Tourism in the African Century; Committee Programme 2001

Meeting report

****************************************************************
This Report is a Contact Natural Resource Information Service
Taking Parliament to People, and People to Parliament
****************************************************************
PORTFOLIO COMMITTEE ON ENVIRONMENTAL AFFAIRS
AND TOURISM
13 February 2001
PROGRAMME FOR FIRST QUARTER 2001

Documents handed out:
South African Airways - SAA the Marketing of South Africa
South African Voyager - Voyager Presentation on Tourism in African Century
South African Tourism - The Wonder Lies Waiting
SPOORNET - Main Line Passenger Services (MLPS)


SUMMARY:
The first session of the year held by The Portfolio Committee on Environmental Affairs concentrated on the promotion of the tourism industry in the African Century. Four different transport companies made presentations to the committee - these are:
Bonang Mohale, South African Airways (SAA), Executive Vice President
Lebona Moleli, South African Voyager, Executive Manager (Marketing)
Mgss Mashishi, South African Tourism, C.E.O
Vusi E.M Mncube, SPOOENET, Executive Manager

MINUTES:
Chairperson Ms Mahlangu opened the session by welcoming everybody to the first meeting of the New Year. After giving a brief overview of the upcoming session's preliminary schedule, she invited Mr. Mohale (SAA) to start his presentation.

M. Mohale started his presentation by giving a description of the SAA company profile. His presentation focused on three main issues:
Quantifying S.A.A's Destination Marketing
Access to South Africa
Real Issues Limiting Tourism Growth

After concluding his presentation, Mr Mohale accepted questions from the Members of the Committee.

Ms Semple asked if SAA has a monopoly on travel, and if they actually have any competition. She commented that the price of an air ticket Cape Town Johannesburg is comparable to the price of a ticket from Johannesburg to London. Mr Mohale responded although SAA would love to be a monopoly, they are not. SAA has only 47% of the market shares in main harbor. As well, most of their competitors have special agreements with the government concerning internal flights.

Mr Hendrikse (ANC) inquired as to what SAA is doing to promote tourism in South Africa. Mr Mohale replied that SAA works to sell destinations (eg. Kruger National Park) more so than selling flights. Although some people think that increasing the number of flights in and out of SA will positively affect tourism growth, this is not true. As it is, SAA is not being used to its full capacity and there are many flights that run every day with empty seats. The high number of empty seats on internal and external flights greatly lowers profits, especially when these flights do not stop at every airport. Partnerships with other airlines have allowed SAA to increase their total number of destinations. Mr Mohale also criticized the media for being "afropessimistic" and making parallels between crime and tourism in SA that are not drawn for other countries.

Mr Moorcroft (DP) wanted more discussion on SAA flights that are not full. He asked why SAA doesn't lower their seat prices and all the seats are full. He also asked if it was true that most people would rather fly British Airways internally.

Ms. Chalmers mentioned that SAA is well respected for its use of "spares". She also noticed that SAA has recently sold off a lot of its spare resources and asked what the current situation of this is.
Mr Mohale replied that due to the disappearing of equipment and the cost related to inventory they decided to go for a new Japanese style of management "Just in Time". This method allows them to reduce their inventory and save money.

Mr Mokaba (ANC) expressed concern regarding the way the presenter criticized the media for its crime reporting. It is a fact in SA that violent crime does happen, and we need to be wary of "shooting the messenger". He urged SAA to come on board and demand the government to address tourist safety and insist upon protection for its customers.

Ms Manquel added that the media's focus on violent crime prompts negative sentiment towards S.A., in particular as a tourist destination. She noticed that the media does not so readily provide reports on positive ways the government has succeeded in affecting crime rates.

Mr Mohale stated that when people see the newspaper headlines they are afraid to come down to S.A. He gave the example of colleagues in Switzerland that didn't want to come down for a business meting because they were afraid of crime.

A member of the committee asked if S.A. is connected to China regarding the alliances between airlines the presenter mentioned. She reminded Mr Mohale of his statements that SAA lost 75M Rand last year and that it expects to lose 80M Rand in the year to come. Could this loss be related to the depreciation of the Rand on the foreign markets currencies?
In regards to the comments on press and crime reporting, it was also brought to the committee's attention the fact that since last year the number of high-jacking and murders have gone down - why doesn't the press broadcast this in their headlines? She wondered whether there exists a campaign to disrepute the black government and if media's high profile focus on violent crime may be a function of those white people who control telecommunication wanting to send a message to the world that black empowerment is undesirable. She urged SAA to provide true statistics to the committee.

Point of order was requested, who said that the committee member has no statistics to affirm her statements and that her comment about white people is discriminative and unfair. Chairperson Ms Mahlangu replied that media focus on negative issues concerning black people is problematic and that the Committee will have to deal with this situation eventually.

A Member added that often it is South Africans who are negative about tourists - it is important that we be positive and encouraging to those who want to visit this country. She also asked what SAA is doing regarding domestic tourism. Since the majority of South Africans don't know their country, cheaper flights would be desirable for them. She asked for discussion about flight within Africa as well.

A committee member suggested that SAA have a more aggressive marketing strategy that includes statistics which displays more accurately the reality of South Africa in comparison to other popular destinations.

Mr Mohale confirmed that an alliance partnership with China is in the works and that as soon as routes with all prospective partners are finalized they will be made available for review. He informed members that most of key players in the industry are experiencing decreasing profits. Profitability is being affected by high interest rates, high prices of crude oil and the weak status of the Rand.

Mr Mohale further stated that, in regards to labor laws, SAA pays about 137% more than any other airline in Africa. SAA is still experiencing some problems with the comportment of the high rank of manager concerning flying first class.

At this point Chairperson Mahlangu stopped the speaker and moved to hear from other presenters

After a brief intermission, Mr Moleli (South African Voyager) started his presentation. SAV is a flyer program in Africa that offers its members free air miles according to how much they fly. The presentation introduced services offered by SAV a brief overview of the future plans.

After concluding his presentation Mr M. Moleli accepted questions from the Members.

Mr September (ANC) asked why there are no local partnerships included in SAV services?

Mr Moleli responded that SAV was created to support frequent voyagers but that when the service became more commercial they extended their services via other companies. There are some local companies such as NedBank involved in the service.

Ms. Semple (DP) commented that the lounge in Heathrow Airport (London) gives a bad impression of the company because it is hard to find and seedy.
Mr Moleli replied that he will relay this message to SAV.

Ms. Ramotsamai (ANC) asked for more information about restrictions (not full amount of air miles) with certain partners. Mr Moleli replied that all users get the full amount of miles when they are using SAA or any other partners. Restrictions are applied only to the use of lounges and other services.

A member asked about the option offering two nights at a hotel - does it mean that the hotel is free? She commented that the staff from Africa and in Europe are not properly informed concerning SAV services. She had a lot of difficulties to get her free miles after her trip in Kenya and in Europe. She also was treated poorly in Lusaka.

Mr Moleli assured members that SAV are currently training employees in workshops about the different services the company offers.

Mr Hendrikse (ANC) mentioned that when committee members went to Vic Falls they had trouble upgrading their seats. He suggested that SAV print their phone numbers on the plane tickets themselves so that customers will be able to reach them when problems appear. He further suggested that SAV recognize the frequency of travel and not just the distance of flights. He asked why there is no family plan offered by SAV.

Mr Moleli responded that SAV is trying to be as flexible as possible and they will definitely consider all the ideas suggested.

At this point Chairperson Mahlangu thanked the presenter and moved to hear from the next speaker.

Mr Mashishi, C.E.O of South African Tourism (SATO), began by explaining that SATO is a marketing agency for the benefit of the South African tourism sector to promote the country internationally as a tourist destination. He than gave the Committee a description of the organization, including its vision, mandate, latest transformation, strategic shifts, objectives, marketing strategy and relationships.

After his presentation Mr Mashishi accepted questions from the committee members.

Ms Mbuyabe (IFP) expressed gratitude that people from rural areas in Kwazulu-Natal have opportunities to get some exposure even do they don't have any resources to promote themselves.

One committee member asked if it would it be possible to use SAA in movies playing on the plane to promote South Africa rather than American and European? She also asked how to encourage more tourism from Scandinavian countries.

Mr Mashishi thanked members for their comments and assured members that SAA is already working to provide entertainment with more South African content. Regarding tourism from Scandinavia, he mentioned that London has a monopoly on this market. However, due to the historic relationship between South Africa and Scandinavia especially during the apartheid era, promoting South Africa as a destination for this population should be feasible.

It was asked if it would be possible to take the provinces even deeper into processes of tourism and expose disadvantages peoples. She also suggested that SATO pay more attention to the daily news headlines because they have contributed to the bad image international tourist has of South Africa.

Mr Mashishi stated that SATO has toured all the main newspapers of South Africa to expose them to the reality of the country. He suggested the problems arise when people relay false stories to the press and then these get communicated to the world creating unrealistic impressions of the country.

Ms Nqodi (ANC) observed that Eastern Cape is the destination that attracts most tourists. Would it be possible to have SATO offices in Eastern Cape in addition to the ones in Durban? Mr Mashishi replied that SATO is contemplating a rotation of venue locations but that they have also just signed a three-year contract with the city of Durban.

Ms Semple asked if SATO has a website. Mr Mashishi responded that an interim web site is functional at the moment while they are busy installing a new version that would allow people from everywhere in the world to book directly through the internet.

Chairperson Mahlangu stopped the question period at this point and turned committee's attention to the presentation from Mr Mncube. Because of time constraints, the presentation from Mr M Katz was postponed for another meeting.

M. Mncube executive manager for SPOORNET spoke briefly about objectives for an integrated tourism industry, business in the passenger transport industry, SPOORNET services, and challenges and issues facing Main Line Passenger Services (MLPS).

After his presentation Chairperson Mahlangu asked if it would be possible for committee members to go one Friday afternoon to see the Blue train. Mr Mncube offered an informal invitation to her and the other twenty members of the Committee to get on the train for a ride Cape Town to Johannesburg. Chairperson Mahlangu then thanked members and presenters for their participation and closed the meeting.