South African Tourism 2019/20 Annual Performance Plan briefing with Deputy Minister

Meeting report

The Chairperson greeted members and welcomed the Deputy Minister to the meeting. The relationship between the Committee and South African Tourism (SAT) is informed by the Constitution, relevant policies and legislation. The Committee’s responsibility is to conduct oversight and it will not compromise on safeguarding the interests of all South African citizens. He then handed over to the Deputy Minister.

Mr Amos Mahlalela, Deputy Minister: Department of Tourism, said SAT must develop a marketing strategy in order to fulfil its mandate. The presentation will highlight the ways in which it plans to do this. The mandate includes ensuring inclusive economic growth, sustainable job creation and redistribution and transformation of the industry.

The Deputy Minister said the Board of SAT is dealing with the precautionary suspension of its Chief Executive Officer (CEO) and will submit a report on it to the Minister tomorrow. After the report is submitted, the Board will be able to comment with certainty on the process of finalising the matter. The position of the Chief Financial Officer (CFO) is in the process of being filled. It has not been filled yet because the appointed candidate received a counter-offer.

Ms Pam Yako, Chairperson of the Board of SAT, said SAT is behind on achieving the 5-in-5 national goal. Moving forward the focus will be on the key markets and the presentation will highlight what those are. There was some improvement on the domestic target. On the CEO’s precautionary suspension, the investigation process was concluded yesterday. SAT will confer with the Minister and thereafter share its view about the position going forward. The CFO position was turned down by the appointed candidate. The same is true for the position of the Chief Marketing Officer (CMO).

Presentation by South African Tourism

Ms Sthembiso Dlamini, Acting Chief Executive Officer of the Board of SAT, said SAT has set a strategic goal of increasing the base of tourism by 5 million arrivals or trips during 2017 to 2021. This will contribute to the mandate of inclusive economic growth by synergising efforts across the tourism sector. SAT is behind on achieving the 5-in-5 national goal. On the international tourism target, only 10% of the target was achieved.

Ms Bashni Muthaya, Chief Strategy Officer of the Board of SAT, said international tourist arrivals within Africa increased while the rest of the world decreased. She said one of the key issues that impact the international tourism target is negative perceptions around events in the country. These are described as the following:

• Safety and security concerns;
• The water crisis;
• Inappropriate wildlife interaction; and
• The land expropriation without compensation debate.

Ms Muthaya added the other key issue is the challenge of visas. The visa processing challenges in India, China, New Zealand and Nigeria are a deterrent for travel to South Africa. This is because there are delays in processing time and inconsistent requirements and submission of visa documents.

Ms Nombulelo Guliwe, Acting Chief Financial Officer of the Board of SAT, indicated that actual expenditure is greater than what was budgeted for. The numbers are not yet audited and only once this is done, the engagement on the budget will be fruitful. A more thorough presentation on the financial performance will therefore be given to members once the numbers have been audited.

Discussion 

Mr G Krumbock (DA) said the bulk of international arrivals came from within the continent. The biggest market is the Southern African Development Community (SADC) countries with the exception of Angola. The biggest spenders come from the northern countries and this presents a problem. It is concerning there is a decline from North America and Europe when the South African Rand is weaker for those markets. Has SAT looked into leveraging the country into more lucrative markets, particularly when it comes to the targets on spending?

Mr Krumbock noted the outlined issues that impact South Africa’s international tourism performance. Can members be furnished with a document quantifying these issues? Is it possible that 1 or 2 of the outlined issues could be the main drivers? If so, and it is likely to become a bigger problem, the Committee can work together with other departments and stakeholders to address the issue.

Mr P Moteka (EFF) agreed with Mr Krumbock’s sentiments. Members need more facts and numbers on the outlined issues. It is non-factual to say the issue of land expropriation without compensation is affecting the tourist arrival targets. How could that debate be chasing tourists away? Tourists have no business in government’s plans to care for its citizens. It is an internal matter by the government for the South African people. Tourists are merely visitors.

Mr Moteka asked for more details on the water crisis. Is it the quality of water or something else which is affecting the tourist arrivals target? On safety and security, the Western Cape has recorded more tourist arrivals yet the amount of violence and killings happening in Cape Town is shocking. Despite the violence, tourists are still visiting Cape Town. Can a more detailed analysis on the issue of safety and security in Cape Town be provided to members? On Tourism Grading, the Northern Cape is recorded as the highest performing province yet it is performing poorly in tourist visits. How is this happening?

Mr H Gumbi (DA) asked about the closing of sales internationally and SAT’s interaction with embassies abroad. Can SAT highlight its experiences with different embassies abroad? On the visa challenges, the Brazil Russia India China South Africa (BRICS) arrangement is to deal with the easier flow of people within its countries. What is the experience with India and China when applying for a visa to visit South Africa? How would SAT like the process for visa applications to be?

Mr Gumbi asked about the issue of grading fees. How did SAT get to the amount of R500 as a discounted grading fee? How often do institutions have to be graded to maintain a certain grading? In the 5th Parliament it was said that grading would be made free and available to everyone due to its benefits but this did not come to fruition due to capacity issues. What are SAT’s views on Airbnb? How do events such as the Vodacom Durban July event feature in tourism marketing?

Ms S Xego (ANC) said it is important for the Committee to invite the Tourism Grading Council (TGC) to understand its mandate better. How is data collected on domestic tourism targets, in particular the visiting of friends and family? Is there a specific method applied to retrieve this data or is it obtained through sampling? The collaboration and coordination with other state departments is important. This needs to be looked at more robustly.

Ms Xego said there should be more benefits for small businesses coming into the market as well as incentives for those that adhere to regulations. On the reasons behind the decline in international arrivals, it could be the way the media sensationalises South African issues to the world. At all times, the media was responsible for the negative perception of the land expropriation without compensation issue. The “We Do Tourism” campaign proves to be beneficial. SAT should continue doing more campaigns to market the country domestically.

Ms M Gomba (ANC) said the Emerging Tourism Entrepreneurship of the Year Award (ETEYA) Programme aims to put small and medium enterprises at the centre of tourism. Why are only people awarded in the ETEYA programme given opportunities to exhibit at Africa’s Travel Indaba event in Durban and The Things Network (TTN) event? There are no visible road shows in communities. Is the provincial or national department responsible for these initiatives?

Ms Gomba said the Enterprise Propeller (EP) is one of the stakeholders that provides small and medium enterprises with marketing material. Are they still doing this? Has SAT partnered with other stakeholders besides the EP? With the 2010 soccer World Cup, most people invested in bed and breakfast establishments to cater for the tourism demand. Is there any ongoing support provided to them? On the processing of visas and visa delays, did you raise the matter with the Department of Home Affairs (DHA)? The small and medium enterprise hotels is used for mentoring and idea-sharing. Is this programme still ongoing? Provinces should be sending reports on it. Can members be provided with a report on it?

Mr M Galo (ANC) said the President indicated earlier this year he would like the SAA (South African Airways) to establish a direct route from South Africa to India. What steps have SAT taken to ensure this is fast-tracked? This might also encourage visitors from India. Has SAT alerted the relevant department on the key challenges impacting the targets for international arrivals? Has SAT begun lobbying the relevant stakeholders to explore other routes? Rural tourism does not feature at all in the presentation. What programmes are currently in place to encourage start-ups in rural spaces? Do the SAT strategy plans speak to rural tourism?

Mr K Sithole (IFP) said the visa challenge is a concern. Where are the delays exactly? Are they in the DHA? What is the role of intergovernmental relations (IGR) in addressing this challenge? People that have visited Nigeria express frustration with the visa application process. Can SAT substantiate on where this issue stems from? On grading, the decline in KwaZulu-Natal is concerning. Can more detail be provided on this? On the presentation and in the programme of Corporate Support, why are there no targets in quarter 3?

Mr Z Peter (ANC) said in hosting visitors, how does SAT make sure the upcoming tour guides are empowered? Is there a programme to promote eKasi or township tourism? 

Ms L Makhubela-Mashele (ANC) said the way the CMO is positioned in the organisational structure of SAT is an issue. The CMO is a level below other executive positions and this needs to change so that talented candidates will apply for the position Can the Board provide a proposed structure that will make the position of the CMO lucrative? What is the recovery plan on the 5-in-5 strategy? SAT did not meet its targets yet the presentation does not highlight plans to deal with it.

Ms Makhubela-Mashele said the Committee should invite the DHA to brief members on the processing of visas in order to understand the challenges. This should happen before members visit processing centres. The DHA said it is no longer processing visas and delegated the responsibility to a processing agency. The challenge of processing visas must be addressed otherwise visitors will not come to South Africa. On the TGC, it was said that it would be revamped and a basket of benefits would be made available. The efforts have not been yielding any results. Was the basket of benefits not attractive to establishments? What is wrong with the strategy? Can SAT provide members with an understanding of where the issues lie?

Ms Makhubela-Mashele noted the training programme which aims to train tour operators. What is the design of the programme and its success rate? Are you able to measure this investment? Members need to ascertain whether there is value for money in this programme.

Mr T Khalipha (ANC) said he hopes the CEO issue will be resolved soon because an organisation that is filled with Acting positions can never be stable. It is important for the Board to speed up the appointment process. It is imperative to link the 5-in-5 strategy to government’s objectives for the next 5 years. On marketing, why is the focus only on the big provinces? Why are smaller provinces left out? What is the plan to fast-track the visa application process? The Committee should invite the Minister of Police to address the safety and security issues. Members need to know the security cluster’s plans to address these concerns. Does SAT have staff morale? If there is no team work and certainty for the future, the organisation’s retention rate will decline.

The Chairperson said SAT needs to look at its resources and come up with plans on how best it can be utilised for its value. The human capital of the Expanded Public Works Programme (EPWP) and the Community Development Workers (CDW) is already on the ground. There may be no need to hire new people when the human capital on the ground is already there. On conducting reports on the activities of rural tourism, the Kruger National Park is categorised as rural and it so it will reflect in the report that you are attracting people in the rural space. The villages nearby need to be focus and need to be induced so that people are aware of their potential to ignite tourism in their areas.

The Chairperson said SAT must not be conventional in its approach. Anything that already exists can be rebranded, repositioned and renewed. On the issue of land expropriation without compensation, SAT does not possess control over public perceptions. The focus must be on how communication is packaged to the rest of the world so that the right message is captured. The Board must erase those negative perceptions by coming up with the right message to communicate the matter. The Department of Agriculture, Land Reform and Rural Development must strengthen its communication channels to ensure minority groups know how the process would unfold.

The Chairperson said SAT must include the interprovincial movements in their future presentations so that the Committee can get an idea of how people move within provinces. The Department of Police needs to strengthen its communication channels because when it releases crime statistics, it ignores the areas in which crime is minimal and the isolated incidents of crime that do take place in those areas must also be highlighted. If the South African Police Service (SAPS) provides statistics on areas where crime is minimal, those statistics would be much higher.

Responses from South African Tourism

Ms Yako replied the essence of the “We Do Tourism” campaign is to get the nation active in promoting tourism. The campaign is a very important enabler for SAT to meet its targets and objectives. If the nation knows why tourism is important, SAT will be better positioned to refine communication channels to achieve its target. On the CEO issue, SAT established a forum to deal with it. The Board met with the provinces and it was agreed engagement with them will continue to keep the 5-in-5 strategy alive. SAT tries to work in line with government’s 2030 vision and align its current action plans to government priorities. The Committee will be briefed on the developments of the 5-in-5 programme. Resources are limited. SAT can’t do everything so provinces need to play their part.

Ms Yako explained the CEO is on one level and all other executives are on the same level. SAT has been struggling in the market to give people the salary level it pays its executives. The Board is busy coming up with solutions on how to deal with this matter. The position of the CEO must be filled as soon as possible. On staff morale, this matter is currently before the Board. A team, as well as individual coaching for managers, was established to assist with the staff morale. There were issues around management and daily operational issues which impacted the personnel. Efforts have been put in place to assist with this. The programme started November of last year and the Board receives quarterly reports on staff morale.  

Mr Darryl Erasmus, Chief Quality Assurance Officer at The Tourism Grading Council of South Africa, said the Northern Cape has 142 graded establishments so it is a relatively small infrastructure. Grading in the country is an annual process and it is voluntary. 3 different components determine how much the fee is. These are the number of rooms in the property, the average amount charged for the rooms and the category of the establishment. The intention behind using these variables is to ensure the smaller players are not disadvantaged. On average, the annual grading fee is R3 500 which excludes the incentives provided by the Department of Tourism (DOT) which can go up to 90% discount. The DOT is required to assess the discount by using BEE (Black Economic Empowerment) certificates, registration certificates and liability insurance. The TGC provides an extra 10% discount to the properties that collect the 1% tourism levy.

Mr Erasmus said the TGC will share its mandate with the Committee. The basket of benefits was discontinued at the end of last year after a cost-benefit analysis was done. This information can be provided in more detail when the TGC meets with the members of the Board again. One of the biggest benefits for being graded is that it allows establishments to position themselves in the market according to the sizes and price ranges. This is alongside other benefits made available for businesses. On the declines in Kwa-Zulu Natal (KZN) numbers, KZN is still the third largest of all the provinces on the graded properties. The 4% decline only translates to about 20 properties which is a small number. There are various reasons why that number declined and it may include renovations happening in properties during the time it should be graded, change of business models or un-lucrative returns on grading the property.

Mr Erasmus said the TGC ensures that townships get an opportunity to showcase themselves to tourists. There are engagements with different provinces on empowering township tourism. Provinces work with the owners of township establishments on how it can be made more visible to attract tourists. On the training programme, there is an ongoing programme led by Tsogo Sun. The TGC has a good working relationship with them.

Ms Yako asked if SAT could provide the rest of the responses in written form due to time constraints.

The Chairperson agreed and asked for written responses to be sent to members. He then adjourned the meeting.