Finweek English Edition - - FRONT PAGE - By Shoks Mzolo

tourism min­is­ter Derek Hanekom doesn’t tire of spread­ing the news that South Africa man­aged to break above the 10m mark of an­nual in­bound tourist traf­fic last year, re­flect­ing a jump of 13% on the pre­vi­ous year. Cit­ing the fig­ures re­leased by Stat­sSA, the min­is­ter noted at this year’s Meet­ings Africa ind­aba that over­seas ar­rivals surged a “re­mark­able” 18%, to 2.5m, while the African con­ti­nent was source of three-quar­ters of in­bound traf­fic.

The next tar­get ap­pears to be 15m vis­i­tors, as Hanekom has said vis­i­tors can grow by 50% over the next five years.

Travel has been iden­ti­fied as a ma­jor eco­nomic driver in SA and across the world, SA Tourism CEO Sisa Nt­shona noted at the ind­aba. The event at­tracts gov­ern­ment of­fi­cials and cap­tains of in­dus­try from around the globe. While shar­ing Nt­shona’s sen­ti­ment, and cit­ing the coun­try’s po­ten­tial and unique fea­tures, Lulu King, a direc­tor at That Sales Lady, a con­sul­tancy, ar­gues that SA is punch­ing way be­low its weight.

Her point is sup­ported by fig­ures from the World Travel & Tourism Coun­cil (WTTC), which show that the lo­cal in­dus­try lags African and global av­er­ages by way of eco­nomic im­pact given the size of the mar­ket – even though the lo­cal sec­tor pro­vides jobs (di­rect or in­di­rectly) to 1.6m peo­ple (pro­jected to grow by an av­er­age of 3.7% per an­num un­til 2026), and con­trib­utes 9.5%, or R375.5bn, to GDP.

In a round­about way such num­bers – point­ing to SA’s rel­a­tive un­der­per­for­mance – af­firm Hanekom and King’s be­lief that, what­ever the re­al­is­tic tar­gets, the coun­try could reg­is­ter sig­nif­i­cant growth in the next few years.

In or­der to boost visitor num­bers, the de­part­ment of tourism has opened of­fices in Nige­ria and else­where to raise aware­ness of this tourist des­ti­na­tion and is woo­ing busi­ness trav­ellers from Rus­sia. En­try rules for Rus­sians vis­it­ing SA for leisure pur­poses have also been re­laxed.

At the same time, ad­di­tional visa fa­cil­i­ta­tion cen­tres have been opened in China and im­mi­gra­tion pro­cesses there and in In­dia have been eased (see side­bar on page 34).

Tourism de­part­ment spokesman Trevor

Bloem be­lieves these mea­sures have buoyed in­com­ing traf­fic.

Re­vised rules saw the num­ber of SA-bound Chi­nese tourists grow­ing by 38% last year to hit 117 000, while 109 000 Aus­tralians vis­ited SA.

How­ever, visitor num­bers from these and many other over­seas coun­tries re­main off the pre-2014 highs (see side­bar). Over­all, the num­bers have risen 5%, or 500 000 vis­i­tors, to cur­rent lev­els ver­sus the 9.5m tal­lied in 2013, be­fore new im­mi­gra­tion rules took their toll on ar­rivals.

Growth po­ten­tial

That Sales Lady’s King, how­ever, reck­ons that “given our re­sources”, SA should aim for many more tourists. She ar­gues the tar­get ought to be no lower than 20m.

“We’re un­der­cut­ting our own mar­ket by bil­lions by not build­ing ca­pac­ity. It’s all good to en­cour­age peo­ple to build B&Bs, but who’s teach­ing own­ers how to run them, how to do mar­ket­ing and sales?” she says, not­ing that the young African mar­ket, which is known to spend thou­sands on the finer things in life, re­mains largely un­tapped by South African tour


Mean­while, La­gos-based events and tourism out­fit Velox has shifted its fo­cus from SA to Dubai and Kenya since the for­mer re­mains “a dif­fi­cult place” to visit for its clients, direc­tor Olalekan Bad­mus tells fin­week.

Broadly, the to­tal global out­bound travel mar­ket, in other words tourists who travel out­side their home coun­tries, is es­ti­mated at 1.2bn per an­num, ac­cord­ing to the WTTC.

Who is vis­it­ing?

The lat­est fig­ures re­veal that the UK – al­beit amid slight de­clines in the wake of its di­vorce from the EU – re­mains SA’s largest over­seas mar­ket. Last year, it ac­counted for 18%, or al­most 450 000, of in­bound tourists from out­side Africa.

“The spec­tac­u­lar growth in tourist ar­rivals in­di­cates that the close col­lab­o­ra­tion be­tween var­i­ous gov­ern­ment de­part­ments, be­tween the de­part­ment of tourism and in­dus­try, and be­tween sup­pli­ers and ser­vice providers on the ground has paid off,” Hanekom said in a state­ment.

Ex­am­ples in­clude gov­ern­ment’s ap­proval of the Bid­ding Fund to im­prove the coun­try’s share of global con­fer­ences, fund­ing projects that, in turn, cre­ate thou­sands of jobs, and col­lab­o­rat­ing with in­dus­try play­ers in im­prov­ing and mar­ket­ing SA as a tourist des­ti­na­tion.

Na­tional Trea­sury has set aside R20m for the next fi­nan­cial year and R90m for the fol­low­ing three years for the Bid­ding Fund.

Hanekom sees busi­ness travel as yet an­other trump card given its im­pact and mul­ti­plier ef­fects. “The es­ti­mated to­tal di­rect spend of busi­ness tourists in South Africa was R42.4bn in 2015. This is big money – more than R40bn in­jected into our econ­omy from one niche seg­ment of tourism in a sin­gle year! And it is grow­ing,” he said, cit­ing a three-year study com­mis­sioned by the SA Na­tional Con­ven­tion Bureau to de­ter­mine the eco­nomic value of the busi­ness events in­dus­try.

Urg­ing co­op­er­a­tion across dif­fer­ent sec­tors and part­ner­ships with for­eign coun­tries, Nt­shona told the 2017 Meet­ings Africa at­ten­dees that the coun­try was well-placed to achieve a big­ger share of the global trav­eller due to an ar­ray of fac­tors such as its world­class in­fra­struc­ture and nat­u­ral beauty.

It doesn’t hurt that Condé Nast, a

well-re­spected mag­a­zine, ranked SA fourth on its Top 20 of coun­tries to visit across the globe, beat­ing well-liked des­ti­na­tions such as France, Morocco and Thai­land in 2016. Cape Town owns brag­ging rights as the culi­nary cap­i­tal of the world, ac­cord­ing to that mag­a­zine.

The visa blun­der

While unhappy with a 7% de­cline in in­bound tourist traf­fic in 2015, Hanekom took so­lace from the length of stay and spend per for­eign tourist in­creased – re­sult­ing in a R4bn yearon-year rev­enue growth, to a to­tal of R68bn, in that year.

But 2015, when trav­ellers ditched this mar­ket for other des­ti­na­tions in Africa and abroad even as the rel­a­tively weaker rand stood to boost traf­fic, seems dis­tant.

The neg­a­tiv­ity started in 2014 fol­low­ing the on-and-off im­mi­gra­tion and visa rules that in­volved pre­sen­ta­tion of bio­met­ric data in per­son and, even in cases of visa-ex­empted coun­tries, unabridged cer­tifi­cates for all mi­nors en­ter­ing or leav­ing the coun­try.

The ad­min­is­tra­tive blun­der cost the in­dus­try an av­er­age 1 600 tourists a day, as the sit­u­a­tion wors­ened in 2015, ac­cord­ing to con­sul­tancy Grant Thorn­ton’s Lee-Ann Bac.

“A loss of this mag­ni­tude in for­eign tourist ar­rivals is un­prece­dented,” she said, adding that al­though the eco­nomic im­pact of this fi­asco would be dif­fi­cult to de­ter­mine, it cost the GDP bil­lions of rand in un­re­alised in­come.

Tourism sup­ports a range of other in­dus­tries – from trans­port to re­tail, en­ter­tain­ment and telecom­mu­ni­ca­tions – mean­ing the rip­ple ef­fects are ex­ten­sive.

Look­ing at the cur­rent sit­u­a­tion, Bac says the re­vised visa re­quire­ment mea­sures stemmed the tide of losses. “There are still lin­ger­ing mat­ters such as the de­part­ment of home af­fairs’ im­ple­mented visas for the New Zealand mar­ket ear­lier this year, which has played havoc in this mar­ket,” she says, adding that early signs sug­gest that 2017 will be no bumper year.

The point is that a great deal of work needs to be done be­fore the coun­try sees its fair share of in­bound traf­fic. editorial@fin­

“There are still lin­ger­ing mat­ters such as the de­part­ment of home af­fairs’ im­ple­mented visas for the New Zealand mar­ket ear­lier this year, which has played havoc in this mar­ket.”

Derek Hanekom Min­is­ter of tourism

Sisa Nt­shona CEO of SA Tourism

Olalekan Bad­mus Direc­tor of Velox

Trevor Bloem Spokesman for the tourism de­part­ment

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