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  • Home »
  • Hansard »
  • 2015 »
  • March »
  • 03 »
  • PROCEEDINGS OF THE NATIONAL ASSEMBLY (Tuesday, 03 March 2015)

PRETORIA, DATED 27 FEBRUARY 2015

  • ← 4. REPORT OF THE PORTFOLIO COMMITTEE ON TOURISM ON OVERSIGHT VISITS TO
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    The Portfolio Committee on Tourism, having undertaken oversight visits to the National Department of Tourism and the South African Tourism Head Offices in Pretoria on 3 - 6 February 2015, reports as follows:
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    1. Introduction
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    The tourism industry continues in the positive growth trajectory with preliminary figures indicating a record 10.3 million international visitors recorded in 2014 and the sector contributing 10.9 billion (R126.9 billion) to the economy and directly employed 645 000 people. The continued growth in the sector justifies why tourism is identified in the New Growth Path as one of the six priority economic sectors in the country. Tourism is seen as one of the economic sectors that can assist the government in creating sustainable jobs and ensure that the developmental agenda of the state is addressed in all economic sectors, particularly in rural areas. Inherently, tourism is a sector with a potential to create job opportunities as it is a labour intensive industry. Currently, the tourism industry surpasses mining and automotive sectors in terms of contribution to the Gross Domestic Product and is responsible for one in every eleven jobs in South Africa.
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    The National Development Plan aims to increase the industry's contribution to the job creation with 225 000 new jobs by 2020. The National Tourism Sector Strategy also projects an increase in the industry's contribution to the economy from R189 billion in 2009 to R499 billion by 2020. The tourism industry is therefore an important sector in South Africa in term of job creation and economic growth. The industry takes into cognisance the eight key priorities and fourteen government outcomes set by the current administration, including decent employment through inclusive growth; vibrant, equitable, sustainable rural communities contributing towards food security for all; and creating a better South Africa and contribute to a better Africa and better world. These priorities have been converted into government's Medium Term Strategic Framework which highlights priorities and outcomes over the MTEF period. The Committee therefore monitors the contribution of the tourism sector to the creation of employment opportunities through inclusive growth. The Committee therefore strives to ensure that it plays robust oversight to the Executive to ensure that the Department achieves the outcomes as articulated in the MTSF.
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    The oversight included intense engagements with the private sector. This was dome through engaging all the tourism sector organisations affiliated to the Tourism Business Council (TBCSA) as an umbrella body coordinating the affairs of the private sector. The Committee acknowledged that the tourism industry thrives on partnerships and collaboration amongst different stakeholders. The private sector is one of the major stakeholders as they own and operate tourism businesses in the country. Their conduct therefore assist in growing the sector and marketing the country abroad as a destination of choice. The private sector is also an integral part of achieving transformation in the sector. Unlocking the full potential of tourism is therefore dependent on the sector receiving sufficient support from the government, private sector, communities and labour. It is only if such support is demonstrated that tourism will be in a position to play the expected role of achieving the competitive edge needed by the economy and actualizing its maximum impact.
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    The mandate of the Committee is to conduct oversight work in an effort to extract optimum benefits for the country from the resources and capacities available to the government in terms of tourism growth. The Committee undertook an oversight visit to Head Offices of the National Department of Tourism (NDT) and South African Tourism (SAT) in November 2014 to assess progress and achievements in terms of quarters 1 and 2 of the 2014/15 financial year. The Committee aimed to take the opportunity as well to engage the private sector and to evaluate the nature of challenges, prospects for inclusive growth particularly in rural areas, and the extent of government intervention and support at all levels. The visit was initially planned for the last week of November 2014, but had to be suspended half-way through due to changes in the parliamentary programme. The latter part of the programme was revived to be undertaken in February 2015.
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    2. Objectives of the visit
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    The objectives of the visit were: . To receive briefings from the Department and the Entity on 2014/15 quarterly reports (Q1 and Q2); . To interact with Tourism Business Council of South Africa (TBCSA) on private sector perspective on tourism development; . To host a Committee pre-strategic planning session for 2014/15 to 2018/19 financial years.
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    3. Delegation The delegation comprised of the following members:
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    Table 1: Delegation |Political Party |Representative/s | |African National |Ms. B.T Ngcobo, MP (Chairperson) | |Congress |Ms. L.S. Makhubela-Mashele , MP | | |Ms. E.K.M Masehela, MP | | |Ms. P.E Adams, MP | | |Ms. S.T Xego-Sovita, MP | | |Mr. S.D Bekwa, MP | |Democratic Alliance |Mr. J. Vos, MP | | |Mr. A.G Whitfield, MP | |Economic Freedom |Mr. P. Khoza, MP | |Fighters | | | |Support staff: | | |Mr. J. Boltina, Committee Secretary | | |Dr. P.S. Khuzwayo, Content Advisor | | |Ms. J. Ntuli, Committee Researcher | | |Ms. K. Tshoma, Committee Assistant | | |Ms. S. Sixaso, Executive Secretary to | | |Chairperson | | |Ms. N. Qumbisa, Assistant to Chairperson |
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    4. Oversight visit schedule in Pretoria Table 2: Oversight programme
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    |Date |Place visited | Activity | | | | | |25 November 2014 |NDT Head Offices, |Q1 and Q2 of 2014/15 | | |Pretoria |presentations by NDT | |26 November 2014 |Freedom Park |Site visit to Freedom| | | |Park | |27-28 November 2014 |Oversight suspended |Oversight suspended | |3 February 2015 |SAT Head Offices, |Q1 and Q2 | | |Sandton |presentation by SA | | | |Tourism | |4 February 2015 |TBCSA (Private Sector),|Meeting with private | | |Centurion |sector | |5 February 2015 |Protea Balalaika Hotel,|Committee | | |Sandton |Pre-Planning Session | |6 February 2015 |Protea Balalaika Hotel,|Committee | | |Sandton |Pre-Planning Session |
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    5. The oversight process and approach The Committee process followed during the visit included: . Briefing session held with the National Department of Tourism presenting their reports on Quarter 1 and Quarter 2 of 2014/15 financial year. . Oversight visit to Freedom Park - heritage destination. . Briefing session with the South African Tourism presenting on their quarter 1 and quarter 2 reports for 2014/15 financial year. . Introductory and interactive session with the Tourism Business Council of South Africa on tourism development. . Committee strategic planning session; and . Briefing session with the Minister of Tourism. The Committee visit commenced with a courtesy visit to the Office of the Deputy Minister of Tourism, viewed the offices of the department. The first day ended with a briefing session where the NDT presented its bi-annual report. On day two, the Committee visited the Freedom Park, a heritage destination. All subsequent meetings scheduled in November 2014 with the Department of Monitoring and Evaluation in the Presidency, engagement with Tourism Business Council of South Africa; and meeting with South African Tourism were suspended.
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    The Committee had to revive the last leg of the oversight programme for the first week of February 2015. The Committee visited the Head Offices of the South African Tourism and received a briefing on the bi-annual report for 2014/15 financial year. On the second day, the Committee met with the private sector and ended the day with the meeting with the NDT on its priority focus areas for the next five years. The Committee spent day three and four were at the Hotel focusing on its own strategic plan. On the last day the Committee had an opportunity to be joined by the Minister of Tourism to share some perspectives on various issues affecting tourism and share his vision for the next five years.
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    6. Briefing sessions and stakeholder engagements
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    1. National Department of Tourism Bi-Annual Report, 2014/15 The NDT shared the following information with the Committee regarding tourism environment: 1. Scanning the environment assists in identifying developments that can challenge past practices and provide new perspectives about future threats and opportunities. In order to contribute towards government priorities, the NDTs scan focused on key factors affecting tourism. These amongst others include, economic, demographic, political, environmental, accessibility and tourism performance. The scan also provided a synopsis of the internal, strengths and weaknesses to address some trends observed from external environment.
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    2. International Tourist arrivals - according to the UNWTO 2014, the percentage share of travel for the emerging economies has been increasing over the years moving from 36.6 in 1995 to 46.6 in 2013.
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    3. Economy and Tourism - there is a strong relationship between tourism and the economy. International Tourism has boosted many African economies, growing by 5.3 per cent in 2013 and reaching a record of 56 million tourists. It is important to note the shift of focus from the advanced to emerging markets (Asia, China, Brazil, Russia and Africa).
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    4. Demography and Tourism - the demographic trends impact on tourism demand in specific generating markets. The structure of societies is continuously changing, and for both public and private organisations working in the tourism field it is relevant to study changes in order to anticipate and react upon them in the most appropriate and competitive way.
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    5. It is imperative to use comprehensive data on the demographics of source markets available from South African Tourism for key population groups (older/young, male/female, single/married) to develop appropriate marketing strategies.
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    6. Politics and tourism - generally unsafe destinations will be avoided by tourists. Destinations perceived to be safe will benefit as a result of political turmoil in neighbouring regions. As part of global community and improving perceptions of safety, South Africa' is involved multilateral forums such as (BRICS, G20, African Union, SADC, etc.) for the benefit of tourism.
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    7. Environment and tourism - South Africa's natural environment and climatic conditions are some of the determinants of viability and attractiveness of the country as a tourist destination. 8. Perceptions and tourism - Research shows that when perceptions of risk are high, tourism demand at a destination is likely to decrease. A more recent case is the outbreak of Ebola in West Africa that could potentially affect travel to the continent. It is therefore important that when such events occur a strategic communication plan, including rapid response mechanism, should be developed in order to combat such misperceptions about the country.
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    9. Connectivity - globally, United Nations World Tourism Organisation (UNWTO) is constantly campaigning against airport taxes due to their negative impact on tourism. In South Africa, Airports Company South Africa (ACSA) increased tariffs by 5.6 per cent from 1 April 2014 to recoup money for investment. In May 2014, International Air Transport Association (IATA) expressed hope that on-going dialogue with ACSA will prevent high increases in the future.
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    10. Challenges of Air connectivity specific to Africa - Africa constitutes 15 per cent of the world population, but it is only served by 4 per cent of the world's schedule air services seats. Long-haul air connections in Africa are dominated by foreign carriers. Air fares to Africa are almost 50 per cent or more expensive compared to other destinations in the world. Limited and non-availability of intra-regional air connectivity hinders progress of multi-country tourism packages in Africa. The aviation sector has been slower to liberalise air policies among African countries.
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    11. Visa Regulations - There is a need for shift towards an e-Visa regime in South Africa. Additional approvals deter travellers due to additional costs on their travel plans. Turn- around time to pass through airport security and immigration and custom officials for verification of documents is also tedious for travellers.
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    12. Threats posed by visa developments in Africa - Economic Community of West African States (ECOWAS) allows nationals of the 15 member countries to travel visa-free within the region. It is envisaged that there will be visa-free region for foreigners in 2015. This will enhance tourism competitiveness of the region. It is advisable for South Africa to emulate this practice.
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    13. Single Destination Tourist Visa - Kenya, Rwanda and Uganda launched a single destination visa to boost tourism in the region. The new branding campaign is called "Borderless Borders". This is to signify the new direction in promoting tourism and trade in the region.
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    14. Bilateral Agreements - according to National Department of Transport Database of Airline activities 2014, there are enough entitlements in terms of agreements however there is not enough capacity to service these entitlements. Some of the challenges include operational costs.
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    15. SA Tourism Performance in Domestic Tourism - The number of domestic trips taken declined by 1 per cent from 25.4 million in 2012 to 25.2 million in 2013. Although the average number of trips taken by South African adult increased from 2.0 in 2012 to 2.1 in 2013, fewer adults took a domestic trip in 2013. This indicates continuing downward trajectory as domestic travel dropped to 35 per cent in 2013 from 40 per cent in 2012.
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    16. Global Tourism Performance vs South Africa - There is a need to intensify focus on emerging economies particularly China due to their spending power. South Africa's 4.7 per cent growth in international arrivals for 2013 was below the global average growth of 5.0 per cent unlike in 2012 where South Africa was above global average. The decline in domestic trips taken in 2013 may result in failure to meet National Tourism Sector Strategy targets which is to grow the number of domestic trips to 54 million by 2020.
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    17. Tourism competitiveness - South African environment is conducive for tourism investment (ease of doing business). There is a need to improve health, safety and security. More emphasis must be put on skills development which will influence tourism competitiveness. In collaboration with the University of Pretoria, the Department is conducting a study that aims to identify and apply the most appropriate set of factors and indicators of destination competitiveness that are relevant to South Africa as a tourism destination with a view to develop and apply a model or instrument to measure and rate the country's competitiveness, relative to its potential.
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    18. Budget and Expenditure review for 1 April to 30 September 2014 - The total ENE Budget allocation is R1 662 110. The expenditure to date amounts to R994 335 million; while percentage of ENE Budget spent is 60 per cent and the variance is R667 775 million.
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    19. An amount of R78 million was returned to National Treasury as the Department was not ready to implement the Tourism Incentive Programme. The Department was called by the Committee on Appropriations in Parliament to account for departmental expenditure.
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    20. The Department was urged to avoid the repeat of poor financial performance that necessitated appearance before the Appropriations Committee.
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    2. National Department of Tourism Five Year Focus Areas
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    The focus for NDT for the period 2014/15 to 2018/19 will be to: 1. Diversify and enhance the tourism offerings; 2. Facilitate tourism capacity building programmes for the sector; 3. Provide knowledge services to inform policy, planning and decision making; 4. Create employment opportunities by implementing tourism projects targeted at the unemployed; 5. Create an enabling legislative and regulatory environment for tourism development and growth; 6. Accelerate transformation of the tourism sector; 7. Develop new and maintain markets (countries / regions) to position South Africa as a preferred destination; 8. Enhance tourism regional integration; 9. Create understanding about the value of the tourism sector and its opportunities; 10. Ensure economic, efficient and effective use of departmental resources; and 11. Contribute to the economic transformation in South Africa.
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    3. Site visit to Freedom Park
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    The Committee learned that the Freedom Park was established in terms of the National Heritage Resource Act, No 25 of 1999. It is a product of the government's response to the Truth and Reconciliation Commission (TRC) and the nation urging government to create a monument and memorial to celebrate those who sacrificed for a free and democratic South Africa. The Park is the South African tale in the voice of the South African people. The country's unique culture, heritage, history and spirituality are used to tell the events that shaped SA. It is the heart and soul of the nation captured in one breathtaking space. The display in the Freedom Park Museum covers seven epochs or eras that form the basis of the South African story, namely, Earth; Ancestors; People; Resistance and Colonisation; Industrialisation and Urbanisation; Nationalisms and Struggle; and Nation Building and Continent Building. The visit to Freedom Park reinforced the need for the Department of Tourism to work closely with the Department of Arts and Culture as heritage monuments such as these serve as pivotal heritage tourism attractions.
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    4. South African Tourism Bi-Annual Report, 2014/15 The South African Tourism reported the performance of Quarter 1 (Q1) and Quarter 2 (Q2) of 2014/15 as follows: 1. Increase foreign visitor arrivals coming to South Africa - In relation to Q1, SA Tourism achieved 99.6 per cent of the quarterly target. Arrivals grew by 7.5 per cent compared to 2013 (3,620,149). Visa issues are cited as hampering travel. Quarter 2 data is not yet available. NDT is facilitating discussions with Stats SA to address and resolve the delays in the release of tourism stats. 2. Increase in domestic tourism in South Africa - The target was achieved for Quarter 1. There was however a drop in Q2 and the Strategic Research Unit is investigating reasons for the drop in Q2 compared to Q1. 3. Increase tourism revenue contribution to the economy - Q1 target was exceeded due to the increase in domestic spend air arrival markets. The results for spend are correlated to the arrivals data as the survey is weighted back to the population of tourist arrivals; as a result the Q2 data is not available. 4. Increase Brand Awareness - annual target is 80 per cent and progress achieved is 80 percent. 5. Provide quality assurance for tourism products - annual target for graded accommodation establishment members is 7,088. Quarterly target is 1,772. Q1 and Q2 recorded 1,486 and 1,407 respectively. The accuracy of QiT system is currently being reviewed for final reporting. 6. Increase business events - there are no quarterly targets. Achievements are reported as progress is being made. The National Conventions Bureau is however on track to achieve annual target of 45 Bids, in line with the progress made this far. 7. Budget analysis - as at the end of September 2014, year to date budget was R667 821 078,66; while the actual is R646 659 666.29 and the variance is R21 161 412,37. The spent amounts to 97 percent. Annual Budget remaining is R429 798 528,72. 8. Next steps - going forward, SA Tourism will focus on the integrated HR strategy; review the marketing strategy; servicing of the Hub; stakeholder engagement strategy and plan; and implementation by 1 April 2015.
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    5. Meeting with Tourism Business Council of South Africa member associations The Committee received presentations and had an opportunity to engage with various member associations affiliated to the Tourism Business Council of South Africa (TBCSA). Discussions covered a wide array of topics in various sectors of the tourism industry. Engagements unfolded as follows:
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    1. Tourism Business Council of South Africa (TBCSA)
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    Some notable achievements of TBCSA include successfully: . Mobilising business in the sector to speak with one voice. . Crafting the Tourism BEE Charter and tourism was the first sector to establish such a Charter. . Lobbying for a dedicated Ministry of Tourism. . Promoting destination South Africa by contributing close to 10 per cent to SA Tourism's marketing budget through tourism levy. . Collaborating with government to develop National Service Excellence Strategy and National Tourism Sector Strategy; and . Spearheading industry dialogue on a broad range of macro-issues, such as energy challenges and immigration regulations.
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    Areas where work is ongoing include: . Extending Tourism Business Councils reach at provincial and local. . Extending Tourism Business Councils reach at SME level. . Ensuring integrity in tourism statistics. . Strengthening relations with other government institutions and departments whose work impacts on travel and tourism, such as South African Local Government Association (SALGA) and the Department of International Relations and Cooperation (DIRCO). . Increasing the TOMSA contributor base in order to grow the contribution to the SA Tourism; and . Solicit intervention where there seems to be an increase in policy and legislative changes threatening growth of Travel and Tourism.
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    2. Association of South African Travel Agents (ASATA) The association was formed in 1956 and its founders created a representative forum in the industry to promote and professional service for both members and their clients. As a Section 21 company not for profit, membership of ASATA is entirely voluntary and extends to South African Retail Travel Agents, Travel Management Companies and Wholesalers. A partners section for those suppliers of travel related products to the industry also exists. Emphasis is on free trade without violating rules and regulations. ASATA is administered by a full time Secretariat headed by Chief Executive Officer and its continued role and direction is are guided by a Board of Directors. All the members of the Regional Forums, Council and Board are elected by the members at an annual general meeting.
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    The Association interfaces with key opinion leaders in the industry and government officials in representing its members on matters of common interest including, policy, planning, operational and regulatory issues ensuring the ongoing sustainability of the travel industry. The make-up of the membership base is directly related to the outbound travel market. The association values tourism and supports the vital growth opportunities it presents. Every effort is made to distinguish travel from tourism as members tend to focus on fulfilling the South African travellers' requirements. The association indicated to the Committee that it is important to make the distinction between travel and tourism as the effect of bundling travel and tourism impacts training needs, statistics, and service delivery and understanding the economics of this dynamic industry. The primary focus of the association is directed at any issue related to improving continued sustainability and profitability of its members and ensuring the delivery of a professional service to the travelling consumer. This is achieved through strong relationships and open dialogue with all stakeholders.
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    3. Southern African Vehicle Rental and Leasing Association (SAVRALA)
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    The Southern African Vehicle Rental and Leasing Association was established to ensure that members maintain highest standards of service, ethical and trading practices. The industry is self-regulated and members commit to their Constitution and Code of Conduct. Represents members' interests and seeks constructively engage with its stakeholders. General car rental forecasted stats for 2014 - annual revenue almost R5 billion. Average fleet of 63 000 (utilisation is 72 percent); and annual number of rentals is 2.7 million. Car rental concerns - increasing cost of new vehicle prices and the impact of new Tourism B-BBEE scorecard; E-toll administration and traffic fines; and positively engages with stakeholders to find mutually beneficial solutions. It was indicated that the government owes this industry an amount of R350 million in unpaid invoices over 30 days, others in the excess of 60 days and more.
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    4. Fair Trade Tourism (FTT)
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    The Fair Trade Tourism (FTT) is a non-profit organisation that promotes responsible tourism in Southern Africa and beyond. The aim of the FTT is to make tourism more sustainable by ensuring that the people who contribute their land, resources, labour and knowledge to tourism are the ones who reap the benefits. This is done by growing awareness about responsible tourism to travellers; assisting tourism businesses to operate more sustainably; and by facilitating a Fair Trade Tourism certification programme across Southern Africa. Tourism businesses that adhere to the FTT standard use the FTT label as a way of signifying their commitment to fair and responsible tourism. This includes fair wages and working conditions, fair purchasing and operations, equitable distribution of benefits and respect for human rights, culture and the environment. By selecting an FTT certified business, travellers are not only assured that their holiday benefits local communities and economies. The business is operated ethically and in a socially and environmentally responsible manner, and will also have more fulfilling holiday experience. FTT raised concerns that tourism in not mainstreamed in the Department of Tourism. The unit dealing with this important aspect of modern tourism is at a directorate level and not well resourced. The Committee was advised to advance mainstreaming of responsible tourism in all programmes of the NDT. This is imperative as the modern tourist is discerning in whether the tourism products and packages adhere to responsible tourism principles and practices.
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    5. Exhibition & Events Association of Southern Africa (EXSA)
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    The Exhibition & Events Association of Southern Africa (EXA) was established in 1980 as an association to serve the exhibition and events industry in South Africa. It is comprised of venues; exhibition organisers; and suppliers / services to the industry. Through hosting exhibitions and events EXSA is able to develop and showcase advances in trade and technology. Created new networking and business opportunities with experts from around the world; and opened the doors for direct investment. Impact of Exhibitions on the economy - EXSA member Cape Town International Convention Centre (CTICC) in their 2013/14 financial year contributed R3.1 billion to national GDP; R2.8 billion to the Western Cape GDP. These activities have generated R172 million revenue from 533 Events and Exhibitions; and created 4 273 indirect jobs.
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    It was reported that the Durban International Convention Centre contributed R17.4 billion to national GDP; and R16.3 billion to KwaZulu/Natal Province; and created 53 475 jobs. Business travel exceeds global average for tourism spending - business tourists often become casual tourists visiting world-class tourist attractions before or after their business meetings. As of 2013 tourism has contributed 9.5 per cent of the South Africa's GDP; and creating more than 1.4 million jobs. The need for EXSA in the tourism industry is crucial as more business is done at trade exhibitions than any other single marketing initiative. Exhibitions bring all relevant industry leaders under one roof for 3 to 4 day intensive "selling" period. If executed well they provide a great return on investment and help businesses grow. Fifth Media Channel exhibitions are as the fifth media channel because they are simply the best face-to-face marketing and communication channel. Exhibitions that bring industry leaders to South Africa include amongst others Mining Indaba; Meeting Africa; Tourism Indaba; Decorex which is hosted in 3 Provinces; Bauma Africa; JIMS; and AAD. EXSA is a partner with National Convention Bureau and therefore works closely with government in growing business tourism in the country.
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    6. Airlines Association of South Africa (AASA)
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    The airlines Association of South Africa was established in 1970. In 1994, AASA formed a single SADC association for airlines and integration of Regional Airlines Association of Southern Africa (RAASA) and Airlines Association of South Africa. AASA is the industry Employer Association registered with the Department of Labour governed by a Constitution. It represents Airlines from States South of the Equator and SADC states; and Indian Ocean islands. AASA indicated that there are numerous challenges faced by the airline industry, including airline sustainability; transformation; skills development; aviation jet fuel; African Aero- political issues; and immigration reforms. 7. Board of Airline Representative of South Africa (BARSA)
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    The Board of Airline Representative of South Africa (BARSA) is the representative association of the international airlines operating to South Africa. It represents member's interests in most countries in the world. The Association has been in existence for several years and has identified the need to establish a recognised means of communication and consultation between member airlines and statutory and other organisations whose actions influence and affect member airlines and the aviation industry in general. BARSA does not engage in fares or any pricing policies and agency remunerations. The Department of Tourism and South African Tourism may benefit in working closely with this association and South African Airways in understanding international aviation dynamics thus choosing packaging tourism offers and choosing routes accordingly.
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    8. Southern African Association for the Conference Industry (SAACI) The Southern African Association for the Conference Industry (SAACI) is the recognised umbrella body of the business events industry in Southern Africa. Provide platform for strategic direction and sustainable growth in the Southern African business events industry. The value proposition for SAACI is providing a platform to obtain relevant qualification or improve skills in the conferencing sector. This also entails partnering of private and public sector to lobby industry issues at the highest level; and linking up with international associations and businesses to keep up to date with trends across the globe. The pillars that guide SAACI include community; business intelligence; academy; venture into Africa; branding and communication; stakeholder engagement; sustainability; and future focus. 9. South African Youth Travel Confederation (SAYTC)
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    The South African Youth Travel Confederation (SAYTC) is a Trust Organisation which was set up to market youth travel around the world to millions of youth travellers. SAYTC operates in four sectors such as Backpacking South Africa (BSA); Volunteer South Africa (Vol SA); Tours and Transport (TATSA); and Education South Africa (Edu SA). Backpacking South Africa is innovative and youth driven. The organisation promotes travelling for the off the beaten track type of products including boutique and out of the box hostels which are recognised worldwide as quality establishments. The youth also engage in adventurous activities such as bush camps or dormitories. SATC also works with organisations such as Volunteer South Africa which brings volunteers to volunteer their time and money to help on many different projects such as Children hospitals, orphanages, sports programmes and educational support in rural areas. The organisation provides Tours and Transport to travellers who want to experience township tourism and related community based tourism.
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    SATC also works with organisations such as Education South Africa and appreciates the wealth of knowledge brought by international students. Students should be encouraged to come as they bring foreign currency, skills, knowledge and investment.
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    10. National Accommodation Association-South Africa (NAA-SA)
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    The National Accommodation Association - South Africa (NAA-SA) is a national organisation catering for smaller accommodation establishments such as guesthouses, bed & breakfasts, small boutique hotels and lodges. The organisation aims to bring together local, regional and provincial associations, along with individual establishments. It acts as a voice of the smaller accommodation sector on matters that directly affect the members of the association. NAA-SA's future plans includes continuing to work with industry role-players to develop favourable conditions for sustainable industry growth and employment creation. The association has noted an increase in the number of tourism graded establishments to 95 per cent of the association. Along with local authorities, the association implements the Hospitality Business Incubator programmes to assist with skills transfer. The association however indicated that there has been a decline in the uptake of the grading scheme by members, with others pulling out. This was ascribed to the new grading criteria that were not properly communicated to members.
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    11. Tourism Enterprise Partnership (TEP)
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    The Tourism Enterprise Partnership (TEP) is a non-profit company with focus on public and private partnerships. It is one of the longest standing and most successful enterprise development partners for small tourism businesses in South Africa. The mandate for TEP is to facilitate the growth, development and sustainability of tourism SMMEs and thereby contributing to the transformation of the industry. The organisation offers interventions that provide hands-on, step by step support and guidance to tourism SMMEs. The service offerings for TEP include client graduation categories such as access to information; business support; skills development; and market access. Clients are classified into five categories ranging from Category 1 clients who are mainly information clients to category 5 clients who are implementing special projects.
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    TEP is in partnership with the NDT. TEP was established and initially funded by Business Trust from 2000 to 2004. The erstwhile Department of Environmental Affairs and Tourism then became a funding partner on a 50% / 50% basis from 2004. The organisation reported that NDT has given a notice that when the current partnership expires on 31 March 2016, they may not be inclined to renew it as the Tourism Incentive Programme (TIP) may become operational and SMME development may be done in-house by NDT itself. This may not be a good move as TEP is a well-established organisation that has vast experience and has established a solid reputation in tourism SMME development. The challenging question of mobilising SMMEs remains a vexing subject and TEP is convinced that with more resources more can be done. With the Tourism Incentive Programme not clear at this. TEP is in the process of reinventing its business model to identify new opportunities to mobilise funding to support its SMME development work and will build on its 15 years of successful experience in tourism SMME development.
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    7. Tourism Business Council Board Chairman The Committee had an opportunity to interact with Mr. Mavuso Msimang who is currently the Chairperson of the Board of the Tourism Business Council of South Africa. He expressed the appreciation for invitation and apologised for not being available the previous day due to pre-planned engagements and other critically important obligations. He outlined the mandate of the Tourism Business Council of South Africa (TBCSA) as to: . Provide the one voice of private sector within the industry and be a conduit of private sector issues with the public sector. . Provide a unified platform for private sector to engage with the public sector and other stakeholders. . Tackle macro-economic issues faced by the sector, which include transformation in tourism, tourism marketing, skills development and quality assurance. . Co-fund tourism marketing activities through the TOMSA Levy which is currently sitting at 10 per cent of the total budget of South African Tourism.
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    The Chairperson of TBCSA also highlighted major achievements that have been which include: . The introduction of the Tourism Marketing South Africa levy . Establishment of the tourism BEE Scorecard. . Establishment of Public Private Partnership, such as the Tourism Grading Council for quality assurance.
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    As an attempt to move business forward, the Chairperson highlighted the establishment of structured relationships through Memorandum of Understanding (MoUs); and engage local government on reducing cost of doing business, such as utility costs and municipal rates.
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    8. Committee Pre-Strategic Planning Session The Committee engaged on a pre-strategic planning exercise. This was meant to prepare the Committee for the strategic planning session that will include a number of external stakeholders. Issues discussed focused on the internal business issues of the Committee and covered the following: . Strategic planning process and template. . Tourism sector analysis. . Prospective study tours. . Vision, Mission and Values. . Mandate of the Committee. . Strategic Goals of Parliament; and . Committee priorities.
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    Emerging strategic priorities for 2014 - 2019: . Strengthen oversight and accountability. . Enhance public involvement and participation. . Deepen representation and participation in international fora. . Strengthen cooperative government; and . Strategic assessment of the impact of legislation.
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    Administrative Focus Areas; . Improved leadership and governance in the institution. . Enhance knowledge, information and policy. . Enhance capacity and skills development of support staff. . Processes and technology. . Enhance the culture of service excellence. . Optimal use of facilities.
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    Decision: The Committee agreed that the consolidation of the 5 Year Strategic Plan; Annual Performance Plan and Committee programme will further be subjected to a follow up session to be held as soon as the Department and the Entity tabled their final 5 year plans to Parliament.
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    9. Committee observations The Committee made the following observations that need to be addressed through the oversight work and strategic planning by the Department and South African Tourism: 9.1. Quality of tourist guiding at Freedom Park The Freedom Park provided high quality guiding of the exhibition walls and the tour of the outside features of the precinct. However, the tour guide inside the museum is politically biased and uses degrading language when referring to the siting head of state and other members of the current administration.
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    9.2 Late release of tourism figures by Statistics South Africa South African Tourism has been unable to provide tourism figures against their targets for two consecutive years due to a late release of tourism figures by Statistics South Africa. This has hampered the oversight work of the Committee over the entity as targets set by the South African Tourism needs to be verified against that information.
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    9.3 Recurring foreign currency exposure by South African Tourism The nature of work done by South African Tourism will always expose this entity to foreign currency exchange rates and impact on their budget. The strategies employed by the entity to date have not resolved this challenge year after year.
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    9.4 Stagnant TOMSA Levy collectors The Committee observed that whilst the TOMSA Levy collection has been increasing year on year the number of TOMSA Levy collectors remained stagnant. This indicates that there are private sector members who are unhappy about the current manner in which collected funds are used by South African Tourism. South African Tourism has failed to demonstrate to the private sector that TOMSA Levy is effectively used to address marketing of South Africa abroad and domestically.
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    9.5 Modernising and revamping Indaba It was noted with concern that the private sector support tourism Indaba only in principle as a South African event but in the main are not satisfied with benefits from this trade platform. The private sector indicated that Indaba does not attract "serious" buyers and there is poor conversion from this event as compared to the new trade shows that have come to the market. The Committee sees this as a lack of innovation and creativity from South African Tourism to position Indaba as an African event on par with similar international events.
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    9.6 Decrease in inbound bookings due to new immigration regulations The Committee observed that most private sector organisations affiliated to the Tourism Business Council of South Africa reported a decrease in forward bookings, especially from India and China, due to the new immigration regulations to start operating on the 1st June 2015. The Committee has also noted results of the study commissioned by the Tourism Business Council which iindicates that the country may lose 270,000 international tourists. This would in turn will result to 21,000 jobs lost annually and loss inadvertently cost South Africa R9.7 billion in revenue.
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    9.7 Government debt to the tourism industry The Committee observed that at the time of this oversight the government departments, provinces and local government had an outstanding debt of R350 million unpaid services provided by the tourism industry. This includes tourism SMMEs who cannot conduct their business effectively due to poor cash flows. The Committee is concerned that the government is not adhering to the 30 day period in paying for travel and tourism related services rendered.
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    9.8 Non-implementation of the Yamoussoukro Declaration The Committee noted that whilst South Africa was promoting the open skies policy other African countries had not ratified the Yamoussoukro Declaration. This contributes to a continued challenge of air travel amongst African countries and pushes up the cost of travel in the African continent. In other instances Africans need to fly out of Africa and connect flights in Europe to fly to other African Countries.
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    9.9 Need to promote responsible tourism The Committee noted that the private sector has realised the need to embrace responsible tourism practices in doing their business. This is necessitated by current international trends in the industry and is good for business and environmental conservation. The Committee however observed that the Department of Tourism does not have full capacity to deal with responsible tourism comprehensively as this is only administered at a directorate level without sufficient staff. The Department therefore should look at ways of streamlining responsible tourism and effectively discharge that mandate.
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    9.10 Slow pace of transformation The Committee observed conflicting reports of the state of transformation in the tourism sector by various affiliations of the Tourism Business Council of South Africa. Whilst other affiliates perceived the tourism industry as being transformed others were of the view that the industry still reflects the structural economic differences in the sector as a result of the economic history of the country. The Committee noted that these differences were as a result of the affiliates who looked at how the tourism industry was performing against the tourism scorecard against those who considered transformation holistically. For those who were not confined to the performance of the scorecard, ownership of the businesses in the sector was still largely unchanged and few emerging operators had entered the sector thus government needed to facilitate radical transformation of the sector.
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    9.11 Termination of Tourism Enterprise Partnership (TEP) funding The Committee noted with concern that the Department had informed TEP management that funding for this important tourism SMME development agency will be terminated in 2016. The Committee is concerned that there vast knowledge and expertise of TEP in tourism SMME development will be lost in the sector. The departmental capacity to run the SMME development programmes similar to TEP is questionable and this may lead to a collapse of many emerging tourism enterprises.
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    10. Recommendations After a careful consideration of issues observed during the oversight visit, the Committee makes the following recommendations:
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    10.1 It is recommended that: (i) The Department of Arts and Culture and Department of Tourism work closely with the Committees on Arts and Culture and Tourism to professionalise tour guiding and developing standards for scripts at all South African Heritage Sites and museums to ensure authentic rendition of information to tourists at these attractions.
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    (ii) The Department makes a presentation on Heritage and Cultural Tourism development in South Africa to both the Portfolio Committee on Tourism and Portfolio Committee on Arts and Culture in a joint meeting.
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    10.2 It is recommended that the Minister of Tourism works closely with Statistics South Africa to ensure timeous release of tourism figures. The Minister should also ensure that figures provided capture tourist arrivals instead of foreign arrivals to depict a true trajectory of tourism growth in South Africa.
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    10.3 It is recommended that the Minister of Tourism engages National Treasury to find a permanent and lasting solution for the challenge of foreign currency exposure faced by South African Tourism.
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    10.4 It is recommended that the Minister of Tourism instructs South African Tourism to develop strategic mechanisms to disburse funds collected through the TOMSA Levy to address issues raised by the private sector to influence an increase in TOMSA Levy collectors thus the amount of marketing funds raised through private sector partners. 10.5 It is recommended that the Minister of Tourism ensures that the Indaba is positioned as an African tourism show on par with international standards to justify budget appropriated for the event and contribute meaningfully to tourism growth in South Africa. The Minister is also urged to include the review of the Indaba in light of the review of the South African Tourism currently underway.
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    10.6 It is recommended that the Minister of Tourism continues to engage colleagues in government to pursue a balanced solution on visa regulations that will not have adverse unintended consequences to the growth of tourism in South Africa.
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    10.7 It is recommended that the Minister of Tourism emphasises the need to pay travel and tourism services within 30 days. The Minister is also urged to encourage government to adhere to the 2002 Cabinet Memo directing procurement of tourism services from graded tourism establishments.
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    10.8 It is recommended that the Parliament of the Republic South Africa puts the issue of ratifying the Yamoussoukro Declaration in the agenda of the African Union to ensure that African Countries ratify this declaration to expedite the open skies policy, facilitate airlift and connectivity, and cut costs of travel within the African continent.
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    10.9 It is recommended that the Minister of Tourism realises the strategic significance of mainstreaming responsible tourism within the Department to address the current trends in the sector, and provide adequate staff at appropriate level to deal with this issue.
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    10.10 It is recommended that the Minister of Tourism devises strategies that will facilitate radical transformation of the tourism sector, not only limited to the performance of the industry against the tourism scorecard, but incorporate mechanisms to tackle structural economic issues facing emerging tourism enterprises and promote new entrants from the previously disadvantaged communities. 10.11 It is recommended that the Minister of Tourism reviews the decision of stopping funding TEP in 2016 until the Department has established full internal capacity to provide tourism SMME development programmes.
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    Report to be considered
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  • ← 4. REPORT OF THE PORTFOLIO COMMITTEE ON TOURISM ON OVERSIGHT VISITS TO

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