ATC210222: Report of the Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour on Virtual engagement with National, Provincial and Local Government on Covid-19 Response for the Tourism Sector, dated 16 February 2021

NCOP Trade & Industry, Economic Development, Small Business, Tourism, Employment & Labour

Report of the Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour on virtualENGAGEMENT WITH NATIONAL, PROVINCIAL AND LOCAL GOVERNMENT ON COVID-19 RESPONSE for THE TOURISM SECTOR, dated 16 FEBRUARY 2021.

 

1.Background

 

The Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour (Committee), having had a virtual engagement with national, provincial and local government on the impact of Covid-19 andinterventions for the tourism sector, reports as follows:

 

2.Introduction

 

The COVID-19 pandemic has had a negative effect on the worldwide economy, resulting in reduced economic activity, and affecting operations of small enterprises and jobs.The hardest hit sectors as result of lockdown measures include wholesale and retail trade, manufacturing, accommodation and food services and real estate, while entertainment, recreation and transport have also been severely impacted. This essentially weakened the tourism industry. Further, the closure of bordersfurther paralysedthe demand for tourism. In the main both domestic and international tourism collapsed. 

 

On 15 September 2020 the Committee hosted a meeting with selected provincial and local government authorities, and national government department which have functional responsibilities to ensure growth and development of tourism industry. The meeting included the Department of Tourism, South African Tourism, Tourism Business Council of South Africa, the KwaZulu-Natal and Mpumalanga Provincial Departments of Economic Development and Tourism, the Nelson Mandela, Johannesburg and Buffalo City Metropoles, the Mopani, Garden Route, Dr Ruth Segomotsi Mompati, Thabo Mafutsanyana District Municipalities.

Following the easing of travel restrictions, the recovery of the industry is a key priority. The Committee’s engagement on COVID-19 interventions for the tourism industry sought to understand the state of readiness of the government including the industry players to kick-start actions plans within the Risk-Adjusted Strategy towards rebooting the industry to contribute to the overall economic recovery. The engagement of the Committee with the selectedprovincial and local government authorities, and national government department including was framed around the following key areas:

 

• Financing that national, provincial and local government offer Tourism SMMEs including Cooperatives;
• Concessions and incentives that sub-national government offer Tourism SMMEs and Cooperatives;
• Non-Financial Development Programmes;
• Partnership initiatives with other spheres of government including other development institutions;
• Donor funding to support Tourism SMMEs and Cooperatives;
• Partnership Initiatives established with private sector including civil society and institutional of higher learning;
• Policy response initiated in response of COVID-19;
• Action Plans to reset the Tourism Industry post COVID-19.

 

The report is structured on five key areas, which include views of the National Department of Tourism and Tourism Business Council of South Africa, and further shares the views of the provincial and local authorities. The report concludes with the issues raised during the deliberations and includes recommendations.

 

3. National Perspective

 

The Department of Tourism submitted that as a result of the COVID-19 pandemic it had to revise the 2020 strategic plan, and the 2020/21 Annual Performance Plan to accommodate policy responses to the health and economic crisis. Further, the 2020/21 Supplementary Adjustment Budget tabled in Parliament by Minister of Finance, and subsequently adopted by Parliament in response to COVID-19 resulted the Department to forgo approximately R1 billion. This was done as part of the government wide reprioritisation to respond to the effectsof the pandemic to the public spending. Further, as the direct response to the COVID-19 pandemic, the Department reprioritized its budget and established the R200 millionTourism Relief Fundfor SMMEs operating in the industry, and a further R30 million was set aside to support the tourist guides. The R200 millionTourism Relief Fund provided support to 4000 businesses across the nine provinces, with the highest of the allocation (1017) given to the Gauteng followed by the Western Cape (967) province. Of those businesses supported 51.7 per cent or 2071 were black owned.

 

The Department highlighted that initiatives such as the Unemployment Insurance Fund (UIF COVID-TERS relief benefits) also contributed to save jobs in the tourism industry. The Department submitted that it is consulting National Treasury to provide additional funding to support the tourism industry. The R200million Tourism Relief Fund was extremely limited in size relative to the need felt by financially distressed businesses, and has already been exhausted.The Department emphasised the potential of the tourism industry, with its job-creation strengths, and how it could also contribute to inclusive growth.

 

In its endeavour to understand the effects of the COVID-19 pandemic to the industry, the Department shared to the meeting that it has conducted a survey in collaboration with the Tourism Business Council of South Africa (TBCSA), with the support of the International Finance Corporation (IFC), which revealed that:

• 99 per cent of responding firms were affected by COVID-19;
• 64 per cent felt neutral or positively believed their business will survive to take part in the recovery;
• 83 per cent of firms reported revenues in March 2020 were down more than 50 per cent compared to March 2019 and 34 per cent of firms say revenues are 100 per cent less;
• 58 per cent of firms were unable to service debts and 54 per cent of firms were unable to cover fixed costs in March 2020;
• Firms reported managing their workforce in different ways, with most favouring reduced wages for more than 50 per cent of staff and 36 per cent of firms have reduced wages for all staff. 11 per cent of firms have made more than 50 per cent of their workforce redundant and 54 per cent have not made any redundancies;
• A greater proportion (75 per cent) of medium businesses have reduced wages than small businesses and a greater proportion (31 per cent) of small businesses have applied redundancies;
• The most commonly applied mitigation measures by businesses were temporary closure at 69 per cent, supporting deferment instead of cancellation at 60 per cent and significant downscaling at 58 per cent;
• All businesses prioritized the need for financial support for cash flow, financial support for recovery, and tax relief;
• Micro firms indicated that cash flow is their first priority, small firms prioritised financial support for recovery and both medium and large firms prioritised tax relief
• The support facilities with the most respondent awareness were the UIF scheme and the Tourism Relief Fund of the Department of Tourism

 

The Department also reported that it would reinstate the Tourism Grading Support Programme, which is a collaborative initiative of the Tourism Grading Council of South Africa (TGCSA). The objective of the programme is to encourage wide participation in the tourism grading system, reduce the cost of burden of grading on small tourism enterprises and stimulate an increase in conformity to quality standards, which in turn will enhance the overall visitor experience and improve South Africa’s competitiveness as a tourism destination.

 

Further, theTourism Grading Support Programmeoffers discounts between 80 and 90 per cent of the costing of star grading assessment for accommodation establishments and meeting venues. The application process is integrated in the standard online application process of TGCSA and is available to all new grading applicants as well as existing TGCSA members wishing to renew their grading. Due to the impact of Covid-19 and lockdown conditions on accommodation enterprises and meeting venues, the Minister announced a temporary exemption of tourism grading fees from 1 April 2020 for a maximum of 12 months or until the resumption of operations. Following the reinstatement of grading assessments, successful applicants to the Tourism Grading Support Programme will qualify for 100 per cent discount.

 

The Department also submitted that it is also implementing the Green Tourism Incentive Programme (GTIP) in Partnership with the Industrial Development Corporation (IDC) which aims to assist private sector tourism enterprises to retrofit their facilities with efficiency solutions for energy and water usage.In order to strengthen the programme, the partnership has also been widened to include the National Cleaner Production Centre (NCPC) and the Small Enterprise Finance Agency (SEFA).While the impact of COVID-19 lockdown conditions resulted in some processing delays, the GTIP remains operational. The Minister has approved a proposal to the revise the GTIP, which will see simplified application criteria, improved benefits and streamlining of processes to significantly reduce the turnaround time of applications.

 

Further, the Department is offering the Tourism Transformation Fund (TTF) in partnership with the National Empowerment Fund (NEF). The TTE aims to stimulate and acceleratesector transformation and inclusive growth through a combination of debt finance offered by the NEF, and granting portion offered by Department for new and expansionary tourism projects targeting to increase majority black shareholding. The TFF is administered by the NEF on behalf of the Department and applications for support, follows the normal loan application process of the NEF. Loans for majority black owned tourism projects that are approved by the NEF will be considered for grant funding portion of 30 per cent of the loan amount up to maximum of R5 million, depending on the size of the project. The TFF focus on Exempt Micro Enterprises (EME) and Qualifying Small Enterprises (QSE’s with a turnover of below R45 million) in line with the Amended Tourism B-BBEE Sector Codes. While the impact of COVID-19 and lockdown conditions on the tourism sector resulted in some processing delays and temporary closure of applications, the TFF remains operational and further application windows will open later this year.

 

The Department also reported that it has developed in partnership with industry players represented by the Tourism Business Council of South Africa (TBCSA), the Tourism Recovery Plan, which includes a number of key actions to support South Africa’s tourism to reboot. The Tourism Recovery Plan includes a number of supply and demand interventions as well as changes to the enabling environment. The priority and objective of this plan aims to resume operations as early as it is safe to do so for South Africa and its visitors. It proposes measures to enabling re-opening and position the country to outcompete the global recovery market. Key features of this programme include the following:

• Industry and Government recovery partnership
• Protection of tourism supply.
• Introduction of biosecurity protocols
• Air access and connectivity
• Facilitating ease of travel
• Catalyse domestic demand
• Targeted global marketing programme
• Investment and market-entry facilitation
• Regional value proposition
• Put in place structural mechanisms for the implementation of the Tourism Recovery Plan.

 

TBCSA is a non-profitumbrella member organisation representing the unified voices of business in the travel and tourism industry. It is one of the essential partners of the Department in the industry. The mission of the TBSA is to facilitate key industry programmes aimed at driving growth and development in the sector and monitor and influence macro-economic developments which impact on the industry.

 

Following the onset of the COVID-19 pandemic, TBCSA in an effort to support businesses operating in the tourism and hospitality industry developed protocols to ensure continued operation of all types of tourism business and facilities. It was reported that the protocols were aligned to international standards and regulations to enable tourism businesses to operate in an environment which is safe for employees, suppliers and tourists. The Department of Tourism, and the World Travel and Tourism Council’s (WTTC) played a critical role in the formulation of the protocols and regulations. As the result, South Africa received the WTTC Global Safety Stamp of Approval, registering the country as one of the safe destinations. The TBCSA is a recognised body in South Africa to issuing rights in accordance to WTTC Safe Travels stamp.

 

The tourism and hospitality industry needs to come together with industry health and safety protocols whilst ensuring that the entire value chain understands the risks of COVID-19 and has mitigation measures in place. As the country decreased alert levels from five to two, the industry made adjustments in respect of sanitizing facilities whilst maintaining international best practice in this regard.

 

 

TBCSA acknowledge the efforts played by government to protect the tourism industry. However, it has submitted that for the industry to survive international borders should be opened. Many of the businesses as already stated continue to suffer, and soon if nothing happens in terms of adjusting lockdown regulations to accommodate tourism industry many businesses would close down, thus would mean more jobs would be lost.

 

Further, the TBCSA submitted that it continues to working very closely with the government though the National Department of Tourism including the South African Tourismregarding to the development of the Tourism Recovery Strategy. Funding, and financing of the tourism industry is crucial. That would need a collaborative approach taking into account limited fiscal capacity to fund public spending’s priority plans. The government multi-billion rands guaranteed loan scheme remains critical, and its implementation is crucial. 

 

Due to the decline in corporate, government and leisure travel, work needs to be done in order to stimulate tourism demand.TBCSA urged that international traveling would need to be re-opened to support efforts to reset the tourism industry. However, what is much pressing is the need to re-open inter and intra provincial travel to stimulate domestic tourism. There is a need to facilitate the resumption of business for tour operators whose staff have either been furloughed or laid off since the beginning of lockdown.

 

With South Africa’s economic growth not looking good, and unemployment on the rise, tourism has a vital role to play in efforts to reboot the economy. South Africa tourism has the potential to be a global competitor. Funding from government would be needed, and domestic tourism has the potential to lift tourism. Further, efforts to market tourism as global should be intensified particular in the African region, and in high income countries. In addition, TBCSA urged the Committee to marketSouth Africa as a safe destination, ready to receive travellers as the country prepares to open its international borders under Alert Level 1.

 

4. Provincial Perspective

 

4.1 Mpumalanga Provincial Department of Economic Development and Tourism

 

The Mpumalanga Provincial Department of Economic Development and Tourism (MPED) is tasked with the responsibility to drive economic development and planning initiatives within the Province. The Department provides an oversight role over the work of three agencies, namely the Mpumalanga Economic Growth Agency (MEGA), Mpumalanga Economic Regulator (MER) and Mpumalanga Tourism and Parks Agency (MTPA).

 

Prior to the advent of the COVID-19 pandemic, the Mpumalanga Province was on a positive trajectory with a steady increase in foreign tourist arrivals which increased from 1.6 million in 2018 to 1.7 million in 2019. The recorded increases were from the countries which include Mozambique, Germany, United States of America (USA) and the United Kingdom (UK). As a result, through 2019 the revenue generated by tourism sector continued to grow.

 

Since the emergence of COVID-19, 30 000 jobs are projected to be lost in the tourism sector in the Province. Recent surveys by the private sector indicate that the majority of businesses had experienced a severe decline in revenue since the national lockdown, with some facing closure.

 

In response, the MPED in collaboration with the private sector developed the Mpumalanga Tourism Recovery Plan which has since been approved by the Provincial Executive Council. The plan proposes measures to enable the re-opening and re-positioning of Mpumalanga to compete in national and global markets post COVID-19. The MPED continues to work with the private sector to solicit funding for the Plan which will primarily benefit Small, Medium and Micro Enterprises (SMME’s).

 

The MPED is currently working with municipalities to offer a 90-day payment holiday for outstanding rates and taxes; electricity bills to affected businesses and SMME’s and Cooperatives. Additionally, engagements are taking place with the South African Revenue Service (SARS) to delay the payment of any monies due by affected businesses.

 

Through the Tourism Marketing Entity, the Mpumalanga Tourism and Parks Agency (MTPA) have granted concessions to the tourism SMME’s in businesses with the Provincial Nature Reserve, namely Manyeleti, Songimvelo, Blyde Canyon as well as the Zithabiseni Resort and Conference Centre. Further assistance by the MPED includes interaction with third parties to:

• Relax the payment of insurances on properties and vehicles
• Grant 90 days’ loan payment holiday
• Through the Mpumalanga Economic Growth Agency (MEGA), a payment holiday between three - six months was approval including tourism SMME’s financed by the entity.

 

Non–-financial support through the MTPA has assisted SMME’s to apply for the Tourism Relief Fund managed by the national Department of Tourism. From this facilitation, a total of R11.9 million was allocated to 238 Provincial SMME’s which translates into R50 000 per business. Supplementary support was provided through webinars for SMME’s on ‘How to Stay in Business during the COVID-19 pandemic’. The MTPA also provided business advice and market access to SMME’s and created the stakeholder partnership platform – Mpumalanga Tourism Sector Forum – to deal with issues affecting the tourism industry in general. Working closely with municipalities, the MTPA is coordinating and supporting the Local Tourism Organisations (LTO’s) and Regional Tourism Organisations (RTO’s) in the Province. Work is underway to finalise the development of the Rural and Township Tourism Plan which seeks to address the geographic spread and transformation of the sector.

 

4.2 KwaZulu-Natal Provincial Department of Economic Development, Tourism and Environmental Affairs

 

The KwaZulu-Natal Department of Economic Development, Environmental Affairs and Tourism (KZNTEA) is mandated to oversee the socio-economic transformation in the Province. It leads policy and strategic initiatives aimed at promoting development and growth in varying sectors of the Provincial economy.

 

Through key initiatives such as event hosting, investment projects, domestic marketing, tourism infrastructure, aviation and policy reforms, the tourism sector contributes 10 per cent to the Kwa-Zulu Natal Gross Value Add (GVA) supporting 740 000 direct jobs linked to a number of sectors which contribute directly and indirectly to support tourism. As a premier domestic tourist destination offering diverse experiences, the Province has started to attract direct regional and international flights. Statistics report 800 223 international flights in 2019 with a total spend value of R6.5 billion, and 6.2 million trips from domestic tourism contributing R7.9 billion in total spend value. From April 2020, the forecasted numbers for international arrivals was between 200 000 – 300 000.

 

Due to the COVID-19 pandemic, the loss of these international arrivals is estimated between R3.8 billion and R4.7 billion. With the domestic sector suffering losses of R5.5 billion when compared to numbers at the same time in 2019.Provincial job losses are anticipated to be between 50 000 to 60 000 for 2020.

 

The one of the key initiatives of the KZNTEA is to de-risk the tourism sector, these interventions include ensuring the alignment and input to national processes; distribute guidelines on health and safety standards to be implemented within the tourism industry; provide guidance about sourcing of appropriate Private Protective Equipment (PPE’s) and create COVID ‘safe zones’. Further initiatives include:

• Relief packages and sector lobbying
• Re-purposing tourism investment
• Support to SMME’s
• Industry Communications
• Promotions and marketing
• Socio- economic compact
• Sector analysis.

 

Through SMME Rural Development, the KZNTEA plays a role in the facilitation and coordination of rural tourism development initiatives amongst stakeholders and creates an enabling environment for rural development through initiatives funded by national, provincial and local government.

 

5. Metropolitan Municipalities’ Perspective

 

5.1 Johannesburg Metropolitan

 

Tourism in the metropole is legislated through the Municipal Structures Act (Act 117 of 1998) as it relates to local tourism and the promotion of social and economic development. Its work is informed by the objectives of its Integrated Development Plan (IDP) as it relates to economic growth and one of the key performance indicators in this regard is the increased number of tourists coming into Johannesburg.

 

The Metropole has assisted tourism SMME’s through business tourism support and has embarked on a process to establish Events Supports Fund for events with meaningful economic impact for improved tourism multiplier effect. Further strategic interventions include tourism management, destination marketing, business tourism and tourism development.

 

Non-financial development programmes include the establishment of Economic Impactful Events for SMME’s to showcase locally made products to trade on this platform and an online academy for SMME’s Additionally, business linkages are conducted through Visitor Information Centres for local tour operators pairing them with international tour operators to handle their business when arriving in Johannesburg, this is collaboration with the Gauteng Tour Operator Association.

 

Key partnerships include collaboration with South African Tourism in business and destination marketing, collaboration with Gauteng Tourism Authority in business tourism and destination marketing and an initiation with the National Department of Arts and Culture for the establishment of the Liberation Heritage Route. Further partnerships include work with the University of South Africa (UNISA) and University of Johannesburg on capacity building and research programmes. Tsogo Sun and Sun International are further partners in respect of business and leisure tourism activities to make use of SMME’s to render services related to ground handling and other related value chain activities.

 

5.2Buffalo City Metropolitan

 

The Buffalo City Metropolitan reported that its political and administrative leadership had been hard hit by the pandemic with the tragic deaths of the Speaker, Councillors and staff. Numerous heads of department and senior managers have further contracted the virus.

 

Tourism has been identified as one of the key economic sectors in Buffalo City, which had a total tourism spend of R3.9 billion in 2019 with an average annual growth rate of 6.1 per cent since 2009. Spending on tourism as a percentage of GDP for 2019 was 5.35 per cent. There are approximately 9700 employment opportunities created by tourist spending.

 

The Metropole has an allocated budget to support the growth in the tourism sector over a three period which is used to fund tourism related programmes. Budget allocations were as follows:

Financial Year	Budget Allocation
2018/19	R24.2 million
2019/20	R20.6 million
2020/21	R15.6 million

 

The Metropole implemented the following programmes to support the tourism sector namely:

• Tourism SMME Support Programme
• Tourism Events Programme
• Destination Marketing and Information Services Programme
• Tourism Infrastructure Programme
• Tourism Awareness Programme.

 

In terms of Enterprise Development Support, the Metropole offers financial support to businesses inclusive of cooperatives and SMME’s and the informal trade sector in terms of grants. This programme was allocated budgetary support of R3.8 million for the 2019/20 financial year and the Metropole is in search of further donor funding for cooperatives. The grant funding is used to procure equipment and machinery for cooperatives. Non-financial support is provided through the following:

• Market access
• Business skills training
• Business registration
• Information sharing on business opportunities
• Branding and marketing
• Workshops and seminars.

 

Tourism relies on well managed and maintained infrastructure to ensure the provision of basic services, the absence of this infrastructure has an impact on the tourist economy. In this regard, the Metropole has a Tourism Infrastructure Programme which aims to unlock tourism potential in rural and township communities by developing catalytic tourism infrastructure. Further initiatives seek to provide opportunities for local SMME’s to operate key tourism infrastructure.

 

Programmes have mainly benefitted tourism SMME’s, over 30 of which have received equipment support and over 20 of which have been supported to attend national and international exhibitions. A further 10 SMME’s have received support towards printing of marketing material and over 20 event organizers have received grant funding.

 

Partnerships with Development Finance Institutions includes work with the Eastern Cape Development Corporation (ECDC), on export development support where companies are exposed on how to explore export opportunities with other countries. In addition, partnership with the Small Enterprise Development Agency (SEDA) on capacity building for SMME businesses within the Metropole.

 

As the country eases into Alert Level 1, work moves towards stimulating and supporting growth in the tourism sector. Key to the re-invigoration of tourism will be to ensure that Buffalo City is serviced by low cost airline. The short-term focus will be on online destination marketing and to ensure that small tourism businesses and SMME’s are registered and formalized to draw on Government relief.

 

5.3Nelson Mandela Bay Metropolitan

 

Tourism is one of the main economic drivers for the Metropole and thus all spheres of government need to play their part in ensuring that the city is ready for the tourism activities.  This includes accessibility issues, cleanliness, safety, education and infrastructure required in order to allow for the growth of the industry.

 

In terms of financing concessions and incentives offered to Tourism SMME’s and Cooperatives the Metropole initiated an Investment Retention Incentive programme for local tourism accommodation businesses. A public process was followed and advertised for tourism accommodation businesses to apply, only those businesses that are paying commercial rates. A total of 108 applications were received from the accommodation sector. An amount of R4.8 million was to successful applicants. The Municipality incentivised a total of 96 qualifying tourism accommodation businesses. Twelve applicants did not meet the criteria.

The Investment Retention Incentive criteria included:

• The entity must be in existence for at least one business financial year;
• The entity must be registered/zoned as a tourism business accommodation establishment with the Nelson Mandela Bay Municipality; and 
• Must be billed for commercial rates by the Nelson Mandela Bay Municipality.

 

Non-financial development programmes that were implemented includes a business support programme that was designed to link and provide support to businesses to access available funding provided by National, Provincial and Private Business as support mechanism. The Metro Established a Tourism COVID-19 Ambassador programme that will assist Tourism businesses with training and making sure compliance to Covid-19 protocol are adhered to. Regular industry communication was done with updates in partnership with industry stakeholders.

 

Partnership initiatives include work with the Eastern Cape Provincial Department of Economic Development, Environmental Affairs and Tourism (DEDEAT) to do research on Covid-19 impact on the Industry. The Metropole further partnered with the Eastern Cape Parks and Tourism Agency (ECPTA) and participated in establishing various virtual stakeholder and marketing engagements andparticipated in the National Department of Tourism (NDT) and South African Tourism (SAT) session.

 

The Metro furtherparticipated in the working groups of National Cruise Line Maximisation Strategy with NDT, Transnet and other government stakeholders. The national Department of Tourism provided grants through the Business Relief Fund which benefitted 103 businesses to the value of R50 000 each. Further initiatives with National and Provincial Government includes implementation of the Tourism Safety Strategy.

 

Sessions were facilitated by the Metro to discuss the impact of COVID-19 on the tourism industry as well as the establishment of tourism recovery work streams.

 

Action Plans to reset the Tourism Industry post COVID-19 include:

• The Metropole developed a tourism recovery plan that is aligned to the National Plan;
• A 3-Year post Covid-19 Marketing Strategy and Plan is in progress;
• Investment Retention Incentive to be rolled out to the rest of the Tourism sector such as restaurants, conferencing and other tourism business categories;
• City Beautification Programme / Initiatives;
• Development and installation of Nelson Mandela statue are planned to be implemented in the current financial year;
• Drive tourism transformation in partnership with the industry;
• NMBM is implementing various tourism product development initiatives in the Townships.

 

Policy recommendations include the following:

• To fast track catalytic projects that will enhance Tourism economic drive such as Apple Express, Waterfront development, Bayworld, Tower of Light, Zipline, International Convention Centre and more;
• Training/upskilling of tourism staff and enterprises;
• Develop NMB Tourism SMME support policy;
• Review current By-laws and policies to stimulate tourism growth;
• In process to carry out comprehensive research and audit to determine the impact of Covid-19.

 

6. Districts’ Municipalities Perspective

 

6.1 The Garden Route District Municipality

 

The Garden Route District Municipality presented the status with regard to tourism sector indicating that the district municipality is leading, enabling and an inclusive district, characterised by equitable and sustainable development, high quality of life and equal opportunities for all.

 

Assistance was provided to the tourism sector through SMME support, with an amount of R50 000 allocated during the 2020/21 financial year for support for stock and equipment for SMME’s in the district. The Municipality is in partnership with the Small Enterprise Development Agency (SEDA), the Western Cape Provincial Department of Economic Development and Tourism, Department of Agriculture and Land Reform and the Cape Design Institute) in terms of additional funding, expertise and identified training programs. The Establishment of the Business, Economy and Tourism Cluster in response to Covid-19 in order to assist businesses in the district in accessing various funding relief opportunities from government (National and Provincial).

 

With regards to non-financial support the Municipality, in collaboration with district and other stakeholders in process of drafting the Garden Route Economic Recovery Plan, the draft document is available. Re-Imagine Garden Route WebiShop hosted on 12 August 2020 to assist businesses with innovative thinking and ideas. The following topics were covered: The circular economy model, concepts and examples; Customer experience, Model and Service Design for the new normal; Solutions for a smart region; Crowd funding as an alternative to conventional funding; Scenario planning concepts. Sector specific WebiShops were expected to take place in September to October focusing on priority sectors severely affected by the pandemic i.e. Tourism, Construction, Manufacturing and Agriculture, as well as other growth sectors such as Oil & Gas, Boat Building, Furniture sector and others. The outcomes of all these engagements would inform the final Economic Recovery Plan to be concluded by end of October 2020.

 

The Municipality facilitated the access to all available relief funding programs to severely affected tourism and other businesses. To date, 136 tourism businesses in the district benefited from the National Tourism Relief Fund. The distribution of Safety Kits in collaboration with Provincial Economic Development & Tourism Department and Local Municipalities to ensure workplace and customer safety. The Distribution of masks in collaboration with WESGRO and Provincial Economic Development & Tourism Department to the general public to create awareness and encourage compliance with health and safety protocols. Social media campaigns with tourism stakeholders to encourage the domestic tourism market on the re-opening of the sector and re-imagining the Garden Route as a preferred tourism destination.

 

The business surveys were done by the George (district wide) & Knysna Business Chambers (Knysna businesses) to determine the effect on businesses and interventions needed. The municipality liaised with Nedbank & Standard Bank through SEDA on the Spaza Shop and General Dealer Program. The economic sector experts are engaged to give guidance on new innovative and smart ways to revive and grow the economy post Covid-19, through both the Re-Imagine Garden Route Think Tank and sector specific task teams.

 

The district is in the process to reset action plans in the tourism industry,Action Plans to reset the Tourism industry includes the following:

• Business Revival Campaign, #GardenRouteandme #myfavouritebusiness.
• Acknowledgement of businesses who displayed innovative ways of operating during lockdown.
• Launch of promotional videos for tourism and film during the September/October Garden Route International Film Festival and Tourism Month.
• Social Media Campaigns in collaboration with Wesgro #weareopen #oneday.
• Familiarization trips in collaboration with Wesgro, SATSA and District Tourism stakeholders targeting specific operators to encourage travel to the Garden Route.
• Finalisation of the recovery plan identifying short, medium and long-term interventions, Garden Route Growth and Development Strategy and District Investment Prospectus. Funding mobilisation to implement initiatives.
• Continuous support to SMME’s.

 

6.2 Dr Ruth Segomotsi Mompati District Municipality

 

The Dr Ruth Segomotsi Mompati District Municipality (DRRSM) is a Category C municipality located in the North West Province. The district municipality comprises five (5) local municipalities: Naledi, Greater Taung, Kagisano-Molopo, Mamusa and Lekwa-Teemane. It is one of four districts in the province, with poor rural areas, formerly situated in the former Bophuthatswana homeland.

 

The district consists of more than 459 957 populations as per Statistic South Africa – Community Survey 2016) people situated in more than 470 villages and towns dispersed in a 250km radius (approximately 50km north to south and 200km east to west), this district presents unique management and organisational challenges. The five Local Municipalities have the following features; in Greater Taung Local Municipality there is a Home to the UNESCO listed Taung World Heritage Site, the area is better known for the discovery of the Taung Child, considered to be one of the most important early human fossils ever discovered.  The skull is the first hominid to be discovered in Africa and was uncovered by a quarry-worker in the nearby Buxton-limestone Quarry in 1924.  In partnership with the Tribal Authorities and the Greater Taung Local Municipality, the district launched the Taung Heritage Route at the Tourism Indaba in 2014. Attractions amongst others are; the Taung Heritage Site include Blue Pool, a picnic site and some impressive San (Bushman) engravings at Dinkgwaneng, Kgosi Galeshewe’s grave, small heaven waterfall.

 

Due to budgetary constraints, the Municipality often partners with other state funding agencies such as SEDA and National Youth Development Agency (NYDA).  If budget allows the intention of the district is to assist the Tourism products especially accommodation establishments with the following: Personal Protective Equipment (PPE’s), Health and Safety Training and Covid19 Awareness Campaign, Tourism grading, procure equipment and furniture, annual full bursaries at the Taung hotel school.

Concessions and Incentives provided incentivizes SMMEs by creating a platform for them to participate in trade shows such as Tourism Indaba, Macufe and Botswana Trade Fairs.The Municipality has developed a video for marketing of the various tourism sites Developed and built marketing billboards on major national routes in the district N12, N18 and N14.

 

It was reported thatNon-Financial support could include:

• SMME’s assistance with marketing material.
• Ongoing moral support (site visits by Tourism officials).
• Hosting capacity growth orientated building workshops to be facilitated by big players in the industry to encourage mentoring and partnerships.
• Improve tourism activity in the district by hosting events. This to be done in partnership with private sector and other sector departments.
• Improving the state of facilities/attractions.
• Populating the Dr Ruth Segomotsi Mompati website to generate more traffic towards the district.
• Establishment of District Tourism Association.

 

The Municipality has entered into a Memorandum of Understanding with SEDA for an ongoing support of SMMEs.  The Memorandum of Understanding (MOU) covers aspects of training, workshops and overall development of small businesses. The Mayor reported that no donor funding for SMMEs has not been received as yet but it could be an option that we could look into in future given our financial state.

 

In partnership with its Local Municipalities the District Municipality has established Youth in Tourism Forums.  These forums are geared at galvanizing efforts by the youth of our district to market and promote the district as a destination of choice. Before the lockdown, the municipality was in the process of launching the Dr Ruth Segomotsi Mompati Women in Tourism (WiT). The district has also established relationship with Tribal Authorities (Bogosi) in terms of availing land for tourism development. In terms of partnership with other stakeholders, the district municipality has already established a business relationship with Batlhaping-ba-ga-Mahura.  The intention is to start an eco-tourism initiative.  The Batlhaping-ba-ga-Mahura Tribal Authority has allocated land for the following developments at Dithakwaneng Villages:

•       A Nature Reserve
•       Leisure Resort
•       Cultural Village
•       Pottery.

 

The consideration of developing a business plan in order to access possible funding. Dithakwaneng Village is 27 kilometers from Vryburg situated along the N14 Route. The village has plenty of water suitable for agricultural activities.  A feasibility study was conducted and was presented to the Department of Economic Development, Environment, Conservation and Tourism (DEDECT).

 

The Municipality has further engaged sector departments such as the Department of Public Works, Department of Economic Development, Environment, Conservation and Tourism and North West Tourism Board on the development of an eco-tourism initiative on the land availed by Batlhaping-Ba-Ga-Mahura Tribal Authority in Dithakwaneng.

 

It is the intention of the Municipality in partnership with Naledi Local Municipality and the private sector to resuscitate the Vryburg Aerodrome. Once up and running, the aerodrome will serve as a catalyst for tourism development in the district.

 

In partnership with Lekwa-Teemane Local Municipality, the Municipality intends to establish SMME HUB in Bloemhof along the N12 Treasure Route.  The Local Municipality has allocated a serviced piece of land for the establishment of SMME HUB. The place will be owned and managed by SMMEs with different offerings such as Chesa Nyama, Curio shop, crafts and artifacts and an information desk to disseminate information for both the public and tourists.  A site visit with the North West Tourism Board was undertaken.  The process came to a halt due to lockdown.

 

The reposition and rebuilding of destination will require a common approach with other relevant stakeholders as recovery is now expected to start and be slower than previously foreseen. The Municipality will strive to create enabling environment to ensure that business sector identify and access opportunities that will contribute to the economic growth and development in communities.

 

6.3 Mopani District Municipality

 

The Mopani District Municipality is one of the five districts of Limpopo province of South Africa. The seat of Mopani is Giyani. According to the 2016 Community Survey it has a population of 1,159,185, of whom the majority speak Northern Sotho.  The district has 42 percent of the residents that are still at a young age of 0-19 years. The age dependency ratio is very high (64.3)due to the high unemployment of youths & high percentage of children and the aged, a considerable number of households are headed by pensioners. About 39.4 percent of the community members in Mopani District Municipality are unemployed inclusive of 125 wards with Modjadjiskloof with highest number of poverty stricken wards

 

The COVID 19 pandemic outbreak resulted in the President declaring a state of emergency in March 2020. The tourism business was hugely affected with the lockdown and travel ban.  The majority of business would have closed down if not assisted, hence the introduction of the relief fund.

 

Common challenges of SMMEs before Covid-19 include:

• Limited access to finance and credit   and poor access to markets;
• Poor access to business development information;
• Shortage of business skills (insufficient training in business) Legal compliance is lacking (CIPC, SARS, Grading, B-BBEE and other business licences);
• Poor profitability – a reason for discontinuance;
• The businesses have no growth plans;
• Poor financial records or plans;
• Marketing planning, tools and activation are a big gap;
• Pricing knowledge is lacking;
• Labour laws discourage employment in the sector;
• Permit delays are an obstacle – government; 
• Staff training and hiring of professional services;and
• Security spending push input costs up.

 

 

 

Habitual support required by SMME’s comprise:

• Financial assistance
• Non-financial support
• Business development information / knowledge
• Market access support
• Basic business skills
• Assistance to register with professional bodies
• Assistance to comply with grading/sector standards or requirements
• Support to lobby government to ring-fence procurement opportunities/

                                                      

As a result of COVID-19, and the resultant lockdown, new issues developed which resulted in

• Job losses in the immediate time period and next 6 months;
• Products without access to internet missing out on information;
• Technicality of applying for relief funds vs lack of training for some SMMEs;
• Cancelations of events and conferences impacting on tourism in the next 12 months; and
• Strain on budget allocations as they are revised to accommodate COVID-19 needs.

 

The Municipality is in partnership with National Department of Tourism to develop the Mopani District Tourism Sector Plan aimed to grow the district sector contribution, increase tourism arrival, identification of priority areas for tourism infrastructure investment. National Department of Tourism, LEDET, Limpopo Tourism Agency with development of CoVID-19 Tourism and Marketing Recovering plan. Further partnerships exist with Small Enterprise Development Agency (SEDA) with Business Development Support services to qualifying SMME’s and Cooperatives, creation of virtual one-stop-shops in the provision of services to the SMME and Cooperatives sector; minimize overlaps that occur in the provision of products and services to SMME & Cooperatives sector.

 

6.4 Thabo Mafutsanyana District Municipality

 

The Thabo Mafutsanyana District Municipality is located in the Eastern portion of the Free State Province and consists of Dihlabeng, Maluti A Phofund, Setsoto, Phumelela, Nketoana and Mantsopa Local Municipalities. The Municipality is dubbed ‘Eagle Route’ and is known as the jewel of the Province due to its scenic beauty, nature reserves, resorts, adventure tourism and deep cultural roots. The Eagle Route hosts one of the biggest parks in the country – the Golden Gate Highlands National Park, which is home to a variety of wildlife such as wildebeest, eland, blesbok, springboks and zebras.

 

The Municipality does not receive grants from either the Provincial or National Government for tourism support in the current financial year. Concessions and incentives are mainly offered by the local municipalities.

 

In terms of non-financial development programmes, such as Women in Tourism, capacity building workshops for tourism SMME’s, there is a need for assistance to lodging establishments with grading and registration. Furthermore, tour guides are assisted to acquire guiding permits in order to curb illegal guiding.

 

Partnerships established include work with the Department of Tourism, Enterprise Development, Tourism Incentive Programmes, tax compliance, Green Tourism Incentives, Tourism Grading, Land Use Planning and Rezoning. Through SEDA, the Municipality assists all graded lodging facilities with marketing material through SEDA. All SMME’s that are assisted with funding are referred to SEDA for capacity building, training and incubation programmes.

 

In preparation for the industry re-opening, the Municipality in partnership with SEDA have assisted with the following:

• COVID-19 Tourism Protocols
• Maintain a Preventive Maintenance Programme
• Maintain a safe working environment
• Monitor and maintain Health, Safety and Security
• Maintain the Cleaning Programme.

Due to the fact that the tourism industry is mainly privately owned, a District Based Tourism Grant should be introduced in order to transform the sector and assist in maintaining tourism infrastructure. The District Development Model approach should be used in dealing with recovery of the Tourism sector post COVID-19. 

 

For the 2020/21 financial year, the Municipality increased its budget to the tourism sector to R2 million to mitigate the impact of COVID-19 on the tourism sector. The Municipality coordinated applications for the National Tourism Relief Fund and to date 28 tourism SMME’s benefitted. Each SMME was allocated R50 000. It was recommended that the Tourism Relief Fund be expanded to other districts to specifically target informal crafters and traders.

 

7. Key issues arising from the engagement

1. A thriving tourism industry depends on the provision of basic services, particularly to rural areas and townships.  Lack of infrastructure hinders the ability of tourism to spur economic growth, and jobs. Most of the areas that lack infrastructure are small, rural and poor towns.
2. The plans and collaborative efforts across government departments both at national and provincial level including local government should be enhanced. Departments such as the Departmentof Cooperative Governanceand Traditional Affairs, Human Settlements, Water and Sanitation, Transport, Minerals and Energy should lead the process in finding sustainable solution to address challenges regarding lack of basic services and infrastructure investment.
3. In response to concerns raised regarding the lack of basic services and the negative impact this has on rural areas and townships, the Department indicated that it is working with the Department of Cooperative Governance and Traditional Affairs to coordinate an Inter-Ministerial Task Team to identify tourist hotspots in order to ensure intervention in this regard. Further work is being conducted using the District Development Model to ensure water provision and address some of the service delivery and infrastructural challenges in tourist hotspots.
4. The provision of Personnel Protective Equipment (PPEs) to informal traders should also be prioritised.
5. The Department in partnership with industry players, and with the support of the Department of Health, made a commitment to develop comprehensive guidelines to assist in managing international tourism segment.
6. In promoting domestic tourism, concerns were raised regarding the financial accessibility of national parks such as the Kruger National Park.
7. The extent to which the Department of Tourism has determined the value for money for the R30 million paid to hotels used as quarantine facilities.
8. Efforts and interventions to attain and promote the Blue Flag status for highest number of South African beaches in order to attract both domestic and international tourists.
9. Out of a reported 7288 applications only 4000 were approved with the remaining 3288 declined when the R200 million Tourism Relief Fund closed for applications. The Department indicated that the 46.9 per cent of applications which were declined were mainly as result of lack of tax compliance, inadequate proof of income, disqualification on the maximum qualifying thresholds and applications from businesses which were not in the tourism industry.
10. Members raised concerns that the R50 000 allocated per approved application was inadequate. Taking into account the impact of the lockdown measures on the hospitality and tourism businesses.
11. As part of the government wide reprioritisation in respond to the COVID-19 pandemic, the Department of Tourism reported it had to forgo R1 billion, which was mostly allocated to boost tourism marketing and destination. In any event there was not much that could have been done to boost tourism marketing because global and domestic movement was limited. The Committee reiterated its stance that for the 2021 medium term spending, the funds would need to be re-allocated to support efforts to reset the tourism industry.
12. Member’s emphasis that government should continue to build closer relationship with the private sector including financial institutions to finance Tourism Recovery Plan.
13. The Committee stressed that alignment of plans and objectives of the public and private sectors should be enhanced. Most of the goods and services in the tourism industry are produced or offered by the private sector.Hence the role of the private sector, and financing institutions is critical.
14. The Department emphasised that government is working hard to ensure that South Africa attain the status to be regarded as a safe tourism destination in accordance to international best practice. Effort are underway to boost safety confidence level. The work that includes law enforcement agencies is expected to yield positive results.
15. Members argued that what is central is to frame the implementation of the tourism industry recovery strategy with the District Development Model.
16. Further it essential to integrate sport and creative economy activities into tourism recovery action plan. That would yield positive local economic development spin-offs.
17. Coordinated investments between the government in all spheres in partnership with private sector, development finance institutions, and financial institutions would be critical.
18. In response to concerns relating to the level of coordination of all spheres of government in the Tourism Recovery Plan, the Department of Tourism indicated that it is participating in Ministers of Executive Council (MINMEC) meetings in Provinces, attended by the respective Premiers, Members of Executive Council (MEC’s) and district municipalities. Further engagements are taking place with Provincial Tourism Boards. The National Tourism Recovery Plan is further aligned to the policy objectives of the National Development Plan (NDP) and guided by the implementation of the Medium Term Budget Policy Statement (MTBPS).
19. Focus on domestic tourism would also need smart packages to meet the needs of domestic travellers, taking into account the economic impact to household expenditure. The measures should not leave behind people who are poor.
20. International visitors’ readiness to travel even if the country re-opens will depend to the international visitors’ appetite to travel.
21. It is also important to look on strategies to attract African-region tourists. 
22. Further, it was noted that that public safety and confidence is crucial to reopening, and to the survival of the tourism industry.
23. Coastal towns (not excluding inland small and rural towns) including those in rural areas would need coordinated investments to reset the industry. This also present an opportunity to attract investment in the renewable energy industry including acceleration of delivery of access roads, investment in regional airports, water and sanitation infrastructure.
24. Aviation industry need to recover to support the growth and expansion of the tourism industry.
25. Investment in innovation and development of technologies should adopt equitable approach. Businesses residing in rural and townships should also benefit on technological advances. 
26. Further it was highlighted that it is essential to integrate sport and creative economy activities into tourism recovery action plan. That would yield positive local economic development spin-offs.

 

8. Recommendations

 

After deliberations which were open with a view to formulate medium to long-term objectives for tourism growth and development, and how to improve resource allocation, and policy and programme alignment with more emphasis on partnership between the private and public sector. Including increasing investment in neglected regions but not forgetting to enhance growth of coastal regions as tourism destinations, and sites of employment opportunities.

 

The Committee noted the Fiscal and Monetary Stimulus that the government launched to assist businesses, and also to save needed jobs. Further, it has acknowledged the implementation of the Tourism Relief Funds, and UIF-Ters funding to protect jobs, and maintain the existing business capacity.  The Committee, further, emphasised that access and acceleration of the implementation of the Loan Guaranteed Scheme to support tourism businesses should be prioritised. The Committee recommends that:

 

1. The role of the provinces and local government is critical for the successful implementation of the Tourism Recovery Plan.
2. Integrated planning should be followed. To avoid duplication, and fragmentation in the implementation of government resources. The Presidency, National Treasury, Cooperative Government and Traditional Affairs should also play an essential role to ensure that coordination and allocation of resources is improved. 
3. For instance, local supply chains should be developed so that accommodation establishments source their supply of fresh fruit and vegetables from small local suppliers rather than from distant urban wholesale markets.
4. What is central is to frame the implementation of the tourism industry recovery strategy with the District Development Model.
5. The Committee agreed that tourism activities, and investment drive is concentrated in Gauteng, Western Cape, and KwaZulu Natal, and thus follows the inequity patterns within those regions, and outside the concentrated regions. Small, rural, and poor towns are neglected.
6. Investments in transport and tourism infrastructure need to be aligned to boost tourism particular in rural and township economies.
7. Government across the spheres should also focus on easing regulatory regime to support growth and development of SMMEs across all regions.
8. Investment in innovation and development of technologies should adopt equitable approach. Businesses residing in rural and townships should also benefit on technological advances. 
9. There is a need to introduce electronic visas to overcome the obstacles hindering the growth of growth of international tourism. In line with safety and health requirements the number of countries falling under visa-waiver agreements should be increased. Further, Africa region should be prioritised.
10. Safety of tourist must be prioritised. Government should continue and improve coordination of allocation of resources in across the spheres of government. Recruitment of tourism safety personnel should be prioritised with particular focus on young people, women and people living with physical disabilities.
11. Further, credible data and information regarding to crime related to tourism should be established and made public.
12. The Committee recognised that domestic tourism had not achieved its full potential and its development particular in the current context of COVID-19 pandemic which will not see many international tourists traveling around the world.
13. Tourism products and services should meet the local tourists’ expectations including pricing mechanisms should accommodate local communities, in particular people who are poor.
14. Provincial and local governments also need more financial support to promote tourism in order to create jobs, and boost local economies both rural and township economies.
15. The Committee emphasised that budget priorities both at local and provincial government level should appreciate the importance of tourism industry both from jobs creation and economic growth dimension.
16. Innovating financing ways should be formulated to enhance infrastructure investment with particular focus on energy, roads, water and sanitation. Public-private financing and funding should be promoted.  
17. Workforce skills development in the tourism industry is another key priority identified. The public-private initiative to lift workforce skills development should be established, particular for the youth, women and people living with physical disabilities.
18. Further, transformative initiatives need to be at the centre of the tourism industry agenda.
19. It essential to integrate sport and creative economy activities into tourism recovery action plan. That would yield positive local economic development spin-offs.

 

In the main the Committee stressed that new ways to mobilise resources, planning, and allocation of those resources is fundamental. The key is to earmark tourism investment across the regions in the country in order to reset growth and development of tourism.  Public-Private initiatives in the tourism industry will be essential to meet government policy outcomes.

 

Report to be considered.