Tourism Bill [B44-2012]: public hearings (day 1)

Meeting report

Cape Dutch Quarters-Tulbagh comment
Mr Jayson Clark, Company Director: Cape Dutch Quarters-Tulbagh, presented his input on the Tourism Bill to the Committee.  His business had been operational for ten years and he managed ten guest houses. In addition to his management role was also been a registered tour guide.

The first issue which he wished to speak about was the renewal process for a registered tour guide. The registration was valid for two years and the renewal cost was R240. In order to renew your tour guide registration you first needed to have a first aid certification which had to be renewed every three years. Even though the tour guide registration was tied in with the first aid certificate the two were not in sync. He felt that the tour guide registration should be valid for three years then the two would be in sync.

He managed various properties in one street. There were different graded properties on different erfen. The Tourism Grading Council of South Africa (TGCSA) required that property on each separate erf be graded. The fact that one of his properties overlapped on a separate erf meant that it needed separate grading. Another issue was that the TGCSA did not allow more than one grade to be attached to one property. Hence different rooms in an establishment could not have different grades. He would have preferred to have his property graded as a four star guest house with three star self catering chalets. He pointed out that most of the establishments in his town had ceased to be graded and considered it a waste of money. Most of the establishments relied on TripAdvisor. He noted that the validity of the TGCSA was falling and if establishments were graded it should be valid for two years and not a year. It was considered crazy to have it done annually. Most of the best guesthouses in his area were not graded. He concluded by stating that the concept of grading was falling by the wayside.

Discussion
The Chairperson said that the points made by Mr Clark were noted.
           
Ms Thembi Kunene, TGCSA Chief Quality Assurance Officer, referred to Mr Clark’s wish to have his business graded as a four star guest house with three star self catering chalets and said that, perhaps if the property was encamped, it could be graded separately. For example at Sun City, the Cascades were graded three stars and the Palace of the Lost City Hotel was graded as five stars. Grading fees needed to be paid for each establishment. The grading fees were scalable. Assessors who did the grading were self-employed and were accredited. Somebody had to pay for the assessors, hence the grading fee.

On the assertion that a great number of businesses were pulling away from grading it needed to be remembered that there was a great deal of value attached to being graded. She referred to the Tourism Indaba held in 2012 and stated that the TGCSA and TripAdvisor had entered into a partnership in which TripAdvisor used grading information to grade establishments. Maintaining standards of quality was important. She said that she would be happy to engage with Mr Clark or the association that he was affiliated to on the issues that he had raised.

Ms M Njobe (COPE) understood that tour guide registrations needed to be in sync with first aid certifications.

Mr S Farrow (DA) referred to Clause 49 (7) of the Bill and said that tour guide registrations were valid for three years and first aid certifications were valid for two years. Mr Clark had mistakenly confused the two periods.  

Ms Njobe asked how Mr Clark felt about the period of validity of tour guide registrations and of first aid certifications being extended to four or five years. She asked the TGCSA if on their annual visits to establishments they encountered deviations from the norms and standards that were adhered to the previous year. Were there notable changes? How did the TGCSA feel about the grading period being extended?

Ms Kunene confirmed that the TGCSA indeed saw changes in standards when they visited establishments every twelve months. Maintenance was a huge issue for establishments.

Mr R Shah (DA) was not too sure how the TGCSA was going to accommodate Mr Clark’s wish of wanting a four star graded guest house together with three star self catering chalets. He referred to the re-registration of tourist guides and asked was it necessary for the guide to be physically present for re-registration. The issue of syncing the registration of tour guides with first aid certifications needed to be looked at.

Mr Farrow felt that Mr Clark’s specific situation was an administrative one which could be dealt with. There was a great deal of merit in the points which Mr Clark had made. He agreed with the synchronisation of the registration of tour guides with first aid certifications. Why was there a renewal of the first aid course? Once you were able to do first aid you did not have to learn something new each time unless there were breakthroughs made in first aid. It was becoming a money-making scheme and something needed to be done. He said that there was too much red tape for small businesses to contend with. Why could registrations not be done online as it was done in Australia? The Committee could unfortunately not dictate to the national Department of Tourism how it should perform its administrative duties.

Ms R Lesoma (ANC) disagreed with Mr Farrow over the issue of registrations being done online. The problem was that not everyone in South Africa had a computer, not even to mention the issue of connectivity in remote areas. She also agreed that tour guide registrations could be synchronised with first aid certifications. The issue of grading and different erfen relating to Mr Clark could be resolved at a municipal level as it was a town planning scheme issue.

Ms C Zikalala (IFP) asked if it was correct that most of the establishments in Mr Clark’s area did not need grading or were not graded. She said that Members still felt that grading was a good idea.

Mr Clark responded that most of the establishments in his area were pulling away from grading.

Ms V Bam-Mugwanya (ANC) asked whether the Cape Dutch Quarters-Tulbagh was registered as one business or as separate businesses with the Companies and Intellectual Property Registration Office (CIPRO). She emphasised that grading would continue as it was the benchmark to ensure that standards of quality were maintained at establishments. Site visits were important to grading. She also agreed that tour guide registrations could be synchronised with first aid certifications.

Mr Clark responded that the Cape Dutch Quarters was one entity. He added that Cape Dutch Quarters was a marketing company. He pointed out that in Tulbagh there were only five graded establishments. The trend he was seeing was that fewer and fewer establishments were getting graded. He did not have any intention no longer to be graded. The problem was that the process was cumbersome. Grading need not be an annual event. If grading fees were also cheaper the establishments would perhaps be more willing to get graded.

The Chairperson said that it seemed that the weaker brands in the hospitality industry needed grading more than the stronger brands.

Federated Hospitality Association of Southern Africa (FEDHASA)
Mr Eddy Khosa, Chief Executive Officer FEDHASA apologised for not submitting a written submission on the Bill to the Committee on time. He felt that there were certain issues which he wished to raise and if they did not fit into the Bill, they were relevant elsewhere in the system.

The first issue was about transformation in the tourism sector and more specifically the lack thereof. The Bill was very silent over the issue of transformation. There were challenges, which previously disadvantaged persons and businesses were experiencing.

He pointed out that when so-called black businesses approached government institutions like the Industrial Development Corporation (IDC) to provide funding, they were told that the IDC did not provide funding for businesses in Cape Town, Durban and Johannesburg. What was the reason for this? Why were black businesses not allowed to operate in the metropolitan cities. Were the funds of the IDC not public funds? Where did they get their mandate from?

Another case in point was the Department of Trade and Industry (DTI). The DTI offered incentive grants but once again not for black businesses which wished to operate in Cape Town, Durban and Johannesburg. Incentive grants were only granted if you were to operate in places like Potchefstroom, Warrenton, etc. Who would want to operate in areas where there was almost no business? What was the reasoning behind such practices?

He considered these serious issues which hampered transformation. In the twenty years that DTI had the incentive grant how many black businesses really benefited from the grant. What percentage of the grants had gone to black businesses?

The second issue was that tourism development was not taking place. There remained an opportunity to develop tourist attractions. Tourist attractions could be built: the only issue was maintaining them. Even if funding was obtained to buy a residential property the process of rezoning it to business rights was cumbersome and could take up to three years. It was mainly small black businesses who suffered from the local government bureaucracy.

For true transformation to take place commitment was needed. The issue was about how the tourism industry could be made black-friendly. For instance of the number of graded establishments how many were black businesses?

He added that some government entities were even prepared to provide funding if you wished to open up businesses in Zimbabwe as long as it was not in the metros. It was evident that there were challenges in the tourism industry. Whether and how it was going to be addressed in the Bill he was unsure.

Discussion
The Chairperson agreed with the sentiments expressed by Mr Khosa but pointed out that some of the issues highlighted fell within the sphere of other departments and not only the national Department of Tourism (NDT). Furthermore some of the issues could be dealt with in policies and not legislation. The tools that could bring about transformation needed to be looked at. The issues pertaining to financing provided by government entities could be properly discussed at another forum.

Mr Shah also agreed that Mr Khosa had raised important issues pertaining to the lack of transformation in the tourism industry. The difficulty was whether the Committee could legislate to deal with these issues or if it could be dealt with in policy. The issue of funding and access thereto was very important.

Ms Njobe requested FEDHASA to provide the Committee with a document, which could be used as a point of reference. The issue of transformation was raised in other submissions on the Bill as well. The Committee needed to be guided by the NDT as to where and how transformation could be accommodated in the Bill.

Ms Lesoma also said a written submission from FEDHASA would be appreciated. She said that not all the issues raised in submissions could be covered by the Bill. The Committee should consider working with the South African Local Government Association (SALGA), municipalities and even provinces to try to sort out the frustrations of small businesses in the tourism industry. What assistance was available to small black businesses? What were the efforts of the NDT? Government needed to ensure that transformation was taking place in the tourism industry.

Ms Bam-Mugwanya agreed that small businesses were frustrated in the tourism industry. She noted that the Black Economic Empowerment Scorecard was detrimental to the small black business. The criteria of the Scorecard needed to be reconsidered. Other departments and municipalities had to come on board as there was a great deal of red tape at municipal level. The issue of government grants was a sensitive issue. There was a problem with communication and hence it led to misinformation. A common mindset was that black people should not be in business; this needed to change. Even in coastal areas government was chasing off black persons who were from the area so that rich whites could build their palaces.

The Chairperson noted that the issue of transformation needed a forum of its own where it could be discussed.

Mr Farrow pointed out that unfortunately the Bill was not a money bill and could not speak to where funds should be allocated. He felt it disgusting what the IDC and DTI were doing, as development should take place. He stated that the Bill in conjunction with the National Tourism Sector Strategy (NTSS) could perhaps address the issues raised by Mr Khosa.

Mr Sibusiso Khuzwayo, Committee Content Adviser, said that perhaps the NDT’s legal adviser and the parliamentary legal adviser could advise the Committee on the status of the NTSS. He noted that the provisions in the Bill speaking to the NTSS had already been addressed. The NTSS had already been accepted by Cabinet. Perhaps the NTSS could be revised in order to address the issues raised about transformation. He noted that there were transformation levers elsewhere in government. For example the Black Economic Empower Sector Codes sat with DTI. He suggested that perhaps tourism specific levers were needed.

Mr Khosa added that he was aware that incentives were being moved from the DTI to the NDT. He said that Minister Rob Davies had in 2012 announced that no further applications for grants would be accepted. He pointed out that there were no transitional arrangements whilst grants were being shifted from the DTI to the NDT. What was to happen in the interim?

The Chairperson assured Mr Khosa that the Committee would look into the issues of the incentive grants and would check on its status. He asked the Committee Content Adviser, Mr Khuzwayo, and the Committee Researcher, Ms Joyce Ntuli, to look into the issue.

Southern African Catholic Bishops' Conference (SACBC) Parliamentary Liaison Office Submission
Ms Lois Law, Researcher to the SACBC briefly presented the SACBC’s inputs on the Bill. The inputs were of a general nature and the SACBC supported the Bill. Of importance to the SACBC was what the Bill could do for the poor. Tourism should create employment and the focus of role players in the sector should be on development. The Bill did not really consider the variety of possibilities for development. The Church had several tourist attractions of its own and the iconic Regina Mundi Catholic Church in Soweto was one which immediately leaped to mind.  However the primary focus of the Bill was the upper end of the tourism market. Not much was said about development. The Bill spoke about local tourism but the fact was that locals could not afford to visit tourist sites as the costs to enter were too high. An intervention was needed regarding the issue of unequal access. Perhaps different prices could be charged for foreigners and citizens visiting tourist sites.

Discussion
Mr Shah noted that an important issue had been highlighted by the SACBC and that was affordability and tourism pricing. Unfortunately it was a policy matter and could not be legislated upon. Having recently holidayed in India he said that, in Kerala, heritage sites were vigorously marketed. Was South Africa doing the same?

Ms Law responded that to the best of her knowledge South Africa was not doing the same.

Ms Njobe said that the SACBC seemed to encourage accessibility of tourist destinations. The SACBC suggested that there be a dual-pricing system one for South African citizens and one for foreign tourists. How was such a system to work?

Ms Law was not sure how dual-pricing system would be implemented. 

The Chairperson said that India had a dual-pricing model in place. It was something that South Africa would consider. A cost-benefit analysis needed to be done to look at the impact it would have on tourism revenue.

Mr Farrow added that the two-tier system could work well. It was however open to abuse as was seen in Zimbabwe. Another option was to have subsidisation for the old, the young and students.

The Chairperson agreed that the principle of equal access was important but the implications of a dual pricing system should be weighed as it could be tricky.

The meeting was adjourned.