Tourism Budget: Committee Report

Meeting report

NOTE: PMG was not present at the meeting. The below is compiled based on the Committee’s official minutes

The Chairperson opened the meeting and welcomed all present. He thanked Members for being able to connect and appealed for patience while some were still trying to connect. He further alluded that he expected technical challenges because he was in an area called Ventersdorp and requested Ms Makhubela-Mashele chair the meeting.

The decision was agreed to

The Acting Chairperson indicated that the purpose of the meeting, was to consider and ultimately adopt the Draft Committee Report on Budget Vote 38 – Tourism; including other reports and minutes of previous meetings - the agenda was adopted. 

Consideration of the Draft  Committee Report on Budget Vote 38 – Tourism

The Chairperson indicated that the draft report was circulated to all members in advance, and hoped Members had an opportunity to read through it. Then, requested the support team to take through the Committee on the key issues in the report.

Dr Khuzwayo, the Content Advisor, took the Committee through the report. He highlighted that the draft report was a culmination of budget hearings process from presentations on Annual Performance Plans (APPs) for 2021/22 to 2023/24 financial year. The report takes into account engagements the Committee had with other tourism stakeholders such as Tourism Business Council, Women in Tourism, CATHSSETA and others. The report highlighted a number of issues that are still a challenge in the industry. For purposes of the meeting, emphasis of the report was limited to observations and proposed recommendations:

 Committee observations   

The Committee made the following specific observations regarding the Annual Performance Plans of the Department and South African Tourism as follows:

Observations with regard to the Department of Tourism

-Court rulings

-Inadequate budget

-Impact of the imbalanced budget prioritisation

-The general decline in the tourism the sector and the threat of a third wave

-Proactive planning for recovery

-The pursuit of transformation of the sector

-Addressing issues that may affect the implementation of the 2021/22 – 2023/24 Annual Performance Plan

-Inclusion of Villages, Townships and Small Dorpies in product development

-Policy review considerations

-The current state of the tourism sector

-Impact of future trends on government funding and private investments

-The importance of airlines in the future of tourism in South Africa

-The roll-out of vaccines to tourism frontline staff

-Harmonising the travel regulations

-Lessons from the pandemic

- Increased focus on Responsible Tourism

Observations with regard to South African Tourism

-Governance and administration

-Budget implications

-The Marketing Investment Framework

-Partnerships

-Econometric forecasts

-The future of South Africa’s source markets

-Future trends in tourism development and marketing

-The role of vaccinations in improving the perceptions about Destination South Africa

-Volume vs value – the regional statistics debate

-Pricing and packaging tourism products

-Possible future of the MICE sector in the VTSDs

-An example of future meetings

-The negative impacts of messages about the South African Variant

-The safety protocols as a unique selling proposition to boost recovery

-Promoting domestic tourism and ending reliance on international markets

- Readiness for the hospitality industry when the tourism sector fully reopens and recovers

Recommendations

The Committee made the following recommendations to the Minister of tourism in relation to the Department of Tourism

It is recommended that the Minister of Tourism:

-Engages the National Treasury to reprioritise and allocate more budget for compensation of employees to Vote 38 during the Medium-Term Budget Policy Statement (MTBPS) to be tabled by the Minister of Finance in October 2021.

-Appeals the interdict to implement the Tourism Equity Fund as made by the Pretoria High Court.

-Given that the budget allocated to Vote 38 is gradually deceasing and not meeting the needs of the sector, explores merging Programme 3 and Programme 4 to maximise the impact of projects that further develop and maximise the involvement and incorporation of VTSDs in the formal tourism economy.

-Establishes a funding mechanism that facilitates the funding of tourism start-up businesses.

-Works closely with the private sector to maximise the impact of the appropriated budget through creation of collaborative partnerships.

-Engages other government sector departments to ensure that cross-cutting sector issues that impact on tourism development and marketing are addresses effectively and efficiently.

-Develops a tracking tool to oversee the implementation of the Norms and Standards for the safe operation of the tourism sector.

-Considers the policy proposals made by the Committee in the finalisation of the new tourism policy for South Africa.

-Considers the policy proposals made by the Committee in the finalisation of the new tourism policy for South Africa.

-Ensures that the policy review process takes into consideration the principles of responsible tourism, ecotourism, climate change and address issues that improve the Blue Flag status of beaches in the country; water health for sporting events; and engage the relevant government departments and municipalities to improve on refuse removal and dumping in order to drive sustainable tourism development and marketing in the country.

-Conducts public education on the transformation imperatives and the tenets of the Broad-Based Black Empowerment in general, and the Tourism Sector Codes in particular, to avoid further court actions interdicting the implementation of transformation programmes.

-Engages the relevant authorities to ensure that the Temporary Employer/Employee Relief Scheme (TERS) funding facility is extended for the tourism sector.

-Conducts a Trend Analysis Study to understand the future trends that will drive tourism development and marketing based on the global changes imposed by the COVID-19 pandemic.

-Analyses the possible future changes in the tourism policy trajectory at a global level that have a possible impact on global travel and international arrivals in South Africa.

-Works with continental bodies such as the African Union (AU) and world organisations such the United Nations World Tourism Organisation (UNWTO) in influencing policy shifts, harmonising and implementing instruments such Norms and Standards for international travel, and open skies policy to facilitate air access and regional marketing organisation to accomplish regional integration at a SADC level.

-Exploits the African Continental Free Trade Agreement for the benefit of tourism in South Africa.

-Engages the Cabinet on the contribution expected from other government departments in unlocking the tourism potential of the country.

-Tightens oversight over South African Tourism as the Entity receives more than 50 percent of the budget allocated to Vote 38.

-Monitors the situation of rising COVID-19 infections in India and recognise its possible impact on global tourism and South Africa in particular.

Recommendations in relation to South African Tourism

It is recommended that the Minister of Tourism engages the Board of South African Tourism to:

-Reprioritise the international marketing budget to Programme 3 and Programme 4 of the Department instead of returning the funds to the National Treasury should the third wave of the COVID-19 strike the country and international tourism come to a grinding halt.

-Prioritise Economic Modelling to leverage funding in order to augment the available budget.

-Improve on organisational efficiencies to maximise the utilisation of available budget.

-Conduct an Econometric Forecasting Study to determine the trends on future international arrivals to set a realistic 2030 target on international arrivals and determine the future trends of domestic trips.

-Develop a Partnership Model that will assist South African Tourism to identify and choose partners that will add value to the business of the organisation and leverage more funding for domestic and international marketing.

-Engage the private sector to package value for money domestic holiday packages.

-Package, coordinate and intensify communication to demystify the 501Y.V2 variant of the COVID-19 virus and mitigate the impact of the narrative at an international level about this strain as a South African variant.

-Intensify the work done in VTSDs to more than three small towns for business events as the venue requirements will change due hybrid meetings.

-Prioritise the thirty Community-Based Tourism projects implemented by the Department of Tourism in the marketing activities.

Discussion 

The following were inputs from Members:

• That the Department should consider integrating Programmes 3 and 4 in order to make available more resources for transformation of the sector.
• That the Tourism Equity Fund must advance participation of the new entrants.  
• That the priority of both the Department and South African Tourism should be more on Villages, Townships and Small Towns.
• That in the recommendations the word “merging” of BrandSA and SA Tourism be replaced by “rationalisation of entities”.
• That going forward, the Committee will continuously monitor the Court processes on the Tourism Equity Fund as challenged by AfriForum and Solidarity.
• That the transformation work of the sector must continue to allow the previously disadvantaged to participate in the economy of the country.
• That the contribution by the Banking sector in the development and funding of tourism sector was deferred to the meeting scheduled with Banks for Tuesday, 1 June 2021.

The report was adopted. 

Draft Committee Annual Activity Report of 2019/20

The Committee considered and adopted the report

Report of the Portfolio Committee on Tourism on Second and Third Quarter Performance Report for 2020/21 Finanacial Year

The report was considered and adopted. 

Report of the Portfolio Committee on Tourism on Oversight Visit at the Waterfront Coronavirus Rapid Testing Centre (Lookout Testing Centre), Cape Town in Western Cape Province

The report was considered and adopted. 

Committee Minutes

The Committee considered and adopted its minutes of 4 and 5 May 2021