Budgetary Review and
Recommendations Report of the Portfolio Committee on Tourism on the Performance
of the Department of Tourism for the 2011/12 Financial Year, Dated 23 October
2012
The Committee, having assessed the service delivery performance by
reviewing the Annual Report and the Financial Statements of the Department of
Tourism under Budget Vote 35 reports as follows:
1.
Introduction
The Annual Report and Financial Statements
are considered against the backdrop of the prevailing legislations and the global
tourism trends that somehow inform and influence attainment of set targets for
both the National Department of Tourism and its entity, South African
Tourism. Some of these major global
trends include an increasing demand for short haul instead of long haul travel,
reduced length of stay by tourists, recession in Europe, decline in disposable
income, and fragile recovery of the American economy linked to
The Department has recorded 8.3 million
tourist arrivals in 2011 against 8.1 million in 2010. This indicates that the Department has
managed to leverage on the gains made by hosting of the 2010 FIFA World Cup and
consolidated its efforts in attracting more tourists to the country. The
Department has also developed communication initiatives with South Africans as
well to reach out to the citizenry and raise awareness of the opportunities of
the tourism sector and to make them travel as domestic tourists within their
own country. In achieving domestic
tourism, the Department has recognised the importance of local government in the
implementation of strategies and achieving synergy across three spheres of
government. A Local Government Support
Programme and Growth Support Programmes were developed and a National
Stakeholder Forum has been established to improve integration and alignment.
The
system of monitoring compliance with BEE rating was piloted and is now
operational to ensure transformation of the tourism industry and compliance
with the tourism BBBEE Charter. To
support the participation of Small Medium and Micro Enterprises, the Department
initiated and piloted a mentorship programme in which enterprises are mentored
by retired business executives. In
addition, the department conducted nationwide workshops for Supply Chain Management
officials, as well as public and private sector tourism associations on the
implementation and alignment of BBBEE and Preferential Procurement Framework
Act to advance transformation of the tourism sector.
This report seeks to
provide an analysis of the annual report of the Department of Tourism for the
2011/2012 financial year. The emphasis of this report will be based mostly on
programme performance in comparison with the Strategic Plan in line with the
2011/2012 budget. The committee, in reviewing the work of the Department for the financial
year under review placed emphasis on the following aspects:
Ø An overview of the overall performance of voted funds: Budget Vote
35: Tourism;
Ø An overview and analysis of the department’s strategic priorities and
measurable objectives;
Ø Analysis of the department’s prevailing strategic and operational plan;
and
Ø Analysis of the department’s annual report and financial statements
using section 32 reports as a guide.
The committee, in undertaking this process
used a number of source documents ranging from the State of the Nation Address,
strategic plans of the department, briefing sessions as well as oversight
visits as a base to analyse the work of the department.
1.1 The role of the Committee
The
mandate of the committee is underpinned by provisions of the Constitution of
the
The
mandate and role of the committee is to:
Ø
Consider all matters falling within its
portfolio as referred to it in terms of the Constitution, legislation, Rules of
the Assembly or by resolution of the Assembly.
Ø
Exercise and maintain oversight over the
executive state organs falling within its portfolio.
Ø
Monitor, investigate, enquire and make
recommendations concerning any executive organ of state or institution.
Ø
Perform any other responsibilities
assigned to the committee in terms of the Constitution, legislation, Rules, resolution
of the Assembly, including functions concerning parliamentary oversight of the
executive organs of state or institutions.
1.2 National
Department of Tourism
The
mandate and core business of the department is underpinned by the Constitution
and all other relevant legislation and policies applicable to the government,
including Batho Pele and the White Paper on Development and Promotion of
Tourism in
The
vision “to be globally celebrated as a leader in tourism excellence” and
mission “collectively and boldly promoting responsible and sustainable tourism
for the benefit of all South Africans” therefore embody the mandate of the
department, as follows:
Ø
The department supports tourism sector’s
contribution to economic growth.
Ø
Its mandate is to create the conditions
for sustainable tourism growth and development, through government’s new growth
path and the National Tourism Sector Strategy which focus on job creation and
economic growth, the department supports both the public and private sectors in
the tourism industry.
2.
Strategic
Priorities and Measurable Objectives of the Department
The aim of the department is to promote and support
growth and development of an equitable, competitive and sustainable tourism
sector, enhancing its contribution to national priorities.
2.1 Strategic Plan of the Department
Key sector for economic growth and job creation:
Government’s New Growth Path identifies tourism as one of the six economic
sectors of economy and asserts tourism as a driver of both domestic consumer
spending and foreign exchange earnings. The
tourism is a key labour-intensive sector and strategic area of the economy,
with low barriers to entry for entrepreneurs, and has the potential to create
jobs in both urban and rural areas and stimulate growth. It is estimated that
for every 16 tourists, a job is created in the sector. The National Tourism
Sector Strategy forecasts that tourism is set to contribute 225 000 new jobs by
2020.
In the medium term the department aims to:
Ø Increase investment in the tourism sector.
Ø Increase inbound tourism.
Ø Deliver a world-class visitor experience.
Ø Entrench a culture of tourism amongst South Africans; and
Ø Increase the sector’s contribution to job creation and economic growth.
2.2 Measurable Objectives of the Department
In line with the vision of the National
Department of Tourism, and in alignment with the national priorities, the
Department identified projects that would accelerate delivery of services in
the tourism sector. Outlined below are the strategic objectives of the Department
as stated in the 2011/2012 Strategic Plan.[1]
Ø
To grow the travel and
tourism sector’s absolute contribution to GDP;
Ø
To achieve
transformation within the travel and tourism sector;
Ø
To provide excellent
people development and decent work within the travel and tourism sector;
Ø
To entrench a culture
of travel amongst South Africans;
Ø
To deliver a world class
visitor experience; and
Ø
To address the issue of
geographic, seasonal and rural spread.
The objectives mentioned above are in line
with the international trends and also address domestic tourism issues. The
major international trend is to develop and drive domestic tourism, and to
achieve this, the Department needs to intensify interventions that will
entrench the culture of travel amongst South Africans, especially historically
disadvantaged and rural communities located near major tourist attractions. These interventions will strengthen the role
of tourism in supporting rural development and ensure diversification of
product offering. The local government support programme will need to be
intensified and cover many district municipalities to ensure capacity to plan
and deliver on tourism mandate at a local level. In the same vein, the Department needs to
intensify mechanisms geared towards ensuring equitable geographical spread of
tourism development and measures that address the seasonal nature of the
industry.
The tourism industry remains mainly
untransformed and the pace of transformation is very slow. The department needs
to intensify interventions aimed at implementing the Tourism Sector Codes and
monitoring compliance by role-players in the industry. There needs to be a concerted effort to
assist emerging tourism enterprises so that they may graduate from the second
to the first economy of the tourism industry. All the interventions mentioned
above will culminate in the increased contribution of the tourism sector to the
Gross Domestic Product growth and realisation of job creation as envisaged in
the current economic policy of the
3.
Analysis
of the Strategic and Prevailing Operational Plan of the Department’s
The following provides a breakdown per programme on
key performance indicators, targets and actual performance:
3.1 Programme 1: Administration
The purpose of this programme is to provide strategic
leadership, centralised administration, corporate support and services. In terms of good corporate and corporative
governance, the department set a target of 100% and was able to implement 100%
of organisational performance management system. The internal protocol was developed with a
target of 100% and 100% was implemented to achieve intergovernmental policy
implementation. With regard to reduce the funded vacancy rate a target of 10% was set
and 9.42% was achieved.
A target of 100% was set for
implementation of the Workplace Skills Plan and 118% was achieved, which was
higher than a set target. The department set a target 100% target for the
implementation of Performance Management System and 100% achievement was
recorded. With regard to
efficient service delivery, the department set a target of 97% for uptime of network and services availability and achieved 99%, which was higher
than the set target.
There was no baseline for the implementation
of the Master Systems Plan (MSP) and the department was able to review the MSP
and implement 100% of phase 1. There was also no baseline for Business Process
Modelling and Structures but the department was able to audit all the business
processes and model 45% of business processes higher than the 40% that was
originally set as target. With regard to
effective internal audit services a target of 100% was set and achieved by the
Department.
Regarding economic, efficient and effective use of departmental
resources a target of 90% was set for compliance with regulatory requirements
and 100% was achieved higher than a set target, whilst a target of 59 % was set
for expenditure on procurement from BBBEE and BEE enterprises and 59% was
achieved per set target.
3.2 Programme 2: Tourism Development
The purpose of this programme is to facilitate and
support the development of an equitable tourism sector. With regards to the creation of employment
opportunities by implementing tourism projects targeted at the unemployed, the
number of full time equivalent jobs created was targeted at 5 270 and the
actual number created was 5 036. With
regard to the number of Full Time Equivalent jobs created from the Medium Term
Expenditure Framework Baseline budget for the Tourism Enterprise Partnership
(TEP) a target was set at 5 000, while the actual jobs created were 5 093. With
regard to contribution to skills and people development within the tourism
sector a target of 800 was set for the number of unemployed youth and graduates
trained as chefs and placed for experiential learning, whilst a number of 818
youth were enrolled in the programme with 536 who graduated. The total of 282
candidates dropped out due to reasons beyond the control of the department
which includes pregnancy, getting permanent employment and others.
In terms of training unemployed youth in the
hospitality field and placing them for experiential learning a target of 300
was set, whilst an actual number of 422 youth were trained and placed exceeding
the target by 122 youth. With regard to
people trained as Tourist Buddies/ Tourism ambassadors and placed for
experiential learning a target of 975 was set whilst a total of 1 221 were
enrolled and 1 170 of them placed for experiential learning, and 913 assessed
and found competent and will be receiving certificates. The committee notes
department performed well on training programmes including those funded through
the EPWP funding the department must intensify the “soft” projects that deal
with skills training whilst sorting out the technical challenges presented by
capital projects.
In terms of facilitating and supporting economic
empowerment through product and enterprise development there was no baseline
and the department targeted to develop a Rural Development Strategy and support
2 rural products, whilst the Rural Tourism Strategy was developed and finalised
and 4 products were supported, 2 more than the target. The department had money to fund development
of feasibility studies and supporting 4 projects and the original target of 2
targets might have been an underestimation which resulted to department
seemingly achieving higher performance on the set targets. With regard to
tourism projects funded through the EPWP funding a target of 45 was set, whilst
an actual number of 76 projects were implemented. Here the committee notes that the department
exceeded the target by 31 projects and encourages the department to set targets
according to the available budget and do proper project costing before setting
the target than to declare overachievement which might have been achieved
within the available budget.
With regards to investment promotion activities there
was no baseline and a target of 4 investment promotion activities was set, whilst
a total of 4 were achieved. In regard to
intensifying domestic tourism development the Cultural Heritage Tourism
Strategy, Events Strategy, and Niche Tourism Strategy were developed and the
Social Tourism concept document was finalised.
With regard to small rural tourism enterprises supported a target of 530
was set, whilst 981 were supported given that 2012 was the first year in which
rural enterprises were supported and the 530 was an estimate at the beginning
of the year.
With regards to number of enterprises supported to
grow either at 5% revenue or 5% jobs, a baseline of 19 was available and a
target of 25 including 5 from rural areas was set, whilst a total of 99 was
achieved due to the mentorship programme that was included for all enterprises
supported to enable them to grow. A
target of businesses supported with market access was set at 170 whilst 186 was
achieved. With regard to members of
designated groups supported, a target was set at 3 351 whilst a total of 2 253
were supported as per advise of the department to TEP to count enterprises
rather than individuals as had been the case previously.
To enable and drive transformation in the sector as
informed by the gazetted tourism BEE Charter and NTSS, a target of 12 MoUs was
set to be signed with strategic partners, whilst 14 were signed, 5 with public
sector and 9 with private sector. A
target of 30 was set for organs of state who report on leavers they use to
drive transformation in the sector, whilst 30 submitted their reports. With regard to mentorship programme
established to support development of Black SMMEs a target of 20 was set,
whilst a total of 22 were accepted in the AMSCO programme. A target of 50 was set for Black graduates
participating in the accelerated tourism graduate apprenticeship, whilst only
37 graduates participated in the programme, reasons being the delays in the
negotiations with relevant institutions to host graduates. The committee notes that the department sets
targets before finalising placement negotiations and urges the department to finalise
negotiations and be certain with number of available spaces for placement
before targets are set.
In ensuring key stakeholder engagements through
strategic events platform, a target of 5 events was set based on the baseline
of 1, whilst 5 events were successfully executed as per set target. A target was set to publish an Annual Report
on the impact of public sector partner spend on empowered tourism goods and
services, whilst 1 report was compiled as per set target.
3.3 Programme 3: Tourism Growth
The purpose of this programme is to promote growth,
competitiveness and quality of the tourism sector. To provide excellent people development
within the tourism sector targeting young people, a target was set to revise the
skills report for 2012 and MoU has been signed between CATHSSETA and the
department. As part of ensuring that unemployed
Matriculants and tourism graduates are trained and placed for experiential
learning per year in the hospitality industry a target of 70 was set, whilst
249 were recruited, trained and placed as more funding was allocated from EPWP
for this initiative. A target of 176 was
set for youth trained as chefs, whilst 818 trained is the same as that
accounted for under Tourism Programme.
The committee notes this as double counting and urges the department to
place target under the Programmes where they are most relevant. A target of 4 National Tourism Leadership
Dialogues was set and all 4 were achieved.
A target of hosting a National Careers Expo was set, whilst an Expo was
successfully held in
In improving service levels in the tourism industry,
Tourism Generic Service Excellence Requirements Norms and Standards were
facilitated as planned. With regard to implementation of Service Excellence
Strategy, the strategy was implemented and norms and standards launched as
planned. With regard to professionalizing
tourist guides services, 9 workshops were planned and 11 implemented, 4 SADC
countries were targeted for consultation on harmonizing guiding standards and
all 4 SADC countries were consulted and a draft framework for harmonizing
guiding standards developed, and a monitoring and reporting of provincial
tourist guides registration was done as planned. With regard to improving service levels in
the tourism industry a target of developing a Consumer Satisfaction Framework
and communicating it to the industry was set and achieved.
To promote responsible tourism best practices, targets
of developing the accreditation system and Minimum Standards for Responsible
tourism; development of Universal Access in Tourism action plan; developing the
National Climate Change and Tourism Response Programme; and developing National
Responsible Tourism Strategy were set, whilst the accreditation system was
approved by SANAS, Universal Accessibility action plan finalised with annual
action plan and 18 workshops conducted with 4 400 brochures distributed; the
National Climate Change and Action Plan developed with 18 workshops and 5 000
brochures distributed; and National Responsible Tourism Strategy including
annual action plan was developed.
3.4 Programme 4: Policy, Research,
Monitoring and Evaluation
The purpose of this programme is sector policy
development, research, planning, monitoring and evaluation. It is meant to ensure that the tourism policy
environment is conducive to sustainable growth and development. To ensure
monitoring and evaluation of the tourism sector performance, a target of 1 was
set for the frequency of the State of
The target was set to have a Draft M&E Framework
for NTSS and a draft monitoring and evaluation framework for the National
Tourism Sector Strategy (NTSS) had been finalised. With regard to progress
reports on tourism indicators for Presidential outcomes a target had been set
to develop quarterly reports based on Presidential timeframes and all quarterly
reports were done as per requests received.
In terms of tourism forecasting models customized and
adopted a target of 1 was set 1 model to estimate number of direct and indirect
jobs created was developed. With regard
to M&E framework for Departmental entities a target was set to develop an
M&E Framework with 1 Monitoring and Evaluation Framework for Tourism
Enterprise Partnership developed.
In terms of creating an enabling policy environment and
improve intergovernmental coordination, a target of 5 tourism related policies
and strategies was set. 5 documents were
produced, namely Draft Domestic Tourism Strategy, Crisis Management Framework,
Intergovernmental and Stakeholder Engagement Framework, Sector Budget
Structure, and two policy papers on transport review and compendium of
legislation with impact on tourism. With
regard to district municipalities supported to implement tourism development
and growth strategies a target of 2 municipalities was set, whilst a Local
Government Tourism Development and Growth Support Programme was developed and 2
district municipalities supported. In
terms of reports on the integration and alignment of tourism initiatives with
NTSS at provincial government level, a target of a report on the alignment with
provincial growth and development strategies and NTSS was set and achieved.
With regard to district municipalities influenced to align tourism initiatives
with the NTSS a target of 15 was set and actual number of 19 was achieved. The Department had planned 2 platforms to
report on the implementation of the Airlift Strategy, whilst 5 platforms were
facilitated to secure additional frequencies in key tourism markets in
With regard to providing knowledge management for the
tourism sector a target of 1 information and knowledge management system was
planned and achieved; a national visitor information framework was planned and
developed; a framework tourism information gateways framework and brand was
planned and developed. A target of
having an approved knowledge management framework and its implementation was
set and the framework was approved and implemented. A target of 1 social media
platform was set and 1 social media approach for the social media strategy was
developed. With regard to district municipalities whose events are captured in
the national events calendar a target of 50% was set, whilst 78% was achieved.
In terms of managing and conducting tourism research
to inform tourism growth and development a target of 2 was set, whilst 2 was
achieved as planned; and 2 research studies were targeted to be initiated to
inform development of new markets, whilst 1 report was completed. A target of 3 research studies on tourism
indicators identified in the NTSS without baseline was set and 3 studies were
conducted. The development of the
research framework with its implementation was planned and the national
research framework was approved and its implementation commenced.
4.
Analysis
of Section 32 Expenditure Reports
At the end of the 2011/12 financial year, the
department spent R1 250 264 billion of the total budget of R1 264 985 billion
which amounts to 98.8 per cent of the total expenditure. The Department under-spent by R14.7 million
which amounts to 1.2% of the allocated budget. The Departmental budget was
increased by R22 million during the adjusted Estimates of National Expenditure².
Economic
classification spending trends
Current Payments: The department spent R262
million or 2% of total budget allocation.
Transfers and subsidies: At the end of the
2011/12 financial year, the department transferred R966 731 million or 77% of
total budget allocation.
Capital Assets:
The Department spent R20 519 million on capital assets or 2% of the
total budget allocation in the 2011/12 financial year.
A breakdown of the spending trends for each of the
programmes reflects the following:
___________________________
²
Expenditure Report 2011/12
4.1
Programme
1: Administration
The allocated budget for this programme was R 197 837
million. An amount of R196 513 million was spent in
this programme which amounts to 99.3% per cent of the total
allocation. The slow spending is due to unspent funds relating to
furniture and equipment for the new Departmental head office building (R1 324 million).
4.2
Programme
2: Tourism Development
The allocated budget for this programme was R346 175
million. Spending amounts to R338 577
million which is 97.8% of allocated budget. The slow spending (R7 598 million) was
due to Tourism product and Enterprise Development’s heritage DVD project
(tender cancelled) and memorandum of Understanding which were not finalised for
the Tourism Sector Transformation’s learnership support programme with Further
Education and
4.3
Programme
3: Tourism Growth
The allocated budget for this programme was R694 074
million. The R689 756 million amounting
to 99.4% of the appropriated budget for this programme was spent. The under spending (R4 318 million) is due to
outstanding invoices for membership fees payable to International Airport
Association (IATA). The underspending on
transfers was due to the memorandum of Understanding with Tourism Business
Council not finalised during the financial year.
4.4
Programme
4: Policy, Research, Monitoring and Evaluation
The total allocation for this programme was R26 899
million. The R25 400 million of the
budget amounting to 94.4% was spent. The
underspending is due the memorandum of Understanding with the
5.
Analysis
of the Department’s Annual Report and Financial Statements³
In the outcomes approach to service
delivery, tourism contributes to the realisation of outcome 4 (decent employment through
inclusive economy), and outcome 7 (vibrant, equitable and sustainable
communities and food security for all). In addressing these outcomes, the
committee acknowledges the strides made by the Department in 2011/12 financial
year in consolidating the tourism sector efforts to increase tourism’s
contribution to job creation and economic growth. A number of policy frameworks have been
developed and launched. Domestic tourism
is now receiving the attention that supports its stature as the backbone for a
sustainable tourism sector in
___________________________
³Annual
Report and Financial Statements 2011/12
The committee is generally satisfied by
the work of the Department and South African Tourism for the work achieved in
the year under review which includes amongst others:
Ø
Reduction of vacancy
rate from 21.6% to 9.4% which has assisted the department in fulfilling its
mandate.
Ø
Establishment of a Risk
Management Unit that assisted management in identifying and mitigating
potential risks which could hinder achievement of set objectives.
Ø
The Development of Rural
Tourism Strategy, Tourism Development Master Plan, Cultural Heritage Tourism
Strategy, Events Strategy, niche Tourism Strategy Decent Work Framework, Crisis
Management Framework, intergovernmental and Stakeholder Engagement Framework,
Tourism Sector Budget Structure, National Responsible Tourism Strategy, Minimum
Standards for Responsible Tourism, Consumer Satisfaction Framework, Tourism
Generic Service Excellence Norms and Standards which will enhance growth of the
tourism industry.
Ø
Training of 818 youth in
a chef programme.
Ø The training of 1 221 people in Tourist Buddies Programme.
Ø Creation of 5 036 Full Time equivalent jobs created from EPWP and 5 093
Full Time Equivalent jobs created from MTEF budget (TEP).
Ø
Foreign direct spend in
rand terms has grown faster than arrivals, with an 11% per-annum growth rate.
Ø
Ø
For the first few months of 2012, tourist
arrivals to
Ø
The domestic tourism statistics indicate that in the first quarter of 2012, 5,5 million domestic trips were
undertaken which contributed R5,2 billion to the economy. This is over R600
million or 13% more than last year’s economic contribution over the same
period.
Ø
Successful hosting of the National Tourism Careers
Expo (NTCE) 2011.
Ø
The latest Statistics SA’s accommodation figures
indicated that total income for the accommodation sector for the second quarter
of 2012 increased by 11,2%, and the number of stay unit nights sold for the
second quarter of 2012 increased by 8,2%, both compared to the same period in
2011.
Ø
President Jacob Zuma signed the United Nations
World Tourism Organisation’s “Golden Book” at the World Economic Forum on
Ø
Harmonising of tourist guiding standards with 4
SADC countries.
Ø
Launching of the South African National
Conventions Bureau Strategy.
Ø
A total of 5 542 graded tourism establishments
which is a 13% increase.
Ø
The successful hosting
of the Imvelo Awards and the Hospitality Investment Conference for Africa
(HICA) was achieved in partnership with the Federated Hospitality
Association of Southern Africa (FEDHASA) and the Tourism Business Council of
South Africa (TBCSA) respectively.
Ø The successful hosting of the 2011 Indaba.
Whereas the Department has managed to register a
number of successes they still have some challenges that must be addressed for
the industry to realise its potential and these challenges include:
Ø
The department failed to
meet their target in relation to the implementation of the International
Relations Strategy due to delays in finalising the Strategy within the set
timeframes that would have informed the implementation programmes.
Ø
The department
experienced challenges with regard to grading of establishments due to a resistance
by stakeholders. The Department needs to
conduct more workshops and awareness campaigns to ensure that there is a buy-in
to newly introduced grading standards.
Ø
Opening of tourism
offices in African markets to attract more tourists from these markets and
ensuring regional growth.
Ø
The continued challenge
faced by the Department with regards to the implementation and monitoring of
the Expanded Public Works Programme.
Ø
Lack of technical
expertise to implement the Expanded Public Works Programme.
Ø
The Department
experienced a huge number of dropouts in the training programmes and needs to
improve recruitment and retention strategies.
Ø
The Department and SAT struggled
to achieve some planned targets and there is a need to improve in setting
targets considering available baseline and external factors that may influence
attainment of results.
Ø
There is a need to
improve financial and performance management at SAT with regard to controls and
monitoring of Supply Chain Management (SCM) processes.
6.
Consideration
of Reports of Standing Committee on Public Accounts (SCOPA)
For the year under review, the department did not receive
any invitation to appear before the Standing Committee on Public Accounts. The SCOPA
prioritizes departments which received a qualified audit opinion or which had
disclaimer or received an adverse audit opinion from the Auditor General.
7.
Consideration
of other Sources of Information
In compiling this report the committee considered
other sources of information that that have a direct impact on the mandate of
the Department, including:
Ø The
State of the Nation Address
Ø Reports
of the Auditor-General of
Ø Fact
–Finding visits (Oversight) reports
Ø Prior
BRRRs
Ø Reports
of the Budget Votes
Ø Reports
from organisations made presentations to the committee.
8. Committee’s
observations
For the year under review, the committee interacted
with a number of government departments, public entities and tourism industry
stakeholders. In all these engagements, the committee made the following
observations:
8.1
Political
relations: The
committee notes the increase in number of tourists from the BRIC
countries. The committee is in support
of the participation of
8.2
National
gateways: The tourist
experience begins by the time a tourist lands at the airport or is processed at
a border gate. The level of customer
care at border gates is somehow not friendly to tourists. The Department of Tourism has to work with
the Department of Home Affairs and South African Revenue Services to devise
mechanisms that could improve customer service at the major points of entry
throughout the country.
8.3
Intergovernmental
relations: The
National Tourism Sector Strategy requires that all three spheres of government
need to synergise their strategic plans as the Constitution defines tourism as
a Schedule 4 competence. The Department
must coordinate strategic planning sessions with all provinces to ensure
synergy. The provinces should also have
strategic planning sessions with municipalities to ensure seamless
institutional support and seamless integration. The committee also notes the
need of the Department of Tourism to enter into MoUs with other departments to
address cross-cutting issues that affect tourism.
8.4
Tourism
Budgets: The successful implementation of the National
Tourism Sector Strategy and its related strategies and programmes require
substantial financial resources. The current national and provincial Tourism Budgets
are extremely limited and do not allow for the successful implementation of the
National Tourism Sector Strategy. The Tourism Budget Structure has been
finalised with the National Treasury and puts a huge financial burden on all
spheres of government. There is a need
to increase tourism budget to meet the mandate of the Department and provide
necessary support to relevant role-players.
8.5
Marketing:
The committee found that there is potential for growth
in the African markets, however, there is inadequate marketing initiatives. The
committee also found that regional tourism is the key to future tourism
growth. It was also discovered that
there is a new trend of a shift from a long haul to short haul travel and
marketing interventions need to take these new trends into account.
8.6
Safety and Security of tourists:
The committee observed that there are a number of violent strikes in the
country; incidents such as the
8.7
Grading
of tourism establishments: The committee observed that there
is a challenge with regard to acceptance of new grading standards by the
private sector in a form of resistance to embrace the new system. The matter is a threat to quality assurance
in the tourism industry and must be addressed by all spheres of government. This also necessitates a closer look at the
influence of the emerging social media on the grading and quality of products
and experiences.
8.8
Public-private-partnerships
(PPPs): The committee
recognises that the tourism industry is government led, private sector driven
and community based. The development of
the tourism industry will not only be facilitated by the government but need
huge injection of investments from the private sector and development of strong
partnerships. The National Treasury has the PPP Toolkit for Tourism and this
needed to be unpacked and simplified to be effectively used as a tool for
tourism development.
8.9
Indaba
as premier African consumer show: The committee has observed that there is a
challenge with the current venue used for Indaba and there is no long-term
strategy to grow the event.
8.10
National
Convention Bureau (NCB) – The
committee notes the operation of the NCB in terms of the three phase
strategy. The committee would however
like to get a clear understanding of what have been the achievements of the NCB
thus far and how its activities interface with the Provincial Convention
Bureaus. The committee would therefore
like to have a full briefing on the matter.
8.11
Tourism
as an economic activity:
The tourism industry is one of the foreign currency issues and is
heavily affected by international economic climate. Tourism needs to be given special attention
and its performance be closely monitored as this industry is the important
foreign currency earner. The tourism
industry must be viewed as an “export industry” serving as a mitigating factor
to other distressed industries that act as foreign currency earners.
8.12
New cost drivers in aviation: The committee notes the effect of
new cost drivers in aviation on consumer behaviour and travel patterns. These
cost drivers included global exchange rate and currency volatility, oil prices,
fuel hedging costs and costs associated with increased transport security. The
committee also notes the concern the impact of high landing rates in growing
the tourism industry.
8.13
SA Tourism
levies – Provinces are of the view that the revenue from SA Tourism levies
should be proportionally allocated to tourism routes so that it can be applied
directly to the benefit of the province where it was generated. Stakeholders
indicated willingness to pay the levy, but also wanted to receive a benefit
from the fee payment.
8.14
Provincial
statistics from SA Tourism – the lead time for obtaining statistics from
SAT is too long and reduces the ability of tourism stakeholders to measure and
manage the industry.
8.15
Unresolved Land Reform Claims – the prolonged land
reform processes, linked to inadequate after care programmes in the wildlife
and tourism business sector hampers investment opportunities in tourism.
8.16
Tourism
Funds – in the form of Tourism Assistance Programme residing with the
Department of Trade and Industry. These funds could assist the NDT to fund
emerging businesses. The committee notes the engagements between the NDT and
the DTI and would like have progress report on the matter.
9
Conclusion
The Committee has expressed satisfaction across the board that the
Department and SA Tourism received unqualified audit reports with SA Tourism
receiving 11th consecutive unqualified no-matter-of-emphasis report.
During the presentation, the Committee was taken through
programmes and policies aimed at increasing jobs and entrepreneurial
opportunities in the tourism sector. The
Department succeeded in creating 5 036 Full Time equivalent jobs and 5 093 Full
Time Equivalent jobs created from MTEF from baseline budget. The Department also implemented the National
Youth Chefs Training Programme on partnership with the South African Chefs
Association. A total of 818 youth were
enrolled in the programme and 536 graduated from the programme. In addition, 422 unemployed young people were
trained and placed in various hospitality fields, 1 221 were enrolled and 1 170
placed for experiential learning as Tourist Buddies.
The Department has also succeeded in
putting policies and strategies in place that will achieve seamless integration
and grow the tourism the tourism industry.
These policies and strategies have been aligned to the National Growth
Plan. There have also been notable strides made with regard to transformation
although the Department still needs to put more efforts in achieving a fully
equitable and inclusive tourism industry.
The Department was able to spend 98% of its budget. The committee also interacted with the
Auditor-General in assessing the performance of the Department as part of its
oversight role.
The Committee further noted the progress made with regard to
monitoring of EPWP projects and will be following up on progress with regard to
the engineers that the department will be employing to ensure quality assurance
and monitoring of capital projects. Although the department was planning to
employ engineers to monitor the EPWP capital projects, the committee still
noted with concern the non viability of EPWP capital projects after the department
has exited the projects as EPWP funding does not cover operational costs.
10. Recommendations
10.1 Leadership
The committee notes with serious concern the continued
lack of monitoring controls to comply with contractual requirements and internal
controls over the Expanded Public Works Programme (Social Responsibility
Implementation) to detect and prevent control deviations and non-compliance
with laws. The value for money for some of the projects is also
questionable. The committee notes the
progress made by the Department in addressing the issues and recommends that the
Department should have more stringent control measures in place to deal with
this challenge and report progress to the committee.
10.2 Governance
The committee notes the existing concerns about the
nature, extent and frequency of management’s assessment of controls in place,
relating to the Expanded Public Works Programme, to prevent and detect
fraudulent activities. The committee
recommends that it be updated regularly on some of governance issues,
particularly on EPWP projects and that there should be:
Ø Improvement
in the reporting system to detect challenges at an early stage.
Ø An
increased capacity and technical expertise to implement and monitor EPWP
projects.
Ø Improved
monitoring and evaluation of Expanded Public Works Programme
10.3 Investigations
The committee notes and is in support of the forensic
investigations initiated by the Accounting Officer of the Department in respect
of the EPWP projects and would follow the investigations with keen interest;
and the criminal cases that have been opened with South African Police Service
(SAPS) in respect of the EPWP projects.
10.4 Tourism Budget
The Budget of the Department of Tourism must be
increased to meet the following:
Ø Create
optimal level of advertising that would in turn ensure greater generation of
jobs.
Ø Open
Tourism offices and marketing hubs in African markets to have marketing
presence and conduct activations in these emerging markets, as marketing intelligence
indicates an increasing demand for short haul instead of long haul travel.
Ø Implement
strategies that will enhance development of domestic tourism.
Ø Facilitate
implementation of strategies and programmes that have been developed to achieve
the objectives of the National tourism sector Strategy.
Ø To
create more Full Time Equivalent jobs from the Expanded Public Works Programme,
especially in rural areas.
Ø To
assist the SMMEs in funding their businesses for start-up capital, staff
training, and extension of existing tourism establishments.
10.5 Mitigating effects of administration costs
The committee acknowledges that tourism businesses as
economic enterprises should pay taxes and utility costs according to the laws
of the country. However, the committee notes with concern the effect of utility
costs to tourism enterprises, especially emerging businesses. The committee recommends that:
Ø The
South African Local Government Association (SALGA) needs to be engaged to
ensure that municipalities charge rates and taxes that take into account the
volatility of tourism businesses due to seasonality in order to ensure that
emerging tourism businesses are sustainable.
Ø Municipalities
should consider mechanisms of lowering electricity tariffs charged to tourism
businesses as higher costs affect emerging enterprises.
Ø The
Department should work with other public entities and the private sector to
come up with sustainable alternative energy sources that could be used in the
tourism industry to lower the costs of doing business.
10.6 Intergovernmental relations in tourism
There is fragmentation of tourism planning across the three spheres of
government, inadequate database on the supply side, with associated lack of
reliable market information and poor integration of tourism with other sectoral
policies. Tourism is a concurrent competence, and
requires good coordination and mutual support between the three spheres of
government, particularly in view of the diverse nature of tourism.
The committee recommends that:
Ø An
integrated approach should be established by the three spheres of government to
enhance their relationship and coordination whereby all Provincial and Local Government
tourism sector strategies will be aligned to the National Tourism Sector strategy.
10.7
Beneficiation
of local communities from local tourism resources
The
committee notes with concern the continued exclusion of rural communities
surrounding the
Ø
The Department of Tourism should work with
other agencies such as
Ø
There should be social tourism concessions
packaged to promote domestic tourism for local rural communities living around
protected areas.
10.8
The
impact of Indaba
The
committee notes with concern the space constraints due to venue and decline in
number of participating buyers and products at Indaba. This hampers the expansion and growth of
Indaba as a premier tourism consumer show in
Ø
A decision should be taken to host a Tourism
Indaba permanently in one city in the country as is the norm with other
international tourism shows such as WTM which is held every year in
Ø
A new and bigger venue that will allow for
expansion and new innovative ideas should be identified.
Ø
The Indabas should be designed to include
formally scheduled seminars on topical domestic and global tourism issues which
will enhance the event and elevate its stature internationally.
Ø
The Budget for the Department should be increased
to allow SA Tourism to overhaul Tourism Indaba.
Ø
The Department should enter into a
partnership with the city that will be granted permanent hosting rights to build
a new customised venue and develop a long term strategy for the event.
Ø
Cost of the participating in Indaba is too
high and there is no value for money.
10.9 Setting tourism research agenda
The
committee notes with appreciation the Memoranda of Agreements that have been
signed with some universities throughout the country to conduct research on
specific commissioned topics. The
committee recommends the intensification of this initiative through:
Ø
Cooperation between the Department of Tourism and the
Department of Higher Education in declaring and working with some universities
as Centres of Excellence in line with the United Nations World Tourism Organisation
Research and Knowledge Management agenda.
Ø
Positioning
10.10 Facilitating product development and job
creation
The committee notes the immense potential of the
tourism industry to create jobs at a local level and recommends as follows:
Ø
Development of products from local tourism
niches identified by the Department, in partnership with provincial and local
government, to improve diversification of local product offerings thus creating
sustainable employment at a local level.
Ø
The Department should forge partnerships
with public Development Finance Institutions such as the Industrial Development
Corporation, the Development Bank of
Ø
The Department should commission
feasibility studies and business plans for strategic job creation projects to
unlock funding from both the public and private sector funding, such as Jobs
Fund, the Presidential Infrastructure Coordination Commission and the
Development Bank of
Ø
Tourist Levy (TOMSA) utilization for communities
adjacent to SANParks.
10.11 Elevating status of tourism at a local level
Tourism
features very low on the priority outputs of the local municipalities due to
competing needs such as water, electricity, infrastructure, housing, sport and
recreation. As a result, municipalities regard tourism as an unfunded mandate
placed on local government. The committee realises- that tourism activities take place
at attractions within municipalities and the municipalities need to be
capacitated to plan and develop tourism and thus recommends as follows:
Ø
Tourism governance or coordinating
structures that emulate national structures should be established at municipality
and provincial levels to ensure seamless integration and coordination of alignment
in the delivery of tourism mandate
Ø
The Department of Tourism should intensify
engagements with the South African Local Government Association (SALGA) to
ensure that municipalities budget prioritise adequately for the tourism sector as
one of the economic sectors.
Ø
The Department of Tourism, in partnership
with provinces, should devise interventions that will ensure municipalities’ understanding
of tourism as a concurrent function as stipulated in Part A of Schedule 4 of
the Constitution of the Republic of South Africa in assisting them to meet
their mandate as a sphere of government.
10.12
Consumer needs for new markets
The committee notes with concern that there is an
expressed communication challenge for the new markets that hamper full
exploitation of the country’s tourism attractions. In consideration of current and emerging tourism
trends, the committee recommends that:
Ø The
Department of Tourism and South African Tourism should ascertain if the current
market segmentation addresses the growing international tourism trends from Africa,
Ø The
Department of Tourism, in partnership with the private sector, should devise
programmes that will address language and communication issues with regard to
tour operators, tour guiding and tourism promotional material in response to the
growing tourism interests from new markets and explore technologies that could
make communication easier for the emerging markets such as
10.13
Seasonality and geographic spread
The committee notes that tourism in
The committee recommends that:
Ø
Cooperation should be established between the
Department of Tourism and the Department of Sports and Recreation in converting
sporting events into tourism events throughout the country.
Ø
Cooperation should be strengthened between the
Department of Tourism and the Department of Arts and Culture to promote
cultural events into local and international tourism events.
Ø
South African Tourism in partnership with the
private sector should develop tour packages that will mitigate seasonality
within the tourism industry. Provincial
marketing agencies should also be engaged in developing local packages.
Ø
The Department of Tourism and South African
Tourism in partnership with Provinces, should develop social tourism packages
to stimulate tourism in less visited Provinces.
Ø
The department should place more emphasis on the
importance of growing domestic tourism and local events into national and
international spectacles in order to sustain the industry and create more
sustainable jobs.
Ø
The Department should grow the
10.14 Rural tourism development
Rural tourism remains a challenge in the country. The Department of
Tourism should work with the Department of Rural Development and Land Reform
together with other government departments to tailor responses to this
challenge in terms of programmes and budgets to address disparities and align
programme to optimize actions that would cushion the vulnerable groups. Some of the programmes have already been
identified in a number of tourism strategies that have been developed by the
Department.
The Department of Tourism should engage the Land Claims Commission on
the outstanding land claims that affect rural tourism development and craft
after care programmes to support communities that inherited land with tourism
projects.
10.15 Air Lift Strategy
The committee notes initiatives undertaken by the Department of
Transport to align air transport with other national strategies of national
interest through interdepartmental participation as well as general
infrastructure requirements of
The committee recommends that:
Ø The
Department of Tourism should engage the Department of Transport and Airport
Company of
10.16 Piloting of the training programme
The noted the contribution of the Mpumalanga Regional Training Trust
(MRTT) which is a non-profit organization in providing tourism skills.
Ø The
committee recommends piloting of a partnership between MRTT, CATHSSETA and the
Department of Higher Education and Training in ascertaining how non-profit
organizations can contribute in providing tourism skills. If the pilot project
yields positive results, the project could be implemented in other provinces.
11. Appreciation
The committee would like to extend special appreciation to the
Ministry, the Director- General, programme managers and heads of entities for
providing support to the committee throughout the financial year. The committee would also like to thank the Office
of the Auditor-General in providing support to the oversight activities of the
committee.
Report to be considered.