Working Together for Tourism Growth and Development A

Working Together for Tourism Growth and Development A Private Sector Perspective Parliamentary Portfolio Committee’s Tourism Summit Ms Mmatšatši Marobe Old Assembly Chamber, Parliament 28 th February 2011

Table of Contents üIntroductions & Insights üAbout the Tourism Business Council of SA üThe Cinderella Industry & Past Achievements üThe State of the Industry üOur Priorities as a sector üApproach to Development, Growth & Transformation üThe Challenges üPossible Solutions üConclusions

Overview of Travel & Tourism q. Travel & tourism is a sector encompassing transport, accommodation, catering, recreation and services for visitors q One of the world’s highest priority industries and employers, and the world’s leading growth sectors. q. One of the fastest growing economic sectors globally q. A sector whose business volume equals or even surpasses oil exports, food products and or automobiles q. A sector that has become a major player in international commerce q. A sector that has become a main source of income for many developing countries q. Last four years have seen T&T Economy GDP increase at an average annual rate of 4. 0% in real terms, faster than the overall global economy. And over the same period, T&T has created more than 34 million new jobs.

PRIVATE SECTOR LANDSCAPE u South Africa’s Travel and Tourism industry is made up of a combination of large corporations and SMMEs. u These businesses operate in different facets of the industry, which can be broadly divided into: 1. 2. 3. 4. Transport – Land, Air and Sea Hospitality – Accommodation and Food & Beverages MICE – Meetings, Incentives, Conferences and Events Tourist Attractions – attractive destinations which tourist visit for business and leisure u These key industry players, all play an important role in the delivery of a ‘unique South African experience’ to local and international tourists.

ABOUT THE TBCSA u TBCSA is the umbrella organisation for the private sector in the travel and tourism industry u Mandate of been the VOICE of private sector within the industry and be a conduit with the public sector u Formed in 1996 to form a unified platform for the private sector to engage with the public sector and other stakeholders to develop and grow the industry u Managed by a Management Board with automatic seats for all key tourism associations and elected business representatives u Over the years, TBCSA has played a pivotal role in tackling macro-economic issues faced by the Sector, which include: – Transformation in Tourism – Tourism Marketing – Skills Development and – Quality Assurance

WHERE DO WE FIT IN? GOVERNMENT PRESS INDUSTRY VOASA FEDHASA SAACI ASATA AHI SATSA SAVRLA BIG MEMBERS SAYTC NAA TOMSA TEP Collector of funds for marketing RASA

TBCSA MEMBERSHIP u TBCSA is made up of fee paying members from key Travel and Tourism sectoral associations and leading businesses. u The Key sectoral associations are al lmembers of the TBCSA and form the backbone of the Management Board u Individual leading businesses have the option of joining the directly or through their sector Association u Members also comes from non-tourism businesses operating within the sector such as research agencies and financial institutions u Membership support also from Corporates operating outside the sector as they recognise the value of tourism to the economy Crown Members:

ASSOCIATION MEMBERS

KEY MILESTONES ü TOMSA Levy for funding for SA Tourism marketing efforts ü Tourism BEE Scorecard - transforming the to be inclusive ü Public Private Partnerships establishing key organisations: Ø Tourism Enterprise Programme – SMME development Ø Tourism Grading Council of South Africa for quality assurance Ø TECSA – Transformation and Employment Equity ü Tourism Safety Initiative (SATSA) ü Hospitality Investment Conference Africa (HICA) ü Invelo Tourism Awards (Fedhasa)

ABOUT TOMSA ü TOMSA (Tourism Marketing Levy South Africa) is a Section 21 entity established in 1998 to provide additional marketing funding to SA Tourism to promote destination South Africa ü The funds are obtained through a voluntary levy on tourism services rendered to the tourist, and are collected monthly ü The agreed levy is charged onto the visitor and not taken from the tourism business unless specified ü TOMSA has grown from collecting R 11. 4 million in 1999 with 50 collectors, to collecting in excess of R 80 million in 2009. ü In 2010, TOMSA transferred approximately R 93 million to SA Tourism between January and December ü Relationship is regulated through a signed MOU and quarterly meetings

The State of the Industry v The Effect of the FIFA Soccer World Cup: ü 2002 the accommodation sector began preparations to host the FIFA Soccer World Cup on the belief that SA will win the 2006 bid ü SA lost the 2006 bid to Germany; ü FIFA award SA with the rights to host the 2010 SWC in May 2004; ü Between 2004 and 2010, more hotels built with more rooms including guest houses and B&Bs; ü Capacity added in the transport sector – rental vehicles& coaches; ü Tour operator block bookings & forward bookings with prepayments; ü Unrealised uptake of packages and occupancy levels for some;

State of the Industry v The Effect of the Global Economic recession: - üEconomic recession affecting worldwide travel in 2008; üRecession hits SA towards end 2008 initially excluding travel; üInternational arrivals slows down mid 2009 lead by EU, UK & USA; üDomestic travel slowing down late 2009 with corporate travel leading; üLocal leisure travel slowing during the SWC – no effective strategy by industry to respond; üCorporate travel shuts down during the SWC and struggles to recover afterwards, with government leading üSA consumer shelving their travel plans & bankrupt;

The State of the Industry v Local Business Developments: ü Slow reaction to the global economic recession – adjusting rates; ü Strength of the local currency; ü Airline prices unusually high leading to Soccer World Cup; ü Cost pressure – electricity tariffs, labour, rates & taxes, fuel costs; ü New regulations such as AARTO, bad road conditions, VISA regime, . . . ; ü Perception of inflated accommodation prices leading to Soccer World Cup.

Some Home Truths – lets face the facts üMissed opportunities during 2010 FIFA Soccer Cup; üInflexibility of some establishments, e. g. unable to get a sandwich @ 11 pm during 2010 Soccer Cup; ü Failure to learn lessons from competitors and newer hotels and other operators; ü Rigid adherence to set rates and tariffs in the sector; üHow does SA pricing compare with competitors in Africa and elsewhere üIn Africa, e. g. Kenya, Morocco and Egypt. üLong haul competitors, further from Europe, e. g. Australia and Thailand; üIs SA getting ROI on marketing spend?

Approach to Development ü Public Private Partnership in developing and growing the sector ü What can be Achieved” üJob Creation – travel and tourism remain one of key sectors for job creation üLittle education required to be employed in the sector üKey sector for skills transfer and on-the-job training üEntrepreneurship Development

Approach to Growth ü Committed focus from top government leadership ü Incentives and special dispensations to promote growth in the sector such as üInvestment Promotion incentives üMarketing and Channel Access packages üYouth Employment Subsidies

Approach to Transformation ü Committed to BBBE policy and programme ü Broader view of Transformation: ü Human Resources Development – training & skills transfer ü Enterprise Development & Support ü Social Investment ü Job Creation & Poverty Alleviation ü Mainstreaming travel and tourism as a sector: ü Statistics and data ü Registration ü Leadership ü Changing the Way Business is done: ü Innovating the SA offering – packaging & value for money ü Growing Domestic travel ü New Markets regionally & internationally

CHALLENGES FACING THE SECTOR

Challenges Facing the Sector üAirlift and Air Access into South Africa üSkills Development – the role of SETAs üSafety and Security – of tourists and our people üLocal Government Role in Tourism – service delivery üService Excellence – grading & culture of customer focus üMarketing & Promotion üCost of doing business

Challenges Facing the Sector üInfrastructure Support e. g. roads, signage, water & electricity supply üResponsible Tourism - integrity of our biodiversity üLand Claims and their speedy resolution üTransformation – role of TECSA and relationship with private sector ü Prioritisation of Tourism within Government/Cabinet üKnowledge and Information – mainstreaming tourism

Possible Solutions ü Air Access – tough decisions on State Airline; linked tourism and aviation policy; and YD implementation üPeople Movement – SADC visa regime; flexible VISA requirements in key source markets üInvestment Promotion – incentives for hotels in small scale segments & rural areas/towns; subsidies in transport & marketing spend üSkills Development – responsive SETA; incentives; üCost of Doing Business – legislative harmonisation between National, Reginal and Local governments üIntegrated planning btw Public and Private sector üSkills Transfer & Leadership Development – creating jobs

THANK YOU