We do Tourism, let us all do Tourism
TOURISM BUDGET HIGHLIGHT 2018/19
Minister Derek Hanekom presented Tourism’s 2018/19 budget in Parliament on 17 May, outlining how his department planned to utilise R2.2 billion to grow the industry.
Tourism’s budget vote took place afoot the successful hosting of Africa’s Travel Indaba in Durban from 08 to 10 May. Themed Africa’s Stories - Your Success, the show attracted more than 1700 buyers, and 1200 exhibitors representing tourism products and services from 22 African countries.
Africa’s Travel Indaba is the third largest travel exhibition in the world, and yet there are very few small, medium and micro-enterprises (SMMEs) that can afford to showcase their tourism offerings at such an event.
This year’s Indaba showcased one hundred and thirty five (135) South African SMMEs at the Hidden Gems pavilion. The SMMEs participation was made possible under the department’s Tourism Incentives Programme designed to assist and facilitate access to international markets to for emerging tourism enterprises.
With a record 10.3 million international tourists visiting the country in 2017, Hanekom is optimistic about growing these numbers and laying solid foundations for a globally competitive industry that yields sustainable and long-term results.
“Our beautiful country offers amazing and authentic tourism experiences. South African Tourism (SAT) has done a great job in marketing our offerings to draw visitors to our shores. We have allocated more than half of our budget to R1.2 billion to market country.”
“We are confident that SAT, with the assistance of our Provincial tourism authorities, will fine-tune its marketing efforts to build on the success of our 2017 tourist arrival numbers,” said Minister Hanekom.
Despite the positive 2017 tourist arrival numbers, failure to address issues surrounding visas and the requirements for travelling with minors have the potential to impede travel to South Africa for tourists.
The visa requirements imposed on New Zealand resulted in a 24% decline in tourist arrivals and a 17% decline from the Chinese market in 2017.
If the recent engagements between Minister Hanekom and Home Affairs Minister Malusi Gigaba are anything to go by, agreements reached by the two departments could herald a positive trajectory for the future growth of tourist arrivals to SA – in lieu of SAT’s marketing efforts.
Discussions with Minister Gigaba have been fruitful, said Hanekom. “We have agreed to bring the requirements for travelling minors in line with practices in the USA, UK and other countries.”
“The introduction of e-visas and the recognition of the Schengen and other valid visas for the USA, Canada, the UK and Australia will facilitate ease of travel for tourists and boost tourism to our country.”
The Tourism Incentive Programme in one of a number of initiatives the department is embarking on to increase the number of new entrants into the industry, and to kick-start the process of transforming the sector and making it inclusive.
According to the Tourism B-BBEE Charter Council’s 2016/17 baseline report on the state of transformation, less than 45% of enterprises in the accommodation, hospitality and travel sub-sectors have achieved the 30% target on ownership.
The absence of thriving black-owned tourism enterprises is attributed to a lack of adequate funding and business support structures. Tourism’s Transformation Fund is poised to address these challenges by providing a dedicated capital investment mechanism that will support black investors and communities to develop and expand tourism related projects.
The Tourism Transformation Fund is a collaborative effort between the Department of Tourism and the National Empowerment Fund. Tourism will invest R120 million towards the fund over the next three years that will be utilised as grant funding. The grant will reduce funding gaps between the investor’s own contribution and the approved loan/equity contribution by the NEF, which will be capped at a maximum of R5 million for each successful applicant.
“Tourism in South Africa is on the rise, and the growth we are achieving must become inclusive,” said Hanekom.
“Through the fund, we will drive transformation that will result in a new generation of black-owned youth, women and community based tourism enterprises that will elevate our industry to new heights.”
The success and sustainability of tourism is heavily reliant on the strength of its domestic market. However, unfavourable economic conditions resulted in a sharp 29.3% drop in South Africa’s domestic tourist volumes from 24.3million to 17.2 million in 2017.
In light of the reduced domestic travel figures, tourism was able to contribute 9% to the Gross Domestic Product, and support 1.6 million jobs across the value chain.
In his first State of the Nation Address, President Cyril Ramaphosa identified tourism as one of the three priority sectors with the potential to create opportunities that could contribute to the growth the economy. The President also challenged Tourism to double its contribution to GDP by strengthening its marketing and further reducing regulatory barriers.
In response to the President’s challenge, the department has adopted a nodal approach in advancing domestic tourism. Equipped with a recently revised Nation Tourism Sector Strategy (NTSS), the focus will be on driving transformation in the rural parts of the country, whilst creating an inclusive environment that will facilitate the growth of new entrants into the industry and employment opportunities.
The department will utilise R1.1 billion of its budget to support initiatives in the Working for Tourism sub-programme through the expanded public works programme (EPWP).
Working for Tourism facilitates the development of tourism infrastructure that leads to job creation, particularly for SMMEs, and accredited training and skills development programmes for youth and women. It is anticipated that the programme will create an estimated 13 475 full-time equivalent jobs by 2020/21.
The working for tourism sub-programmes are firmly anchored on the five pillars of the NTSS namely: Effective Marketing, Facilitating Ease of Access, Visitor Experience, Destination Management and Broad-based Benefits.
The successful implementation of the programmes aligned to the NTSS will result in an inclusive tourism economy that leverages on South Africa’s competitive edge in nature, culture, and heritage, underpinned by Ubuntu and supported by innovation and service excellence.