Department on Tourism Development: briefing

ENVIRONMENTAL AFFAIRS AND TOURISM PORTFOLIO COMMITTEE
27 March 2007
DEPARTMENT ON TOURISM DEVELOPMENT: BRIEFING

Chairperson: Mr L Zita (ANC)

Documents handed out:
Department’s Powerpoint Presentation on Tourism Development

Audio Recording of the Meeting

SUMMARY
The Department of Environmental Affairs and Tourism (DEAT) informed the Committee on the gains which the industry had achieved over the last six years and the gaps in the process of tourism development among SMMEs. Communication and information dissemination was not sufficient to create enough awareness of the opportunities available in the industry. Tour operators would not easily change successful existing tours. The BEE Charter would have to force change on this score. At the same time service levels and skills development had to be addressed to provide tourists with experiences of world class standard.

The 2010 event was the focus for members and it seemed that the Department was forming linkages with other departments in order to facilitate an integrated approach to providing accommodation that was safe and of the necessary standard. Issues about people not being able to derive the maximum benefit from an event of this scale were met with the Department’s concern that changes and “opportunistic exercises” should be avoided. The industry would be using volunteers and certain makeshift measures to meet requirements, apart form accelerating changes that were ongoing and therefore sustainable. Questions around domestic tourism seemed to be overshadowed by these more pressing priorities.

MINUTES
Ms Lisa-Ann Hosking, Chief Director of Tourism Development, DEAT, is responsible for the management of the Tourism Enterprise Programme (TEP), which deals with SMME development. She gave the presentation on Tourism Development. Tourism was a priority sector within the Accelerated and Shared Growth Initiative (ASGIS-SA) that had to contribute to sustainable GDP growth, sustainable job creation and redistribution and transformation. They had defined six key objectives to attain these goals. Growth over the last eleven years had been exceptional, increasing by more than 100% with more than seven million tourist arrivals in 2005. Domestic tourists had spent some R21 billion and over 500 000 jobs had been created.

Focusing specifically on TEP, Ms Hosking said it was partially funded by the Business Trust and DEAT. It assisted SMMEs to market themselves, develop skills and to obtain finance over a period of three years. She elaborated on the progress they had made over the last six years. These SMMEs included those who were directly and indirectly linked to the industry. The Department provided assistance in facilitating linkages between major established companies in the business and SMMEs.

They were not a funding organization although they did provide 50% cost sharing in aspects like setting up business plans and grading. They took the SMMEs through every step of becoming a viable and sustainable business. They had developed three TEP toolkits to aid in this programme and there were others in process. Training was a major initiative, in order to build capacity in the industry and to develop SMMEs. The TEP Host City Programme was looking at analysing all gaps and weaknesses in the industry in order to assess the interventions required.

Discussion
Mr R Shah (DA) asked what the growth of 6.2 % since 2001 could be attributed to. Did they keep track of people who arrived as tourists, but who then become asylum seekers, especially visitors coming from conflict areas in Africa? Did Tourism interact with Foreign and Home Affairs in this regard?

Mr D K Maluleke (ANC) asked for a breakdown of the entities that had benefitted from TEP. What sort of information dissemination was taking place? Did they have a stand at the Rand Show so that people from surrounding areas could also have access to the information and opportunities offered by TEP? There were many disadvantaged people still living in those areas. Tsonga and Venda languages should be included in the translations of the toolkits being offered, as this is the language of people in the Northern areas of Limpopo. Was the existing infrastructure being used to distribute information, especially constituency offices?

Ms J Chalmers (ANC) said her constituency, which was some 200km away from Port Elizabeth, was a rural area, where people did not have the means to come into town for training workshops. Could such workshops be brought into those areas, making them more accessible? Parliamentarians should be supplied with toolkits so that toolkits were more accessible at their constituency offices for those who expressed an interest. The plan looked admirable on paper, but the practicality of getting the information out there to the people presented a challenge, which parliamentarians would gladly help to overcome.

Mr S M Rasmeni (ANC) asked for more detail on domestic tourism, especially which provinces were favoured in this regard, and asked how marketing to SMMEs was taking place and which methods of support were being provided. Few government departments seemed to be making use of constituency offices for the purposes of distributing information. Was TEP linked in any way with SEDA (Small Enterprises Development Agency) and how was financial support provided?

Ms Hosking said that she ascribed the increase in growth to an increase in marketing budget. She said SA Tourism adjusted its marketing strategy every three years. Among politically safe destinations such as America and Europe, people were choosing to go to South Africa. She said they did have a working relationship with Foreign Affairs and Home Affairs and they were also part of a residence commission set up by Statistics SA, which was attended by these departments, as well as the Reserve Bank. They did have some idea of the incidence of people arriving with the purpose of staying, but she did not have accurate figures available.

Mr Shah asked whether her figures had taken into consideration purely tourists.

Ms Hosking said this was the case as contract workers and the like were excluded form those numbers as well.

Mr Maluleke reiterated his concern about the effectiveness of information dissemination and communication and suggested that this needed more work.

Ms Hosking said that they did have a stand at the Rand Show as well as at other tradeshows. She said that his comment regarding language had been noted and that this would be taken into consideration in future toolkits, as their budget had been limited for this purpose. There were only three toolkits now available with a host of others in the pipeline for this year. She said training took place on request and therefore they were in a position to send trainers to certain areas. There had been little response in this regard from provinces and municipalities thus far. There was one business development consultant available.

She said they were currently involved in a Research Directorate survey on domestic tourism. Presently the Western Cape and Kwazulu Natal were the most popular provinces locally. She said that their website offered more information and that the toolkits could also be downloaded off their website. The toolkits could be made available to constituency offices. Partnerships with the private sector were working well in the Western Cape and in Kwazulu Natal where they had started a SMME Development Forum. She said SEDA was different to TEP. TEP focused on the tourism industry only while SEDA worked across the board. Financing for SMMEs was from the Business Trust.

The Chair asked for a comparison between rates of success achieved by TEP and SEDA. Was training offered geared towards individuals or groups? He asked about the BEE Charter.

Mr Shah asked if there was any drive to train tour guides, especially in foreign languages such as Spanish and French. Was there marketing drives taking places via foreign missions in other countries.

Ms C N Zikalala (IFP) asked if there was continued attention being paid to maintaining the standard of ‘Bed and Breakfast’ hotels and guest houses. She was concerned that an exclusive focus on 2010 was not taking into cognisance the various and continuing international events that were taking place in our country, such as the imminent World Congress of Rural Women. She asked if we were committed to raising service levels and being aware of how visitors were being received.

Mr M U Kalako (ANC) asked for a demographic breakdown of SMMEs.

Mr I M Cachalia (ANC) referred to the incidence of continued pilfering of baggage at airports and the safety aspect of travelling to South Africa. Was there any cooperation between Tourism and the Department of Safety and Security. Does the hospitality industry have the capacity and management skills to cope with visitors? Recently it had become difficult to get visas in India to travel to South Africa.

Ms Hosking said that no comparison had been drawn between SEDA and TEP, but that these figures could be extracted if necessary. Training was done on a group basis by the business development consultants, as there were very few of them. They trained between fifteen and twenty five in a group. She said the Charter Council was in place and they would be aligning the charter with the codes of good practice. The development of tour guides was in process and guides had been trained in Spanish, French and Chinese. They had also been sent overseas to spend time in various places in order to familiarize themselves more with the language. She said that they did have contact with certain foreign missions overseas, especially those where their markets were big.

She said that the standard of Bed and Breakfasts hotels and guesthouses was maintained through a grading system. Once grading was obtained, there was extensive marketing available to those establishments through being placed on the South African Tourism (SAT) website, which had overseas linkages as well. There was therefore a considerable incentive to fulfil the grading requirements. SAT also had a Welcome Programme and a Host Programme. She said TEP was prepared to finance 50% of the cost of grading in the first year and 25% of the cost in the second. She said that cabinet had already decided to use graded establishments. Through FIFA the organization MATCH had been formed with the purpose of finding accommodation for all ticket holders of the World Cup. This included all kinds of accommodation, as long as it was graded. The bookings could be done on the FIFA website and therefore establishments had international exposure.

Ms Hosking said she could provide a breakdown of the SMMEs in the tourism industry. Regarding the question of safety for tourists, she said they were in partnership with SAPS in each province and they had a safety and awareness drive for tourists in order to promote awareness among tourists and in order to raise awareness among the police of their needs. They were in the process of finalizing a safety and awareness strategy.

She was aware of the problem with visas from India and they were addressing the problem through bilateral agreements with that country. She said SAT had a product database which had captured 100 000 products of which 83 000 had already been verified. MATCH had presented a demand of some 55 000 rooms for 2010 of which 2000 rooms were already being provided by SMMEs. National parks were being involved in answering the accommodation requirements, as well as several big property agents. Already 80% of hotel rooms were committed and other alternatives such as tented camps and even house boats were being considered to fulfil accommodation needs for 2010.

Mr Maluleke was concerned about communication reaching the right people, such as ward committee structures, in order to ensure that more people could reap the benefits presented by this event.

Ms Zikalala asked if other events were also being considered. What was happening regarding the promotion of domestic tourism? Was the SABC programme ‘Short Left’ still being broadcasted, in order to facilitate this.

Mr Shah asked if the funds spent on human resources and infrastructure for the World Cup would be sustainable after the event and how much benefit people would derive from it. Were township tourist guides also being developed?

Mr Zita enquired how much of the revenue derived from the industry actually went to black people and to what extent was women, youth and disabled people targeted by the TEP. What were the proportions of funding between the Business Trust and the Department? He asked for an exercise to be done which would analyze to what extent the revenue from package tours was referred to their countries of origin and how much was trapped in South Africa. He asked for a similar exercise to be conducted with regard to African visitors. He suggested that all government officials make use of black-owned establishments rather than going the conventional route.

Ms Chalmers asked if big tour operators were prepared to change direction from using the well known resorts to trying new lesser known alternatives, using local tourist guides who often had a greater knowledge of the local history and plants.

Ms Hosking stated that they were being very careful about managing expectations and therefore only those that were in the business of tourism generally should be getting involved in any form of “gearing up” for 2010, otherwise they would be overextending themselves for something that was going to be very temporary and therefore not sustainable. She said it was really up to the municipalities of the host cities to initiate linkages with surrounding areas, in order to prepare for the event and to enable the spreading of benefit for those in more outlying areas. They would be making extensive use of volunteers, just as Germany had done, and therefore this would not entail the employment of extra human resources. They were in the process of forming a strategy to include second economy tour operators. This would mean an adjustment of their programme.

They did take cognisance of other events and they also supported SMMEs in exhibiting at local tradeshows and eventually international shows. Domestic tourism was an ongoing venture, but the campaign was also driven by the need for people to come forward with their products. This was an investment that would go beyond 2010. She said that areas such as transport, aviation capacity, information provision were among the many challenges they were facing on an ongoing basis, but which with the advent of 2010 would see accelerated implementation. She was not too concerned by the instance of skilled staff leaving them as once they were skilled they would probably stay in the industry in one way or another and would be absorbed by it. She said that they did not specifically target certain groups, but that their objectives of providing employment and skilling had a positive effect on all those groups and particularly the skilling of SMMEs which involved black people, many of whom were women.

She said that unfortunately these SMMEs were negatively competitive with each other instead of standing together and forming a whole, there were instances where operators approached an SMME in a township and asked for accommodation. Often one SMME could not answer the full need and unless they stood together to fulfil the requirements of the operator they stood to lose everything. She said SMMEs would have to start cooperating with each other. Tour operators had used the same routines and establishments for years simply because they were effective and they were lucrative. They could not afford to change this if there was no incentive to do so and this is where the charter would be helpful in forcing change. The industry was based on confidence and perception of service levels and people had to be assured of a good and positive experience. She said the government procurement tool could be used to track where government officials were staying.

Mr Zita said that if SMMEs were not able to provide the necessary service levels and standards to fulfil requirements then an agency should be established that would help them to acquire the necessary skills and standards. Parliament should improve its oversight function in the industry.

The meeting was adjourned.