategic sector partnerships by organising three tourism leadership forums and four stakeholder engagement sessions by March 2021.

 

The Committee will scrutinise the transfers made to South African Tourism as this represents 56.3 percent of the departmental budget. Most of this budget is allocated to international marketing. The Committee’s oversight will also include ensuring that a reasonable amount is allocated to domestic tourism marketing activities. This will assist in promoting tourism facilities in Villages, Townships& Small Dorpies(VTSDs) in line with the oversight philosophy of the Committee. The transfers to SA Tourism should also be used to facilitate cheaper domestic tourism deals. This is imperative given the volatility of the international tourism markets. 

The domestic tourism market is important as it could be used as tool to eliminate poverty at a local level, generate employment and Local Economic Development, improve local infrastructure, spread tourism benefits to non-tourism suppliers such as crafters, address seasonality caused by fluctuations in the international markets, and put local communities onthe international map to attract international tourists. The marketing for domestic tourism is therefore central to the Committees’ oversight approach focusing on VTSDs. The Committee will therefore impress upon the Department to ensure that the Board of South African Tourism improves on the incorporation of domestic tourism in its plans for the current MTSF.

Another important initiative in this Branch is monitoring and evaluation (M&E) which will improve accountability and track progress in projects to facilitate decision making. This is a critical component that tracks the effectiveness and Return on Investment of the Programmes and projects implemented by other Branches of the Department. The Committee will conduct robust oversight on the Monitoring and Evaluation of the departmental Programmes.

The revised changes under this programme include:

• Output Indicator 1 – the number of monitoring and evaluation reports produced increases from six to nine.
• The following two reports will not be implemented: Report on the monitoring of capacity building programmes; and Report on the state of key public owned tourism attractions.
• The following reports have been added:

• An additional two tourism quarterly performance reports, resulting in four performance reports for the year.
• Two reports on the ‘Impact Evaluation of COVID-19 on the tourism sector’, which is a new target.
• An evaluation report on ‘Monitoring the implementation of the Tourism Relief Fund on tourism enterprises’, which is a new target.

• Output Indicator 2 – the number of systems developed for tourism analytics has been reduced from two to one. The target on the development of a National Visitor Membership and Information Management System prototype has been removed.
• The indicator on the ‘number of initiatives undertaken to showcase and profile South Africa as a tourism destination’ has been removed, including the following two targets under it:

• One regional activation facilitated to profile South Africa as a destination of choice implemented;
• Preparation for Destination South Africa’s showcasing at Expo 2020 Dubai undertaken.

• The target on ‘Indaba Ministerial Session 2020 hosted and preparation for 2021 undertaken’ has also been removed.
• The target on developing a ‘Draft National Tourism Innovation Programme’ has been excluded from the APP for 2020/21.
• The target on ‘training 600 youth on multimedia skills’ has also been excluded from the revised 2020/21 APP.

 

6.2.3     Programme 3: Destination Development

The purpose of the programme is to facilitate and coordinate tourism destination development. The sub-programmes in this Programme include Destination Development Management, Tourism Enhancement, Destination Planning and Investment Coordination, and Working for Tourism (infrastructure projects). Table 5 shows budget allocation to Programme 3.

Table 5: Programme 3 Budget Allocation 2019/20 – 2020/21

Destination Development	Budget		Nominal Increase/ Decrease in 2020/21	Real Increase/ Decrease in 2020/21	Nominal percent change in 2020/21	Real percent Change in 2020/21
R million	2019/20	2020/21
Destination Development Management	39.0	35.6	-3.4	-4.9	-8.72%	-12.57%
Tourism Enhancement	23.3	25.2	1.9	0.8	8.15%	3.60%
Destination Planning and Investment Coordination	29.7	31.9	2.2	0.9	7.41%	2.88%
Working for Tourism	371.3	393.2	21.9	5.3	5.90%	1.44%
TOTAL	463.3	485.9	22.6	2.1	4.9%	0.46%

Source:National Treasury ENE, 2020/21

 

The budget allocation to this Programme is R485.9 million for 2020/21.The main cost driver under this programme, at R393.2 million, is the Working for Tourism Expanded Public Works sub-programme. This Sub-programme entails various skills development programmes and tourism projects, which incorporates the Tourism Incentive Programme implemented under Programme 4. Through these, the Department plans to create 15 946 tourism work opportunities over the medium term. This is an increase from 12 993 projected in the previous financial year.  A total of R425.2 million is allocated to Goods and Services and R60.6 million to Compensation of Employees for the programme. The budget allocation for sub-programme 1 decreased by 12.57 percent in real terms. This has implications for service delivery under this sub-programme and stated priorities, and the Committee will monitor implementation.

 

The programme objectives entail the following:

• Increase the tourism sector’s contribution to inclusive economic growth over the medium term by:

• Diversifying and enhancing tourism offerings in priority areas by implementing nine destination enhancement and route development initiatives.
• Undertaking 18 destination planning and investment coordination initiatives.

• Create 15 946 work opportunities by implementing tourism projects through the Working for Tourism programme over the medium term.
• Develop a pipeline for product development on infrastructure development projects by March 2021.

 

The Committee appreciates the importance of the Working for Tourism sub-programme as it is responsible for funding the infrastructure projects by the Department. The Committee will therefore scrutinise the funded projects and influence future funding or replacement of some of the funded projects in the MTSF. The Expanded Public works funding could be rechannelled to promote tourism development in Villages, Townships& Small Dorpies (VTSDs). The funding is currently mostly used to fund projects in the jurisdictions of other government departments, such as improving tourism facilities within SANParks. The modus operandi could be changed and funding channelled to more Community-Based Tourism Enterprises (CBTEs). The Department used to fund CBTEs in the past, but scaled down due to internal capacity challenges in implementing such infrastructure projects. The Government Technical Advisory Centre (GTAC) was engaged and recommendations to improve project implementation were made to the Department. The implementation of the CBTEs would go a long way in ensuring the implementation of the Committees oversight approach on VTSDs through increasing community ownership of tourism businesses.

Another important project implemented in this Branch is that of Tourism Safety Monitors. This is important in improving the safety and security of tourists. However, it is not clear how this project will be implemented in line with the safety initiatives announced by the President during the State of the National Address.  A clear coordination strategy with the South African Police Services should be developed in line with SONA pronouncements and House Resolutions based on the joint recommendations of the Committees of Tourism and Police made in August 2019 through the Safety and Security Summit held in Parliament.

The Department will implement tourism plans through the District Development Model in the three pilot areas, namely, OR Tambo district, Waterberg district, and eThekwini Metro. The Department should integrate the Tourism Sector Master Plans developed in the previous financial years to the District Development Model.

The Department has revised the title of the target of Full-Time Equivalent (FTEs) jobs to Work Opportunities. More information is needed to illustrate the difference between the two, and how the Work Opportunities will provide better employment stability as compared to FTEs driven through EPWP criteria.

The revised changes under this programme include:

• Output Indicator 1 - the following targets have been excluded from the revised APP, resulting in four destination planning and investment coordination initiatives instead of the initial seven:
  • A pipeline of nationally prioritised tourism investment opportunities managed.
  • Establishment and piloting of a tourism preparation facility for the development of concepts for: Karoo Succulent Garden; Magwa Falls and Tea Estate development; Port St Johns Precinct; Orange River Mouth development; Northern Cape Coast Waterpark.
  • Development of designs of prioritised elements at township tourism precincts: Vilakazi Street; Mdantsane; Galeshewe; Khayelitsha.
• Output Indicator 2 - the following targets have been excluded from the revised APP, resulting in four destination enhancement initiatives as opposed to the initial nine:
  • Interpretative signage implemented in six iconic tourism sites: Bontebok National Park; Kruger National Park (Northern Section); Knysna National Park; West Coast; Mountain Zebra; Richtersveld.
  • Monitor implementation of Leopard Trail at Baviaanskloof World Heritage Site.
  • Monitor Implementation of Interpretation Centre at Baviaanskloof World Heritage Site.
  • Commencement of construction works at Shangoni Gate.
• Completion of bid documentation for the appointment of acontractor for the Phalaborwa Wild Life Activity Hub.
• An additional project was included under the ‘Project concepts developed for four community-based tourism projects’ target, Mtititi Game Farm. This increases the projects to five instead of the initial four.
• Output Indicator 3 – this target has been revised downward, from 5109 to 2500 work opportunities created through the Working for Tourism projects.

 

6.2.4     Programme 4: Tourism Sector Support Services

The purpose of this programme is to enhance transformation, increase skill levels and support the development of the sector to ensure that South Africa is a competitive tourism destination.

The sub-programmes in the Branch include Tourism Support Services Management, Tourism Human Resources Management, Enterprise Development and Transformation, and the Tourism Incentive Programme. Table 6shows the budget allocation to Programme 4.

Table 6: Programme 4 Budget Allocation 2019/20 – 2020/21

Tourism Sector Support Services	Budget		Nominal Increase/ Decrease in 2020/21	Real Increase/ Decrease in 2020/21	Nominal percent change in 2020/21	Real percent Change in 2020/21
R million	2019/20	2020/21
Tourism Sector Support Services Management	11.9	11.0	-0,9	-1,4	-7.56%	-11.46%
Tourism Human Resource Development	27.9	28.5	0.6	-0.6	2.15%	-2.15%
Enterprise Development and Transformation	52.7	50.6	-2.1	-4.2	-3.98%	-8.03%
Tourism Visitor Services	24.9	23.6	-1.3	-2.3	-5.22%	-9.22%
Tourism Incentive Programme	185.1	181.4	-3.7	-11.3	-2.00%	-6.13%
TOTAL	302.5	295.1	-7.4	-19.8	-2.4%	-6.53%

Source:National Treasury ENE, 2020/21

 

The budget allocation for Programme 4 decreases by 6.53 percent in real terms from R302.5 million in 2019/20 to R295.1 million in 2020/21. The Tourism Incentive Sub-Programme, at R181.4 million, is the main cost driver under this Programme. This Programme aims to incentivise priority areas, including providing market access support, tourism grading support, implementation of energy efficiency initiatives and funding of transformation initiatives in the tourism sector towards unlocking capital investment by black tourism entrepreneurs. However, the sub-programme experiences a decrease in both nominal and real terms.

 

The Tourism Transformation Fund is a good initiative under this Branch that will be implemented during the MTEF in expediting the transformation of the sector. However, the Department has been struggling with the uptake on the implementation of the Tourism Transformation Fund. During the MTEF, the the Committee will  ensure that the processing of applications is scaled up and the VTSDs should be prioritised in granting funding.

 

The Tourism Equity Fund is another good initiative under this Branch. However, the Department struggled with the implementation and processing of this funding in the 2019/20 financial year. The Committee should note that although this was announced by the President as a new funding, it was already in the Annual Performance Plan for the 2019/20 financial year, therefore not exactly a new fund.

 

The Tourism Incentive Programme could also be used to improve tourism development in the VTSDs. The funding criteria could be improved to be biased towards the previously disadvantaged communities and geographical areas, thus improving chances of tourism enterprises to grow and participate in the mainstream tourism economy, particularly in villages and townships.

The Department had previously reported that it will change the implementation method of the SMME incubators into virtual incubators. However, the Strategic Plan indicates that the Department will be implementing more incubators in the MTEF from sixin 2020/21 to tenin the 2022/23 financial year. The Department should standardise the implementation of incubators and decide on the lasting implementation methodology.

The revised changes under this programme include:

• Output Indicator 1 – the target has been revised, resulting in one instead of two initiatives implemented to stimulate domestic tourism growth. The following activities have been removed for the 2020/21 financial year:
  • Implement Annual Domestic Tourism Campaign in partnership with provinces
  • World Tourism Day Celebrations
  • Support Provincial Events
• Output Indicator 2 – the Department will now only implement five instead of six incubators, with the exclusion of the Women in Tourism Empowerment Incubator.
• The output on Incentive programmes such as, Market Access Programme, Tourism Grading Support, Tourism Transformation Fund, has been excluded for the 2020/21 financial year.
• Output Indicator 3 – the number of initiatives implemented to increase the participation of women in the tourism sector has been reduced to two instead of the initial three. The target on ‘Establish set asides for market access incentive targeted at women’ has been removed.
• Output Indicator 4 – the number of programmes implemented to enhance visitor service and experiences has been reduced to three instead of the initial five. The following targets have been removed:
  • Implementation of Tourism Service Excellence standard (SANS: 1197).
  • Implement Service Excellence with focus on customer care service in GP.
  • Report on the Implementation of the J2SE Programme developed focusing on small towns developed: Howick (KZN); Mogwase (NW).
  • Implementation of the Tourism Safety Strategy.
• Output Indicator 6 – the number of capacity building programmes has been reduced from eleven to five. The following programmes will not be implemented during this financial year:
  • 15 Chefs supported through RPL process and designated.
  • The designation of 20 candidates as travel consultants.
  • The hosting of the National Tourism Careers Expo.
  • The National Chefs training programme that was to be implemented in nine provinces targeting 381 youth.
  • The Coastal Marine Tourism Skills development programme.
• The number of participants targeted for the Food Safety Quality Assurer Programme has also been reduced to 500 from the initial 1500.

 

1.  

The Department of Tourism has only one Entity called South African Tourism (SA Tourism). SA Tourism is established through Chapter 3 of the Tourism Act (No. 3 of 2014), which mandates the entity to market South Africa internationally and domestically as a preferred tourism and business events destination, ensure that tourist facilities and services are of the highest standard and monitor and evaluate the performance of the tourism sector. Over the medium term, the Entity will focus on: boosting domestic and international tourism, improving customer relations management and increasing trade partnerships.

The Entity’s vision is to position South Africa as an exceptional tourist and business events destination that offers a value-for-money, quality tourist experience that is diverse and unique.

The Entity carries out its mandate through the following five key programmes:

• Programme 1: Corporate Support – provides support services to the organisation, as well as ensure compliance with statutory requirements.
• Programme 2: Business Enablement – ensures strategy development and integration with business performance monitoring, governance and evaluation; to provide centralised research insights and analytics to support the core business and provide an open source for information sharing with the tourism sector.

• Programme 3: Leisure Tourism Marketing – provides destination tourism marketing for leisure tourists for both international and domestic markets.
• Programme 4: Business Events – markets South Africa as a business events destination.
• Programme 5: Tourist Experience – delivers a quality experience expected by international and domestic tourists through: grading establishments; product capacity building; and itinerary building.

 

7.1        Budget allocation

7.1.1     Budget Allocation 2020/21

According to the Estimates of National Expenditure, the Entity’s budget allocation in the 2020/21 financial year is R1.56 billion, increasing to R1.7 billion in 2022/23. Of this, an amount of R1.33 billion is allocated to fund Goods and Services, and R213.4 million is allocated to Compensation of Employees. The Committee noted that there has been a reduction of -R19.2 million in the government grant transferred from the Department of Tourism. The reduction in the budget reduces the financial capacity of the Entity to conduct its business. The Board of South African Tourism is urged make innovate decisions to maximise impact using the available budget.

 

For the 2020/21 financial year the budget allocations per programme are as follows: 

• Programme 1: Administration is R140.9 million.
• Programme 2: Business Enablement is R94.7 million.
• Programme 3: Leisure Tourism Marketing is R1.1billion. This programme is the main cost driver for the Entity, as this is its core mandate, which entails marketing initiatives both locally and internationally.
• Programme 4: Business Events is R140.9 million.
• Programme 5: Visitor Experience is R72.5 million

Table 7 indicates the expenditure estimates for each programme for the years 2019/20 to 2022/23. Overall, the budget allocation to the Entity decreases by 0.21 percent in real terms. From the table too can be observed that only Programmes 2 and 5 experience real increases. Programme 2 entails research and insights capabilities, which is at the centre of the Entity’s mandate, including stakeholder management across the various country offices.  Programme 5 includes activities of the tourism grading council. The Portfolio Committee will follow-up with the Entity on the decreases in programme allocations and how these will impact target attainment over the financial year. Budget allocation to Programme 3, which is the core mandate of the Entity, also experiences a decrease in real terms. The Committee will monitor this, especially in view of the impact of COVID-19.

 

Table 7: Overall Budget Allocation 2019/20 – 2022/23

SA Tourism	Budget				Nominal Rand Change	Real Rand Change	Nominal percent change	Real percent Change
R million	2019/20	2020/21	2021/22	2022/23
Programme					2019/20-2020/21		2019/20-2020/21
Administration	135.2	140.9	148.4	154.2	5.7	- 0.2	4.22%	-0.18%
Business Enablement	89.7	94.7	99.7	103.6	5.0	1.0	5.57%	1.12%
Leisure Tourism Marketing	1 066.6	1 111.6	1 169.90	1 217.5	45.0	-1.8	4.22%	-0.17%
Business Events	137.7	140.9	148.4	154.2	3.2	-2.7	2.32%	-1.99%
Visitor Experience	68.7	72.5	76.4	79.3	3.8	0.7	5.53%	1.08%
TOTAL	1  497.9	1  560.6	1  642.8	1  708.8	62.7	-3.1	4.19%	-0,21%

Source:National Treasury ENE, 2020/21

However, in view of the COVID-19 crisis, the Entity has had to revise its priorities and projections detailed in the ENE. The Mid-Term Budget Review will provide an opportunity for SAT to make its case for budget adjustments to the National Treasury, based on prevailing conditions at the time. According to the Entity, the revised APP reflects a reduced budget, the best use of resources and an organisation that will be prepared to move quickly once travel potential returns. During this period of travel restrictions, the Entity will have a drastic reduction in the ratio of its marketing expenditure, resulting in more focus towards general operating expenditure. The Entity indicates that its annual budget for 2020/21 will be adjusted downwards to R438.96 million.

Table 8: Revised Budget Allocation 2019/20 – 2020/21

SA Tourism	Budget	Nominal Rand Change		Real Rand Change		Nominal percent change	Real percent Change
R million	2019/20			2020/21		2019/20-2020/21
Programme				2019/20-2020/21
Administration	135.2		111.4	-23.8	-28.5	-17.60%	-21.08%
Business Enablement	89.7		33.8	-55.9	-57.3	-62.32%	-63.91%
Leisure Tourism Marketing	1 066.6		226.4	-840.2	-849.7	-78.77%	-79.67%
Business Events	137.7		23.3	-114.4	-115.4	-83.08%	-83.79%
Visitor Experience	68.7		44.1	-24.6	-26.5	-35.81%	-38.51%
TOTAL	1 497.9		439.0	-1 058.9	-1 077.4	-70.69%	-71.93%

Source: SAT, 2020/21

 

Table 8 indicates the expenditure estimates for each programme for the years 2019/20 to 2020/21. The Entity indicates that it will be returning R865 million to the fiscus, thus implementing a 66 percent cut in its annual budget. For the 2020/21 financial year the budget allocations per programme have been revised as follows:

• Programme 1: Administration is R111.4 million.
• Programme 2: Business Enablement is R33.8 million.

• Programme 3: Leisure Tourism Marketing is R226.4 million. This programme is the main cost driver for the Entity, as this is its core mandate, which entails marketing initiatives both locally and internationally.
• Programme 4: Business Events is R23.3 million.
• Programme 5: Visitor Experience is R44.1 million.

 

Overall, as seen in Table 8, the budget allocation to the Entity decreases by 71.93 percentin real terms. From the table it can also be observed that all programmes experience nominal and real decreases. What is interesting to note is the shift in allocation to Business Events and Visitor Experience. Whilst the latter was allocated half of what the former was, originally, the converse now applies.

 

7.1.2     Lost potential revenue

In addition to grant funding, the Entity also receives revenue from the Tourism Marketing Levy (TOMSA), SA National Convention Bureau (SANCB), Tourism Grading Council South Africa (TGCSA) and Interest Income. For the 2020/21 financial year the following receipts were expected:

• TOMSA – R144 million, however the shutdown of the sector has resulted in zero TOMSA levy collections. As a result, there will be no transfers from TOMSA during this financial year.
• Exhibition Income – R63.5 million, however, no exhibition income is expected from INDABA nor Meetings Africa during the financial year.
• TGCSA – R25 million, however, no grading revenue is expected during this period.
• Interest Income – R23 million.

 

1. Committee observations

 

Having carefully considered and scrutinised the Departmental and South African Tourism’s 2020/21 – 2024/25 Five-year Strategic Plans and 2020/21 Annual Performance Plans with associated budgets, the Committee made the following observations:

 

8.1        Appropriated budget vs the tourism mandate

The National Development Plan (NDP) identifies tourism as one of the main drivers of labour intensive employment and economic growth. The government has also identified tourism as a growth sector and set a target of 21 million additional arrivals by 2030. However, the appropriated budget in the MTEF is not commensurate to the huge mandate assigned to the tourism sector. The Committee acknowledges the fiscal constraints facing the country in appropriating more budget to the Tourism Vote 38. This calls for the Committee to conduct robust oversight on tourism witha whole government approach to maximise allocated budget and extended tourism mandate to other departments. The Committee also accepted that the tabled Annual Performance Plan and budget has been done in accordance with the 2020 Estimates of National Expenditure, and will await the Minister of Finance to table the adjustment budget that takes the impact of the COVID-19 into consideration.

The Committee also noted that South African Tourism lost the potential budget fromthe usual annual sources of revenue due to the impact of COVID-19.  The Entity reported that the shutdown of the sector has resulted in nil TOMSA Levy collections. There was no income expected from INDABA nor Meetings Africa during the 2020/21 fiscal year. There is also no revenue expected from the grading fees in the 2020/21 financial year. The Committee noted that the Entity lost at least 16 percent of its projected revenue for the 2020/21 financial year as the only available budget is R1.30 billion from the government, which is 84 percent of the initially projected R1.56 billion. This will have a negative impact on the collaboration activities between the Entity and the private sector partners.

 

8.2        Legislative and policy review

With regard to the legislative review, the Committee has identified a number of legislative gaps and matters that need to be addressed through the Tourism Amendment Bill. Some of these issues include the National Grading Scheme and Sharing Economy (e.g. Airbnb). The five-year strategic Plan and the Annual Performance Plan do not have any indication of when the Tourism Amendment Bill will be introduced. The Committee observed that the timeline of developing the Tourism Amendment Act is not included in the departmental planning documents. This is a matter of serious concern, the Department is urged to attend to the Tourism Amendment Bill as soon as possible.

On quality assurance, the Committee continues to call for a policy shift in the quality assurance scheme implemented in South Africa, with a free but compulsory grading systemto be introduced. The Committee accepted the plan tabled by the Department whereby the policy on quality assurance in the country will be completely overhauled, with a comprehensive review that will include the National Grading System as one of the integral components.

With regard to the White Paper, the Committee also welcomed the pending review of the White Paper on the Development and promotion of Tourism in South Africa by the end of the 2020/21 financial year. This will assist the sector to incorporate the contemporary international and domestic trends, as the current white paper was developed in 1996.

In relation to ease of access, the Committee also commends the Department for the continued collaboration with the Department of Home Affairs in introducing aworld-class e-visa regime. The Committee noted the successful piloting of the e-visas in Kenya and India. The work done by the Airports Company of South Africa (ACSA) towards the introduction of e-gates at the airports is also highly commendable, and the Department is urged to work closely with ACSA on this exciting initiative that will facilitate the movement of tourists at the points of entry in South Africa. The Committee noted that the Department of Tourism is reliant on the Department of Health to determine the protocols for health screening of all the international tourists entering the country. The Committee is of the view that more work should be done to prevent tourists entering the country with one form of the virus or another.

 

8.3        Organisational stability and human resources

The Committee is satisfied with organisational stability in the Department and the Entity with the employment contract of Mr Nkhumeleni Victor Tharage as the Director-General (DG) of the Department of Tourism that has been extended by a further five years, and the Chief Executive Officer, Mr Sisa Ntshona, reinstated in his position. The Committee also noted that the three vacancies in the South African Tourism Board have been filled, and the Minister was in the process of filling the positions of the Board Chairperson and the Deputy Chairperson. All the executive positions in the Department are filled. However, the Committee noted a resignation in the Entity in the position of the Chief Strategy Officer, whilst the employment contract of the Chief Quality Assurance Officer is coming to an end within the current financial year.

The Committee noted that strained financial constraints on the budget allocated for the Compensation of Employees and the possible negative impact on the implementation of the tourism mandate. The Committee commends the Department and the Entity on walking the tightrope in managing to pursue their mandate within the confines of the budget. The Committee also commended the Department for sound organisational policies, including the development of the Sexual Harassment Policy which will be customised to the organisational values of zero tolerance on sexual harassment.

The Committee also noted that both the Department and the Entity have sound staff appraisal systems to track individual staff performance. In the Entity, this is linked to the Remuneration Policy approved by the Minister and the National Treasury, which also governs the payment of bonuses based on staff performance.

 

8.4        Corporate governance

The Committee noted the latest findings by the Auditor-General which revealed that there is a lax in corporate governance in both the Department and South African Tourism, especially on internal controls and financial management. The Committee was concerned that this had serious implications for efficient and effective use of available financial resources. The Committee noted the challenges identified in the implementation of Working for Tourism infrastructure projects in relation to poor conceptualisation, poor project management, and management of implementing agents. The Committee also noted the reported cases of financial malpractice and maleficence, with certain cases having served before the courts.  The Committee will closely monitor both the Department and SA Tourism to ensure that the identified weaknesses in governance and financial misconduct are addressed.

The Committee noted that the Entity will be improving its capacity for monitoring and evaluation of the implementation of the Annual Performance Plan through enterprise development work linked to every target.

 

8.5        Alignment of the VTSDs with the District Development Model

On the one hand, the Committee has a sharp focus on tourism development and growth in Villages, Townships& Small Dorpies. On the other hand, the governments’ Medium Term Strategic Framework (MTSF) for 2019-2024 focuses on the Khawuleza District Development Model/ Approach. The Department has not optimally aligned the Committee’s VTSD’s oversight model to the District Development Model. The integration could assist in entrenching the philosophy of tourism development at a local level. The tourism development Masterplans could be incorporated into municipal Integrated Development Plans (IDPs). This may assist in streamlining tourism development budgets amongst various spheres of government.  The Committee welcomed the work done by the Department in collaboration with the Department of Cooperative Governanceand Traditional Affairsfor the integration of tourism into the districts already identified by the government, especially the marine tourism work in the OR Tambo District Municipality and eThekwini Metro.

 

8.6        Intersectoral collaboration

The strained financial resources allocated to Vote 38 and associated huge mandate necessitate a focussed collaboration with other sector departments and the private sector. The District Development Model has also established the Public Private Growth Initiative (PPGI), which aims to develop a more coherent partnership with government, and drive inclusive economic growth and job creation. The Department has always struggled with projects implemented in collaboration with other departments. The Department has attempted to consolidated its intergovernmental and intersectoral collaborations. However, the stakeholder engagements have not yielded maximum results. The intersectoral collaboration will become progressively more important during the 6th Parliament and this needs formal institutional arrangements. The Department has not fully considered the Committee’s philosophy of the “bicycle wheel approach” where various government departments are rallied together, with tourism at the centre, in a coordinated nexus to drive the tourism mandate. Whilst the Committee will be coordinating Parliamentary Committees, the Minister is urged to push for the whole government approach for tourism development within the Cabinet.

 

8.7        Re-industrialisation of the economy and digitisation

The government is pursuing re-industrialisation, localisation and exports. The tourism sector, together with automotive, agriculture & agro-processing, CTLF, chemicals, gas, steel and metal fabrication, ICT, defence, health, mining, renewables, green economy, oceans economy, and creative industries have been identified to drive this strategy. This calls for both the Department and South African Tourism to modernise their business processes through digitisation. The target of 21 million additional arrivals by 2030 will be achieved if both organisations keep up with technological advancements in the sector.

The Department and South African Tourism are commended for the efforts to embrace technology. This is evident in projects such as virtual incubators for the department and digital transformation which will be implemented by the Entity in their organisational activities such as integration of country offices in markets. The Committee also welcomes the Digital Marketing Strategy that has been adopted by the Board of South African Tourism. This strategy will ensure that the Entity conducts a more focussed and highly targeted marketing and maximise the Return on Investment.

 

8.8        Focus on the development and promoting of domestic tourism

The Committee is cognisant of the fact that international tourists go where locals go. This calls for the development and promotion of local domestic facilities, not just for international tourists, but mainly for domestic tourists. The Committee is of the view that the global outbreak of the novel corona virus pandemic has further emboldened the call by the Committee to anchor tourism development on domestic tourism. The Committee is satisfied with the plans to refocus both the Department and the Entity towards domestic tourism over the next five years. This calls for a more targeted approach towards developing domestic tourism, with more budget diverted towards this work by both the Department and South African Tourism. The Committee also noted the Meetings, Incentives, Conferences, and Exhibitions (MICE) sector will now have a focus on secondary cities and towns. This bodes well with the Committees’ oversight approach on VTSDs and will ensure that the National Conventions Bureau does not only focus on the Johannesburg-Durban-Cape Town Golden Triangle.  The Committee is also of the view that the exploration of rail tourism and cultural heritage has a potential of enhancing domestic tourism. The work being done in training traditional leaders, councillors, and municipal tourism staff is also commended in emboldening prospects of domestic tourism development.

The Committee noted the change of sentiments within the private sector in relation to domestic tourism. The COVID-19 pandemic has caused the industry to repurpose itself to domestic tourism, which has always served the interest of the international tourism. The Department and the Entity should use this opportunity to forge more collaborations to develop, package, and promote domestic tourism.

 

8.9        Accelerating transformation

The oversight model of the Committee emphasises inclusive growth through accelerated transformation. The tourism industry remains untransformed and the Committee is concerned about the ownership of tourism business and the diversification of tourism products in South Africa. The Committee acknowledges the efforts by the Department and the Entity to drive transformation. However, the Committee is not entirely satisfied with the transformation agenda in general and would like more to be done to include previously marginalised communities. The VTSD model is seen as a catalyst in expediting transformation. This is particularly important as domestic tourism has a potential to address local economic development and deal with poverty and unemployment. The Committee, therefore, calls for the Department and the Entity to have clearly expressed transformation programmes and demonstrate how these address transformation in VTSDs. The BBBEE Charter Council should also provide a Comprehensive Tourism Transformation Plan, which outlines the transformation agenda in the current MTSF.

 

8.10      Funding SONA commitments

The Committee noted announcements made by the President in the 2020 State of the Nation Address to stimulate the growth of various economic sectors in the country. This included the announcement that the South African Police Services (SAPS) will increase visibility at identified tourist attraction sites, and that a reserve police capacity to focus on the policing of the tourist attraction areas will be established. However, there is no specific budget in either the Estimates of National Expenditure for the Departments of Police and Tourism to fund these initiatives. The Committee will conduct oversight on this announcement as it is an important intervention to ensure the safety and security of international and domestic tourists.

In the medium term, the Department will be implementing the Tourism Safety Monitors project. This augurs well with the President’s announcement and could easily be linked with the SAPS programmes.  This is important in improving the safety and security of tourists. The Committee will conduct oversight on this initiative to ensure that it is implemented in line with the safety initiatives announced by the President during the SONA. A clear coordination strategy with the SAPS should be presented to the Committee in line with SONA pronouncements and House Resolutions based on the joint recommendations of the Committees of Tourism and Police made in August 2019 through the Safety and Security Summit held in Parliament. However, the Committee urged the Department to learn from the manner in which the country handled negative messages about the impact of the drought in Cape Town, and not send messages to the international community that will deter potential visitors to come to South Africa.

Furthermore, in the 2020 Budget Speech, the Ministry of Finance also indicated that to support tourism, the government will engage with the tourism industry on formalising the Tourism Levy. However, there are no details in the future plans tabled by either the Department or South African Tourism on how the Tourism Levy will be formalised. The Committee is concerned about the low number of tourism businesses which contribute to the TOMSA Levy. Currently, ten percent of the Entity’s budget comes from TOMSA levies. This can drastically increase if the number of TOMSA Levy Collectors increases. The Committee will conduct close oversight on how the TOMSA Levy will be formalised and maximised. Amongst other things, the Committee will impress on the Minister, the South African Tourism Board and the Tourism Business Council of South Africa that the TOMSA Levy should be made compulsory.

 

8.11      Using the Working for Tourism Programme to improve tourism in VTSDs

The Committee noted and appreciates the importance of the Working for Tourism sub-programme that is responsible for funding the infrastructure projects by the Department. The Committee is of the view that the budget for the currently funded and future Working for Tourism infrastructure projects should be rechannelled to promote tourism development in VTSDs. The funding is currently mostly used to fund projects in the jurisdictions of other government departments, such improving tourism facilities within SANParks. The modus operandi could be changed and funding channelled to more Community-Based Tourism Enterprises (CBTEs). The Committee acknowledges that the Department used to fund CBTEs in the past, but scaled down due to internal capacity challenges in implementing such infrastructure projects. The Government Technical Advisory Centre (GTAC) was engaged and recommendations to improve implementation were made to the Department. The Department could implement the recommendations of the GTAC to align the implementation of the CBTEs with the Committees’ oversight approach on VTSDs through increasing community ownership of tourism businesses. The Department indicated that the EPWP infrastructure projects were currently at the back-burner  of departmental programmes. However, the Minister made an undertaking to update the Committee on the status of all the infrastructure projects in due course.

 

8.12      Alignment with the District Development Model

The Committee noted that the Department will implement tourism plans through the District Development Model in the three pilot areas, namely, OR Tambo district, Waterberg district, and eThekwini Metro.  This is a start of the development and promotion of tourism in the VTSD model. The Committee is of the view that this should also extend to the integration of the Tourism Sector Master Plans already developed by the Department in the previous financial years in the District Development Model.

 

8.13      The remodelling of Full-Time Equivalent Jobs

The Department has always set targets for the Full-Time Equivalent (FTE) jobs. However, the Department has revised the title of the target of Full-Time Equivalent (FTEs) jobs and named it“Work Opportunities”. The Full-time Equivalenet Jobs is the termininlogy used by the Department of Publuc Workd and Infrastructure for the jobs created through the Expamded Public Works Programme (EPWP). The Committee realises the importance of the creation of work opportunitiesthrough the Expanded Pubic Works Programme. These work opportunities have a potential to address poverty in rural communities. However, the difference between the Full-Time Equivalent Jobs and Work Opportunitiesis not clear for the Committee, and the Department needs to provide more clarity on the issue. The Committee will conduct oversight on how the Department will implement the new philosophy of the Work Opportunities, particularly in the VTSDs.

 

8.14      The impact of the corona virus on the tourism sector

The corona virus and subsequent lockdown have had serious unintended consequences for the tourism sector in South Africa. The COVID-19 led to the government of South Africa implanting the general lockdown to flatten the curve and prepare the health sector to be ready to deal with increasing numbers of infected citizens. The government further implemented the Risk Adjusted Strategy for economic activity with five levels of allowed and disallowed economic activities. When on 24th May 2020 the President announced the opening of economic activity to Level 3 on the 1st June 2020, it was confirmed that the tourism industry will remain closed. This includes accommodation facilities, events and conference venues. Domestic travel willonly open for business purposes. The indication is that domestic tourism will only open in December 2020, whilst international tourism will open in February 2021.

The Committee acknowledges that tourism remains one of the world’s most labour intensive sectors that supports 330 million jobs worldwide. One in four jobs created globally across sectors in 2019 came from the tourism sector. In South Africa, tourism contributed more than 1.5 million jobs and more than R425 billion in 2019. However, the World Travel and Tourism Council (WTTC) has warned that the COVID-19 pandemic could cost up to 50 million jobs worldwide in the tourism industry. The Committee further acknowledges that the World Bank has reported that one in 20 jobs in sub-Saharan Africa is in the travel and tourism sector. This means that the job losses in the continent, and South Africa in particular aregoing to be devastating. The rate of job losses may be even more in South Africa given the continued closure of the tourism sector, and this needs urgent attention. In 2019 the World Travel & Tourism Council (WTTC) indicated that the tourism and travel sector was responsible for creating one in five new jobs in the last five years in South Africa.

The Committee is concerned about the reported information by the leading tourism experts which indicate that the COVID-19 pandemic will lead to a loss of 555 000 to 600 000 direct jobs and 1 100 000 to 1 200 000 jobs in total indirect employment. The Committee noted the survey conducted in April by the Department where tourismemployers indicated that they had introduced a phased reduction of wages for employees instead of shedding jobs in the sector. It was also noted that the Department will conduct further studies to get empirical statistics on the number of jobs that have been shed in the sector, looking forward to a two-year period. The Committee also noted that the studies conducted by the Department will also provide information on the number of jobs that will be affected in cases where the employers do not comply with the B-BBEE code of good practice. The Committee urged the Department to ensure that the recovery plan and related interventions should ensure that the industry champions, who support other tourism industry players, do not go under as this may have serious negative repercussions for the tourism value chain in the country.

The pandemic will also have a repercussion on the contribution of the tourism sector in the economy, which currently contributes R425 billion to the GDP, which is an 8.9 percent contribution to the country’s total GDP. The Department and South African Tourism should work closely with the Tourism Business Council of South Africa (TBCSA) to determine the real impact of the pandemic. The additional target of developing two reports on the impact of COVID-19 on the tourism sector is most welcome as this will assist the Committee in conducting oversight.

 

8.15      Tourism Relief Fund, court challenges and subsequent delays

The Committee noted with concern the court cases lodged by two civil organisations, AfriForum and Solidarity, against the Minister of Tourism on the B-BBEE requirements in the implmenetation of the Tourism Relief Fund. These court cases worked against the government intentions of providing speedy relief to the deserving tourism businesses. The Committee noted that the governmentmade available an amount of R200 millionas a Tourism Relief Fund. This money was to be used towards fixed costs, operational costs, supplies and other pressure cost items by tourism businesses. This R200 million was disbursed and managed by South African Tourism on behalf of the Department until the 31st May 2020. The Committee was, however, concerned about the delays incurred in the implementation of this fund. The Committee learned with concern that when the criteria for the Tourism Relief Fund were being finalised, the Department was taken to court by Solidarity and then by AfriForum. AfriForum applied for an urgent court hearing and the Department requested the court to join the two cases and they were heard on the same day by the North Gauteng High Court. It was noted that the Department submitted affidavits and defended the criteria, and won the case. The AfriForum and Solidarity then took the matter to the Constitutional Court. The Committee welcomed the dismissal of the matter by the Constitutional Court on the 15thMay 2020. The Committee is pleased that after the case was dismissed by the Constitutional Court, the Department successfullyimplemented the Tourism Relief Fund to deserving beneficiaries. However, given that the tourism sector will be closed longer than other economic sectors, the Committee is concerned that the R200 million will not be enough to provide all the necessary relief, particularly to the emerging tourism enterprises.

 

8.16      Upfront payments and multi-year projects

The Committee noted that the Entity will be making upfront payments and introducing multi-year projects to deal with foreign currency exposure and maximising the budget. The Committee acknowledges that the National Treasury has permitted the Entity to conduct upfront payments to mitigate foreign currency exposure. The Committee will closely monitor the introduction of the multi-year projects and how this will either lead to maximising of the budget or to a financial loss.

 

8.17      The Tourism Recovery Plan

The Committee commends the Entity for heeding its call to start developing the post COVID-19 Tourism Recovery Plan.The Committee has noted the industry wide consultations which have culminated in the initiation of the process of developing the National Tourism Recovery Strategy (NTRS). The Committee further noted the three driving pillars of the NTRS which are:

• Re-igniting demand – this entails conserving the marketing investment. The marketing investment framework should be evolving to incorporate multi-year investment cycles to optimise scarce resource deployment. The Entity should redirect its energy to domestic tourism, which the Committee is fervently advocating for.
• Protecting the supply side of tourism – the Entity will focus on strengthening the visitor experience and ensure high quality standards of the country’s tourism offerings.
• Strengthening enabling capability – this entails strengthening collaborations and partnerships between the Entity and the industry.

The Committee will follow this process closely to ensure that there is speedy recovery of the tourism sector in South Africa post COVID-19. The Committee understands that the National Tourism Recovery Strategy will provide various scenarios which will influence the policy direction, and will also provide insights on how those scenarios will influence variables such as job losses in the sector.

 

8.18      The proposed tourism industry standards protocols for COVID-19 operations

The Committee commends the work done by the Tourism Business Council of South Africa in collaboration with the Entity in developing the COVID-19 tourism protocols to guide opening of the tourism sector. These protocols have not been adopted by the government as yet, but the Committee noted the Presidents’ acknowledgement of these protocols and pending further engagements between the government and the tourism industry. The proposed protocols include issues of persons with higher risk; public transport and staff; travel between provinces; contact tracing; protocol commitment; medical and travel declaration; and training. These protocols have assisted in ensuring that some aspects of the tourism industry open at Level 3 instead of Level 1 of the Risk Adjusted Strategy. The Committee will follow the engagements between the government and the tourism industry very closely to ensure that the industry does not collapse and that the stakeholders are comfortable with the final protocols.

The Committee also noted the concern raised about the tourism establishments that have been used as quarantine sites. The Entity is commended for working with these establishments to remove the stigma, andviews them as heroes who made sacrifices in the fight against COVID-19 and flattening the curve of infections in the country.

 

8.19      Rethinking tourism strategy

The Committee is cognisant of the fact that tourism will not be business as usual post COVID-19. The Committee has also noted reports that recovery in South Africa will be driven by domestic tourism. This puts a sharp focus on the need to revise South Africa’s tourism strategies to focus more on domestic tourism instead of international tourism. This will be a bold move as the focus for South African Tourism has always been on international inbound tourism. Increasing the domestic holiday trips imply that the Entity should implement a dedicated Domestic Tourism Growth Strategy. There also needs to be a sharp focus on intra-African tourism, with a new focus on increasing the share of the African markets. The Committee is of the view that the Entity should include more African markets in the Marketing Investment Framework to induce intra-Africa travel, and regional tourism promotion within the Southern African Development Community (SADC).

 

8.20      Creating Demand vs Market-Driven Marketing

The Committee has observed that the Entity has previously based all their marketing strategies on responding to demand. The Committee in the 6th Parliament holds the view that demand-driven marketing is an established and acceptable norm in the marketing fraternity, and that the Entity , however, needs to be innovative and “think outside the box” to “create demand” for South African products. Creating demand will deviate from the current trend of the tourism growth trajectory that is concentrated in the ‘Cape Town-Durban-Gauteng Triangle’ and focus on the products in Villages, Townships&Small Dorpies (VTSDs). The Committee is of the view that the Entity should also focus on VTSDs with regard to business tourism in the MTSF. Marketing should intentionally focus on packaging and marketing products in the VTSDs. Creating demand may also be linked to the government’s District Development Model where the Entity can work with the ProvincialDestinationManagement Organisations and local government marketing organisations to package specific tailor-made experiences for certain off the beaten track municipalities.

 

8.21      Destination brand

The Committee is cognisant that before COVID-19, the brand reputation ofSouth Africa had already suffered due to a number of factors, including perceptions caused by negative crime reports, xenophobic attacks on foreign nationals, tourist animal interactions, canned hunting, a government policy of expropriation of land without compensation, and related brand killers and disablers. The Committee noted that the Entity is trying to deal with this issue through the destination brand of South Africa as a country separated from the corporate brand of South African Tourism as an organisation. The Committee is also aware of the government’s intention to rationalise public entities with similar mandates. The Committee will follow these new developments closely to ensure that the Entity fulfils its mandate and does not hide behind the country brand vs corporate brand debate.

 

8.22      The Marketing Investment Framework

The Committee noted that the new market portfolio of South African Tourism in the MTSF will include 14 Growth Markets; 14 Defend Markets, and 15 Developing Markets. The Committee will conduct oversight on the breakdown of these markets, the decisions for choosing certain markets against others, budget to be spent in each market, and the return on investment from each market. The Committee will also follow closely on the segmentation of domestic marketing campaigns geared towards activating the domestic market and inculcating the culture of travel amongst South Africans.

 

8.23      Joint Marketing Agreements

The Committee acknowledges that the Joint Marketing Agreements (JMAs) are useful in driving volumes from the identified markets in the mMrketing Investment Framework The Auditor-General (AG) made some findings with regard to meeting deliverables, which led to South African Tourism putting a moratorium on JMAs. The Committee encourages the Entity to resume the JMAs and select the international tour wholesalers that will have a high return on investment in the number of international arrivals to South Africa.

 

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The Committee noted that the tabled five-year Strategic Plan refers to new income streams and possible commercialisation of certain services that will be identified to ensure adequate financial resources are available. The Committee will conduct close oversight on this initiative to ensure that the Entity does it in line with the legislation and that there is a return on investment.

 

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The Committee observed that the Entity will be moving to adigital operating model, which will be based on the “5 R’s” namely, right people, in right the place, doing right things with the right processes at the right time. This is an important initiative in modernising organisational operations. TheCommittee commends the Entity for this initiative and will monitor how it contributes to business optimisation in the organisation. The Committee urges the Entity to ensure that this digital model does not displace staff currently employed, but creates a meaningful hybrid as tourism is the people’s business.

 

8.26      Outsourcing of Services

The Committee acknowledges that the mandate of SA Tourism requires the Entity to use consultants to fulfil some of its obligations.       This implies that some of the allocated budget goes towards consultant fees.     These consultant fees include items such as retainer fees for above and below the line marketing advertising agencies, PR agencies, exhibition management services, market research, market development, research and campaigns. The Committee has previously recommended that the Entity should increase its capacity to do some of the outsourced work in-house. As such, the Committee is satisfied with the work being done by the Entity to develop the staff to insource more work that was done by consultants.The Committee would like to see a drastic decrease in the consultant fees which currently sit at 14 percent of the total budget of the Entity for both international marketing and IT services.

 

9.         Recommendations

After the careful scrutiny of the Strategic Plans and Annual Performance Plans of the Department of Tourism and South African Tourism, it is requested that the Minister of Tourism considers the following recommenedations and reports back to the Committee by no later than the end of the 2020/21 financial year, 31 March 2021.

Recommendations in relation to the Department of Tourism

It is recommended that the Minister of Tourism:

9.1        Expedites legislative and policy review for the Department and provides time-frames for the development of the Tourism Amendment Bill.

9.2        Ensures that the review of the White Paper on the Development and Promotion of Tourism in South Africa should consider the current tourism delivery environment, such as the sharing economy.

9.3        Collaborates with the tourism industry when developing the planned COVID-19 Impact Reports on the tourism sector, and ensure the these include the analysis of the future of tourism jobs and adaptation mechanisms to future jobs.

9.4        Ensures that the Departmental programmes are perfectly aligned with government priorities and programmes, such as the District Development Programme.

9.5        Advocates in Cabinet for more tourism funding assistance in addition to the R200 million Tourism Relief Fund as the sector will remain on Corona Virus Level 5 for the foreseeable future, with many tourism businesses on the verge of closing down.

9.6        Ensures that in addition to the improvement of the visa regime for South Africa, the Department engages the Department of Home Affairs to look at the possibility of recognising other reputable visas, such as the United Kingdom, Australia, United States of America, and Schengen to allow tourists to come to South Africa.

9.7        Develops a comprehensive plan that details collaborative partnerships between the Department, South African Tourism, the private sector, provincial departments, and provincial Destination Marketing Organisations to maximise the available budget for marketing across government and private sector.

9.8        Demonstrates to the Committee that the Department has formalised partnerships with other sector departments that assist in fulfilling the mandate of the Department through formal institutional arrangements.

9.9        Implements initiatives that promote domestic tourism to engender transformation and resilience of the tourism sector against the volatility of international markets.

9.10      Channels the Working for Tourism funding to the implementation of Community-Based Tourism Enterprises instead of funding projects within SANParks.

9.11      Ensures that the funding criteria of the Tourism Transformation Fund, the Tourism Equity Fund, and the Tourism Incentive Programme are in favour of previously disadvantaged communities, particularly enterprises in villages and townships.

9.12      Develops a clear implementation plan to integrate the Tourism Safety Monitors to the South African Police Services initiatives.

9.13      Reviews the Rural Tourism Strategy and the Heritage Tourism Strategy to implement practical projects to be funded through the Working for Tourism infrastructure budget in facilitating tourism development in the VTSDs.

9.14      Engages the private sector in refocussing domestic tourism and revising/dropping prices to stimulate domestic tourism and to boost the recovery of the sector in mitigating the aftermaths of COVID-19.

9.15      Provides detailed and focussed plans that ensure equitable tourism development and promotion in Villages, Townships&Small Dorpies (VTSDs) to boost domestic tourism, working in partnership with local government, the industry and South African Tourism.

9.16      Ensures that transformation is the key driver of all Departmental and South African Tourism programmes to expedite inclusive growth that benefits all citizens, particularly ownership.

Recommendations in relation to South African Tourism

It is recommended that the Minister of Tourism:

9.17      Expedites the development of the National Tourism Recovery Strategy (NTRS) to ignite the tourism sector post COVID-19.

9.18      Develops a comprehensive collaboration and partnerships plan between South African Tourism, Provincial Destination Management Organisations and Municipalities to drive domestic tourism initiatives.

9.19      Ensures that the process of repositioning and repurposing public entities currently being undertaken by the National Treasury does not erode the mandate of South African Tourism in marketing the country internationally and locally.

9.20      Quantifies the marketing budget available across all the spheres of government and maximise optimal marketing across markets and platforms.

9.21      Expedites digitalisation of the tourism sector to modernise marketing and maximise presence across global and domestic digital platforms.

9.22      Develops a comprehensive domestic growth strategy that covers various domestic market segments, and takes into consideration the Villages, Townships&Small  Dorpies.

9.23      Infuses deliberate inclusive growth in the plans of South African Tourism to deal decisively with transformation in the sector.

9.24      Works closely with the airlines to ensure that the cost of travel does not affect South Africa as a long haul destination.

9.25      Develops a comprehensive collaboration strategy between the private sector and South African Tourism in funding targeted marketing activities in both international and domestic tourism spaces.

9.26      Targets international and African markets that bring both volume and value.

9.27      Focuses on the higher spending international tourism markets in South Africa in order to drive Total Direct Foreign Tourism spend to increase the contribution of the sector to the county’s Gross Domestic Product.

9.28      Intensifies the focus on the new high-growth markets in Africa, China and India, and tablesto the Committee a focussed strategy developed for these high growth markets.

9.29      Expands the presence of South Africa in the African markets to include many countries in order to stimulate intra-Africa travel and mitigate the volatility and fluidity of the international tourism markets.

9.30      Improves internal controls and governance of the organisation.

9.31      Collaborates with the provinces, cities, and towns to improve tourism airlift in the country and for international routes.

9.32      Integrates technology in destination South Africa to improve the tourist experience and competitive advantage.

9.33      Works with provincial Destination Management Organisations to capacitate municipal officials to bridge the tourism marketing and business tourism knowledge gap.

9.34   Works with the private sector to stimulate the South African Incentives market.

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10.     Conclusion

The Committee welcomes the 2020/21 – 2024/25Five-year Strategic Plans and the 2020/21 Annual Performance Plans of the Department of Tourism and South African Tourism. These planning documents have charted a progressive tourism development and marketing trajectory under difficult economic conditions. These documents have demonstrated the repositioning and repurposing of the Department and the Entity in delivering the tourism mandate in line with the adopted Committee approach of focussing on domestic tourism through programmes implemented in Villages, Townships, Small Towns & Dorpies (VTSDs). These planning documents will ensure that South Africa remains a competitive tourism destination geared towards attaining additional 21 million tourist arrivals by 2030.

The Committee acknowledges the difficulties in the delivery environment that has negatively impacted on the work of the Department of Tourism and South African Tourism in delivering on their mandate. The tourism industry has been extremely affected by the novel corona virus and the gains made over a number of years. The 2020/21 Annual Performance Planshavebeen seriously compromised with a number of projects initially planned for implementation having been removed. However, the Committee is of the view that the current situation will be reversed by a carefully researched and crafted National Tourism Recovery Plan being developed by South African Tourism. The Tourism Relief Fund being implemented will also go a long way in cushioning many tourism businesses from going under. The Committee urges the Minister of Tourism to continually consult with the industry to assess their needs, and if necessary, consult with the Cabinet to provide more relief funding for the sector. However, the Committee is confident that during the course of the 2020/21 – 2024/25 Medium Term Strategic Framework the sector will recover. The Committee will therefore continue conducting its oversight work to ensure that the collective efforts by the government and the private sector are still contributing to the trajectory of creating 21 million additional international arrivals by 2030. The Committee will follow up on the Departmental programmes and South African Tourism to ensure an inclusive tourism development and growth that benefits all the citizens of the country. At the centre of this inclusive tourism development and growth will be the development and promotion of tourism in the Villages, Townships&SmallDorpies (VTSDs).

 

Report to be considered.