Cape Times

We do Tourism, let us all do Tourism

TOURISM BUDGET HIGHLIGHT 2018/19

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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.

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