1

Analysis of the State of the Nation Address

Implications for Tourism

February 2015

Dr. Sibusiso Khuzwayo

PRESENTATION OUTLINEPRESENTATION OUTLINE

1. Response of tourism to the nine point growth plan

2. Review of Visa Regulations

3. Unintended consequences and possible solutions for new visa regulations

4. National Minimum Wage

5. State procurement from SMMEs

6. Transport networks and tourism

2

1. Response of Tourism to the nine 1. Response of Tourism to the nine point growth plan point growth plan

(i). Resolving the energy challenge There is a need to mainstream tourism into Green Economy. Develop a South African model to quantify energy usage by hotels

(version of the Hotel Energy Solutions E-Toolkit in Europe). Retrofit hotels with energy saving equipment. Promoting responsible and sustainable tourism.

(ii). Encouraging private sector investment Tourism to feature highly in the trade missions abroad. Intensify the already existing Hotel Investment Conference Africa. Investment in community-based tourism by private sector. Structured mentorship programme of SMMEs by big tourism

businesses.

3

Cont.Cont.(iii) Moderating workplace conflictImproving working conditions in the tourism sector.Improving minimum wage for the tourism sector.

(iv) Unlocking potential for SMMEs, cooperatives, township and rural enterprisesTourism Enterprise Partnership (TEP) must intensify their SMMEs support programmes.Strengthen domestic tourism marketing campaigns to highlight offerings by SMMEs.Mainstream township tourism and develop supporting packagesRevive community-based projects through well crafted sustainability plans .Investigate potential for establishing a Tourism Development Fund.Establish tourism cooperatives in various tourism sectors to bid for events and other business tourism related activities.

4

Cont.Cont.

(v) Operation Phakisa aimed at growing ocean economy and other sectors

Investigate possibility of developing Beach Resorts in coastal cities and communal land along the coastline of South Africa.

Investigate Cruise Tourism opportunities for South Africa.

Develop ocean recreational facilities for tourists and communities.

Issue operating licences for ocean activities such as Whale Watching to emerging tourism operators.

5

2. Review of Visa Regulations2. Review of Visa RegulationsThe president mentioned that:

to attract skills for our growing economy we will invite dialogue with various stakeholders on the Migration Policy

we will also prioritise the review of visa regulations to strike a balance between national security and growth in tourism.

6

3. Unintended consequences and possible 3. Unintended consequences and possible solutions for new regulations solutions for new regulations Mr David Scowsill, CEO of World Travel and Tourism Council (WTTC),

announced on the 16th February 2015 that inbound operators are reporting year-on-year decline in bookings by 60% to 80% from countries such as China.

Solution, as done in other countries, might be collection of biometric data on arrival.

Turkey recorded an increase from 1.5 million tourism in 2009 to 8.6 million tourists in 2010 after introducing visa on arrival in 2009.

The Minister of Tourism has indicated that the Department would be

engaged in discussions facilitated by the Deputy President and Departments of International Relations and Cooperation, and Home Affairs on the new regulations.

It might be prudent for the Minister of Home Affairs to suspend the 1st June 2015 date for commencement of new regulations until the matter has been finalised by the deputy president.

7

4. National Minimum Wage4. National Minimum Wage

The tourism industry pays relatively low wages/ salary

The sector has potential to absorb low skilled workers and youth

The tourism sector should be engaged in the current discussions about the minimum wage

The Department of Tourism and the Tourism Business Council of South Africa should engage on how the sector can implement the minimum wage.

8

5. State procurement from SMMEs5. State procurement from SMMEs

The President alluded that “government will set aside 30% of appropriate categories of State procurement for purchasing from SMMEs, cooperatives, as well as township and rural enterprises”

Government consumes hospitality and travel services on a large scale.

The private sector reports that government departments owe the industry in unpaid receipts – non adherence to 30 days turn around period.

Government should procure hospitality and travelling services from graded and accredited tourism SMMEs.

Government must adhere to 30 days period for paying tourism SMMEs.

9

6. Transport networks and tourism6. Transport networks and tourism

The announcement of 11 billion rand of upgrading and maintaining roads which are not tolled is welcome.

Tourism has been affected negatively in some tourism hotspots due to poor road network.

Some destinations have been removed from itineraries due to poor road conditions.

The private sector, especially vehicle based operators, complain about high maintenance costs for vehicles.

10

7. Back to Basics programme and tourism7. Back to Basics programme and tourism

The Back to Basics programme is appreciated in the tourism sector as:Tourism takes place at local level,

The programme will ensure tourism and recreation facilities at municipal level are maintained,

The well managed municipalities will establish tourism coordination structures,

Municipalities should include tourism in their Integrated Development Plans.

11

THANK YOUTHANK YOU

12