Report: Budget Vote 35: Tourism
Tourism
REPORT OF
THE PORTFOLIO COMMITTEE ON BUDGET VOTE 35: TOURISM
The Portfolio Committee on Tourism, having considered the Budget Vote
No. 35 and Medium Term Strategic Frameworks, Strategic Plan and Annual
Performance Plan of the National Department of Tourism and South African
Tourism, reports as follows:
1.
INTRODUCTION
The
Constitution of South Africa (Act No. 108 of 1996) recognises that the Legislative
Authority has an important role to play in the overseeing both the financial
and non-financial performance of government departments and public
entities.
In terms of
section 10 of the Money Bills Amendment Procedure and Related Matters Act of
2009, (Act No 9 of 2009) the member of the Executive must table strategic plans
after the adoption of the Fiscal Framework by Parliament.
It is
important for the strategic plans to be tabled within the stipulated period
because the plans provide information for the budget review process of the relevant
Portfolio Committee.
The budget
and including the annual performance plan and strategic plan form the basis of
the annual report. The Public Service Commission in its report Evaluation of
the Departments Annual Reports as an Accountability Mechanisms clearly states
that the emphasis on measurable objectives, which should be part of the
strategic plan, is to create a contract between Parliament and the relevant
Minister regarding specific deliverables for which the Minister can be held
accountable.
2.
THE
COMMITTEE PROCESS
The above exercise
explains the importance of the budget and strategic plan process in the
calendar of Parliament and the necessity for departments to table these on time
to ensure that Parliament is provided with information required for its
oversight work.
On the 7
th
March 2012, the Minister of Tourism tabled to Parliament the Strategic Plan of
the Department of Tourism for 2010/11 to 2014/15 financial years together with
annual performance plan (review) of the department for 2012/13; and
Updated
Strategic Plan of South African Tourism for 2012/17 financial years and annual
performance plan for 2012/13 for consideration and report.
Upon
referral of these instruments by the National Assembly, the committee scheduled
two extended briefing sessions, first with South African Tourism; second with
the National Department of Tourism so as to present their strategic plans,
annual performance plan and budget for the ensuing financial years on 13 March
and 17 April 2012 respectively.
The
engagement simultaneously reviewed the past performance of the Department
of Tourism and South African Tourism. The Minister
and Deputy Minister attended the first briefing session, while the delegation
was led by the Director General and the senior management during the second
briefing.
3.
NATIONAL
DEPARTMENT OF TOURISM
3.1
Ministers
Overview
Minister Van Schalkwyk said that
tourism is poised to play a greater role than ever before, both on the global
stage and in the lives of South Africans. However, tourism is about much more
than the policies, statistics and objectives that often talked about. It is
about people. The year 2011 was a good year for global travel and tourism,
though growth was not as strong as in 2010. The last few months of 2011
witnessed a slight slowdown, but tourist arrivals still grew to 980 million in
2011. Globally, international tourism will top 1 billion trips this year. The
United Nations World Tourism Organisation (UNWTO) expects international
arrivals in 2012 to increase by 3% to 4%, which is recorded in 2011.
Being labour-intensive sector with a
supply chain that cascades deep into the national economy and across all
communities, tourism is positioned as a priority sector in Governments planning
and policy frameworks.
In 2011, the tourism sector
worldwide supported 258 million direct, indirect and induced employment
opportunities, just under 9% of the global workforce. Of these, 100 million were
direct jobs, which means, that every single employment opportunity in the
direct tourism economy supports another 1.6 indirect jobs.
During the 2008/09 global economic downturn, tourism
also played a critical anti-cyclical role in support of national economy, and
contributed significantly to gross domestic product, foreign exchange earnings
and poverty reduction. In
The
tourism sectors success story of the past decade can easily lead to
complacency. However, government understand that markets are continuously
shifting and consumer preferences evolving. That is why government rely heavily
on the best available market research and information about emerging demand
patterns. The new opportunities in
Emerging
markets like
South African Tourisms focus on the
African continent:
v
v
Tourist arrivals from
v
Tourist arrivals from
Africa to
v
The value
v
SA
Tourisms objectives to drive growth from the continent:
v
Increasing regional awareness of
v
Increase arrivals and spend from
v
In SADC, market penetration is high but opportunities exist
to promote repeat travel and to turn shoppers into holiday travel.
v
In Africa Air markets, sizable opportunity exists to attract
high value business and leisure traveller.
v
Setting up five marketing offices in key African markets by
2020; and
v
Implementation of regional tourism programmes.
Utilisation
of government grant: Project Growing Tourism from Africa - The intention was
also to open five SA Tourism offices in
v
2012/13 R50 million
v
2013/14 R84 million
v
2014/15 R84 million
Domestic tourism comprised: The
backbone of any tourism industry is also in its domestic market. With domestic
tourism contributing over 70% of countrys tourism volume as well as sustaining
and creating much-needed jobs, building the domestic tourism market is a
priority. Domestic tourism growth will not only assist
Tourism
will continue to address issues raised by the President in his State of the
Nation address in 2011 and 2012 respectively. To ensure the achievement of the
sectors targets, the Department will continue to work hard to implement the
National Tourism Sector Strategy (NTSS). This, however, is not an end in
itself. What is important is to translate increasing arrivals into broader
economic benefits for the people. Working with other government institutions
and relevant stakeholders, the Department will also play a more active role in
addressing travel barriers, including visa processing, airlift, enabling
infrastructure and the development of cultural industries. A critical area for
sustainable and global competitiveness of the sector is the development and
improvement of public and private tourism infrastructure.
Departments key policy priorities
for 2012/3
The national
Department of Tourism aims to promote and support the growth and development of
an equitable, competitive and sustainable tourism sector in order to enhance
the Departments contribution to national priorities.
[1]
The State of
the Nation Address (SoNA) has placed infrastructure development such as roads,
railways, airports and electricity in the centre of the years national
priorities.
[2]
This move
is seen as a great stride towards ensuring tourism growth and development. In
the past year oversight had outlined the lack of infrastructure in some
provinces as the biggest hurdle towards ensuring that the countrys tourism
potential is realised.
[3]
There was
also going to be greater investment in cultural and heritage tourism which will
go a long way in revitalising heritage and cultural tourism. However this move
requires that heritage and cultural heritage sites be kept at an acceptable
tourism level. The refocus on such sites would benefit poor and rural
communities.
[4]
The
Department identified key priorities in line with the national priorities of
governments New Growth Path (NGP) and the current SoNA. Since tourism is one
of the priority sectors in the NGP, the Department is doing its best to ensure
that these key priorities are well aligned with governments objectives in
order to receive/acquire the desired results. The key priorities as identified
by the Department are as follows:
[5]
·
Promoting job creation;
·
Developing rural, cultural, heritage
and domestic tourism;
·
Facilitating skills development in
the tourism sector;
·
Providing quality assurance;
·
Promoting service excellence;
·
Facilitating transformation of the
sector;
·
Providing opportunities for youth;
·
Promoting entrepreneurship;
·
Increasing investment in the tourism
sector;
·
Promoting responsible tourism;
·
Expanding tourism infrastructure;
·
Facilitating product development;
·
Coordinating stakeholder cooperation
and partnerships;
·
Strengthening information and
knowledge management; and
·
Growing the market locally and
internationally from a tourism perspective.
These key priorities of the Department are well
aligned with the key national priority; which seeks to significantly reduce the
unemployment rate especially among the young people in our country.
[6]
Since, for the unemployment rate to be significantly reduced, it is important
for the respective departments to create an environment conducive to growth.
3.2
Performance and Service Delivery
Information
The Industrial
Policy Action Plan 2(IPAP 2) identifies tourism as one of the important drivers
for job creation in line with the general understanding that tourism has low
barriers of entry for entrepreneurs. The Department has the Expanded Public
Works Programme (EPWP) which is supposed to address issues of job creation as
well as infrastructure development.
[7]
The
Department is well underway in terms of its targets for the 2011/2012 financial
year, having successfully reached the half mark in a number of its programmes
by the end of the first half of the 2011/2012 financial year. The concerns,
however, for the Administration Programme would be to ensure that issues such
as the vacancy rate and the work skills plan be addressed.
The Department also reported to have had
positive results with regard to compliance with performance and risk management
prescripts; compliance relating to regulatory requirements and finally the
progress made with regards to scheduled international agreements.
In terms of
procurement from Broad Based Black Economic Empowerment (BBBEE) and Black
Economic Empowerment (BEE) enterprises, the Department is on track, through
achieving 56 per cent for the first half with the target being set at 59 per
cent. The communication strategy of the Department needs to boost its
performance where the implementation plan is concerned, due to the fact that
for a number of projects to bear the necessary fruits there should be effective
communication. The target set for this indicator was 100 per cent and by the
end of the first half of the year under review the Department had only
implemented 23.5 per cent of the strategy. However it must also be noted that
the Department was doing well in terms of high level media interventions that
led to media coverage, the Department was able to get six out 8 interventions
by the first half.
The
Department had not reached the half target mark by the end of the first half of
the year for the Expanded Public Works Programme (EPWP), in as much as there
was improvement in the programme as compared to its performance in the
2010/2011 financial year - hence more effort is required to ensure this
programme delivers the temporary and full time job opportunities. This will
further improve the Departments contribution towards decent work through
sustainable projects.
[8]
The Department actually fell short of its half term target by 727 full time
equivalent jobs; but when considering the target for the number of projects
funded by the EPWP (65 projects as compared to the target of 45) it is easy to
assume that the target for the full time jobs can still be met within the
financial year. This can only be true if these funded projects are all
successful and further sustainable.
As
with the previous year other projects fell through the cracks.
[9]
The
intake for young chefs for the year under review was reported to be 767 and 531
graduated and the target was set at 800, it is however difficult to gather
whether there will still be a second in-take that will cover the remaining
students in order for the Department to meet its target. The Department has
also met its target with regards to the rural prjects supported, getting two
out of two.
[10]
The
Department has over the years done work on niche product development and this
year it has developed a strategy for avitourism, however it is also important
for the Department to do an evaluation of how these strategies have paid
off,
for example the recent report on
cruise tourism.
[11]
The
Department had thus far supported 357 rural enterprises out of the targeted
530; this achievement places the Department ahead of its 50 per cent mark by
the end of the first half of the 2011/2012 financial year. The Department is,
however, behind on meeting the target set at 3 351 for support of Historically
Disadvantaged enterprises having only supported 1 122 enterprises. The
Department had set a target of 20 black SMMEs to be supported on a mentorship
programme, and of the 20 targeted only two have been identified and supported.
The
programmes for youth development are all on track as some of the targets have
been met while other programmes were above the 50 per cent mark and finally the
target set for the roll out of the National Tourism Sector Strategy (NTSS) was
set at 15 and to date 14 district municipalities have already had work-shops in
three provinces.
The
most worrying factor is that the Departments Strategic Plan in some instances
is characterised by Key Performance Indicators (KPIs) which are not necessarily
within the Departments power to deliver but is dependent on other departments.
The Department needs to work hard at creating platforms that allow for these
issues to be discussed and further develop ways of addressing overlapping
issues.
3.3
Budget Analysis
The Department carries out its mandate through
four programmes (Table 35.1). The budget is expected to grow at a moderate rate
reaching R1.6 billion in the Medium Term Expenditure Framework (MTEF) due to
an additional allocation of R218 million for South African Tourism to
expand its work in growing the number of tourists visiting from other African
states
.
[12]
Table 35.1 shows the programme allocation for
the Department of Tourisms budget.
Table
35.1
Programme
|
Budget
|
Nominal
|
Real
|
Nominal % change
|
Real % change
|
|||
R million
|
2011/12
|
2012/13
|
2013/14
|
2014/15
|
2011/12-2012/13
|
2011/12-2012/13
|
||
Programme
1:Administartion
|
185.9
|
195.0
|
206.7
|
218.8
|
9.1
|
-
1.8
|
4.90 per cent
|
-0.95 per cent
|
Programme 2:
Policy and knowledge services
|
695.5
|
788.0
|
861.4
|
908.0
|
92.5
|
48.6
|
13.30 per cent
|
6.99 per cent
|
Programme
3: International Tourism
|
33.7
|
46.8
|
48.8
|
51.7
|
13.1
|
10.5
|
38.87 per cent
|
31.14 per cent
|
Programme
4: Domestic Tourism
|
349.8
|
337.5
|
378.5
|
401.7
|
-
12.3
|
-
31.1
|
-3.52 per cent
|
-8.89 per cent
|
TOTAL
|
1 264.9
|
1 367.3
|
1 495.4
|
1 580.2
|
102.4
|
26.2
|
8.10 per cent
|
2.07 per cent
|
National Treasury (2012) Vote 35 Tourism
An
increase of 8.10 per cent in the Departments allocation has been observed for
the budget year 2012/2013 in nominal terms although in real terms (after taking
inflation into account) that translates to a mere 2.07 per cent (Table 1). This
is due to an increase in three of the programme budgets.
The
four programmes have been changed from their initial representation in the
previous financial years (2010/2011 to 2011/2012). The Administration Programme
has remained the same and the last three programmes have been renamed as
follows:
·
Programme
2:
formerly known as Tourism Development is now known as
International Tourism and consists of the following sub-programmes
(International Tourism Management; Tourism Development in the
·
Programme
3:
formerly known as Tourism Growth and it is currently
known as Domestic Tourism and consists of the following sub-programmes
(Domestic Tourism Management; Domestic Tourism Management: Southern Region
Domestic Tourism Management: Northern Region;
Social Responsibility Implementation; and
Strategic Partners in Tourism).
·
Programme
4:
formerly known as
Policy, Research, Monitoring and
Evaluation is now know as Policy and Knowledge Services and consists of the
following sub-programmes (Policy and Knowledge Services Management; Policy
Development and Evaluation; Research and Knowledge Management and South African
Tourism (SAT).
3.4
Programme Analysis
Programme 1: Administration
Table
35.2: Budget analysis for Programme 1
Programme
|
Budget
|
Nominal
|
Real
|
Nominal % change
|
Real % change
|
|||
R million
|
2011/12
|
2012/13
|
2013/14
|
2014/15
|
2011/12-2012/13
|
2011/12-2012/13
|
||
Sub
Programme 1: Ministry
|
32.5
|
32.9
|
37.4
|
39.6
|
0.4
|
-
1.4
|
1.23 per cent
|
-4.41 per cent
|
Sub
Programme 2: Management
|
10.7
|
16.6
|
17.2
|
18.2
|
5.9
|
5.0
|
55.14 per cent
|
46.50 per cent
|
Sub
Programme 3: Cooperate Affairs
|
120.7
|
121.5
|
127.1
|
134.5
|
0.8
|
-
6.0
|
0.66 per cent
|
-4.95 per cent
|
Sub
Programme 4: Office Accommodation
|
22.0
|
24.0
|
24.9
|
26.4
|
2.0
|
0.7
|
9.09 per cent
|
3.01 per cent
|
TOTAL
|
185.9
|
195.0
|
206.6
|
218.7
|
9.1
|
-
1.8
|
4.90 per cent
|
-0.95 per cent
|
Source:
National Treasury (2012) Vote 35 Tourism
The
budget allocated to the Administration Programme is for strategic governance and
risk management; legal, Corporate Affairs, information technology, and
strategic communications support services to the Department, and has increased
from R185.9 million in 2011/2012 to R195 million in 2012/2013. This represents
a nominal increase of 4.9 per cent; but after adding inflation a decrease of
0.95 per cent in real terms. This programme constitutes 14.7 per cent of the
Departments total budget, most of which will be spent through the Corporate
Affairs sub-programme, which will be used for IT services, furniture for the
new offices and security equipment for the building. A further R12 million has
been set aside for consultants to provide support to the Departments internal
audit.
Programme 2:
Policy and knowledge services
Table
35.3: Budget analysis for Programme 2
Programme
|
Budget
|
Nominal
|
Real
|
Nominal % change
|
Real % change
|
|||
R million
|
2011/12
|
2012/13
|
2013/14
|
2014/15
|
2011/12-2012/13
|
2011/12-2012/13
|
||
Sub
Programme 1: Policy and Knowledge Services Management
|
3.8
|
3.4
|
3.6
|
3.8
|
-
0.4
|
-
0.6
|
-10.53 per cent
|
-15.51 per cent
|
Sub
Programme 2: Policy Development and Evaluation
|
10.7
|
18.1
|
17.6
|
18.7
|
7.4
|
6.4
|
69.16 per cent
|
59.73 per cent
|
Sub
Programme 3: Research and Knowledge Management
|
12.4
|
13.2
|
14.2
|
15.1
|
0.8
|
0.1
|
6.45 per cent
|
0.52 per cent
|
Sub
Programme 4: South African Tourism
|
668.6
|
753.3
|
825.9
|
870.5
|
84.7
|
42.7
|
12.67 per cent
|
6.39 per cent
|
TOTAL
|
695.5
|
788.0
|
861.3
|
908.1
|
92.5
|
48.6
|
13.30
per cent
|
6.99
per cent
|
Source:
National Treasury (2012) Vote 35 Tourism
The budget allocation for the
Policy and Knowledge
Services
Programme, which has received the largest allocation
in the budget increased by 13.30 per cent in real terms from 2011/2012
financial year. This programme is entrusted with
ensuring
strategic tourism sector policy development, monitoring and evaluation, and
research and knowledge management services.
The South
African Tourism sub-programme which is tasked with the marketing of
Programme 3: International Tourism
Table
35.4: Budget analysis for Programme 3
Programme
|
Budget
|
Nominal
|
Real
|
Nominal % change
|
Real % change
|
|||
R million
|
2011/12
|
2012/13
|
2013/14
|
2014/15
|
2011/12-2012/13
|
2011/12-2012/13
|
||
Sub
Programme 1: International Tourism Management
|
11.6
|
3.9
|
4.2
|
4.4
|
-
7.7
|
-
7.9
|
-66.38 per cent
|
-68.25 per cent
|
Sub
Programme 2:
|
7.5
|
11.5
|
11.9
|
12.6
|
4.0
|
3.4
|
53.33 per cent
|
44.79 per cent
|
Sub
Programme 3:
|
6.0
|
9.2
|
9.6
|
10.2
|
3.2
|
2.7
|
53.33 per cent
|
44.79 per cent
|
Sub
Programme 4: Africa and
|
4.3
|
12.8
|
13.3
|
14.1
|
8.5
|
7.8
|
197.67 per cent
|
181.09 per cent
|
Sub
Programme 5: Asia and
|
4.3
|
9.4
|
9.7
|
10.3
|
5.1
|
4.6
|
118.60 per cent
|
106.43 per cent
|
TOTAL
|
33.7
|
46.8
|
48.7
|
51.6
|
13.1
|
10.5
|
38.87 per cent
|
31.14 per cent
|
Source:
National Treasury (2012) Vote 35 Tourism
The
International Tourism Growth Programme is responsible for the development and
support of
Programme 4: Domestic Tourism
Table
35.5: Budget analysis for Programme 5
Programme
|
Budget
|
Nominal
|
Real
|
Nominal % change
|
Real % change
|
|||
R million
|
2011/12
|
2012/13
|
2013/14
|
2014/15
|
2011/12-2012/13
|
2011/12-2012/13
|
||
Sub
Programme 1: Domestic Tourism Management
|
6.3
|
11.0
|
11.5
|
12.7
|
4.7
|
4.1
|
74.60 per cent
|
64.88 per cent
|
Sub
Programme 2: southern Region
|
9.7
|
11.9
|
12.3
|
13.0
|
2.2
|
1.5
|
22.68 per cent
|
15.85 per cent
|
Sub
Programme 3: Northern Region
|
11.1
|
12.2
|
12.7
|
13.4
|
1.0
|
0.4
|
9.23 per cent
|
3.14 per cent
|
Sub
Programme 4: Social Responsibility implementation
|
302.7
|
277.4
|
312.0
|
330.7
|
-
25.3
|
-
40.7
|
-8.34 per cent
|
-13.45 per cent
|
Sub
Programme 5: Strategic Partners in Tourism
|
20.0
|
25.0
|
30.0
|
31.8
|
5.0
|
3.6
|
25.00 per cent
|
18.04 per cent
|
TOTAL
|
349.8
|
337.5
|
378.5
|
401.6
|
-
12.3
|
-
31.1
|
-3.52 per cent
|
-8.90 per cent
|
Source:
National Treasury (2012) Vote 35 Tourism
The
Departments budget allocation for the Domestic Tourism Programme has decreased
by 3.52 per cent in nominal terms from R349.8 million in 2011/2012 to R337.5
million in 2012/2013. This decrease is due to the decrease in the
Social Responsibility implementation
sub-programme
allocation; this was due to the Departments failure to meet job creation
targets.
[15]
This
programme is responsible for the promotion, development, and growth of
sustainable domestic tourism throughout
4
SOUTH
AFRICAN TOURISM
The core
mandate of South African Tourism (SAT) is to position
The key objectives include increasing:
Ø
The
annual volume of international tourists visiting the country.
Ø
The
average-spend per tourist.
Ø
International
brand awareness of
Ø
The
number of graded accommodation establishments.
SAT was
established with the aim of stimulating sustainable international and domestic
demand for South African tourism experiences as well as to institute measures
aimed at the maintenance and enhancement of standards of facilities and
services hired out or made available to tourists. SAT therefore competes in a
fiercely competitive global environment to attract tourists to
In terms of
funding, SAT is involved in a joint operation with the private sector partner,
Tourism Business Council of South Africa (TBCSA). The objective of the joint
operation is to market SA in certain markets identified through research. Funds
contributed into this fund are used for marketing activities. Given the limited
resources, SAT has adopted and rolled out a Tourism Marketing Growth Strategy
based on in-depth segmentation research and focus groups conducted around the
world. The strategy focuses its marketing activities on specific segments of
tourists in particular markets:
v
That
are most likely to come to
v
Whose
value for
4.1
Performance
environment
As at the
end of November 2011, growth was at 2.7%, taking the impact of the 2010 FIFA
Soccer World Cup into consideration the growth rose to 7%. The idea is linking
the work of the SAT to governments key priorities. The five priorities have
been converted into governments Medium Term Strategic Framework.
4.2
National
Tourism Sector Strategy targets
v
Arrivals
one of
the aims was to have 15 million foreign arrivals by 2020.
v
Domestic tourists
expected to grow by 3.4 million from 14.6 million in 2009 to 18 million by 2020
and total trips to grow from 30 million to 54 million, with holiday trips
increasing by 5 million.
v
Gross Domestic Product
(GDP)
expected to increase tourisms
contribution to the GDP from an estimated R189.4 billion in 2009 to R499
billion by 2020.
v
Job creation
the tourism sector is committed to consolidating its efforts to create jobs
and aims to create 225 000 jobs by 2020 177 000 in the tourism sector and 48
000through direct government investment.
4.2
Markets
classification
SA Tourism with its 16 business units sells
v
Core markets: Markets which present
the greatest opportunity. These markets are very attractive and have easier
access from a tourism marketing point of view, deliver the bread & butter
in terms of tourism for South Africa and approximately 60% of organisations
efforts (in terms of human capital and budget) is deployed in these markets.
These markets are
v
Investment markets: Markets where
some investment is made for returns in future. These are also very attractive,
but more difficult to access from a tourism marketing point of view. Given the
potential of these markets, it is of great importance for SA Tourism to invest
in these markets, ahead of future returns. Approximately 20% of the
organisations efforts (in terms of human capital and budget) is deployed in
these markets. These markets are
v
Tactical markets: Markets that
should be considered for specific, tactical opportunities. These markets are
less attractive, but very easy to access from a tourism marketing point of
view. Approximately 15% of the organisations effort (in terms of human capital
and budget) is deployed in these markets. These markets are
v
Watchlist markets: These markets
are less attractive and more difficult to do from a tourism marketing point of
view. However, limited exploratory marketing, largely in conjunction with
SAT promotes
v
v
v
Europe
and the
4.3
Importance of
v
Africa
delivers the highest number of tourist arrivals
:
v
Africa
is growing:
v
Africa
is accessible:
Africa is
v
Africa
still represents untapped potential:
4.3
SA
Tourism strategies to deliver on the outcome
v
Invest
only in selected markets to deliver volume and value.
v
Convince
consumers that
v
Engage
Stakeholders to deliver quality visitor experience that re-affirm the brand
promise.
v
Work
the distribution channel to promote
v
Energise
and empower the organisation to innovate and achieve excellence.
4.4
South
African Tourisms six strategic orientated goals
To market
v
Annual arrivals to
v
Increase the average spend per
arrival in
v
Become the most preferred Tourism
Brand by obtaining an average positive brand awareness percentage of 79% in all
the markets where Brand Tracking is done.
v
To deliver on the quality experience
expected by the international and domestic tourist by having at 6 172 graded
tourism products in
v
To continuously improve internal
policies, procedures and business processes so that it supports the spending of
no less than 98% or no more than 102% of its consolidated annual approved
budget as well as the achievement of clean annual audit reports; and
v
To grow
4.5
MTEF
allocation to aggressively grow
Objectives to drive growth from the continent to meet
NTSS targets:
v
Increasing regional awareness of
v
Increase
arrivals and spend from
v
In
SADC, South African market penetration is high but opportunities exist to
promote repeat travel and to turn shoppers into holiday travel.
v
In
Africa Air markets, sizeable opportunity exists to attract high value business
and leisure traveller.
v
Setting
up five marketing offices in key African markets by 2020; and
v
Implementation
of regional tourism programmes.
4.6
Air
markets
Limited
marketing activities are also undertaken around key international airline hubs
given the available airlift from such markets to
In addition
to developing each market individually, SA Tourism would look at growing
arrivals in key regional markets using a hub strategy:
v
East African Regional Strategy: Large
regional market potential suggests the need to establish presence in the market
rapidly by building key relationships to be leveraged for winning in these
markets. For example,
v
West African Quick Win Strategy: The
strategy will include showing in the short term, presence in
v
Central African Spill-over Effect:
Limited additional effort is required in the short to medium term as effects
will automatically spill over with no additional effort. For example, the DRC
market remains an investment market with its high tourism potential warrants
increased investment. Due to the proximity and high connectivity between the
DRC and Congo-Brazaville, any activities in the DRC will have spill-over
effects into Congo-Brazaville.
5.
KEY ISSUES FOR THE COMMITTEE
The
committee welcomed the proposed budget allocations and medium term strategic
frameworks as presented. The committee raised the following key issues:
5.1
Rural
tourism development remains a challenge. Government departments should tailor
responses to this challenge in terms of programmes and budgets to address
disparities and in an enjoined programme to optimise actions that would cushion
the vulnerable.
5.2
To
ensure that the current EPWP Programmes are sustainable by closely monitoring
and evaluating these projects to assist in addressing concerns raised by the
Auditor General in the 2010/11 financial year; including the difficulties of
obtaining information specifically the statistics on the number of jobs created
and the effectiveness or impact of the EPWP projects run by Department of
Tourism on behalf of the communities.
5.3
To
obtain details with regards to the R12 million to be spent on consultants for
the support of the Departments internal audit unit; the R3.9 million to be
used on advisory services and R8.6 million to be used on the development of a
visitor information centre and national tourism information gateway space
planning through the MTEF period. Further R5 million to be spent on consultants
in the MTEF period.
5.4
To
ensure that there is no overlap of roles where the marketing of tourism locally
and internationally is concerned.
5.5
To
monitor the support the different enterprises receive from the Department and
how many of these enterprises actually yield positive results from this
support.
5.6
Refocus
on heritage and cultural heritage projects there was a greater need for
investment towards cultural and heritage tourism. Heritage and cultural sites
should be kept at an acceptable tourism level. The refocus on such sites would
benefit poor rural communities.
5.7
Cost
drivers in aviation sector that affect consumer behaviour and travel patterns.
These cost drivers include global exchange rate and currency volatility, oil
prices, fuel costs and costs associated with increased transport security plus
landing fees.
6
RECOMMENDATIONS
Having
considered the budget and medium term strategic frameworks of the Department
and SA Tourism, the committee recommends that:
6.1
Public-Private Partnerships (PPPs)
:
The Department should double its efforts by ensuring that the notion of
private-public partnerships is a well endorsed practice for building capacity
to delivery in the tourism and hospitality sectors.
6.2
Small, Medium and Micro Enterprises
(SMMEs)
:
All spheres of government should work towards strengthening competitiveness and
promotion of SMMEs and cooperatives as they remain the cornerstone for growth
of the economy and creation of work opportunities within the tourism and
hospitality sectors.
6.3
The
Government aught to facilitate
market
access and entry
into the value chain by small businesses and cooperatives
and reduce regulatory burden on small businesses.
6.4
Local Government:
The
local sphere of government is an important contributor to the success of
tourism activities in terms of community driven tourism philosophy. The efforts
should be coordinated within the provincial tourism growth strategy.
6.5
Job creation at local level:
tourism is a demand-driven sector. Therefore the volume and value of demand
inform investment in supply and job creation. Provision of public
infrastructure supporting local economic development is improved. This will
assist municipalities to focus Local Economic Development initiatives that are
skills creating, employment generating and domestic production and consumption
promoting.
6.6
Signage and road infrastructure
:
poor road
signage and infrastructure impact negatively on access to tourism products,
especially in rural areas. The cooperative work between the Department of
Tourism and the Department of Transport to be intensified.
6.7
Use of graded establishments
:
In order to encourage SMMEs and other tourism enterprises to register their
businesses in terms of the new grading system, the use of graded establishments
by governments departments is encouraged or the Cabinet directive of 2006 would
need to be enforced.
6.8
Tourism budget
:
while the committee notes the competing needs, obligations and challenges
facing the government, the committee maintains the budget is not adequate, and
does not compare favourably with the budgets of
6.9
Tourism information
:
Public education, awareness and information dissemination should be linked to
outreach initiatives of the Department.
6.10
Synergic
linkages
should be developed and harnessed at all spheres of
government so as to promote local tourism activities and strategic
partnerships.
6.11
Flexible
visa requirements
:
Department of Tourism, Department of Home Affair and Department of
International Relations and Co-operation to implement their memorandum of
understanding (MoU) to ensure that tourists and investors were not turned away
because of stringent visa requirements or because it takes too long to obtain a
South African visa, whilst still ensuring that national security is not
compromised.
6.12
Transformation
of the tourism sector
: There should greater action taken
to support and implement Broad-Based Black Economic Empowerment (BBBEE) as well
as procurement policy implemented to achieve the BBEEE imperatives of
government.
6.13
Air
Lift Strategy:
Aligning air transport with other national
strategies through the common criteria of the national interest through
interdepartmental participation with regards to National Foreign Policy,
National Trade and Industry Strategy as well as general infrastructure
requirements of
6.14
Memorandum
of Understanding (MoU):
The Department of Tourism to
present to the committee a comprehensive reports on the memorandum of
understandings signed first with key sister departments to support tourism
development and growth and secondly, with countries where South Africa has a
strategic interests for purposes of oversight.
6.15
Skills
Development
: while the committee acknowledges the
initiatives taken by the department to engage five universities in the country
to develop skills and capacity the industry, there is also a need to support
FET colleges and Sector Education and Training Authorities to be linked to
business, industry and other advanced education and training programmes.
6.16
2010
FIFA Soccer World Cup Legacy
: the department to present its blue
print on benefits in real terms of the World Cup and how the country has
capitalised on the event.
6.17
Landing
Fees
: The Department of Tourism to engage the Department
of Transport and Airport Company of
6.18
Implementation
of infrastructure development
: Parliament should prioritise
overseeing the implementation of infrastructure development aligned to rural
communities and also ascertain support facilities in rural areas for tourism
sector.
6.19
Extended
Public Works Programme:
There should be greater focus on
monitoring the outputs and outcomes of Extended Public Work Programmes as it
holds potential for poverty relief and providing first level skills and
opportunity for productive citizenry.
7
APPRECIATION
The Committee would like to extend special
appreciation to the Ministry, the Director General, programme managers and
heads of entities for cooperation throughout the last financial year.
8.
CONCLUSION
Having considered the strategic frameworks of the
Department of Tourism and South African Tourism for the next five years and
budget allocation for 2012/13 financial year, the committee recommends the
House endorse the report.
Report to be
considered.
[1] National Treasury (2012).
[2] Zuma (2012).
[3]
Northwest and
[4] PMG (2012).
[5] National Treasury (2012).
[6] Zuma (2012).
[7] Department of Tourism (2012).
[8] Department of Tourism (2011).
[9] ibid
[10] ibid
[11] Department of Tourism (2010)
[13] Ibid.
[15] Treasury (2012).
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