ATC210511: Report of the Portfolio Committee on Tourism on budget Vote 38: Tourism, Dated 11 May 2021

Tourism

REPORT OF THE PORTFOLIO COMMITTEE ON TOURISM ONBUDGET VOTE  38: TOURISM, DATED 11 MAY 2021

 

The Portfolio Committee on Tourism, having considered Budget Vote 38: Tourism, together with the 2021/22 – 2023/24 Annual Performance Plan of the Department of Tourism (Department) and the 2021/22 Annual Performance Plan of South African Tourism, reports as follows:

 

1. INTRODUCTION

 

The Annual Performance Plan of the Department is tabled at a time when the tourism sector is still practically non-performing. International tourism has come to a grinding halt whilst domestic tourism is recovering, albeit at a sluggish pace. Many countries have imposed travel restrictions and the United Nations World TourismOrganisation (UNWTO) expects the international arrivals to have declined by 70 to 75 percent forthe whole of 2020. Consequently, global tourism has returned to levels of 30years ago. South Africa has not been immune to these global trends and Statistics South Africa has reported that foreign arrivals decreased by 82.1 percent, from 1.5 million arrivals in December 2019 to 279,539 in December 2020.

The decline in both international and domestic tourism has caused an unprecedented distress to the tourism industry. The Committee has learned from the Department, South African Tourism and the Tourism Business Council of South Africa that the situation is dire on the ground. The sector is shedding jobs and businesses are closing down. The Committee acknowledges a number of interventions implemented by the government to cushion the sector, includingthe Tourism Relief Fund, the Tourist Guides Relief Fund, the implementation of the Temporary Employer/Employee Relief Scheme (TERS) and the development of Norms and Standards as safety protocols to facilitate the safe reopening of the sector. All these initiatives, and more, have not yet been able to adequately save the sector from decimation.

The Annual Performance Plans tabled for the current financial year and associated budget in the Medium Term Expenditure Framework (MTEF) have taken into consideration the current situation in the sector. The focus of the tabled budget for Vote 38 will focus on the recovery of the sector. The Cabinet has adopted a Tourism Sector Recovery Plan (TSRP) that has been developed in partnership with the private sector.The TSRP is premised on the government’s Economic Recovery and Reconstruction Plan. These interventions will go a long way in assisting the sector to recover from the current predicament. The full participation of all stakeholders, coupled with well-coordinated activities, will determine whether or not the TSRP is able to salvage the sector. A whole government approach is also necessary to rally all the sector departments to the economic recovery of the country in general and the tourism industry in particular.

The purpose of this document is, therefore, to provide a budget report for Vote 38 with associated implementation strategies contained in the Annual Performance Plans (APPs) for the 2021/22 financial year. The report makes a number of inherent observations based on the current industry conditions and proffers incisive recommendations to the Minister of Tourism for her consideration and implementation.

1. COMMITTEE PROCESS

 

The Portfolio Committee on Tourism (Committee) held a meeting with the Department on the 4th May 2021 to consider its 2021/22 - 2023/24 Annual Performance Plan. The Committee also convened a meeting with South African Tourism on the 5th May 2021 to consider its 2021/22 Annual Performance Plan. The Committee then considered and adopted the budget report on the 11th May 2021.

 

1. DEPARTMENT OF TOURISM

 

The Department derives its core mandate and responsibilities from the Tourism Act (Act No. 3 of 2014) which aims to:

• promote the practice 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 and development of the tourism sector; and
• enhance cooperation and coordination between all spheres of government in developing and managing tourism.

The Department’s vision is for South Africa to become a leading sustainable tourism development destination that promotes inclusive economic growth. The Department executes its mandate through the following four key programmes:

1. Programme 1: Administration - the purpose of this programme is to provide strategic leadership, management and support services to the Department.
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.
3. Programme 3: Destination Development - the purpose of the programme is to facilitate and coordinate tourism destination development.
4. Programme 4: Tourism Sector 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.

 

3.1        Policy mandate

 

The policy framework that informs the work of the Department includes the White Paper on the Development and Promotion of Tourism in South Africa, 1996; the National Development Plan (NDP); the National Tourism Sector Strategy (NTSS) and the Medium Term Strategic Framework (MTSF: 2019-2024). The summary of the policy mandate is as follows:

1. White Paper on the Development and Promotion of Tourism in South Africa (1996)– provides the framework and guidelines for tourism development and promotion in South Africa.
2. National Development Plan (NDP)– is the 2030 vision for the country. The NDP recognises tourism as one of the main drivers of employment creation and economic growth and envisages the promotion of South Africa as a major tourist and business events destination.
3. National Tourism Sector Strategy (NTSS)– is a blueprint for the tourism sector and sets bold commitments for the sector. The NTSS advocates for a coherent approach to promoting South Africa as a preferred destination of choice.
4. Medium Term Strategic Framework (MTSF: 2019-2024)– is the manifestation of an implementation of the NDP Vision 2030 and the implementation of the electoral mandate of the sixth administration of government. It recognises tourism as a national priority sector that can play a key role in the country’s economic transformation, addressing unemployment challenges and developing a better Africa and world.
5. State of the Nation Address –in the 2021 State of the Nation Address, the President of the republic announced that work was underway with the relevant departments to reform the visa and immigration regime to attract skills and grow the tourism sector. As international travel starts to recover in the wake of COVID-19, the government was planning to undertake a full roll-out of e-Visas to visitors from China, India, Nigeria, Kenya and 10 other countries.

 

3.2        Strategic priorities for 2021/22

 

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. The strategic outcomes of the Department, as stated in the 2020/21 – 2024/25 Strategic Plan, which correlate with the Government’s Outcomes are depicted in Table 1.

In its efforts to accomplish the above, 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, implementing 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.

 

 

 

Table 1: Strategic priorities for 2021/22

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 – 2021/22 – 2023/24

 

These strategic priorities comprehensively cover the mandate of the Department and the envisaged contribution of the sector to the county’s economy.

 

3.3        Institutional policy reviews

 

The following policies and strategies are due for review within this medium term:

• White Paper on the Development and Promotion of Tourism in South Africa, 1996.
• Tourism Act, No. 3 of 2014.
• National Grading System.
• National Tourism Sector Strategy, 2016.

The review of the White Paper, Tourism Act and strategies will determine which aspects of these policies should be retained and which ones should be changed to enhance the tourism sector’s performance.

 

3.4        Budget allocation for 2021/2022

 

The Department receives a total budget of R7.4 billion over the medium term. Transfers to South African Tourism account for an estimated 53.6 percent (R3.9 billion) of this amount over this period. Cabinet-approved budget reductions of R606.4 million over the MTEF period will be effected on goods and services (R125.7 million), transfers and subsidies (R325.1 million), and compensation of employees (R155.5 million).

The Department’s 2021/22 budget allocation amounts to R2 429.6 billion, R333.1 million of which is allocated to fund Compensation of Employees. National Treasury has imposed a ceiling on Compensation of Employees over the MTEF period and the ceiling amounts are R334.4 million for 2019/20, R360.3 million for 2020/21 and R383.7 million for 2021/22.9 The Department is thus well within the compensation ceiling set by National Treasury for the current financial year. An amount of R471.7 million is budgeted for Goods and Services, R1 620.8 billion for Transfers and Subsidies and R4 million for the payments of Capital Assets. Table 2reflects the allocation of funds per programme.

 

Table 2: Overall Budget Allocation 2019/20 – 2022/23

Tourism   R million	Budget				Nominal Rand Change	Real Rand Change	Nominal percent Change	Real percent Change
Programme	2020/21	2021/2022	2022/2023	2023/24	2020/21 – 2021/22		2020/21 – 2021/22
Administration	299.6	305.3	311.2	316.3	5.7	-6.6	1.90%	-2.20%
Tourism Research, Policy and International Relations	499.1	1 382.2	1 414.5	1 431.8	88.1	827.4	176.94%	165.78%
Destination Development	465.9	305.6	315.2	299.9	-160.3	-172.6	34.41%	-37.05%
Tourism Sector Support Services	162.2	436.6	441.9	444.3	274.4	256.8	169.17%	158.32%
TOTAL	1 426.9	2 429.6	2 483.9	2 492.3	1 002.9	905.0	70.29%	63.43%

Source: National Treasury ENE, 2020/21

 

Table 2 indicates that the overall budget allocation to the Department significantly increases by 63.43 percentin real terms from the adjusted budget of R1 426.9 billion in 2020/21 to R2 429.6 billion in 2021/22. The reason for this significant increase in budget is the reprioritisation of funds in 2020/21 towards COVID-19 relief. The Department organises its expenditure under four programmes, these are:

• Programme 1: Administration (R305.3 million);
• Programme 2: Tourism Research, Policy and International Relations (R1 382.2 billion);
• Programme 3: Destination Development (R305.6 million); and
• Programme 4: Tourism Sector Support Services (R436.6 million).

 

The main cost driver under Vote 38 is Programme 2 (Tourism Research, Policy and International Relations), which consumes more than half (approximately 56.9 percent) of the total Vote allocation. This is mainly due to the significant transfer to the Department’s Entity, South African Tourism. In contrast, Programme 3 (Destination Development) experiences a significant decrease at 37.1 percent in real terms. The Department reported that an amount of R540 million will be reprioritised over the medium term from this programme to Programme 4 (Tourism Sector Support Services) for the Tourism Equity Fund.

The major cost driver under programme 3 is the Working for Tourism, Expanded Public Works Programme, sub-programme. The sub-programme’s allocation also sees a significant decrease from R378.1 million in 2020/21 to R216.6 million in the current financial year. The Committee will monitor how this decrease in funding will affect deliverables under this sub-programme, especially in view of its aim towards job creation. The cost driver under programme 4, the Tourism Incentive Programme, sees a substantial increase for the year from R59.8 million in 2020/21 to R327.0 million in 2021/22. As alluded, a number of projects were cancelled for the 2020/21 financial year in this sub-programme. Some of these have been included for the 2021/22 financial year such as the Green Tourism Incentive Programme.

 

3.5        Annual Performance Plan per Programme

 

The Annual Performance Plan (APP) sets out performance indicators and targets for budget programmes and sub-programmes where relevant, to facilitate the Department realising its goals and objectives as set out in the Strategic Plan. The APP covers the upcoming financial year and the MTEF period. The 2021/22 APP specifies actions that will be undertaken by the Department for the country to achieve Economic Transformation, Job Creation and A Better Africa and World.

This section provides the details of the APP per programme, with a focus on specific select indicators. In addition to the identification of projects, targets and performance indicators were analysed to determine whether they are specific, measurable, achievable, relevant and time-bound (SMART) and they proved to be compliant with the SMART principles.

 

3.5.1     Programme 1: Administration

 

The purpose of this programme is to provide strategic leadership, management and support services to the Department. The Programme is allocated R305.3 million in the 2021/22 financial year, which equates to 12.6 percent of the overall departmental budget. An amount of R151.6 million (49.7 percent) of the Programme’s budget has been allocated towards Compensation of Employees and R150.2 million (49.2 percent) towards Goods and Services. The Goods and Services allocation includes contractual commitments for computer services and audit payments to the Office of the Auditor-General South Africa. The amount allocated for Office Accommodation amounts to R45.5 million. This is for thepayment of the Head Office building of Tourism to the Department of Public Works towards the lease agreement. Table 3 reflects the allocation of funds per sub-programme.

Table 3 indicates that the budget allocation for Programme 1 increases by 1.9 percent in nominal terms from R299.6 million in 2020/21 to R305.3 million in 2021/22. Of this amount, R151.6 million (49.7 percent) is for Compensation of Employees.19 The major cost driver under this programme is Corporate Management, with an allocation of R168.9 million for the 2021/22 financial year. Sub-programme 2 (Management) experiences a significant decrease in allocation by 10.43 percent in real terms. The Committee will monitor the implications of this decrease to the departmental programmes.

Notably, the Department has introduced a new target under Programme 1 aimed at a number of initiatives implemented to support tourism sector recovery. In this regard, the Department will implement one initiative targeted at procurement of commercial venues for departmental conferences and meetings to support tourism sector recovery.

 

 

Table 3: Programme 1 Budget Allocation 2020/21 – 2021/22

Administration	Budget		Nominal Increase/ Decrease in 2021/22	Real Increase/ Decrease in 2021/22	Nominal percent change in 2021/22	Real percent Change in 2021/22
R million	2020/21	2021/22
Ministry	36.1	36.4	0.3	-1.2	0.83%	-3.23%
Management	3.0	2.8	-0.2	-0.3	-6.67%	-10.43%
Corporate Management	168.7	168.9	0.2	-6.6	0.12%	-3.92%
Financial Management	48.6	51.6	3.0	0.9	6.17%	1.89%
Office Accommodation	43.2	45.5	2.3	0.5	5.32%	1.08%
TOTAL	299.6	305.3	5.7	-6.6	1.9%	-2.20%

Source: National Treasury ENE, 2021/22

 

The Committee will monitor the impact of reduced budget on the compensation of employees to the implementation of the Annual Performance Plan.

 

3.5.2     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 Programme receives a budget allocation of R1 382.2 billion for 2021/22, of which R1 297.0 billion is transferred to South African Tourism. The programme’s allocation represents 56.9 percent of the Department’s budget allocation; while the transfer to the Entity represents 53.3 percent of the Department’s budget allocation. The remaining allocation available for this Programme is R85.2 million, of which R53.6 million (62.9%) is allocated to Compensation of Employees. Table 4 reflects the allocation of funds per sub-programme.

The figures in Table 4 indicate that the budget allocation for Programme 2 increases by 165.78 percentin real terms from R499.1 million in 2020/21 to R1 382.2 billion in 2021/22. The main cost driver under this Programme is the transfer to the Department’s Entity, South African Tourism. In 2020/21 the transfer to South African Tourism was significantly reduced to R438.9 million, with the funding allocated towards relief funds for COVID-19. The substantial increase is aimed at recovery strategies for the sector.The budget allocation for sub-programme 2 increases by 14.48 percent in real terms, and sub-programme 5 by 3.91 percent in real terms, respectively. The Department indicated that it will be conducting a number of monitoring studies to evaluate the impact of its projects and initiatives over the medium term. This will also include enhanced participation and engagement in order to advance national priorities over the medium term.

Some of the deliverables for Programme 2 in the 2021/22 financial year will include monitoring of the implementation of the Norms and Standards for safe operations in the sector; review of the Tourism Policy: Green Paper on the Development and Promotion of Tourism in South Africa; two systems developed and implemented:An Integrated Tourism Knowledge System, namely, the development of System Architecture for Integrated Tourism Knowledge System finalised and the Integration of Knowledge Systems commenced; and four outreach programmes to the diplomatic community implemented. 

 

Table 4: Programme 2 Budget Allocation 2020/21 – 2021/22

Administration	Budget		Nominal Increase/ Decrease in 2021/22	Real Increase/ Decrease in 2021/22	Nominal percent change in 2021/22	Real percent Change in 2021/22
R million	2020/21	2021/22
Tourism Research, Policy and International Relations Management	8.3	8.8	0.5	0.1	6.02%	1.75%
Research and knowledge management	28.0	33.4	5.4	4.1	19.29%	14.48%
Policy Planning and Strategy	13.2	14.1	0.9	0.3	6.82%	2.51%
South African Tourism	423.0	1 297.0	874.0	821.7	206.62%	194.26%
International Relations and Cooperation	26.6	28.8	2.2	1.0	8.27%	3.91%
TOTAL	499.1	1 382.2	883.1	827.4	176.9%	165.78%

Source: National Treasury ENE, 2021/22

 

The Norms and Standards for safe operations in the sector is a new indicator for the Department and is a much required one for the sector. The Committee will follow-up with the Department on how the synchronisation of these norms with the current safety protocols as developed by the Tourism Business Council of South Africa (TBCSA) will be done. The target of the four outreach programmes to the diplomatic community is also a new one. As a new target, the Department is commended for introducing such a target as the country finds itself on red travel lists of both regional and international markets.  

 

3.5.3     Programme 3: Destination Development

 

The purpose of the programme is to facilitate and coordinate tourism destination development.The budget for this Programme is R305.6 million for 2021/22, the bulk of which, namely, R216.6 million (70.8 percent), is allocated to the Working for Tourism sub-programme. A total of R249.6 million is allocated to Goods and Services for the programme. Table 5reflects the allocation of funds per sub-programme.Table 5 depicts that the budget allocation for Programme 3 decreases by 37.05 percent in real terms from R465.9 million in 2020/21 to R305.6 million in 2021/22. The main cost driver under this programme, at R216.6 million, is the Working for Tourism,which is the department’s implementation programme for the Expanded Public Works Programme. This sub-programme entails various skills development programmes and tourism projects. Through these the Department plans to create 12 569 work opportunities over the medium term. However, the budget for this sub-programme substantially decreased for the new financial year by 45.02 percent in real terms. The Committee will follow-up on how the decrease in the budget will impact its service delivery initiatives.

 

Table 5: Programme 3 Budget Allocation 2020/21 – 2021/22

Administration	Budget		Nominal Increase/ Decrease in 2021/22	Real Increase/ Decrease in 2021/22	Nominal percent change in 2021/22	Real percent Change in 2021/22
R million	2020/21	2021/22
Destination Development	34.8	33.3	-1.5	-2.8	-4.31%	-8.17%
Tourism Enhancement	23.3	24.5	1.2	0.2	5.15%	0.91%
Destination Planning and Investment Coordination	29.7	31.1	1.4	0.1	4.71%	0.49%
Working for Tourism	378.1	216.6	-161.5	-170.2	-42.71%	-45.02%
TOTAL	465.9	305.6	-160.3	-172.6	-34.4%	-37.05%

Source: National Treasury ENE, 2021/22

Another decrease in allocation is experienced under sub-programme 1, Destination Development Management, by 8.17 percent in real terms. Some of the activities under this sub-programme include destination enhancement initiatives at tourism sites, and supporting South African National Parks sites through infrastructure maintenance programmes. The Committee will also follow-up with the Department on how the decrease in the budget will impact service delivery under this sub-programme.

Some of the programme performance indicators and targets for this programme include a pipeline of nationally prioritised tourism investment opportunities (greenfield projects) managed; a database of distressed high-impact tourism properties (brownfield projects) managed; four investment promotion platforms facilitated; and supporting the implementation of thirty Community-based Tourism Projects.

 

3.5.4     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 Programme is allocated R436.6 million for the 2021/22 financial year. This includes Compensation of Employees with a budget allocation of R72.0 million and the Tourism Incentive Programme (TIP)with a budget allocation of R327.0 million.

 

Table 6: Programme 4 Budget Allocation 2020/21 – 2021/22

Administration	Budget		Nominal Increase/ Decrease in 2021/22	Real Increase/ Decrease in 2021/22	Nominal percent change in 2021/22	Real percent Change in 2021/22
R million	2020/21	2021/22
Tourism Sector Support Services Management	10.3	11.1	0.8	0.4	7.77%	3.42%
Tourism Human Resource Development	23.0	27.9	4.9	3.8	21.30%	16.41%
Enterprise Development and Transformation	46.7	48.3	1.6	-0.3	3.43%	-0.74%
Tourism visitor Services	22.4	22.3	-0.1	-1.0	-0.45%	-4.46%
Tourism Incentive Programme	59.8	327.0	267.2	254.0	446.82%	428.78%
TOTAL	162.2	436.6	274.4	256.8	169.2%	158.32%

Source: National Treasury ENE, 2021/22

The projects within TIP include tourism market access, tourism grading support, tourism destination development and energy efficient projects. A number of these projects were placed on hold in the 2020/21 financial year due to the outbreak of COVID-19. This resulted in a decrease in budget from R148.3 million in 2019/20 to R59.8 million in 2020/21. The TIP consumes 74.9 percent of the total Programme budget and Enterprise Development and Transformation 11.1 percent. Table 6 reflects the allocation of funds per sub-programme.

Table 6 depicts that budget allocation for Programme 4 substantially increases by 158.32 percentin real terms from R162.2 million in 2020/21 to R436.6 million in 2021/22. This is mainly driven by the significant growth of more than 400 percent experienced in the Programme’s priority sub-programme, the Tourism Incentive Programme, from R59.8 million in 2020/21 to R327.0 million in 2021/22. 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. The substantial increase in allocation results from the inclusion of projects and initiatives that were excluded in 2020/21 due to the COVID-19 pandemic, such as the incentive projects, Tourism Transformation Fund, National Tourism Careers Expo and capacity building programmes. Another significant increase in budget allocation is experienced in sub-programme 2, Tourism Human Resource Development, at 16.41 percent in real terms. This sub-programme focuses on human resource development initiatives for the tourism sector.

Some of the programme performance indicators and targets for this programme include Tourism Equity Fund (TEF) applications approved in 2021/22 (four adjudication meetings); Green Tourism Incentive Programme (GTIP) applications approved in 2021/22 (four adjudication meetings); Incubation Programme implemented to support tourism SMMEs through the following Incubators (Business support and development) - Food Services Incubator; Two (2) community-based enterprises incubation programmes; and the implementation of Educators Development Programme in all nine provinces.

The Committee notes that some of the incentive programmes that are not included for this financial year under the indicator are: Market Access Support, Tourism Grading Support and the Tourism Transformation Fund (TTF). The programmes were also excluded as targets for the 2020/21 financial year due to COVID-19. The Committee will follow-up with the Department on the TTF and whether the fund is still open for applications. In its 2019/20 annual report, the Department reported that only six applications were approved and only R2 million of the R40 million set aside for the programme was spent during the financial year. The TTF is managed by the National Empowerment Fund for the Department. The Committee also noted challenges with the implementation of the Tourism Equity Fund as it has been interdicted by the Pretoria High Court.

The Food Services Incubator, the two Community-based Enterprises Incubator Programme and the thirty community-based projects supported are also new performance indicators. These new performance indicators address the recommendations made by the Committee to focus tourism development in the villages, townships and small dorpies (VTSDs).

 

1. SOUTH AFRICAN TOURISM

 

Chapter 3, Section 41(1) of the Constitution of the Republic of South Africa (Act No. 108 of 1996) stipulates the relationship and principles underlying cooperation and assigning functions between various spheres of government. The Tourism Act (Act No.3 of 2014) mandates South African Tourism to market South Africa internationally anddomestically as a preferred tourism and business events destination; ensure that tourist facilities and servicesare of the highest standard; and monitor and evaluate the performance of the tourism sector. Over the mediumterm, the Entity will focus on responding to the national Tourism Sector Recovery Plan. Primary activities will includerevitalising South Africa’s reputation as a premier travel destination; and protecting, defending and entrenchingcurrent markets while growing new strategically identified markets to drive domestic business travel and meetthe rising demand for domestic leisure travel.

To revitalise South Africa as a premier destination brand, the Entity has set aside R3 billion over the mediumterm. Expenditure is expected to increase from R1.5 billion in 2020/21 to R1.6 billion in 2023/24. Transfers from the Department account for an estimated 90.1 per cent (R3.9 billion) of total revenue. Other revenue isgenerated from tourism marketing levies, grading income, interest on investments and sundry income fromevents such as exhibitions.

 

4.1        Institutional policies and strategies

 

South African Tourism reported that COVID-19 and the economic shutdown has had a severe impact on the tourism sector, with many businesses struggling to recover from the related hard lockdown. Industry consultations have surfaced critical business continuity risks across the value chain. The Economic Reconstruction and Recovery Planwas published in late 2020, as the country’s plan for overall recovery of the economy post the impact of COVID-19. The Plan identified 8 priority interventions, one of which is support for tourism recovery and growth. This priority emphasises 3 recovery phases: re-igniting demand; rejuvenating supply and building enabling capability.

The fundamental consideration is the manner in which South Africa will protect its tourism sector and outcompete in a market where every destination is simultaneously chasing recovery. Thus, the Tourism Sector Recovery Planis anchored on the same pillars identified as the recovery phases in the ERRP.

The following strategic interventions will be implemented through the Tourism Sector Recovery Plan:

1. Implement biosecurity norms and standards across the value chain to enable safe travel and rebuild traveller confidence;
2. Stimulate domestic demand through targeted initiatives and campaigns;
3. Launch an investment and resource mobilisation programme to support supply requirements of the post-COVID-19 era;
4. Support for the protection of core tourism infrastructure and assets;
5. Execute a global marketing programme to reignite international demand;
6. Tourism regional integration; and
7. Review the tourism policy to provide enhanced support for sector growth and development outlines specific interventions under each strategic theme, with timeframes and lines of accountability.

 

4.2        Annual Performance Plan Programmes

 

South African Tourism delivers on its mandate through the five Programmes as follows:

1. Programme 1: Corporate Support - provides effective support services to the organisation, as well as ensure compliance with statutory requirements; and ensures strategy development and integration with business performance monitoring, governance and evaluation.
2. Programme 2: Business Enablement - enhances collaboration with various stakeholders; and provides centralised tourism intelligence to support evidence-based decision-making.

1. Programme 3: Leisure Tourism Marketing - creates demand through travel acquisition and growing brand equity for South Africa as a leisure and business events destination, in identified markets.
2. Programme 4: Business Events - grows the nation’s business events industry.
3. Programme 5: Tourist Experience - ensures the delivery of quality assured tourist/ visitor experiences, which are diverse, unique and enriched.

 

4.3        Available budget for the 2021/22 financial year

 

In the 2021/22 financial year South African Tourism received from the Department of Tourism a total of R1,297.0 billion of the R2,429.6 billion allocated to the tourism Vote. This accounts for 53.6 percent of the total budget allocated to the tourism Vote. The Committee will scrutinise how this budget is spent to facilitate inclusive tourism growth through equitable marketing activities. South African Tourism has a total of R1.417.6 billion in the 2021/22 financial year. The Entity receives allocation from the Department of Tourism and other sources of revenue. The Sources of revenue for the 2021/22 financial year are depicted in Table 7.

The budget for the 2020/21 was reduced by R866 000. The Entity received revenue from other sources, including, R50 million from the TOMSA levies; R33.4 million from Indaba, Meetings Africa & other exhibitions; R12.2 million from grading fees and R24.8 million from sundry revenue. This is an improvement in the revenue collected in the 2020/21 financial year wherein no revenue was realised from the Indaba, Meetings Africa & other exhibitions; grading fees and sundry revenue.

Table 7: Projected revenue for 2021/22 MTEF

Revenue	2019/20	2020/21			2021/22	2022/23	2023/24
(R’000)	Audited	Approved	Special Adjustments	Revised Budget	Estimates	Estimates	Estimates
Department of Tourism	1,256,523	1,304,306	-866 000	438 306	1 297 038	1 329 206	1 344 672
TOMSA levies	133,304	144,224	-144 224	0	50 000	52 400	53 972
Indaba, Meetings Africa & other exhibitions	110,189	63,503	-62 823	680	33 498	35 106	36 159
Grading fees	23,164	25,134	-25 134	0	12 239	12 826	13 211
Sundry revenue	22,498	23,552	-23 552	0	24 847	26 040	26 821
TOTAL	1,545,678	1,560,719	-1 121 733	438 986	1 417 622	1 455 578	1 474 835

Source: adapted from South Africa Tourism 2021/22Annula Performance Plan

 

The available budget is inadequate to implement programmes aimed towards the recovery of the sector. The Entity has undertaken to conduct financial modelling in order to find ways to maximise the available budget and raise more revenue from other partners.

 

4.4        Annual performance targets

 

The Entity has set predetermined objectives for the 2021/22 financial years. In Programme 1, these will include implementation of the Employment Equity Plan through percentage of women in South African Tourism, percentage of women in senior and top management positions, and percentage of people with disabilities employed.

In Programme 2, South African Tourism will strive to maintain at least 60 percent Black people (Africans, Coloureds and Indians) across all occupational levels; percentage of approved MOUs with provinces implemented; B2B and B2C portal supported; SA Tourism Reputation Index; number of reports assessing performance of tourism sector produced; and a number of sector engagements.

In Programme 3, the Entity will pursue 2.6 million international tourist arrivals; 2.0 million regional tourist arrivals; 3.1 million domestic holiday trips; R10.1 billion in domestic holiday direct spend; 116.1 million day trips; 39.9 brand strength index (leisure); four domestic deal-driven campaigns implemented; 481720 digital engagements-domestic; 1 regional brand campaign; 1 annual campaign launched and global roll-out; and the tourism activation at the World Expo 2020 in Dubai.

In Programme 4, the Entity will pursue BusinessEvents brand strength index; 1 global business events campaign; 1 domestic business events campaign; 77 bid submissions; 3 national business events to be piloted in VTSDs; Hosting of Indaba and Meetings Africa in a hybrid format; and hosting of Lilizela Awards in a hybrid format.

In Programme 5, South African Tourism will implement aNet Promoter Score (NPS) improvement plan; 4 707 graded establishments; Enterprise and Supplier Development(E&SD) through the development of an E&SD programme, 25 percent of total seats at SA Tourism tradeshow platforms dedicated for SMME participants;implement Basic Quality Verification programme to support new accommodation entrants; 100 percent procurement from B-BBEE contributor status levels 1-5, 30 percent SMME, 40 percent Women-owned, 30 percent Youth-owned and 7 percent PWD-owned as aminimum percentage expenditure achieved on procurement of goods and services from targeted groups. 

The tabled Annual Performance Plan is meticulously crafted and adapted to the current situation in the tourism industry. If effectively and efficiently implemented, the Entity would have been able to somehow respond to the crisis created by the COVID-19 pandemic.

 

5.       COMMITTEE OBSERVATIONS

 

After a careful scrutiny of the Department of Tourism 2021/22 – 2023/24 and South African Tourism’s 2021/22 Annual Performance Plans, the Committee made a number of organisation-specific and sector-wide observations that are meant to assist the Department and South African Tourism in their efforts towards the sector recovery. The Committee observations are as follows:

 

Observations with regard to the Department of Tourism

 

5.1        Court rulings

 

The Committee notedthat on the 26th April 2021 the High Court in Pretoria stopped the Tourism Equity Fund (TEF) as the civic organisations AfriForum and Solidarity wanted thefund interdicted. The Committee upholds the rule of law and appreciates the work done by the judiciary as another arm of the state. The Committee is, however, concerned that the court interdicts derail the efforts of the Department to drive transformation. This also frustrates the focus of the Committee on programmes that facilitate the transformation of the sector during the Sixth Parliament tenure.

It is noted that the main issue raised by the two organisations is the assertion that the TEF is a racial tourism fund. The two organisations took the Minister of Tourism, the Director-General for Tourism and the Small Enterprise Finance Agency (SEFA) to court. The Acting judge John Holland-Muter granted the interdict but withheld the reasons for his decision saying these will follow. The court interdicted the Department and SEFA from processing any application and/or making any payments from the Tourism Equity Fund pending the main application.The Committee awaits the finalisation of the matter.

The Committee noted with concern that it was the second instance that the two organisations took the Minister to court. Similar events unfolded when the Tourism Relief Fund was introducedin 2020 to provide relief to the distressed tourism sector as a result of the COVID-19 pandemic. At that time the court ruled in favour of the Minister and the fund was disbursed. When that happened, the Committeeidentified that the public, including some civic organisations, did not understand the spirit and letter of the Broad-Based Black Empowerment and the need to provide redress in the tourism sector. The Committee had recommended that the Minister intensified public education on the B-BBEE Act and the Tourism Sector Codes. The Committee maintains that more public education needs to be provided for the citizenry to understand the imperatives of transformation in the country.

 

5.2        Inadequate budget

 

The Committee noted that the total budget appropriated to Vote 38 in the current MTEF is R7.4 billion with transfers to South African Tourism accounting for an estimated 53.6 percent at R3.9 billion. The major concern is the amount allocated to compensation of employees at R333.1 million. This has a potential to affect the operations of the Department as there will be no sufficient budget to fund vacancies. The Committee was, nonetheless, satisfied that the Department will strive to maintain a vacancy rate of 10 percent in the 2021/22 financial year.  The 2021/22 allocation amounts to R2 429.6 billion, R333.1 million of which is allocated to fund Compensation of Employees. National Treasury has imposed a ceiling on Compensation of Employees over the MTEF period and the ceiling amounts are R334.4 million for 2019/20, R360.3 million for 2020/21 and R383.7 million for 2021/22.9. The Cabinet‐approved budget reductions of R606.4 million over the MTEF period will be effected on good and services (R125.7 million), transfers and subsidies (R325.1 million), and compensation of employees (R155.5 million).

This budget cut will also have a negative impact on the implementation of tourism projects, especially tourism development and destination development aimed at creating tourism supply at villages, townships and small towns. The Committee is also concerned about the continued imbalance in the budget as more funds in the Vote are allocated to marketing instead of tourism development. The Committee noted the sentiments raised by the Department that this imbalance is going to be a challenge for the foreseeable future as there is no envisaged budget increase in the near future.

1. Impact of the imbalanced budget prioritisation

 

As alluded, the Committee noted that South African Tourism receives more that 50 percent of the budget Vote. The impact of this skewed budget allocation is that the recommendations of the Committee on matters such as tourism development and enhancement of tourism in the Villages, Townships and Small Dorpies (VTSDs) will not be effectively implemented,culminating in a slow transformation of the sector.  The large portion of the budget allocated to marketing continues to accrue benefits mainly to the existing tourism enterprises. This means that the gap between the established and the emerging enterprises will continue widening as tourism is currently concentrated in the Johannesburg-Durban-Cape Town Golden Triangle. The Committee considers this as an area that has huge oversight implications, as the available budget should equitably work for the benefit of all South Africans.

 

1. The general decline in the tourism sector and a threat of the third wave

 

The Committee observed that the 2021/22 -2023/24 Annual Performance Plan,with related budget, is tabled against the backdrop of a depressed tourism sector. The sector has contracted globally and in South Africa, putting a strain on important key performance indicators such as contribution to the GDP and employment creation. In a survey conducted by the Department in October 2020, the tourism businesses reported a more than 50 percent decline in revenue, less than 50 percent in forward bookings; and less than 50 percent in occupancy rates as some of the impact of the pandemic on the sector. The reality is that many businesses had no income at all and the sector will continue shedding jobs. This threatens the attributes of tourism as a labour intensive sector that contributes to the economic growth.

The Committee also noted with concern the developments in India with a predicted adverse effects on global tourism and safe opening of international travel. Countries are increasingly putting restrictions on travel from India, which is the same fate that had befallen South Africa when the second wave affected the country. The Committee was also concerned that a crew from India had tested positive for COVID-19 at the Durban harbour. The Committee will continue to monitor developments in this regard as this poses a threat of the third wave which may strike an irreparable damage to the tourism sector.

 

1. Proactive planning for recovery

 

The Committee commends the Department for the proactive planning that focuses on the recovery of the tourism sector. The Committee is contented that the tabled Annual Performance Plan (APP) has meticulously considered the major issues experienced by the sector and is geared for the recovery of the industry. The tabled APP addresses the issues of supply, especially in VTSDs, with the projects such as the thirtycommunity-based projects and the incorporation of the Masterplans in the District Development Model. This will assist when the sector is fully recovered as the previously disadvantaged communities will also become part of the tourism value chain. It was noted with approval that the Minister had launched the Tourism Sector Recovery Plan (TSRP) on the 22nd April 2021 after the approval by the Cabinet. The Cabinet approval is crucial in that the TSRP is not just the plan for the Department of Tourism but incorporates elements that need to be facilitated by other government sector departments.The TSRP is anchored on three strategic themes, namely:

• Re-igniting demand,
• Rejuvenation supply, and
• Strengthening enabling capability.

 

The thrust of these strategic themes is relevant to address the current distressed tourism sector in South Africa. If the TSRP is fully implemented, it will go a long way in facilitating the recovery of the sector.

 

1. The pursuit of transformation of the sector

 

The transformation imperative remains central to the work of the Committee. The Committee commends the Minister for the continued commitment in implementing the Tourism Equity Fund and the Tourism Transformation Fund. The Committee acknowledges the challenges experienced by the Department in implementing these funds. The successes reported in the implementation of the Tourism Transformation Fund were noted by the Committee whilst awaiting to address issues experienced in the Tourism Equity Fund, such as the pending court interdict.

The Committee also noted that the Department is implementing a number of projects aimed at improving the plight of the vulnerable groups, namely, the unemployed youth, retrenched youth, women and people living with disabilities. The beneficiaries of various training programmes implemented by the Department are these designated groups.

 

1. Addressing issues that may affect the implementation of the 2021/22 – 2023/24 Annual Performance Plan

 

Over time, the Committee has identified a number of challenges in the implementation of the planned projects and programmes in the previous Annual Performance Plans. The challenges have always led to poor performance against the quarterly targets, culminating in the non-achievement of the annual targets. Some of the common recurrent challenges include, but are not limited to:

• Poor project planning and implementation,
• Poor planning for projects implemented with third parties,
• Contract management,
• Delays in appointing service providers,
• Supply chain and procurement challenges,
• Poor implementation of infrastructure projects,
• Poor planning and implementation of training projects,
• Placement of learners for training projects, etc.

 

The Committee is satisfied that the Department has taken serious steps to address these challenges. Some of the improvement plans include limiting the amount of the project budget availed to project implementers as advance payments and the appointment of the Development Bank of Southern Africa (DBSA) as an implementing agent for the infrastructure projects. The limit put on advance payments will reduce the exposure of the Department to unscrupulous project implementers. The Committee noted with approval that the DBSA has in-house builtenvironment engineers who will oversee project implementation. This will eliminate a plethora of project implementation challenges as enumerated above.

 

1. Inclusion of Villages, Townships and Small Dorpies (VTSDs) in product development

 

The Department is undertaking to support the implementation of thirty community-based projects in the 2021/22 Annual Performance. This initiative is considered as a good intervention as it implements the Committee recommendations on supporting tourism development in the VTSDs. The Committee, however, noted that these are not greenfield (new) projects. These are (brown) historical projects that have been on the departmental books for many years. The programme implementation names of these projects have changed several times over the years, including being referred to as Social Responsibility Implementation Programme (SRI), Working for Tourism Projects, and now Community-Based projects.

 

The Committee will conduct a strict oversight on the implementation of these projects as the previous Committees of past Parliaments have conducted oversight over some of these infrastructure projects and discovered a number of challenges. Some of the issues exposed included, amongst others, poor project conceptualisation; poor project management; no value for money; poor workmanship and structural integrity; accountability, maintenance and management of facilities; lack of internal capacity by the Department to manage infrastructure projects; and operational challenges.

 

The Committee is aware that in response to the issues raised by Parliament on the implementation of infrastructure projects, the Department commissioned the Government Technical Advisory Centre (GTAC) to assist in the evaluation of SRI projects, both planned and active, to ensure their viability.  The GTAC made various recommendations, including for the Department to continue implementing some of the infrastructure projects whilst others were found not viable and therefore recommended for discontinuation and to be taken off the departmental books. The Committee takes comfort in the new implementation methodology with the DBSA as an implementing agent.

 

1. Policy review considerations

 

The Committee noted that the Department has commenced with the policy review process aimed at providing an enabling policy milieu and influencing a legislative review process. The panel of experts appointed by the Minister has commenced with their work and the Minister is awaiting policy proposals.  Given the current changes in the tourism industry, the Committee reiterated its position that the Minister ascertains that the following issues are included in the policy and the legislative review process, and are incorporated in the tourism strategies:

• Quality assurance – the Committee maintains the view that in order to ensure quality assurance in the destination, South Africa should implement a free but compulsory grading system.
• Health protocols – the Minister has already gazetted the National Norms and Standards for the Safe Operation of the Tourism Sector. There is a need to harmonise these with other countries for a coherent global strategy to safely open the sector and facilitate travel.
• Safety and security for tourists – the concerns about the safety and security for tourists predates the advent of the COVID-19 pandemic. The Committee maintains that the policy should provide clear policy directives in line with the protocols already developed in order to ensure safety and security for tourists. These should include emergency protocols.
• Air access and airlift – the recovery will depend on open and affordable air access. The Committee is of the view that theairlift should be improved in South Africa. This will be influenced by what the government does at global, continental, national and local government levels.  The policy should enhance intersectoral engagements to activate other stakeholders, such as the Department of Transport to facilitate the development of an Airlift Strategy for the country. Cities and municipalities should be engaged in developing their air access strategies. The affordability issues should also be addressed through the engagements on the revision of airport taxes and tariffs.
• Getting the visa regime right – the policy proposals should consider engagements with the Department of Home Affairs on visa simplification and harmonisation. This includes expediting the pronouncements made by the President in the 2021 State of the Nation Address.
•  Environmental sustainability – the success of the tourism industry in South Africa will depend on environmental sustainability. The policy review should strengthen the application of responsible tourism principles in all the government programmes and private sector investment initiatives.
• Regional integration – the government policy should clarify the regional integration issues, including regional marketing and trans-border guiding.

 

1. The current state of the tourism sector

 

The Committee learned, based on the recent meeting with the Tourism Business Council of South Africa (TBCSA) on the 23rd February 2021,that the industry is going through unprecedented hardship. The submissions based on lived-experiences by the trade revealed a number of issues that should be considered by the Minister and the Department. TheMinister is urged to address the issues raised by the TBCSA, including:

• There has been little to no revenue for the sector, which has led to the closure of many tourism businesses.
• Low demand of tourism products due to low numbers of international tourists and impact of Lockdown on domestic demand.
• Hotels are operating at very low occupancies of about 30 percent, especially in the larger cities.
• The reduction in international flights to South Africa due to decreased passenger numbers.
• Employees are retrenched or put on reduced pay.
• The UIF TERS could abate the impact if extended for the tourism sector, therefore should be extended for the sector.
• The collections for the TOMSA levy had reduced to about 30 percent of their pre-COVID-19 levels.
• The impact on the MICE sector has been severe.
• The South African Association for the Conference Industry (SAACI) alluded that a number of events and meetings were being pushed into the third and fourth quarter of 2021 and that if the situation did not improve, the sector would permanently lose skills and experience, which would impact the sector’s ability to roll out future events.
• The MICE sector was preparing for a safe reopening with the invention of some health passports.
• The above led the Committee conducting an oversight visit to the Health Passport Worldwide facility in Cape Town to see how the health passport works.
• The adoption of the health passport can assist to restart the sector, allowing large-scale events, exhibitions and attendance of spectators in stadiums.
• The sector was experiencing difficulties with the banks who expected loan repayments while there was zero income for businesses.
• Hotels had experienced challenges in claiming Business Interruption insurance.
• The sector had to continue paying rates and taxes to municipalities while there was no income made by the tourism businesses.

 

The Committee noted that the main cost driver for health passports is the rapid testing component. The Committee noted that South African Tourism is scanning the market for more service providers as this may assist with dealing with the price of testing. The Committee also noted that even when the price of testing is reduced, the travel policy environment will haveto change for the health passports to be acceptable. Currently, the country allows everybody to travel to South Africa as long as they can produce a negative PCR test at the point of entry.

 

1. Impact of future trends on government funding and private investments

 

One of the probable future trends might be the demand for more isolated and secluded spaces at hotels and other tourist facilities and attractions. Previously, tourists had wanted to mingle with the locals at destinations and experience the culture with the locals and other guests. However, with the advent of the pandemic, tourists may become more demanding in terms of having more private spaces. This will have huge implications for hotels. The emerging tourism businesses in the VTSDs who might not have ample space for isolated and secluded enjoyment by the patrons may be more affected. It is therefore imperative that the Minister engages the private sector, especially the emerging tourism entrepreneurs about these probable future developments.

If this is not done, transformation may be reversed as the tourists will stop visiting smaller tourism establishments which lack facilities for private enjoyment and seclusion. This has implications for government funding such as the Tourism Equity Fund (TEF) and the Tourism Transformation Fund (TTF) in terms of the criteria and future of tourism in the country. The TEF and the TTF should also ensure that the smaller facilities are assisted to expand and provide ample isolated, open, clean air and secluded spaces for private enjoyment or and by patrons. If this is not done, there might be less traffic to the facilities in the VTSDs and transformation will be reversed. This is therefore a critical tourism development consideration for the government and the private sector.

 

 

 

1. The importance of airlift in the future of tourism in South Africa

 

The Committee noted that the closure of international travel due to the implementation of the Risk Adjusted Strategy had a huge impact on the aviation sector in South Africa. International flights were cancelled and this affected the airline industry worldwide. This, coupled with restrictions from other countries in the world, resulted in some unprecedented financial burden for airlines. The result was some airlines cutting certain routes to South Africa or reducing frequencies in some routes. The narrative about the South African variant has added more panic to international airlines about flying to South Africa.  This caused more airlines to cancel their South Africa routes.

The Committee encourages the Minister to have ongoing interactions with the airlines to ensure that when the country is ready to accept international visitors there is sufficient airlift capacity to bring travellers to the destination. This is important as the budget spent on marketing will be futile if the demand is stimulated but access to the destination is limited. The importance of air transport in boosting South Africa’s tourism recovery can, therefore, not be overemphasized.

The Committee also noted that there are aviation concerns that existed in the pre-COVID-19 period that will remain a challenge if not addressed sufficiently. The opportunity provided by the pandemic should be exploited to address all the issues and concerns pertinent to air transport. It is a given that South Africa is a long haul destination, which makes it expensive for tourists to travel to the country. The long distances between African markets; the exorbitant prices to fly between South Africa and other African markets; the lack of national or local carriers; exorbitant airport taxes; protection of national carriers; the poor air transport infrastructure; the lack of  or non-implementation of the South African Airlift Strategy; poor connectivity between destinations; exorbitant domestic rates; no scheduled flights for potential tourism destinations;  the non-implementation of African Open Skies Policy; and many other pertinent issues were a concern for tourism in Africa before the pandemic. The Committee is concerned that not enough is being done to resolve the challenges pertaining to airliftat a continental and country level, for the recovery of tourism in Africa and South Africa in particular. The Committee is also concerned about the non-implementation of the Yamoussoukro Declaration by the African States.

 

1. The roll-out of vaccines to tourism frontline staff

 

The Committee has previously recommended that the Minister considers recommending to the Cabinet that the tourism frontline staff be targeted for vaccinations. The Committee noted the response that the country follows the vaccine roll-out strategy as prescribed by the Minster of Health. As much as this is a vaccination trajectory taken by the government of South Africa, it is important for the Minister to note that our neighbouring country, Zimbabwe, has started with vaccinating the frontline tourism staff. Zimbabwe has started vaccinating the residents and staff of the Victoria Falls to boost tourism. This is being done as tourism is one of the important foreign exchange earners for Zimbabwe. The examination of the move by Zimbabwe is important because most of the South African Safari Packages include Kruger National Park in South Africa and Victoria Falls in Zimbabwe. It is crucial for the Minister to understand the dynamics and the impact of staff in the Victoria Falls being vaccinated whilst the other major component of Safari tours packages on the South African side are not vaccinated. The Minister needs to note that these regional tourism developments and packages are mutually dependent on what happens inside and outside sovereign political borders. This is important as the Committee understands that tourism knows no political boundaries, and the regional tourism developments impact neighbouring sovereign states.

 

1. Harmonising the travel regulations

 

The Committee notes that a huge challenge for opening international travel is posed by varying policy provisions on travel restrictions imposed by sovereign states. South Africa has banned travelling from some countries whilst other countries have also banned travel from South Africa. This is a phenomenon among countries in various continents and within the continent of Africa itself. For example, the 54 countries in Africa have 54 various sets of travel regulations. It is also an impossible or arduous process for some foreign visitors to return to their countries of origin after completing their holiday in South Africa. Consequently, travellers opt not to visit South Africa as they would inadvertently be subjected to these arduous processes when they return home.

The different travel protocols cause uncertainty to travellers as they are not sure what will happen about their holiday whilst in South Africa. For example, there is an uncertainty about the holiday being cancelled, cut short and issues about refunds; uncertainty about quarantine on arrival in South Africa and when returning to the home country; uncertainty for airlines to carry the cost burden of returning back to original destination with passengers when they test positive on arrival in South Africa; uncertainty about the validity of COVID-19 tests and a fear of being returned home when testing positive on arrival. These are genuine concerns for travellers whilst countries are within their rights to protect their citizens. The main issue is with uniformity and certainty about the implications of these travel protocols. For example, South Africa just announces and implements travel protocols for implementation (Lockdown) with immediate effect whilst tourists are already in the country, causing logistical challenges for tour operators and tourists alike.

These concerns affect many countries in the region and throughout the world. The Committee is of the view that it might be prudent for the government of South Africa, using the platforms of the African Union and the World Tourism Organisation, to propose and initiate a mechanism that may investigate the possibility of common travel regulations (Norms and standards) amongst countries. This may be a system that is tested and adopted by the World Health Organisation to ensure that there is a common but reliable system of testing and clearing of people to travel among various countries.This will assist with ensuring that all the prospective tourists who want to travel anywhere in the world are cleared through a common and agreed process. This may assist South Africa and the region to recover very quickly as some of the tourism products are cross-country packages between countriesin the region. A common travel protocol may also assist with providing certainty to the airlines about their obligations when flying to South Africa and elsewhere in the world. This will generally be useful in also safely opening the Meetings, Incentives, Conventions and Exhibitions (MICE) sector.

 

1. Lessons from the pandemic

 

The Committee has noted that there are various lessons that the government should learn from the pandemic in order to make pointed recommendations to the Minister for quick recovery and future sustainability of the sector.  Some of these lessons include:

• The developments in India with the recent surge in the pandemic cases is an indicator that South Africa is not out of the woods yet as this poses a threat for the third wave and possible further restrictions on international travel. The government should therefore study the situation in India and take proactive actions to save lives and livelihoods in South Africa.
• A need to pay more focus on domestic tourism and encouraging citizens to travel within their own country.
• A need for a careful segmentation and targeting of regional and international markets.
• Being abreast of the fluidity and ever changing global tourism trends.
• A need to adapt to the changing consumer needs and meeting future expectations.
• A need to start planning for smaller groups and individual travellers instead of focusing on group travel and mass tourism.
• Entrenching responsible tourism in all the work done by the government and the private sector. This should be emphasised in the policy, but also enforced for implementation.
• Embracing technology and social media as a core for future tourism.
• A need for improved and coordinated communication between government and the private sector.
• A need to cultivate and enhance a mutual symbiotic relationship between the government and private sector.
• A need for more regional cooperation and coopetition instead of competition for regional success.
• A need to sign carefully structured bilateral agreements for regional and African success.
• A need for more coordinated government approach to tourism development.
• A need to revive international tourism as it is currently the bread basket of the sector, whilst vigorously getting domestic tourism right.
• A need to expedite the effective and efficient implementation of the Norms and Standards for safety protocols.
• A need to develop common international travel safety protocols.
• Ensuring that South Africa remains top of mind to international markets, even though the country and the world are still ravaged by the pandemic.

 

5.16      Increased focus on Responsible Tourism

 

The Committee recognises that the current White paper on the Development and Promotion of Tourism in South Africa (1996) advocates for a tourism industry that is anchored on responsible tourism, albeit not ubiquitously implemented. However, the pandemic has put the tourism industry in South Africa on a reset button. Responsible tourism has a strong element of community involvement.  The major concern for the Committee is that the tourism activities in the country are still concentrated in Johannesburg-Durban-Cape Town golden triangle. The pandemic has presented new prospects for tourism development in the VTSDs.  The new focus on domestic tourism provides opportunities for the shift of tourism concentration from big cities to villages and small towns. It is therefore imperative that as the country effectively implements its Tourism Sector Recovery Plan, the VTSDs are involved from a responsible tourism point of view. Tourism development in South Africa should be seen to empower and build local tourism. This will entrench the tenets of sustainable and responsible tourism in the county’s tourism development initiatives.

 

Some of the responsible tourism principles that the Committee believes can be easily implemented in communities include:

• Promoting eco-friendly modes of practices - green transportation can easily be provided in villages, including traditional modes of travel and bicycle community tours.
• Supporting the local communities - tourism can contribute to local economies by supporting the usage of community facilities such as Homestays and integrating cultural practices in tourism offerings.
• Localisation and recycling - usage of the local offerings and only using minimal materials that degrade the environment can be easily adaptable to local tourism. The communities can also be encouraged to practice the practice of “reduce, reuse, recycle” in all the community facilities and attractions.

 

The Department is urged to ensure that all the government programmes incorporate and entrench responsible tourism practices.

 

Observations with regard to South African Tourism

 

1. Governance and administration

 

The Committee acknowledges that the 2021/22 Annual Performance Plan of South African Tourism is tabled with the tenures of the current Board and CEO of the Entity coming to an end soon. The Committee noted that the Minister of Tourism, in terms of section 13(3)(a) of the Tourism Act, 2014 issued an invitation for the nominations of suitable candidates to be considered for appointment to serve as members of the South African Tourism Board for a three-year term effective from 01 June 2021 until 31 May 2024. The Committee noted that the Cabinet has recommended the extension of the tenure of the current Board by a further one year due to the pending government process of repurposing state entities to avoid duplication. The Committee also noted that South African Tourism has common aspects in the mandate with Brand SA, and that necessary rationalisationengagements have taken place with the Acting Minister in the Presidency, and the outcome of the process is awaited.The Committee would like to thank the Board for the dedication and outstanding work they are performing in steering South African Tourism, especially given the challenges imposed by the COVID-19 pandemic.

The Committee also noted that the tenure of the current CEO is coming to an end soon. The advertisement was issued in February with a closing date for 12 March 2021. The Committee is satisfied with the process undertaken by the Board so far in ensuring that there is no leadership vacuum when thetenure of the current CEO ends. The Committee noted that the Board of South African Tourism solicited the services of an external service provider to drive the process of recruiting the new CEO. This move by Board is commended as it eliminates the conflict of interest as the current incumbent is still in office, should he wish to be considered. The Committee would also like to thankthe outgoing CEO, Mr Sisa Ntshona, for the sterling work he performed at the Entity. The Committee observed that under his leadership, there was an improvement inpublic and stakeholder involvement through the initiative of regular webinars that addressed a number of industry specific issues. The Committee will ensure that the incoming CEO continues this legacy which has set a new benchmark with regard to stakeholder involvement.

 

1. Budgetimplications

 

In the 2021/22 financial year, South African Tourism received from the Department of Tourism a total of R1,297.0 billion of the R2,429.6 billion allocated to the Tourism Vote (Vote 38). This accounts for 53.6 percent of the total budget allocated to the tourism Vote. The Committee appreciates the reimbursement of the R1 billion to the 2021/22 budget as the transfer to South African Tourism was significantly reduced to R438.9 million in 2020/21, with the funds redirected towards government relief funding for COVID-19. The additional R1 billion returned in the 2021/22 financial year is aimed at the marketing activities and the implementation of the Tourism Sector Recovery Plan. The Committee acknowledges that South African Tourism receives a large share of the Vote budget. As such, the work of South African Tourism is critical in the fulfilment of the tourism mandate bestowed unto the Department of Tourism. Currently, thebudget allocation reflects an imbalance between the marketing and tourism development budget. The Committee, thus maintains that the budget allocated to the Tourism Vote is insufficient to adequately address the marketing andtourism development imperatives in South Africa.

The Committee noted that having realised the limited budget available for tourism marketing, the Entity has embarked on a project of financial modelling to fund the recovery. One of the goals of this financial modelling is to target domestic tourism, followed by regional tourism and ultimately international tourism. The Committee appreciates that the financial modelling also focusses on partnerships to augment the available financial resources.

 

1. The Marketing Investment Framework

 

The Committee recognises that the effective and efficient allocation and spend of the allocated marketing budget depends on the strength of the Marketing Investment Framework (MIF) developed by South African Tourism. For the purposes of oversight, the Committee considers the MIF as a carefully crafted marketing plan that identifies markets to optimise marketing investments across the identified target markets, and distributing available budget to help meet the set marketing objectives of the country. The Committee notes that the Entity is using the MIF developed in the 2016/17 financial year as revised in 2020. This MIF identified 24markets or countries that are segmented into 16 Growth and 8 Defend markets. The Committee is of the view that the identified markets for the 2021/22 financial year should be those in which the travel restricts and advisories are not too restrictive for international travel. Spending money on activations in the markets that cannot travel to South Africa will be a futile exercise. However, the Committee also recognises the importance of continuation of the brand presence in the core markets to defend the market share for South Africa to ensure that the country remains a top of mind destination. The Entity is therefore urged to strike a balance between activations and defending the market share.

 

 

 

 

1. Partnerships

 

As alluded, the Committee noted that the Entity is looking more towards partnerships to augment the limited available financial resources. The Committee is pleased to note the two broad categories of partnerships pursued by the Entity. The one category focusses on channel partnerships that build and maintain channel relationship to ensure that when the sector recovers the country is ready to receive international tourists. The other category of partnerships focusses on enhancing the brand. This includes interventions such as a partnership with Netflix to enhance the esteem and the appeal of the brand.

 

1. Econometric forecasts

 

The Committee recognises that South African Tourism conducts the market analytics study to gain insights and understand future travel trends. These analytic studies should be viewed in the light of the target of 21 million additional tourist arrivals set for 2030. The Committee is concerned that this target was set before the advent of the pandemic and the operating environment may no longer be conducive for achieving this bold target. The Committee, is thus concerned that the Entity may not be able to meet the target of 21 million additional tourist arrivals. The Entity should therefore seriously scrutinise the prevailing conditions to ascertain if the set target is still applicable or needs to be revised down for realistic planning and budgeting. The Committee noted that the Entity still regards 21 million arrivals as the target as it is contained in their five-year strategic plan. The Committee is, however, adamant that the Entity needs to closely scrutinise this target and ascertain if it is still feasible to achieve.

The important factnoted by the Committee is that the recently launched Tourism Sector Recovery Plan states that tourism’s contribution to economic output and employment is flat on pre-2008 levels, while global tourism growth has outstripped South Africa’s performance in the past decade. Compounding these challenges is the impact of the COVID-19 pandemic. The prevailing circumstances turn the set target on its head, and the Committee understands that the Entity has its work cut out to make the Tourism Sector Recovery Plan work effectively. A proper econometric forecast, therefore, needs to be done once the sector starts to recover using a new benchmark imposed by COVID-19 conditions for realistic forecasting calculations.

 

1. The future of South Africa’s source markets

 

The Committee understands that an African holiday has always been on a to-do-list of many travellers from mature and emerging markets. It is observed that tourism demand is currently subdued due to the fear of travel, travel advisories and travel restrictions imposed by many countries, including to South Africa. The Committee, nonetheless, is optimistic that there will be a pent-up demand (a strong demand) for South African tourism products after the current period of subdued demand. The Committee urges the Entity to take practical steps to ensure that South Africa is ready to deal with an increased demand once international travel has been fully opened. The Entity is thus urged to study the current and future demand patterns to ensure that the country understands the current and future trends that will determine demand. This is important as the future tourist, in the post-COVID-19 era, will be more safety conscious. The Committee is of the view that the consumers will take huge risks to travel. As such, these consumers will expect more from the destinations theychoose for their holidays. The Committee, therefore, encourages the Board of South African Tourism to engage the private sector to ensure that the South African tourism products are geared for the future tourism consumer needs.

 

1. Future trends in tourism development and marketing

 

The Committee noted that it is not going to be business as usual for the future of tourism development, management and marketing. The established trend in tourism is that mature travellers always return, but for more and better experiences. The consumers will, in future, seek better returns from their trips to particular destinations. This will also include better coordinated and seamless transport networks. The Committee admits that safety will be at the core of all future travel arrangements. With the current developments in the global tourism sector, it is clear that the destinations need to do things differently. As such, South Africa should rethink its tourism development and management trajectory. The responsible tourism that is part of tourism development in South Africa should be more entrenched and somehow enforced. The marketing should be more than a product portfolio, but also include other aspects of the destination such as safety protocols and ease of travel. The Committee, thus, considers it important for the country to recalibrate its tourism development, management and marketing.

Another big change in the travel patterns might be a shift from large group travel to small groups. This may affect how South Africa has to plan for markets such as China and India. This consideration is important as some markets are fastidious about their travel arrangements and facilities available at the destination. The Committee has previously advised that the Board of South African Tourism develops strategies for China and India. The Entity needs to adapt these strategiesto the current and prevailing trends in the sector.

The future might also see a number of travellers opting to make their own travel arrangements and travelling as small groups or as individuals. The Committee considers this as requiring a special type of focus in marketing and tourism development, including the transportation and servicing of tourists when they arrive. The Committee, therefore, deems it necessary to conduct a future trends analysis study to better understand the future markets. This should be a living document that is updated from time to time as the changes in the sector will remain fluid and will keep changing at a very high pace.

 

1. The role of vaccinations in improving the perceptions about Destination South Africa

 

The Committee recognises that most countries have embarked on the vaccination drive against the COVID-19 pandemic. The vaccinations are not only good for saving lives, but are also important marketing tools for tourism destinations. A variety of anti-coronavirus vaccines have been developed by many pharmaceutical companies around the world with their efficacy growing to acceptable levels. This has led to vaccination campaigns being undertaken by many countries. South Africa has also not been left behind in this vaccination drive. This will have huge implications for tourism when the country reaches the herd immunity. Reaching the herd immunity could be incorporated into the marketing campaigns as a tool to reflect South Africa as a safe, even corona free destination. The Committee deems it necessary for the Minister of Tourism to have such conversations at the Cabinet level so that the government can understand the cumulative impact of vaccinations to the tourism industry.

 

1. Volume vs value –the regional statistics debate

 

The Committee noted that the Entity is prioritising domestic and regional tourism to drive recovery. This is the consequence of poor prospects for early resumption of international tourism as the tourism activities at an international level have come to a grinding halt and the arrivals to South Africa are mainly from the three neighbouring countries in the region, namely, Lesotho, Zimbabwe and Mozambique. The big regional numbers always come from these top three regional markets. As such, the recovery is expected to be driven by the domestic market, and the Africa regional market is expected to play a huge role in the recovery. Whilst gearing up for recovery, the Committee urges the Minister to evaluate the volume vs value of the regional market from SADC countries. The SADC countries provide volume in terms of numbers coming to the country. However, the Committee is of the view that the value of the SADC region in terms of revenue generation is minimal. The Board of South African Tourism should question the reliance of recovery on such a precarious imbalance between the volume and value of the regional market.

 

1. Pricing and packaging tourism products

 

The Committee has always recommended that the government and South African Tourism should engage the private sector to provide competitive pricing for the tourism products. The Committee even mooted a differential and dual pricing for international and domestic tourism markets. The recommendation of dual pricing has always been rejected by both government and the private sector. However, the Committee is of the view that the prevailing situation dictates that the demand frominternational tourists is very low and innovative ways should be implemented to boost recovery.

The Committee acknowledges the efforts of the Ministerin embarking on a campaign to crisscross the country to stimulate the domestic demand. The Committee asserts that the reality of the situation is that most tourism products in South Africa were developed for the international market. As such, the pricing has always targeted the international market. There is a serious need to consider price reductions to tailor-make travel packages for the domestic market. Otherwise, the Minister may stimulate interest for domestic travel only to find that affordability is the issue for the domestic market.

The Committee maintains that with the advent of the pandemic, the government and the private sector should realise that pricing is no longer the only issue for the domestic market. The considerations for the domestic market may be more thancheap and bargain holiday packages. The considerations may have become more similar to those of the international travellers with regard to safety and health protocols. It is therefore important to study and gain deep insights into the future domestic tourist in South Africa. This calls for the reconsideration of pricing in the tourism sector to stimulate demand and ensure conversion in the domestic market.

 

 

 

 

1. Possible future of the MICE sector in the VTSDs

 

Some of the emerging trends favour planning and hosting more meetings in the VTSDs. The Committee engaged the South African National Conventions Bureau on how these emerging trends could leverage more meetings for the VTSDs. The considerations included, but are not limited to:

• Hybrid platforms – many digital platforms are being adapted for virtual meetings. It has been observed that throughout lockdowns, digital platforms such as Zoom have been increasingly used to host meetings and other events. This has facilitated the virtual participation of delegates from all over the world. This is becoming a serious consideration for companies as it reduces the chances of infection whist also saving a huge amount of costs.
• Need for human interaction still necessary – it is emerging that the virtual meetings will not entirely eliminate the need for face-to-face meetings. The consideration for event planners is to determine which delegates need to be at the venue of the event and who could effectively participate remotely.
• Future size of events favours VTSDs – the virtual/ hybrid meetings have a significant impact on the meeting venues. As the numbers of meetings will get smaller due to hybrid meetings, the venues needed to host these meetings will also change. This means the meetings can now be held in smaller venues. This provides an opportunity for the small meeting venues in the VTSDs to be considered for the MICE events. The South African National Conventions Bureau needs to provide a strategy of how they will leverage more meetings for the VTSDs given that the size of the venues will not be a consideration of the foreseeable future.
• Ecotourism and the MICE sector (green thinking) – the Committee has recently been raising a number of issues that should be considered by the Department and South African Tourism with regard to greening the tourism sector.  The smaller virtual meetings provide opportunities for the MICE sector to be held in villages and small towns. This provides more opportunities for the interaction between the delegates and communities. This is also a platform to take the MICE business to communities, thus ensuring that the economic benefits of the MICE sector also accrue to local communities. The smaller venues in communities can also be easily adaptable to eco-friendly practices in hosting meetings.

 

The Committee is satisfied with the initiatives taken by the Entity and the SANCB in stimulating tourism in the VTSDs. The Committee appreciates the Memoranda of Understanding that have been signed between South African Tourism and the provincial DestinationManagement Organisations (DMOs) to work on various projects at a local level. The MOUs target the VTSDs and the consultations will continue to improve implementation. The Committee also welcomes the initiative by the SANCB of identifying three small towns that will be supported and developed so that they may be able to host MICE events. The Committee appreciates that the SANCB has made an undertaking that all services will be sourced from and rendered by the local towns without anything outsourced to external service providers to prevent economic leakages from the MICE events.

 

 

 

1. An example of future meetings

 

The Committee has engaged the Minister and the Board of South African Tourism about the readiness of South Africa for the nature and future of the MICE sector. The Committee noted that the Africa Travel Week 2021was held from Wednesday, April 7 to Friday, April 9, albeit virtually. This trade show facilitated 5 000 one-on-one meetings, 4 000 views of content sessions and over 4 300 minutes of speed networking. This was a huge success given the new dynamics imposed by the pandemic. However, this is an event independently organised by the private sector. South African Tourism, through the South African National Conventions Bureau is responsible for organising events such as Africa’s Travel Indaba and Meetings Africa.

The Committee welcomes the undertaking by the SANCB to plan hosting hybrid meetings for the Meetings Africa and Africa’s Travel Indaba events. The Committee understands that there will be some teething problems but urges the Entity to go head so that these events may provide a benchmark of what is possible in the future of the MICE sector in South Africa.

 

1. The negative impacts of messages about the South African Variant

 

The Committee has previously raised concerns about the negative messages emanating from the discovery of the 501Y.V2 strain of COVID-19 in South Africa. The Committee raised concerns that referring to 501Y.V2 as a South African variant would cause an irreparable brand damage to the country as a tourism destination. The negative unintended consequences have already begun as some countries have issued travel advisories against South Africa; some airlines have cancelled their South Africa routes; some events planned for the country, such the Lions Rugby Tour were being affected as accommodation and flight bookings were being cancelled. The Committee notes that there are over 41 other countries with the same strain of the virus and the government had to take more serious steps to protect the country from being negatively targeted.

The Committee notes that the government is taking the matter seriously as there have been some critical steps taken to address the issue of the “South African Variant”. The government has embarked on a number of initiatives to dispel the myths about the South African Variant, including that:

• The Government Communication and Information Systems Department arranged a panel discussion with CNN to address negative messages.
• The Minister has been interviewed by a number of German print and broadcast media where she addressed the matter of the South African Variant.
• The Minister has met various ambassadors from South Africa’s key source markets to intervene on travel advisories.
• The Minister of Health serves in the World Health Organisation and provides health perspective on the matter.

 

The Committee also noted that South African Tourism has continuously engaged the trade channel partners on what is being done in South Africa to deal with the pandemic. The relationship with the embassies has also helped in addressing the issue of the South African variant message, for example, the United States of America has put South Africa on Level 4 travel advisory as a result of the engagements with the embassy.

 

1. The safety protocols as a unique selling proposition to boost recovery

 

At the onset of the pandemic, the Committee recommended that the Minister develops a Tourism Recovery Strategy with safety protocols. This was done by the Department in partnership with South African Tourism and the Tourism Business Council of South Africa. The Cabinet has adopted the Norms and Standards and the sector is ready to implement. The Committee is of the view that the 2021/22 Annual Performance Plan will be successful if these Norms and Standards are effectively implemented. The Committee will closely monitor the implementation of the Norms and Standards. If these safety protocols are effectively implemented, they can provide an assurance to potential travellers that South Africa is a tourist destination that takes the safety of its visitors seriously. This can become a marketing tool that is used as a unique selling proposition for South Africa as a destination.

 

1. Promoting domestic tourism and ending reliance on international markets

 

The Committee observed that the tourism sector has many constituent parts that need to be considered separately but as a part of a whole in order for each component to be fully developed and supported.   The hospitality sector is one part of the tourism sector that was decimated by the pandemic as there was no trading at all. The players in this category were heavily affected. The Committee heard from the Tourism Business Council of South Africa (TBCSA) that hotels were closing down. The impact was so devastating that the TBCSA reported to the Committee that some members even committed suicide. However, the Committee noted the reported comments of the Minister that the accommodation establishments, in particular, have seen up to 90 percent occupancy rate by marketing to the domestic market. The Committee considers this as a huge improvement, but ponders as to what extent is this assertion applicable throughout the country; whether this is a general upswing of the domestic market everywhere or just a lucky stroke for a few businesses; in which parts of the country has this upswing been recorded;and which type of accommodation establishments have experienced that type of recovery?

These pertinent details are important in order to understand this huge improvement that defies the odds when considering the subdued economic growth in the country and the burden caused by the pandemic on the households. This recovery in the domestic market may mean that there has been tourism substitution and replacement of international tourism by domestic tourism. The people that would have taken international trips might have opted for domestic trips. This is an important dynamic that should be studied and fully understood by the Board of South African Tourism. This calls for the Department and South African Tourism to engage the hospitality sector to understand the emerging trends in the sector.

Another cause for the upswing may be that some hospitality businesses have already adjusted well in using technology to address changing environments to remain competitive. As reported, hospitality brands that are positively responding to the crisis may have deployed more advanced technologies, digital products, and tech talent to speed up innovation, and they expect most of these changes to outlast the pandemic. Some hospitality establishments may have integrated technology in their businesses to streamline the booking process, eradicate paper trails and the administration process, manage occupancy and revenue in real-time, and provide instant access to customer data for future sales and marketing. These trends should be studied and shared with the sector, especially emerging tourism businesses who might not have integrated technologies in their businesses. This is most important for the emerging businesses in the VTSDs.

 

1. Readiness for the hospitality industry when the tourism sector fully reopens and recovers

 

The Committee is of the view that South African Tourism should engage the tourism business sector, especially the emerging businesses about the nuanced changes that are expected for the future of the tourism sector as the tourism sector is no longer the same as the pre-COVID-19 period. The pillars of tourism recovery which are the strategic thrusts of the Tourism Sector Recovery Plan may not yield intended results for the emerging businesses if they are not attuned to the new prevailing conditions in the sector. The state of poor readiness may continue to put more tourism businesses under stress, or even lead to their permanent closure if they are not ready for the new business models.

The important observation is that technology is going to be increasingly important for tourism business in the near future. As alluded, the right technology will determine the rise and fall of many businesses. The Committee is concerned that some tourism businesses may still be using inefficient systems when the industry recovers. These old technologies will not be effective for the real-time all-in-one solutions needed by the future consumers. The consumers will seek efficient establishments that may respond to them in real time.

The Committee is also aware that the technological advancements may disrupt the attributes of the tourism sector as a labour-intensive sector. Most of the work done by a number of people employed in the sector will become automated. The tourism APPs are abounding and they are replacing the need for person-to-person interaction when booking and experiencing the products. These include destination APPs and maps that provide virtual interactive interaction between the consumer and the product.

The Committee urges the Minister and the Board of South African Tourism to study the nature of these future changes in the tourism labour requirements and the potential devastating impact they would have on the employment prospects in the sector. This is important to understand the nature of future tourism jobs.

 

1. RECOMMENDATIONS

 

After the judicious scrutiny of the Annual Performance Plans of the Department of Tourism and South African Tourism, the Committee makes the following recommendations to the Minister of Tourism for a response no later than 30 August 2021:

 

Recommendations in relation to the Department of Tourism

 

It is recommended that the Minister of Tourism:

 

1. Engages the National Treasury to reprioritise and allocate more budget for compensation of employees to Vote 38 during the Medium-Term Budget Policy Statement (MTBPS) to be tabled by the Minister of Finance in October 2021.

 

1. Appeals the interdict to implement the Tourism Equity Fund as made by  the Pretoria High Court.

 

1. Given that the budget allocated to Vote 38 is gradually deceasing and not meeting the needs of the sector, explores merging Programme 3 and Programme 4 to maximise the impact of projects that further develop and maximise the involvement and incorporation of VTSDs in the formal tourism economy.

 

1. Establishes a funding mechanism that facilitates the funding of tourism start-up businesses.

 

1. Works closely with the private sector to maximise the impact of the appropriated budget through creation of collaborative partnerships.

 

1. Engages other government sector departments to ensure that cross-cutting sector issues that impact on tourism development and marketing are addresses effectively and efficiently.

 

1. Develops a tracking tool to oversee the implementation of the Norms and Standards for the safe operation of the tourism sector.

 

1. Considers the policy proposals made by the Committee in the finalisation of the new tourism policy for South Africa.

 

1. Ensures that the policy review process takes into consideration the principles of responsible tourism, ecotourism, climate changeand address issues that improve the Blue Flag status of beaches in the country; water health for sporting events; and engage the relevant government departments and municipalities to improve on refuse removal and dumpingin order to drive sustainable tourism development and marketing in the country.

 

1. Conducts public education on the transformation imperatives and the tenets of the Broad-Based Black Empowerment in general, and the Tourism Sector Codes in particular, to avoid further court actions interdicting the implementation of transformation programes.

 

1. Engages the relevant authorities to ensure that the Temporary Employer/Employee Relief Scheme (TERS) funding facility is extended for the tourism sector.

 

1. Conducts a Trend Analysis Study to understand the future trends that will drive tourism development and marketing based on the global changes imposed by the COVID-19 pandemic.

 

1. Analyses the possible future changes in the tourism policy trajectory at a global level that have a possible impact on global travel and international arrivals in South Africa.

 

1. Works with continental bodies such as the African Union (AU) and world organisations such the United Nations World Tourism Organisation (UNWTO) in influencing policy shifts, harmonising and implementing instruments such Norms and Standards for international travel, and open skies policy to facilitate air access and regional marketing organisation to accomplish regional integration at a SADC level.

 

1. Exploits the African Continental Free Trade Agreement for the benefit of tourism in South Africa.

 

1. Engagesthe Cabinet on the contribution expected from other government departments in unlocking the tourism potential of the country.

 

1. Tightens oversight over South African Tourism as the Entity receives more than 50 percent of the budget allocated to Vote 38.

 

1. Monitors the situation of rising COVID-19 infections in India and recognise its possible impact on global tourism and South Africa in particular.

 

Recommendations in relation to South African Tourism

 

It is recommended that the Minister of Tourism engages the Board of South African Tourism to:

 

1. Reprioritise the international marketing budget to Programme 3 and Programme 4 of the Department instead of returning the funds to the National Treasury should the third wave of the COVID-19 strike the country and international tourism come to a grinding halt.

 

1. Prioritise Economic Modelling to leverage funding in order to augment the available budget.

 

1. Improve on organisational efficiencies to maximise the utilisation of available budget.

 

1. Conduct an Econometric ForecastingStudy to determine the trends on future international arrivals to set a realistic 2030 target oninternational arrivals and determine the future trends of domestic trips.

 

1. Develop a Partnership Model that will assist South African Tourism to identify and choose partners that will add value to the business of the organisation and leverage more funding for domestic and international marketing.

 

1. Engage the private sector to package value for money domestic holiday packages.

 

1. Package, coordinateand intensifycommunication to demystify the 501Y.V2 variant of the COVID-19 virus and mitigate the impact of the narrative at an international level about this strain as a South African variant.

 

1. Intensify the work done in VTSDs to more than three small towns for business events as the venue requirements will change due hybrid meetings.

 

1. Prioritise the thirty Community-Based Tourism projects implemented by the Department of Tourism in the marketing activities.

 

1. CONCLUSION

 

The Committee accepts and adopts the 2021/22 -2023/24 Annual Performance Plan and the 2021/22 Annual Performance Plan tabled by the Department of Tourism and South African Tourism respectively.  These plans have aptly captured the current situation experienced by the tourism sector. The Committee is satisfied with these plans and commends the two organisations for developing programmes and strategies that are geared towards the recovery of the sector. The Committee also acknowledges that the road ahead is a difficult and a fluid one given the rapid global changes in the pandemic. The current situation in India poses a serious threat in global travel and fears of the third wave in South Africa. The Committee urges the government to keep an eye on the developments in India to cushion the country and continue saving lives and livelihoods.

 

Report to be considered.