Department of Tourism 2020/21 Annual Performance plan; with Minister and Deputy Minister

Meeting report

Opening remarks by the Chairperson

The Chairperson welcomed all the Members to the meeting. He noted that the Committee was meeting a day after Africa Day. He explained how achieving democracy in Africa had been a long protracted struggle which led to the formation of the African Union (AU). Celebrating Africa Day was a reminder of the unity that Africans needed to preserve to ensure that they hone the skills needed to develop local content. This would also help ensure that the Afro-pessimism and Afro-phobia that had been prevalent in the continent for many decades were eradicated.

He recounted that the Department had been given some time to review its Annual Performance Plan (APP) in the context of the Coronavirus (COVID-19). The Committee would now be briefed by the Minister and Deputy Minister on the revised APP; this would followed by a discussion.

He apologised on behalf of the Members who had struggled to join the meeting the last time. It was not by design but purely because of technical duties; he had also struggled and joined the meeting 25 minutes later. He also submitted a formal apology to the Committee.

He noted apologies from four Members as well as an apology from the NCOP Chairperson, explaining that he was unwell and would not participate in the meeting. There was an indication that NCOP Select Committee would join later as they were held down with other NCOP responsibilities.

The Chairperson welcomed the Minister of Tourism, Ms Mmamoloko Kubayi-Ngubane, and the Deputy Minister, Mr Fish Mahlalela. He noted that Members should remember that the presentation would be done in terms of Section 27 of the Public Finance Management Act (PFMA). The requirement of Parliament was that by 01 June, the Committee should have submitted the report arising from the interaction. He then Chairperson handed over to the Minister for the presentation.

The Minister expressed her appreciation of the support from the Committee in allowing the Department to postpone its presentation and revise its APP. She informed the Committee that the Department had decided to appoint the Director-General (DG) of the Department for another five years; his contract was expiring at the end of August and renewed contract would begin on 01 September.

Foreword by the Minister

The Minister said that the national state of affairs was unprecedented. Following the President’s announcement on Sunday, 24 May 2020, regarding the regulations under level three of the national lockdown, the Department saw a number of activities from tourism coming into life. The Department would do a formal briefing on Thursday, 28 May 2020, to outline the guidelines to the sector on how to follow the regulations and what those regulations mean. Restaurants would continue to operate under level four. Additionally, under level three, collections and drive-through would be allowed at food restaurants. Those who had permits to sell alcohol would be allowed to do so as takeaways. Car rentals, which fell under transportation but were tourism-related, would be fully operational and Transport Minister would outline the guidelines thereof. Private and public game farms would also be opened under level three but only for self-drive. Hunting would be allowed; inter-provincial travel would be allowed thus allowing domestic flights between provinces. Meetings and conferences would still not be allowed under level three. Casinos, sit-downs in restaurants, travel for leisure and group tours were all still not allowed.

She handed over to the Director-General (DG) who took the Committee through the APP and Strategic Plan.

Mr Nkhumeleni Tharage, DG, Department of Tourism, briefed the Committee on the APP. He indicated that programme one was largely going to remain the same. Programme two would show a change on research focus; there would be more COVID-19 activities in order to track the impact and all those things that may affect the Department’s work. The Innovation Conference, which had been planned for the year, was removed from the programme because of the pandemic. Under programme three major construction activities would be pulled out - especially those that needed stakeholder management or physical presence on sites. Others would be moved to quarters three and four, instead of quarters one and two. The fourth programme was largely training activities - which would also be highly impacted. Some of the activities which would be able to be carried over and concluded were reflected in the APP. The anticipated departmental target numbers would be lower because of the two lost quarters. So the original number of trainings that had been anticipated would change. The tourism incentive programme would be removed because the Department deemed it impractical. Given the current environment, the Tourism Equity Fund that was announced by the President would be put on hold as it was impossible. The budget would remain the same until the Finance Minister tabled the adjusted budget.

The DG said that the efforts from the Department and South African Tourism (SAT) would broadly be on recovery. This recovery would take place in three phases – from immediate things that were open right now, getting to the full-scale opening of domestic tourism. Thereafter, the Department would move to regional and then international operations. All of these would certainly have some timeframe.

As much as the Department’s strategy was impacted by COVID-19, its aspirations remained the same. The renewal of the country’s brand was of even greater importance, given the nature of competition which would ensue because of COVID-19. Back office issues such as visas and tour operators licensing would be one of the primary focuses. Tourist safety would still remain an integral part of the agenda. However, in the future, safety would be redefined not only to entail physical safety, but would include aspects pertaining to the virus. The Department had to ensure that the facilities, the product and assets were world-class. At the moment, what needed to be focused on more were maintenance issues.

The transformation of the sector would occupy most of the Department’s time. This would relate to the reorientation of the kind of administrative leadership in the organisation. The Department was now more compelled to be a lot more orientated in way that would help understand the needs of the sector in the future. The nature of the sector needed to be totally transformed into one that supported an industry that could operate in a reoriented environment. Issues of technology remained of great importance. Essentially, going into the future, technology will play a big part in how the Department functioned. The use of digital platforms would become the new normal. Therefore, the Department needed to build its internal capacity to better understand the digital environment and to understand how to operate within it.

In the current environment, the Department was realising that monitoring and evaluation (M&E) were crucial. There was a need to understand what was going on in the sector and, more importantly, to be up-to-date with what was happening in the sector. Tourism must create jobs; it must contribute to the GDP as well as revenue generation. It must also contribute to inclusivity – transformation of the sector. But most importantly, it must offer quality services and memorable experiences so that tourists would return. The overarching outcome that SAT was trying to achieve was an increase in the sector’s contribution to inclusive economic growth. 

The SAT’s revised 2020/21 APP outlined seven strategic focus areas:

• Brand - A detailed analysis of the tourism band at both a sector and the corporate level resulted in an appreciation of the need to develop a differentiated brand proposition for the corporate entity, SAT, led by the Minister and the Department of Tourism. The development of specific, yet complementary, brand value propositions would be supported with the conceptualisation of specific integrated campaigns which entrenched the value propositions.
• Domestic Market - Recognising that tourism recovery would experience a number of phases, from hyper-local community attractions, through broker domestic tourism, regional land and air markets, lastly the resumption of world-wide international travel, SAT planned to partner with provinces to develop domestic holiday packages and experiences as well as package thematic South African experiences that met the needs of target segments when domestic travel resumed. These initiatives would be supported by research to understand the changes in consumer preferences and travel behaviours.
• International Tourism - The pandemic had rendered SAT’s current market investment portfolio outdated; for 2020, plans were in place to review the market investment choices by revising and updating the Marketing Investment Framework. It was important to recognise that SA’s international base was significant. The country was already a top global destination and was one of the world’s most popular long-haul destinations.
• Demand Creation - While markets were closed, economies under pressure and consumer confidence uncertain, SAT’s efforts would be strengthened to develop the future leisure and business markets. This would include bidding for future MICE events. For the leisure market, relevant content would be developed and promoted through various digital channels to increase visibility and desirability. The country’s arts and culture assets would be crucial to this initiative.
• Visitor experience - A key factor of tourism’s recovery would be the alignment of the visitor experience to hygiene standards. SAT would work with the Department of Health to communicate and promote the health and hygiene assurance for the sector.
• Organisational Efficiency - SAT’s structure represented the technical nature of the organisation resulting in a high proportion of professional and skilled employees. Forty-three percent of employees were in professional functions, with 34% in a skilled function. This meant continuous development was an absolute necessity due to the changing nature of these functions. To enable the achievement of the strategic targets, SAT must evolve to be responsive to delivering what was required to achieve its strategic objectives.
• Stakeholder engagement - The success of delivering the mandate of tourism is depended on co-ordination among different stakeholders. Internal stakeholders were equally important and must be managed to ensure the alignment with the vision of the organisation towards its strategic targets. This would require the development of an internal stakeholder management framework which would include appropriate products, inter alia, newsletters, regular chide calls with hubs, engagements on the brand values as well as appropriate use of platforms like social media.

There were three strategic objectives that were central to SAT’s recovery: re-igniting demand, rejuvenating supply and strengthening capability. These objectives, along with a court relating to corporate support, were adopted as SAT’s core focus for the coming fiscal period.

In light of the constrained fiscal space and limitations on marketing, SAT reduced budgeted spend significantly, focusing on foundational and transformative initiatives that would position the organisation to best support the recovery.

Discussion

Mr H April (ANC) welcomed the presentation, stating it was very comprehensive and that he had no questions.

Mr K Sithole (IFP) thanked the Minister and the Department for the presentation. He asked if the Department had any programmes pertaining to transformation in the sector. He noted that there was no transformation in the sectors, and asked the Department to expand on this.

He enquired about the budget allocation to the Department’s entities, noting that it had decreased by 79.9%. How does the Department plan to align it with the revised strategy?

He also asked if the Department could have programmes that addressed specifically participation of the ownership.

Lastly, regarding sexual harassment, he asked if the Department was still in the process of drafting the sexual harassment policy. When will it be finalised?

Mr H Gumbi (ANC) noted that the Department made reference to air travel and making sure that there was a world-class visa regime. There had obviously been some issues in the past with visas, so he asked the Department to expand on what exactly it meant ‘world-class regime’. What are the regulations? What would change?

He said that he heard no mention of grading. What is the Department doing concerning grading?

He made the point that there were a number of tenants in tourism who created very great value for South Africans, particularly through job creation. To what degree are we communicating with them to make sure that they are not collapsing because that can have devastating effects to the smaller players who we aim to protect naturally?

Tourism was invisible in local communities but he heard that the Department was going to interact with Local and Economic Development (LED). How soon will this happen? Regarding the district model, how will the Department to interact with them again?

Mr G Krumbock (DA) was experiencing poor connection and his comments were inaudible.

The Chairperson asked him to stay put and they would come back to him when his connection was better.

Ms M Gumba (ANC) expressed her appreciation and applauded the Minister and the Department for a brief but comprehensive presentation. She asked if the grading policy was going to accommodate the Western- and African-culture products. In most cases, most of the accommodation was graded according to Western designs; she would like to hear if the African-culture accommodation such as B&Bs would have a special grading category so as to infuse African taste in their accommodation.

Secondly, regarding the tourism training for tour guides and operators, she said that she had never heard of any training within travel agencies, for those who were previously disadvantaged. She would like to hear of more such training.

She said she would like to see the Department having a strengthened health policy in the tourism sector. The Department should ensure that people who would be entering SA borders would be in a good health state so as to prevent further spread of the pandemic.

She emphasised that rail and marine tourism were tourism products that the Committee would like to see growing. There was tourism happening in the Indian and Atlantic Ocean in which the SAT seemed to not be participating.

Mr Krumbock expressed that he would like to get a sense of what the unemployment numbers were within the industry right now. Although the number of people employed directly and indirectly in the tourism sector was known, but with the lockdowns and the state of the economy, how many people have lost their jobs entirely?

In the next eight quarters, has the Department or the Minister’s office done some kind of forward planning? Has the Department drawn out some kind of scenario that spells out how those unemployment figures may be improved? What are the exceptions? Will there be a recovery, and if so, to what extent and over time period will that recovery be expected to take place?

He also asked how many employees in the tourism industry were affected by the BBBEE policy which prohibited funding and assistance to their employers if those employers did not meet the BBBEE requirements.

The Chairperson welcomed the NCOP Members who joined the meeting at this point in time.

Ms S Boshoff (DA, Mpumalanga) greeted the Members and the guests, and apologised for joining the meeting late. She explained that the NCOP Members were coming from another meeting.

She said tourism was a huge generator of funding and had added roughly R18.1 billion to the fiscus in 2018 and supported around about 113 000 jobs. She asked if dates had been assigned to the different levels of the current lockdown in terms of domestic reach and international travel. According to the information the Committee currently had, domestic travel would only be able to be undertaken in November and borders would only be opened round about January or February 2021. This meant that no regional or international travel would take place for approximately nine months. In view of this, she asked the Minister to confirm whether this information was correct. If so, she urges the Minister to engage the President in the National Command Council (NCC) to allow the tourism industry to open under level three, subject to strict health conditions.

Secondly, she asked whether the Department had engaged with the Minister of CoGTA to see if any of the 257 municipalities were in position to assist the smaller tourism businesses with possible reductions in rates and taxes. If not, could the Department commit to entering into discussions with the CoGTA Minister and provide the Committee with the outcome or the decisions?

She also asked if the Department had had any discussions with provinces to look into collaboration between provinces and respective tourism bodies united and presenting the best the country had to offer – instead of seeing each province operating in his or her own silo.

Mr M Mmoiemang (ANC, Northern Cape) noted that the strategy of the Department to adjust its plans of meeting 21 million international tourisms was set for 2030. He asked what adjustment would be made by the Department in ensuring that this target was met.

Mr P Moteka (EFF) pointed out that when looking at the APP presented by the Department, it did not talk clearly about what was going to happen. If an APP does not address the Committee’s oversight focus, then the Committee cannot accept it. The Department would have to revise its APP until the Committee’s interests were included in it.

He asked how domestic tourism would prioritise the villages and townships. More importantly, where is the money going because in the previous year’s plan, R24 million was lost where the Department had reported to have done some project but the project was not done? There was a roofless building in Mafikeng, which was reported as completed, while it was incomplete. The Committee needed the specifics so that it can do its oversight work. Where, in the APP, is the oversight focus on the Committee being budgeted for and addressed?

When it came to the grading policy, those who were poor should be accommodated. Otherwise, the tourists would always go to the places with higher grading.

Ms L Makhubela-Mashele (ANC) appreciated and welcomed the review of the 1996 White Paper on the development of tourism in SA. She asked the Department to give specific timeframes on how long it would take it to work on the review of the White Paper. This way, the Committee could hold them accountable and they can report to the Committee on the progress.

She said that she did hear the DG saying about the introduction of the Tourism Amendment Bill. Perhaps it would assist the Members to also have an indication of when they could see the re-introduction of the Bill to Parliament.

She asked that the Department to give details of the projects that were removed as a result of the pandemic. This was so that the Committee could measure and oversee the planning that the Department said it was going to conduct.

She also asked if the Department could give the Committee a progress report on the e-Visa matter so after the pandemic, tourists could be able to travel to SA with ease. She complained about Parliament and its ITC system because there had been many challenges with Microsoft Teams.

The Chairperson assured Ms Makhubela-Mashele that he would make sure to raise that matter to Parliament Administration.

Responses

Ms Lulama Duma, DDG: Communications, Legal Services, Strategy & Systems and Human Resources, Department of Tourism, indicated that the Department had been implementing the Department of Public Service and Administration (DPSA) policy and procedures on the management of sexual harassment. What the Department of Tourism was doing now was to revise that policy and adapt it to its own sector. SAT wanted to set out policies, procedures and guidelines to help prevent and manage sexual harassment within the Department. The Department would be conducting consultations broadly within the organisation; that process should take two quarters to complete. The plan would soon be finalised and implementation would start.

Ms Aneme’ Malan, DDG: Research Policy and International Relations, Department of Tourism, responded to Mr Krumbock’s question about the unemployment and plans moving forward. The first survey that SAT ran in April this year indicated that at that point, employers chose to phase in reduced wages into their pandemic response, rather than to making employees redundant. So at that point, the emphasis was more on the reduced wages than on retrenchments. Going into the following week, the Department would see if there were any changes in that response.

Secondly, she indicated that the Department was in the final phases of developing tourism recovery strategy. It was developing a predictive model that would be able to handle different inputs in order to inform the policy responses in the end; for example, if borders were opened or closed, what the impact would be on key variables such as employment and GDP contribution.

Regarding Ms Boshoff question around the number of jobs in tourism, she responded that one in 22 employed individuals in the economy was employed in the tourism sector. This was according to the TSA in 2018.

In terms of the questions about grading policy, she said that the Department intended to do a comprehensive review of its quality assurance policy and the grading was just one aspect thereof. So a number of issues that were raised by the Members would form part of that work.

Concerning the review of the White Paper timeframes, the Department intended to have a draft review ready by the end of the financial year and finalise it by the following financial year.

She indicated that the Department had been working very closely with the Department of Home Affairs in introducing the e-Visa system. The e-Visa system also introduced the e-Gate system at key airports. OR Tambo was the first airport to have this introduced. The plan was that for the first phase, it would be piloted for SA citizens to move through the e-Gates.

Ms Shamilla Chettiar, DDG: Policy and Knowledge Services, Department of Toursim, noted that there were a few issues that were raised around the district development model. She said that the Department was very engaged with CoGTA around the model and, in particular, around the pilot site of OR Tambo, eThekwini and Waterberg. The work that the Department was doing on marine tourism would find very clear expression in the master plans being developed for OR Tambo and eThekwini. There was tier integration where the Department also linked the coastal experience with a little bit more of the inland experiences which included township tourism. She agreed that all of the SAT space should be friendly to locals. The SAT must be visible in the neighbourhoods where locals were frequent. There was work that was not in the APP that was being done around township precinct development. Rail tourism was also something that the Department was exploring. One of the challenges of rail tourism was that the infrastructure was fairly expensive to operate; the Department was beginning its work on it, regardless. SAT was also venturing towards the area of Cultural Heritage Tourism.

She explained that capital projects were a little bit on the back burner, at this point in time. But the Department would take guidance from the Minister and DG on how these would get presented to the Committee at a later stage.

Ms Morongoe Ramphele, DDG: Domestic Tourism, Department of Tourism, responded to the question raised by Mr Gumbi, who asked why training on travel agents was not done. It was part of the initial APP, but the Department moved it to the business plan. This did not mean that the Department would not deal with it now. She indicated that this was an area that would need a face-to-face interaction and in the current environment it was not feasible to put in the APP.

She responded to the question raised by a Member on how tourism in local government was not visible in interaction with LED officials. She said that this was a project that was started some time back, both in terms of capacity building within the local government space and in bringing together officials of municipalities and the private sectors. It was working well.

In response to Mr Krumbock’s question regarding the directly affected entities by BBBEE, she indicated that the Department would be able to assess that after the TRF funding was exhausted.

Regarding domestic tourism, the Department had come up with a domestic tourism scheme. The success of the scheme lied in having partnerships between the tourism value chain stakeholders and the private sector.

The DG explained that on grading, affordability was not a problem in the sense that the Department did have specific incentive that was directed at reducing the cost of grading. It went to almost 90% of the costs.

The Department’s strategy of realising 21 million tourists by 2030 was based on a number of aspects, including competitiveness; product development and diversification; repositioning of the brand.

Regarding health policy, the Department would work under the guidance of the Department of Health. The Department would have to work with their sector to ensure that it was ready to adapt to the ‘new normal’.

He recounted that the Minister had reported the extent of reopening that would come through with level three. These efforts were intended to save all the businesses in the sector. So looking at the different types of initiatives that government had put in place, there was a credit guarantee line which the bulk of the businesses may be able to get. They would also be to access UIF and support.

Through all these processes, the Department would be guided by what epidemiological data stipulated and what the President allowed.

The Deputy Minister, due to technical difficulties, he was unable to join in on the discussion.

The Minister explained that regarding the EPWP Capital projects, the Department had had many challenges and would make a submission in writing detailing the progress on the project. A lot of work had been done and professionals had been brought in; they have been able to verify and quantify some issues. One of the issues was that there was an instance where the value for money was less than what the Department had paid. The Department did have projects which experienced difficulties.

Responding to Ms Makhubela-Mashele’s question regarding how far the Department was with the e-Visa. She explained that before the lockdown, Home Affairs had started the piloting.

The President has asked the Tourism and Home Affairs departments to ensure that their work continued even under lockdown so that when activities resume, the work around e-Visas system was up and running so that people could apply online.

Responding to Members’ questions about grading, she indicated that previously disadvantaged people were currently able to get a fund. They were, in fact, able to receive support in terms of grading.

He indicated that domestic tourism would be phased in lockdown level three. Members should remember that leisure and business both formed part of tourism. People who travel for business could book at a hotel, lodge or a B&B. This meant that domestic tourism was coming in and so there was a level of domestic tourism coming in from 01 June 2020.

The Department was continuing to encourage and support small enterprises; it was engaging with TPCSA and working on supporting small enterprises.

The Department’s target of 21 million international tourist arrivals by 2030 was still in place. The Department had definitely made a loss in terms of the numbers because of the pandemic, but as part of the recovery strategy it would make sure to assess what was still feasible and what was not, and then report to Parliament. If there was a need to change the figures, the Department would do so and be transparent about it.

Responding to Ms Boshoff’s question on the dates that were aligned to risk levels, the Minister indicated that there were none. Level three was announced to start on 01 June. The document that was issued previously stipulated that a lot of tourism activities would be reinstated at level one and level two. She further explained that the Department had worked really hard to put together protocols that would see tourism activities come into life under level three. The document that Ms Boshoff was referring to was based on someone who did an assessment after Professor Karim had addressed the public. However, the environment was fluid and constantly changing, which was why the Department had to remain agile in its approach.

Responding to Mr Krumbock’s question on future planning, she explained that it fell under the Tourism Recovery Strategy. What the Department was doing was looking at domestic, regional and international tourism and discerning what the appropriate recovery strategy was for each. The work was not done yet and once the department was done with the strategy, it would be presented to Parliament. Currently, the Department only had the draft which outlined the various inputs across the sector. But the Department would come back to Parliament for the Committee’s inputs before finalising the strategy.

The Department would come back to report regarding the BBBEE policy. There was a need to have a conversation around the importance of BBBEE, what it meant for the sector. The Department would share the statistics it had on the sector – showing what had been the transformation over time, where they were relative to the targets. The Minister expressed her belief that if the Department did not ensure an inclusive economy and tourism sector, then it would not be sustainable and it would collapse.

Lastly, she explained that before the Tourism Bill, the Department should finish the White paper policy review, and then from that they will be able to implement and review the legislation completely so that it was responsive to the current environment.

Closing remarks by the Chairperson

The Chairperson thanked the Minister and Deputy Minister. He noted that they have answered the questions that were asked by members. He explained that he thinks at this point it should be indicated to the members how present matters will be dealt with. Will it be completed as soon as SAT has done its presentation tomorrow? Tomorrow after indicting with SAT, having added what the department has done today, the department will have a fuller picture. This will then be culminated into the adjustment budget which will be presented by the Finance Minister.

He noted that that the Minister had fulfilled the duties that the Committee had asked and that the Committee was happy that the Minister had addressed issues of transformation. He said that the Committee was satisfied with the way that the Minister had dealt with these duties. The Committee had asked the Minister to go and do a review of the APP Strategic plan and she had done so.

He also highlighted that the Committee had asked the Minister to initiate a process that would culminate in a post-corona recovery plan for tourism, to ensure that she spoke to the NCC to ensure the there was a gradually-accelerated reactivation of tourism and she did done so. He said that the Department could now move on to the next stage, which entailed a complete picture coming from SAT. As soon as that was complete, the Committee would then do its report so that the necessary approval of the budget could be done.

He thanked the Members for attending the meeting and reminded them to be safe and adopt the necessary safety measures against the virus.

The meeting was adjourned.