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

2. Table of Contents Introductions & Insights About the Tourism Business Council of SA The Cinderella Industry & Past Achievements The State of the Industry Our Priorities as a sector Approach to Development, Growth & Transformation The Challenges Possible Solutions Conclusions

3. Overview of Travel & Tourism  Travel & tourism is a sector encompassing transport, accommodation, catering, recreation and services for visitors  One of the world’s highest priority industries and employers, and the world’s leading growth sectors.  One of the fastest growing economic sectors globally  A sector whose business volume equals or even surpasses oil exports, food products and or automobiles  A sector that has become a major player in international commerce  A sector that has become a main source of income for many developing countries  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.

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

5. ABOUT THE TBCSA  TBCSA is the umbrella organisation for the private sector in the travel and tourism industry  Mandate of been the VOICE of private sector within the industry and be a conduit with the public sector  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  Managed by a Management Board with automatic seats for all key tourism associations and elected business representatives  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

6. WHERE DO WE FIT IN? GOVERNMENT PRESS INDUSTRY VOASAFEDHASAASATASATSABIG MEMBERSTEP TOMSA Collector of funds for marketing Organised tourism businesses SAACIAHISAVRLASAYTC NAA RASA

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

8. ASSOCIATION MEMBERS

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

10. ABOUT TOMSA TOMSA (Tourism Marketing Levy South Africa) is a Section21 entity established in 1998 to provide additional marketing funding to SA Tourism to promote destination South Africa The funds are obtained through a voluntary levy on tourism services rendered to the tourist, and are collected monthly The agreed levy is charged onto the visitor and not taken from the tourism business unless specified TOMSA has grown from collecting R11.4 million in 1999 with 50 collectors, to collecting in excess of R 80 million in 2009. In 2010, TOMSA transferred approximately R 93 million to SA Tourism between January and December Relationship is regulated through a signed MOU and quarterly meetings

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

12. State of the Industry  The Effect of the Global Economic recession:- Economic recession affecting worldwide travel in 2008; Recession hits SA towards end 2008 initially excluding travel; International arrivals slows down mid 2009 lead by EU,UK & USA; Domestic travel slowing down late 2009 with corporate travel leading; Local leisure travel slowing during the SWC – no effective strategy by industry to respond; Corporate travel shuts down during the SWC and struggles to recover afterwards, with government leading SA consumer shelving their travel plans & bankrupt; 

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

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

15. Approach to Development Public Private Partnership in developing and growing the sector What can be Achieved” Job Creation – travel and tourism remain one of key sectors for job creation Little education required to be employed in the sector Key sector for skills transfer and on-the-job training Entrepreneurship Development

16. Approach to Growth Committed focus from top government leadership Incentives and special dispensations to promote growth in the sector such as Investment Promotion incentives Marketing and Channel Access packages Youth Employment Subsidies

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

18. CHALLENGES FACING THE SECTOR

19. Challenges Facing the Sector Airlift and Air Access into South Africa Skills Development – the role of SETAs Safety and Security – of tourists and our people Local Government Role in Tourism – service delivery Service Excellence – grading & culture of customer focus Marketing & Promotion Cost of doing business

20. Challenges Facing the Sector Infrastructure Support e.g. roads, signage, water & electricity supply Responsible Tourism - integrity of our biodiversity Land Claims and their speedy resolution Transformation – role of TECSA and relationship with private sector Prioritisation of Tourism within Government/Cabinet Knowledge and Information – mainstreaming tourism

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

22. THANK YOU