ATC210527: Report of the Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour on Budget Vote 38: Tourism, Dated 25 May 2021

NCOP Trade & Industry, Economic Development, Small Business, Tourism, Employment & Labour

Report of the Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour on Budget Vote 38: Tourism, Dated 25 May 2021

 

1. Background

 

The Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour, having considered Budget Vote 38: Tourism, together with the Departmental Annual Performance Plan, 2021/22 -2023/24, tabled by the Minister of Tourism, in terms of the Public Finance Management Act of 1999 (PFMA), as well as the Money Bills Amendment Procedure and Related Matters Act, 2009, reports as follows:

 

1. Committee Process     

 

The Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour was briefed by the Department of Tourism on Budget Vote 38 and including the Departmental Annual Performance Plan of 2021/22 – 2023/24 on 11 May 2021.

 

1. Introduction

 

The Committee considered the 2021/22 Annual Performance Plan and the Budget of Department on 11 May 2021. Further, the Committee recognised that the Department’s expenditure plans were presented under constrained economic and health context as a result of the global health crisis.

 

Without any doubt COVID-19 remains a major risk to the operations of the Department. Though it should be stated that long before the COVID-19 outbreak, South African economy was experiencing low economic growth, weak fiscal position, decline in investment attractive ratings and major State-Owned Entities experience deep hole in their balance sheet. But the tourism industry experienced positive growth before the global health crisis, over ten million tourists visited South Africa in 2018, boosting the country’s economy, and sustaining jobs for many households. Tourism industry employs many people, particular women and the youth. It has a potential to ignite rural and peri-urban towns economies and improve incomes of these areas.

 

Like many reports from World Bank (WB), International Monetary Fund (IMF), United Nations World Tourism Organisation (UNTWTO), the South Africa Reserve Bank (SARB), and National Treasury have revealed that the COVID-19 pandemic has affected hard the tourism industry. Many jobs have been lost, and many businesses would face liquidation. The COVID-19 pandemic has ravaged international tourism economy.

 

From a domestic tourism perspective,lockdown measures to contain the spread of the virus have significantly damaged the tourism economy. However, it was reported that the Department has adopted the Tourism Sector Recovery Plan which is aligned to the Country’s Economic Reconstruction and Recovery Plan. The Committee noted the policy strategy development efforts by government. However, the Committee emphasised that without adequate financial and non-financial support deployed to reset the tourism industry the recovery strategy would remain meaningless. Public-Private financing should be prioritised.

 

It is expected that the tourism industry would recover and continue to play its important role to the national economies. The tourism industry remains a strategic industry in the overall South Africa economy. South Africa is the largest tourism economy in Africa. Further, the tourism industry plays major role in the economies of many regions, and cities in South Africa.

 

The Committee recognised the depth of the crisis presented by the COVID-19 pandemic in relation to the operations of SMMEs in the tourism industry, and the deeper problem of the unemployment that would have to be tackled. The Committee emphasised that preservation of jobs, and support to many tourisms related businesses should be on top of government agenda taking into account the important role that the industry plays in the economy, and employment. Further, the Committee support the interventions initiated by the Department to establish the Tourism Equity Fund in an effort to transform the economy to be more inclusive.

 

The Committee urged that existing transformative policies and legislation should be applied taking into account the exceptional situation presented by the COVID-19 to the economy, and to the livelihoods. Partnerships amongst development partners should be enhanced, and to ensure that the impact of the pandemic to businesses and jobs is minimised. Access to finance, and non-financial measures should be prioritised. Partnership with both commercial financing institutions, and development finances institutions should be enhanced. Further, measures to access the R200 billion loan guarantee scheme should be designed to ensure all SMMEs have equitable access to the funds.  

 

The Committee noted that the tourism industry is primary driven by the private sector, hence partnership between government and the industry players such as the Tourism Business Council of South Africa (TBCSA) would be crucial in jump-starting the tourism economy, and also driving transformative initiatives in the tourism industry. Further, the Committee stressed the importance of directing resources in stabilising and stimulating domestic tourism. Further, deployment of resources to also apply equity considerations to harness and nurture economic activity in poor regions, particular in rural and poor small towns to ensure economic growth and benefits associated to growth become more inclusive.

 

The Department submitted that for the tourism industry to realise both social and economic benefits the following risks should be tackled:

• Inability to meet the Tourism B-BBEE Sector Code targets.
• Inability to create enabling legislative and regulatory environment for tourism development.
• Norms and standards for COVID-19 safe operations in tourism sector not implemented.
• Poor brand reputation (South Africa labelled as having a “South African variant”).
• Decline in supply side products and services following the COVID-19 pandemic.
• Negative effect of public health emergencies due to global outbreaks.
• Negative impacts of climate change (including natural disasters).
• Negative impacts on implementation of signed bilateral agreements due to pandemic.
• Negative impact of COVID-19 to employment creation.
• Poor implementation of bilateral agreements due to health outbreaks and political instability.
• Capacity of SA Tourism to fulfil mandate.

 

Further, the following were identified as key risk that could have an effect to the good corporate and cooperative governance of the Department:

• Inadequate capacity for management of infrastructure and training projects.
• Inadequate contract management by project managers.
•  Inadequate impact evaluation of COVID-19 on the tourism sector.
• Inadequate understanding of the supply side of tourism.
• Monopoly and collusive practices by suppliers.
• Corruption.

 

Some of the risks identified by the Department are similar to the challenges and risks highlighted by the Committee in the previous oversight engagements with the Department. The Committee further emphasised that following key risks should be tackled in order South Africa could enjoy full the benefits of the tourism industry in terms of economic growth, employment, including reduction of poverty and inequality:

• Inadequate appreciation of the tourism industry, and insufficient allocation of resources;
• Further, inadequate coordination across the spheres of government, and between government departments and agencies;
• Impact of safety and security to the industry;
• Further, there is a need to improve and enhance integrated public transport;
• Poor investment in road infrastructure including energy and water. This area needs to be prioritised. Rural and poor towns including peri-urban areas are the most affected by this kind of neglect in terms of infrastructure investment;
• There is need to improve price competitiveness, and encourage domestic tourism;
• There is a need to address access to visas;
• Lack of cohesive and good destination marketing, particular in poor provinces. To address inequity in the allocation of resources between provinces and within provinces;
• Encourage and promote Public-Private partnership to boost investments. Thus to enhance Public-Private sector trust and cooperation;
• Tackle regulatory burden, encourage ease of development and operation of businesses;
• Further, there is a need to embed sustainable practices in the tourism industry;
• Encourage and promote investment in human capital to enhance capacity and capability of the industry.

 

The Committee noted the impact of COVID-19 to the operations of the Department relating to its priorities. Further, the duration of the virus remains uncertain. That has an effect to planning including how and where resources are deployed. The long-term recovery of the tourism industry depends on how long it takes to roll out the COVID-19 vaccines globally to achieve effective immunity so that travel restrictions can be lifted and borders opened, reported the UNTWTO. This is likely to happen first in China, followed by advanced countries and the middle-income or emerging market economies. Hence it essential that the government vaccination programme rollout should succeed, thus perform according to expectations. In the short term existing health and safety protocols and COVID-19 testing should be observed.

 

Further, efforts to maintain and invest in public sector related tourism infrastructure should be scaled-up. Private sector participation and transformative efforts should be prioritised and enhanced. 

 

1. Overview of the Legislative and Policy Mandate of the Department

 

The aim of the Department is to be a leading sustainable tourism development for inclusive economic growth in South Africa. It aims to realise that by growing an inclusive and sustainable tourism economy through:  

• good corporate and cooperative governance;
• strategic partnerships and collaboration;
• innovation and knowledge management; and
• effective stakeholder communication.

 

Beside the Constitution of the Republic, the Tourism Act of 2014 (Act No. 3 of 2014) is the current legislation governing tourism in South Africa. The Act seeks to:

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

 

The White Paper on the Development and Promotion of Tourism in South Africa, New Growth Path, National Tourism Sector Strategy including the Re-imagined Industrial Strategy emphasise the crucial role that the tourism industry could play in addressing unemployment, inequality and poverty including driving the transformative agenda the country. Further the National Development Plan (NDP) recognises that the tourism industry could play a significant role in stimulating growth of national economies, as such it places the tourism industry at the centre of government inclusive growth agenda. The Economic Reconstruction and Recovery Plan including the Tourism Sector Plan stress the strategic importance of the tourism industry’s contribution to the country inclusive growth trajectory. The Department submitted that over the 2021 medium term it will continue to structure its functional operations to respond to the government economic policy strategies and plans.

 

1. Budget Policy Area

 

The Department submitted that over the medium term it will continue to respond to the MTSF priority 1Building a capable, ethical and developmental State, priority 2:Economic Transformation and Job creation and priority 7: Better Africa and the World by focusing on the following departmental outcomes:

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

 

The Department submitted that over the 2021 medium term it will conduct the following policy and legislation reviews:

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

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

 

The Department emphasised that the Strategic Plan, and the Annual Plan including the Budget are aligned to the National Development Plan 2030, and the Economic Reconstruction and Recovery Plan. As stated elsewhere in this report, the Committee noted that the impact of COVID-19 will certainly affect international tourism markets. To that effect, the target to increase international arrival by facilitating an additional increase of 21 million by 2030 has the potential to be compromised. Over the medium, it was noted by the Committee that strategic priorities might be affected as result of the current global health crisis.

 

As the public resources will continue to be constrained over the medium period, reprioritisation, and sharing of resources across government and within the department and its entities (SA Tourism) remains a reality.The Department would need to use the current resources to leverage private sector resources to reset the tourism industry. Over the medium term, alternative financing options should be designed to support the tourism industry to reset, and further accelerate transformative initiatives. Further, the Committee emphasised that transformative policies such the Broad-Based Black Economic Empowerment should be implemented. However, the Department should also be mindful that the current crisis would necessitate flexibility in implementing standing government policies taking into account thatthe pandemic has affected productive capacity of all businesses, which employ many people irrespective of race, class and gender.

 

The key focus of government should mitigate the impact of the pandemic to the businesses and save as many jobs possible to minimise the impact of COVID-19 to the income of businesses and households. South Africa need growth and expansion of small businesses to fuel economic growth, and create needed jobs. 

 

The following section will outline the spending priority plan of the Department. The spending, covers the key functional policy areas, namely

• Tourism Research, Policy and International Relations;
• Destination Development;
• Tourism Sector Support Services.

 

Further, the report will highlight strategic administrative focus areas. As governments around the world continue to grapple with the pandemic. Over the 2021 medium term period the Department intends to spend R7,4 billion in an effort to meet government and tourism industry policy priorities. Certainly, as already sated additional resources need to be deployed in the industry. Private resources should be leveraged.

 

The Committee would also monitor the implementation of the Tourism Equity Fund. The Committee agrees in principle that transformative policies should be implemented, however the current crisis need flexibility in implementing standing government policies. The current aim is to preserve tourism business productive capacity, and protecting jobs.

 

1. Spending Over 2021 Medium Term

 

In 2020/21 Special Adjustment Budget process, the Department lost approximately R1,4 billion through government wide reprioritisation in response to the COVID-19. So any increase registered in the 2021/22 financial year should be taken within the 2020/21 Special Adjustment Budget context.As already stated over the 2021 medium term, the Department is expected to spend approximately R7,4 billion.  The bulk of the Department’s spending over the medium term is on transfers to the SA Tourism amounting R3,97 billion for the implementation of initiatives to marketing South Africa as a tourism destination of choice. Over the medium term period, Cabinet has approved budget reductions of R606.4 million, which will be effected on good and services (R125.7 million), transfers and subsidies (R325.1 million), and compensation of employees (R155.5 million).

 

Over the 2021 medium term period, approximately R999 million is expected to be spent on Compensation of Employees spending item. Whilst, approximately R1,4 billion is anticipated to be spent on Goods and Services spending item. As already indicated in this report, the bulk of the Department spending is deployed to the Transfers and Subsidies spending item, which covers transfers to SA Tourism (R3,97 billion), departmental transfers to Public corporations and private enterprises (R940 million), Non-profit institutions (R1,3 million) and foreign agencies (R7,1 million).

 

Before outlining the 2021 medium spending outlook it is critical to re-iterate what the 2020 OECD report had to say about local economic development functional capacity. The 2020 OECD report state that despite their legislative mandate to plan for and drive tourism development, planning for tourism by local governments risks falling short of achieving its full potential due to the sheer volume of responsibilities in service delivery — especially in distressed regions. The report urges that national government should ensure that local level governments have sufficient capacity to support planning for sustainable tourism.

 

Table 1 shows how and where the Department is expected to spend over the 2021 medium term. The Department has organised its expenditure plan into four functional policy programmes, which comprise of Programme 1:Administration; Programme 2:Tourism Research, Policy and International Relations; Programme 3: Destination Development and Programme 4:Tourism Sector Support Services.

 

Table 1: Summary of the Departmental Spending for the 2021 Medium Term Expenditure Framework

Source: Estimates of National Expenditure, National Treasury

 

In terms of Programme 1: Administration, the Department is expected to spend over the 2021 medium term R932,9 million. Programme 1 seeks to undertake various initiatives to strengthen governance and compliance. The Department has undertaken to continue to maintain unqualified audit outcomes. Further it has reported that internal audit function would be enhanced.

 

The Department is expected to continue to implement transformative initiatives such as maintaining 50 per cent minimum representation of women at Senior Management Level, including maintaining 3 per cent representation of people with disabilities at departmental level. Further, transformative policies in relation to procurement will continue to be implemented. To this end, the Department has committed to use procurement as an instrument to drive transformation through paying SMMEs with in the regulatory requirement, set aside 30 per cent of spending to benefit SMMEs.

 

Programme 2:Tourism Research, Policy and International Relations receives the bulk of the budget. Over the 2021 medium term, Programme 2 is anticipated to spend R4,2 billion. Further, the Department has planned to monitor and evaluate tourism projects and initiatives by:

• Developing a progress report on the draft 2020/21 state of tourism report by March 2022;
• Developing 12 quarterly tourism performance reports over the medium term assessing the state of key state‐owned tourist attractions in South Africa by March 2022; 
• Conducting an impact evaluation of the tourism incubator programme in 2021/22;
• Developing an implementation report on the national tourism sector strategy over the medium term, and
• Developing a report on the leveraging of bilateral tourism relations to advance national priorities. To this end, over the medium term the Department will advance South Africa’s tourism interests at regional, continental and global level through participation in G20, SADC, AU, BRICS, UNWTO and IORA.

 

Further, over the 2021 medium term period, the Programme has planned to enhance understanding and awareness on the value of tourism and its opportunities by hosting knowledge sharing platforms on the fourth industrial revolution over the medium term. In addition, the Programme is expected to create an enabling policy and regulatory environment for tourism growth and development by:

• Developing a green paper on the development and promotion of tourism in South Africa by March 2022;
• Further, developing a report on the implementation of national tourism information and monitoring system regulations;
• In addition, the Department has planned to develop 2 evaluation reports in relation to the Impact of COVID-19 pandemic to Tourism.

 

The Programme is expected to continue to as planned to promote innovation in the South African tourism sector by developing a framework on virtual reality solutions for tourism attractions by March 2022. Further, the Programme has planned to provide oversight by developing reports on the governance and performance of South African Tourism.

 

Further, it was submitted by the Department that it will continue to advance South Africa’s tourism priorities by enhancing participation and engagement in bilateral and multilateral processes and strategic formations. Further reported that it will facilitate regional integration by hosting a workshop to share best practices targeted at African countries with which South Africa has signed tourism agreements.

 

Most of the budget under Programme 2 constitute of transfers to the South Africa Tourism. Over the 2021 medium term, the Department is expected to allocate approximately R4 billion to the South Africa Tourism. Over the medium term, SA Tourism in partnership with the Department is expected to support tourism recovery strategies and plan to stabilise and spur growth of the tourism industry to meet government policy outcomes.The Committee urged the Department to turn the COVID-19 crisis to an opportunity to invest in activities that seek to spur domestic tourism, and support local communities to enjoy local tourism products and services (offering cheaper domestic tourism deals). The Committee emphasised that resources should also be allocated to support growth and expansion to boost rural, township and peri-urban areas economies better known to the sector as Villages, Townships, Small Towns and Dorpies (VTSDs) tourism initiative.

 

Coordination with other spheres of government and across government departments and development agencies should be enhanced. In the main infrastructure investment in energy, water, transport and ICT should be scaled up boost tourism industry, and also to exact impact to rural economies to improve rural incomes for both small businesses and households.

 

Over the medium term period, Programme 3, Destination Development, is anticipated to spend approximately R1,5 billion. Most of the spending in this programme would be directed to the Working for Tourism Programme. The spending priorities in this programme are geared to boost tourism destination, job creation, accelerate skills development, and drive transformation in the tourism industry.

 

The Programme is expected over the medium term to eenhance and implement route development projects to diversify tourism offerings and enhance visitor experiences in identified priority areas by undertaking 9 destination planning and investment coordination initiatives. These tourism development programmes will cover the following areas:

• Establishment and piloting of a tourism preparation facility for the development of concepts for: Karoo Succulent Garden; Magwa Falls and Tea Estate development; Port St Johns Precinct; Orange River Mouth development; Northern Cape Coast Waterpark.
• Development of designs at prioritised elements at township tourism precincts: Vilakazi Street; Mdantsane; Galeshewe; Khayelitsha.
• Interpretative signage implemented in six iconic tourism sites: Bontebok National Park; Kruger National Park (Northern Section); Knysna National Park; West Coast; Mountain Zebra; Richtersveld.
• Monitoring implementation of Leopard Trail at Baviaanskloof World Heritage Site.
• Monitoring implementation of Interpretation Centre at Baviaanskloof World Heritage Site.
• Construction works planned to commence at Shangoni Gate.
• Completion of bid documentation for the appointment of the contractor for Phalaborwa Wild Life Activity Hub.
• The establishment and piloting of a tourism preparation facility for the development of concepts for: Karoo Succulent Garden; Magwa Falls and Tea Estate development; Port St Johns Precinct; Orange River Mouth development; Northern Cape Coast Waterpark.
• Development of designs at prioritised elements at township tourism precincts: Vilakazi Street; Mdantsane; Galeshewe; Khayelitsha.
• Interpretative signage implemented in six iconic tourism sites: Bontebok National Park; Kruger National Park (Northern Section); Knysna National Park; West Coast; Mountain Zebra; Richtersveld.
• Monitoring implementation of Leopard Trail at Baviaanskloof World Heritage Site.
• Monitoring implementation of Interpretation Centre at Baviaanskloof World Heritage Site.
• Construction works planned to commence at Shangoni Gate.
• Completion of bid documentation for the appointment of the contractor for Phalaborwa Wild Life Activity Hub.

 

Other destination enhancement initiatives in relation to infrastructure development include the following:

• To implementing infrastructure maintenance and beautification programmes in 12 state‐owned attractions;
• To implement community‐based tourism projects at Numbi Gate in Mpumalanga; and Nandoni Dam, Tshathogwe game farm, Mtititi game farm and the Mapate recreational social tourism facility, all in Limpopo, by March 2021;
• Further to upgrade 5 local community museums (Anton Lembede Museum in KwaZulu‐Natal, McGregor Museum in Northern Cape, AmaHlubi Cultural Heritage Museum in KwaZulu‐Natal, Lehurutshe Liberation Heritage Museum in North West and Sol Plaatje Museum in North West) by March 2022.

 

 

Further, the Department reported that it has planned incorporate prioritised initiatives from tourism spatial masterplans into One Plans for the following DDM districts: OR Tambo District Municipality; eThekwini Metropolitan; Pixley Ka Seme District Municipality and Namakwa District Municipality.

 

Over the medium term, the Programme is expected to create 12 569 work opportunities through the Working for Tourism programme. The Committee stressed that a coordinated approach with other departments and government agencies such as SANParks including local and provincial government would need to be strengthened and enhanced. Further, the Committee urged the Department to ensure that the Tourism Sector Master Plans are integrated to local government integrated plans to drive local economic development. Further, the Committee stressed the need for development resources to be spread equitable across provinces, and within provinces to address imbalance distribution of development initiatives. 

 

In terms of the Tourism Sector Support Services, over the medium term, the Department is anticipated to spend approximately R1,3 billion. Over the medium term, the Programme is expected to aaccelerate transformation in the tourism sector by:

• Implementing 5 incentives (market access support programme, tourism grading support programme;
• To implement green tourism incentive programme, Tourism Transformation Fund and Tourism Equity Fund;
• Further implementing 8 incubators;
• To implement 2 community‐based enterprise incubation programmes;
• In addition to implement the United Nations Women in Tourism pilot project in Limpopo.

 

Further, the Department reported that the Programme is expected to enhance visitor service and experiences by:

• Encouraging service excellence with a focus on a customer‐centric approach;
• Managing tourist complaints in line with regulations for lodging and dealing with tourism complaints.

 

Over the medium term, the Programme is expected to support tourism development programmes in identified rural municipalities by implementing capacity building programmes for traditional leaders and authorities, community representatives, tourism associations, tourism officials and SMMEs. Further, to support tourism development programmes in local government by:

• Conducting peer learning network sessions for municipal practitioners over the medium term;
• Further to finalise 26 profiles in line with the district development model by March 2022;
• In addition to host information sharing sessions on departmental programmes and services.

 

The Programme is also tasked to facilitate tourism capacity building programmes over the medium term by:

• Implementing a programme to create capacity for tour guides;
• Implementing the food safety quality assurer programme, wine service training (sommelier) programme, hospitality youth programme and educator development programme;
• Enrolling 60 women in the executive development programme for women in tourism;
• Supporting 45 chefs through a recognition of prior learning process for a qualification, 45 chefs through a recognition of prior learning process for a designation, and 60 travel advisers through a recognition of prior learning process for a designation;
• Conveningthe national tourism careers expo.

 

It was further reported that the Department will over the 2021 the medium term facilitates the training of 20 frontline port of entry personnel and managers, particularly Portuguese and French speakers, by March 2022.

 

1. Issues Arising from Engagement

 

1. The Committee noted the improvement recorded by the Department in the formulation of the Annual Performance Plan for the 2021 medium term.
2. Further, the Committee noted that the spending plans for 2021 medium term recognised that the tourism industry was the hardest hit by the COVID-19. As a result, the tourism industry remains uncertain.
3. The Department submitted that the Tourism Recovery Plan placed domestic tourism is one of the highest priorities. The restart of the domestic would certainly help to mitigate the impact on jobs and businesses in some destinations. But it was emphasised that real recovery will only be possible when international tourism returns. It was noted that it would require global co-operation and evidence-based solutions to accelerate opening of the industry, particular tackling travel restrictions. The Department of Health continues to play a role in supporting the Department to make informed decisions in mapping out risk-adjustment plans in order to restoring traveller confidence, supporting tourism businesses to adapt and survive and promoting domestic tourism and supporting safe return of international tourism.  
4. Further, South Africa need to exploit bilateral agreements, and international trade relations with other global countries in all the international markets-Asia, South and North America, Europe including Britain and Africa.
5. It was noted that China appears to be the fastest country on the path to reset the economy, and by extension the tourism industry. Advanced industrial countries would follow soon followed by emerging market and developing economies. It was stressed by the Committee that the government vaccination programme needs to be accelerated to enable a quick opening of the tourism industry. 
6. Coordinated efforts in deploying resources across all spheres of government including across government departments and development agencies should be enhanced. The Committee encouraged the Department to cement collaborative initiatives with other departments such as Cooperative Government and Traditional Affairs, South African Police Services, Environmental Affairs, Public Works and Infrastructure, Transport, Human Settlements, Water and Sanitation, Energy and Mineral Resources. The primary aim is to improve coordination of infrastructure investment in energy, roads, water and sanitation, ICT to boost tourism industry across the country. Investment in rural towns including poor towns should be prioritised.
7.  It was agreed by the Committee and the Department that government needs to leverage private capital in order to fully realise the benefits of tourism industry, and to realise policy priorities. More should be done to improve government and business relations. Co-ordinated action across governments at all levels and the private sector should be prioritised.
8. It was further agreed that it is critical that government should create a conducive business environment to attract private investments to reset the tourism industry, and to further realise transformative policy priorities.
9. The Department indicated that the spending plans as aligned to both the Economic Reconstruction and Recovery Plan, and the Tourism Recovery Plan look tourism beyond COVID-19. The plans support a tourism industry that is aligned to sustainable development objectives, which also promote digital transition and move to a greener tourism system.
10. It was noted that in order for the Department to meet the set policy priorities, funding and financing of both the Economic Reconstruction and Recovery Plan, and the Tourism Recovery Plan is critical. 
11. The survival of businesses in the tourism industry is essential. The industry remains at risk, and without continued government support it would not survive. The Department submitted that 4000 businesses were supported, each received an amount of R50 000, one business was overpaid. Currently, the Department is in the process of recovering the funds.
12. Further, the Department has launched the Tourism Equity Fund. However, disbursement of the funds had to be halted due to the court challenge. While the Committee appreciate the fact that COVID-19 has ravaged all businesses across race, class and gender lines as such flexible policy solutions should be found to tackle the damaged capacity in order to keep businesses floating, investing for growth and expansion of businesses to restore jobs and to further creating needed jobs. The Committee re-iterated its position that transformative initiatives should not be negated, a balanced approach should be found.
13. Further, businesses in the tourism industry should be assisted to access the government R200 billion Covid-19 Loan Guarantee Scheme, emphasised the Committee.
14. Further, the tourism industry should be re-built in a form that is much more inclusive. Human capital development should be placed at the centre of transformation in the industry. All provinces, and regions in the country should be integrated in the national tourism human capital development plans.
15. It was noted that the Department has plans to develop human resource capacity in the tourism industry that includes developing local government tourism practitioners. Further, there are initiatives in the pipeline to development skills in the industry in partnership with industry players and institutions of higher learning.
16. Workforce skills development in the tourism industry is another key priority identified. The public-private initiative to lift workforce skills development should be established, particular for the youth, women and people living with physical disabilities.
17. From the international tourism marketing perspective, as part of the broader investment marketing initiatives. The Department in partnership with the Department of International Relations and Cooperation (Dirco) continue to conduct training for Ambassadors and Dirco Officials posted abroad.
18. Further learning networks have been established at local government level to expose SMMEs including empowerment enterprise to established businesses in the industry.   
19. The Committee urged the department to strategic use public procurement as an instrument to drive transformative initiatives in particular initiatives attempting to integrate women, youth and persons with disabilities to the public procurement market.
20. Further, it was agreed by the Committee and the Department that internal capacity to manage delivery of infrastructure should be prioritised. Tourism infrastructure planning and delivery remains critical in government efforts to reset the industry.       Further, government spending leakages on infrastructure should be reversed. Particular under the current fiscal conditions experienced by the government.
21. In addition, the Department was urged to fast track tourism policy review process, and the outcomes should tackle funding and financing requirements needed to boost tourism industry. Reports indicate that SMMEs, particular in the current economic and health crisis prefer grants or equity funding that accepting loans that would further expose their businesses to possible unrepayable debt.

 

1. Findings

 

1. The Committee supportstransformation initiatives to integrate the previous excluded community to the mainstream economy. It is noted that some of the policy intentions of the Tourism Equity Fund attempts to tackle the imbalances of the past. Taking into account that COVID-19 has severely damaged tourism industry capacity, thus affected many businesses and many jobs evaporated. Flexibility in implementing policies would under the current situation be required. In principle, funding and financing should support equity, and also exact a balanced approach. The key focus of government should mitigate the impact of the pandemic to the businesses and save as many jobs possible to minimise the impact of COVID-19 to the income of businesses and households.
2. In 2020, the OECD report stressed that South Africa need to introduce electronic visas on a large scale to overcome the obstacles inhibiting the growth of international tourism. The number of countries falling under visa-waiver agreements should be increased and SA should join SADAC’s visa agreement to facilitate regional travel and the flow of visitors.
3. Further, the 2020 OECD report states that the budget allocations for tourism at the provincial and local level are often insufficient as the sector is competing with policy fields that are of higher importance to the local population. In addition, the OECD report recommends that frameworks governing infrastructure and other conditional grants be created to provide additional revenues to provincial and local budget and to provide a dedicated financial source for local tourism development, marketing and maintaining natural and cultural tourism resources.
4. Public spending to boost tourism industry should be strategic allocated to avoid mis-allocation of resources. Partnership in resource allocation geared to stimulate tourism must be done taking into account the needs, and opportunities presented by provinces, regions, and cities including rural towns. Equity considerations should be incorporated in the distribution of resources.
5. As stated in this report, coordination and collaborative initiatives should be prioritised. The Minister should work with the departments responsible for energy, roads, transport, water and sanitation including provincial governments and local government to ensure that development plans these sectors support growth and development of the tourism industry.

 

1. Recommendations

 

Co-ordinated action across governments at all levels and the private sector is essential. Funding and financing of the Economic Reconstruction and Recovery Plan, particular the Tourism Industry Recovery Plan would be critical in order for the government to attain policy priorities.

1. The Committee recommends that the Minister of Tourism, with the support of the Department, should create a dedicated Tourism Development Fund to support tourism businesses not necessarily covered (could be start-up businesses) by the Tourism Equity Fund. Further, private sector financing should be leveraged to broaden access to funding and financing for SMMEs in the tourism industry. The funding should be distributed taking into account equitable resource allocation. To this end, the role of National Treasury is essential.
2. The visa regime remains a critical feature in an effort to reset the tourism industry, and also position it in sustainable growth path. Over the medium term, the Minister should continue to engage the Minister of Home Affairs on visa simplification and harmonisation.
3. Taking into account infrastructure investment and maintenance of the existing tourism assets is critical in order to successfully implement the Tourism Recovery Plan. The Minister, with the support of the Department over the medium term,should accelerate efforts in building internal capacity to manage planning, management and delivery of infrastructure.
4. The 2020 OECD report states that the budget allocations for tourism at the provincial and local level are often insufficient as the sector is competing with policy fields that are of higher importance to the local population. In addition, the OECD report recommends that frameworks governing infrastructure and other conditional grants be created to provide additional revenues to provincial and local budget and to provide a dedicated financial source for local tourism development, marketing and maintaining natural and cultural tourism resources. The Minister of Tourism should engage theMinisters of Finance and of Cooperative Governance and of International Relations to translate the recommendations suggested in the 2020 OECD report.
5. Over the medium term the Minister should, in collaboration with local and provincial governments, ensure that the Tourism Development Master Plan finds expression in the provincial and provincial expenditure plans to support the implementation of the government District Development Model.
6. Over the medium term, the Minister, with the support of the Department, Tourism South Africain partnership with industry players, should expedite digitalisation of the tourism industry to modernise tourism marketing in line with global practice.
7. It is critical that within the 2021 medium term period, the Minister should submit to the Committee the tourism policy review report.

 

1. Conclusion

 

The tourism industry remains a key strategic industry that should be exploited to boost the economy, tackle unemployment, inequality and poverty. The key is to earmark tourism investment across the regions in the country in order to reset the tourism industry. The current economic, financial and social crisis need public-private initiatives to be prioritised to fund and finance the tourism industry. Government has no many choices to drive job creation. Tourism is one of essential labour extensive industries that need to be leveraged to drive development for sustainable and inclusive growth.

 

Report to be considered.