Strategies to expedite transformation in the tourism sector

Meeting report

The Chairperson said the meeting was taking place at a time when the Coronavirus recovery rate was at 86%, but the battle was not over. Part of the risk-adjusted strategy for level two of the COVID-19 was the fact that some people thought that there was no longer a virus in society. Some were behaving in a manner that would make it possible for them to contract the virus.  He urged Members and those joining the meeting to continue the education of themselves and others, and to take all necessary precautionary measures in order not to contract it. 

Chairperson on transformation in the tourism sector

The focus of the meeting was to address transformation in the tourism sector. An agreement had been reached in the Portfolio Committee that every September -- Tourism Month -- there would be a genuine undertaking to evaluate progress of the sector, especially within South Africa’s borders, and around matters of transformation. This would happen annually for the following four years, as oversight was necessary to account to the people of South Africa on the performance of the executive, the role of the private sector, and the role of South Africans and aspirant role players in the tourism sector. This would be a long haul, particularly because reflection on the past 26 years showed that not much commendable progress had been made with transformation.

Transformation within the tourism sector was done within the context of the broader transformation agenda of South Africa. The country still had highly prevalent inheritances of colonialism and apartheid visible. All South Africans -- black, white, coloured and Indian -- had agreed that it was necessary to join hands in addressing the challenges that stemmed from colonialism. The transformation agenda was one which sought that all South Africans should play a role in the tourism sector – particularly those who had been excluded from the economy “by design.” By this, he was referring to the fact that colonialism and apartheid had designed, through acts of Parliament and other role players, to make sure that blacks were not only excluded from tourism, but from the broader economy of South Africa.

The generation that was responsible to take South Africa forward as a democratic, non-racial, non-sexist generation and prosperous society needed to be one that would prepare the ground for the next generation. This would not be an easy task going forward, because within the list of the beneficiaries within the colonialist and apartheid system, there would be those who would either frustrate the process or drag their feet. Others would pretend to cooperate with the transformation agenda when they in fact were not cooperating. The Chairperson also warned of potential conniving with “other forces” that may occur and frustrate the agenda of transformation of the tourism sector in particular.

To have peace and stability in South Africa, reconciliation was critical, but this was impossible without reconciliation and transformation in the tourism sector. The majority of South African villages -- over 90% -- experienced no activities involving tourism, as did over 75% of townships. Small towns were doing slightly better, because both the colonial and apartheid structures sought to reposition small towns as points from which economic activities, such as the supply of raw material, agricultural products etc, were to be based. Almost all small towns in SA had the infrastructure of roads and telecommunications needed to move forwards. The colonial and apartheid design was such that black individuals were “suffocated.” It was now the responsibility of black, white, coloured and Indian South Africans to construct the “new South Africa.”

The Chairperson was sceptical about whether those who controlled the economy would share or relinquish control.  For instance, the banks had made various promises, but not all had delivered on these promises. This was why many were in debt and suffocating financially. Some businesses might never resurface and were gone forever. Others might struggle in the post COVID-19 period, meaning that business owners might be swimming in debt for seven to ten years to come. The COVID-19 pandemic meant that there had not been much activity in tourism. and this would be indicated in the presentation. Even the cost of compliance with COVID-19 regulations and broad-based black economic empowerment (BBBEE), for example, were big struggles for some companies.

Black people in the tourism sector were mainly sweepers, cleaners, garden boys and girls, drivers, security guards, cooks, receptionists and other smaller jobs. Job creation by the tourism sector, which was a big contributor to the economy, showed that these smaller jobs by black people were not controlling the core of the tourism sector. These workers struggled to gain access to financial institutions and to have tourism structures in place. Even beyond this, there were struggles with customers, the market, the supply of everything needed to make the business a success, marketing – ultimately, there was a long way to go. This was not just the responsibility of black people, but the collective responsibility of all South Africans.

The Chairperson continued by commenting on land and land ownership. For example, 78% of land was owned by white people. This was not by coincidence, but by design. It was up to Members and the public to make sure that everyone benefited from the land of the Republic of South Africa. Those whose land had been taken from them, often by force, needed to feel that some degree of justice had been served. For example, to run a business or run a lodge or bed and breakfast (BnB) establishment, one needed land. There might be individuals who would need to start a business by incurring a high level of debt for land that had in fact been taken from them “by the barrel of the gun” previously.

Economic growth needed to benefit everyone. This was the true challenge: to make all South Africans feel that they were responsible for transforming the country into a South Africa for all, while ensuring justice for those who had experienced past injustice. The meeting’s agenda was a start towards this, but was also a continuation from the previous administration.

Tourism sector transformation report

Ms Sisanda Loni, Committee Researcher, began by detailing the public submissions on proposals and strategies to expedite transformation in the tourism sector. She said transformation in the tourism sector was mandated by the Constitution and beyond, and was monitored by the Tourism BBEEE Charter Council.

A wide array of proposals were made across the various types of tourism -- accommodation, hospitality and travel-related services -- and the tourism value chain at large, such as ownership, management control, skills development, enterprise and supplier development.

Dr Sibusiso Khuzwayo, Committee Content Adviser, continued on the public submissions process and outcomes, which had been received until 31 July. All 28 submissions had been considered, even though some had been submitted as business tender proposals. Submissions had been grouped into eight themes, which were detailed. It was suggested that as part of the way forward, the report be tabled to the House so that Members from other portfolio committees would recognise the importance of their role in this.

The Chairperson thanked both staff members for their presentation.

He welcomed Ms P Mpushe (ANC) into the ranks of the Portfolio Committee of Tourism, who was a new Member.

Discussion

Mr H Gumbi (DA) appreciated the hard work and details covered in the report, particularly the focus on new jobs and entrants.

Mr M Galo (AIC) said the report was clear and straightforward. He referred back to the Chairperson’s opening remarks, and supported the idea that the report be tabled in Parliament.

Ms Mpushe appreciated the welcome from the Chairperson, and said the presentation had been in line with the transformation agenda. She wanted to plan the way forward together with the Committee, and awaited a response from the Minister on how far implementation had progressed.

Ms L Makhubela-Mashele (ANC) appreciated the report, which reflected of the status-quo. She reminded the presenters that when the sector was struggling to promote domestic tourism, there had been a request from National Treasury to re-allocate approximately R100 million towards reviving domestic tourism. This had led to the introduction of the transformation fund when transformation seemed to be staggering. She wanted to know if these resources were enough to ensure that transformation would happen more quickly. Was it possible to advocate for more funding and for money to be ring-fenced, so that even if resources were not used, they could be rolled over to the following financial year? This would enable a tailor-made transformation programme, which would see transformation accelerate beyond the sector’s current pace.

She also asked whether it was possible that from the ring-fenced resources, funds could be allocated to an entity which would have the mandate to market South African products, and to promote the country -- including each province -- as a desirable tourist destination. Was it also possible to come up with a strategy which would dictate that the ring-fenced funds would also be used for developing products and ensuring that there was transformation in the sector -- for example, by having stakes in game lodges to bring in BBBEE partners? Ultimately, these were strategies that fast-tracked transformation and did not allow the appropriation of funds. It had been said by stakeholders at a previous meeting that they wanted to be incentivised to do the things the government wanted them to do. They did not want to do these things “just for the sake of doing them.” These incentives would ensure that businesses saw the value, which could be a move in the right direction.

The Chairperson noted that there were four Members absent from the meeting, who had struggled with connection to gain access to the platform. He was sorry that this was the case, as an opportunity would have been given to them to speak if they were present.

He thanked the researchers and office administration, commending the manner in which they had executed the decision of the Portfolio Committee.

Chairperson on transformation agenda

The Chairperson said there was a four-year plan that would bring about transformation in the tourism sector. Transformation was critical in reuniting South Africa. As such, transformation was unavoidable, inevitable and had to happen.  If transformation did not occur, the consequences for the future would be dire. Currently, the transformation agenda was “sluggish”. The proposal to take the presented report to the House had been agreed upon by the Members, and the necessary processes would be followed to ensure it was debated in the House so that it could formally be a decision resolution by Parliament to pursue the transformation agenda. Essentially, a platform was being created for future generations that would drive the transformation agenda.

The Chairperson commented that there were approximately 18 Portfolio Committees overall, and that the Tourism Portfolio Committee would aim to involve as many as possible in joining the drive towards the transformation agenda. If they did not work together, he felt strongly that they would not succeed.

Moving forward, it had become clear that the Committee needed to work very hard to ensure that every village, township and small-town had its own localised tourism plan. This was particularly important, because tourism was highly concentrated in the main or big cities. In order to move aggressively forward, it was therefore necessary to push village and township-based tourism plans not only for jobs, but for entrepreneurship and economic ownership. He referred to an over-reliance on international tourists, which was important but was not sustainable, as had been made clear by the COVID-19 pandemic.  From a budget and implementing perspective, things would need to be done differently. This is why a multi-tiered approach was necessary from other portfolios. For example there was a need for roads and water supplies.

The Chairperson continued by drawing a distinction between rural tourism compared to township or village tourism. “Rural tourism” was too broad, because the performance of rural tourism, which included private infrastructure owned by whites, seemed to be doing well though it was not, as nearby villages were struggling. While there were black people working in private game lodges with some concessions, overall private game lodges were owned by whites. This situation needed to change. For the next four years, this would be the focus of the Portfolio Committee so that future generations could benefit from their work.

The meeting was adjourned.