Tourism Minister Derek Hanekom’s budget vote in parliament on 17th May hit all the right notes, but if South Africa wants to deliver on President Cyril Ramaphosa’s challenge to the sector to double the number of people it employs, then the sector needs broader government support.
This is the view of Tourism Business Council of South Africa (TBCSA) CEO, Mmatšatši Ramawela, in reaction to the budget vote. The TBCSA is the umbrella business organization representing the country’s travel and tourism private sector.
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“While we welcome the budget, which seemed to hit all the right notes and is in-line with the department’s National Tourism Sector Strategy, the industry, which includes government has its work cut out for it, if we want to double the tourism sector’s contribution in terms of arrivals, jobs and GDP,” says Ramawela.
“President Cyril Ramaphosa put a challenge to us in his State of the Nation Address, but the National Department of Tourism and the industry cannot do it alone.
"We need the full support of government from all levels, including key departments such as Home Affairs, Transport, Public Enterprises, Police, Labour; and Cooperative Governance and Traditional Affairs, just to mention the notable ones. Broader government collaboration is essential, together with the private sector to redouble our efforts and deliver on the directive, which comes from the highest office,” she says.
'Currently employs more than 700 000 people directly'
South Africa’s tourism sector currently employs more than 700 000 people directly. The sector’s total employment contribution, including jobs indirectly supported by the sector, comes to more than 1.6 million.
TBCSA says business outlook on employment levels for the first six months of 2018 remains mixed as highlighted by the Council’s Tourism Business Index (June to December 2017). A significant number of respondents in both the ‘accommodation’ and ‘other tourism businesses’ segments of the TBI expect employment levels in the sector to remain the same.
It highlights that travel and tourism’s direct contribution to SA’s GDP was R136.1 billion in 2017, according to the World Travel and Tourism Council (WTTC) Economic Impact Report.
The WTTC report further states that the tourism sector’s total contribution to SA’s GDP last year was R412.5 billion, or 8,9% of the country’s overall GDP.
Ramawela says, “Certainly, one of the highlights from Minister Hanekom’s budget speech is his commitment to address the critical issue of travel facilitation, particularly the regulations around unabridged birth certificates for minors of foreign tourists travelling to South Africa. The regulations have had a major impact on the industry and tourism growth figures.
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The negative effects are still being felt, so we are really happy to hear that the Tourism Minister is now working with Home Affairs Minister, Malusi Gigaba, to come up with a workable solution,” she says.
On this note, the TBCSA CEO commended the Department of Home Affairs and Minister Gigaba on their plans to pilot e-permitting functionality which will allow visitors to South Africa to apply for visas online; simplify visa requirements for Chinese and Indian visitors; and also to ease the entry of people with valid visas from countries with stringent criteria such as the United States of America and the United Kingdom.
The Department of Tourism saw a nominal increase in its budget, from R2.1 billion last year to R2.2 billion for the 2018/19 financial year. More than half of this budget, some R1.2 billion, will go towards SA Tourism’s operations.
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“While we understand that government funds are under pressure, we have to ask if this budget is sufficient to deliver on the ambitious growth expectations for the tourism sector. As the TBCSA, we believe that the budget is insufficient considering the tough competition from other destinations within and outside our continent," says Ramawela
“It is also important to note that the TBCSA, which administers the Tourism Marketing South Africa (TOMSA) levy, last year contributed a total of R157 million to SA Tourism’s marketing efforts. It was great that for the first time during a Department of Tourism budget debate, TOMSA’s contribution was recognised by the chairperson of Parliament’s Portfolio Committee on Tourism, Ms Lusizo Makhubela-Mashele."
"We also welcome the chairperson’s call for SA Tourism to work more closely with us to increase the TOMSA levy collection in the country.”
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On the tourism transformation front, the TBCSA welcomes Minister Hanekom’s budget announcement on the introduction of the Tourism Transformation Fund.
"While the new Tourism Transformation Fund only has an allocation of R120 million over the next three years, it is a start and we hope this will increase in the future.”