Budgetary Review and Recommendation Report of the Portfolio Committee on Tourism on the performance of the Department of Tourism for the 2010/11 Financial Year, dated 18 October 2011


The Portfolio Committee on Tourism, having assessed the service delivery performance by reviewing the Annual Report and Financial Statements of the Department of Tourism, reports as follows:


1.                   Introduction


The National Department of Tourism has made notable progress since its separation from the Department of Environmental Affairs; it has also ensured that a proper foundation is in place towards the realisation of the departmentís vision, which is to be globally celebrated as a leader in tourism excellence.[1] In line with the vision of the Department a review of the 2009/2011- 2014/1015 strategic imperatives was conducted to ensure that departmental priorities take precedence. In as much as this move has assisted the department in refocusing its deliverables, there have been areas of concern that still require the departmentís intervention in order for it to fully recognise its vision and greatly assist in realising the countryís national priorities.


The hosting of the 2010 FIFA World Cup did not only provide South Africa with a platform to showcase its capacity tohost mega-Events but it went as far as changing global perceptions about the country as a tourist destination. Perceptions about the safety of tourists in South Africa dramatically changed as 92 per cent of the 766 visitors interviewed were positive about their experience in South Africa and would recommend it to friends and family.[2]Tourism being a concurrent functioning department which requires the delivery of services from other departments for the easy facilitation of activities such as developing tourism products and ensuring the geographic spread of tourism, it becomes vital for the Department to pioneer intergovernmental relations amongst sister departments, as well as the three spheres of government. The success of intergovernmental relations within the three spheres of government will allow for the Department to work like a well-oiled machine that will be able to realise its vision for tourism in the country.


Tourism being a slow transforming industry, the Department had to further ensure that steps in realising transformation of this economically important industry are carried out, mainly through the tourism Broad Based Black Economic Empowerment (BBBEE) Framework.[3] Tourism in the country is mostly private sector-driven and the role of the private sector should not be undermined as it plays a huge role in the growth and development of this sector. However there is a need for the private sector and the Department to form Public Private Partnerships that will allow for the growth of the emerging small businesses and subsequently work towards transforming the industry.


The committee, in reviewing the work of the department in the 2010/11 financial year placed emphasis on the following aspects:


  • An overview of the overall performance of voted funds: Budget Vote 34: Tourism;
  • An overview and analysis of the departmentís strategic priorities and measurable objectives;
  • Analysis of the departmentís prevailing strategic and operational plan; and
  • Analysis of the departmentís annual report and financial statements using section 32 reports as a guide.



The committee, in undertaking this process used a number of source documents ranging from the State of the Nation Address, strategic plans of the department, briefing sessions as well as oversight visits as a base to analyse the work of the department.


1.1   The role of the Committee


The mandate of the committee is underpinned by provisions of the Constitution of the Republic of South Africa, 1996, Parliamentís vision and mission and the rules of Parliament.


The mandate and role of the committee is to:

  • Consider all matters falling within its portfolio as referred to it in terms of the Constitution, legislation, Rules of the Assembly or by resolution of the Assembly.
  • Exercise and maintain oversight over the executive state organs falling within its portfolio.
  • Monitor, investigate, enquire and make recommendations concerning any executive organ of state or institution.
  • Perform any other responsibilities assigned to the committee in terms of the Constitution, legislation, Rules, resolution of the Assembly, including functions concerning parliamentary oversight of the executive organs of state or institutions.


1.2††††††† National Department of Tourism


The mandate and core business of the department is underpinned by the Constitution and all other relevant legislation and policies applicable to the government, including Batho Pele and the White Paper.


The vision and mission of the department embodies the mandate of the department, as follows:


  • The department supports tourism sectorís contribution to economic growth.
  • Its mandate is to create the conditions for sustainable tourism growth and development, through governmentís new growth path, which focuses on job creation and economic growth, the department supports both the public and private sectors in the tourism industry.†† ††


2.                   Departments Strategic Priorities and Measurable Objectives


The aim of the department is to promote and support growth and development of an equitable, competitive and sustainable tourism sector, enhancing its contribution to national priorities.


2.1   Strategic Plan of the Department


Key sector for economic growth and job creation: Governmentís industrial policy action plan identifies tourism as a driver of both domestic consumer spending and foreign exchange earnings. The tourism is a key labour-intensive sector and strategic area of the economy, with low barriers to entry for entrepreneurs, and has the potential to create jobs in both urban and rural areas and stimulate growth. It is estimated that for every 16 tourists, a job is created in the sector. Tourism is set to contribute 225 000 new jobs by 2020. †††††


In the medium term the department aims to:


  • Increase investment in the tourism sector.
  • Increase inbound tourism.
  • Deliver a world-class visitor experience.
  • Entrench a culture of tourism amongst South Africans; and
  • Increase the sectorís contribution to job creation and economic growth.


2.2   Measurable Objectives of the Department


In line with the vision of the National Department of Tourism, and in alignment with the national priorities, the Department identified objectives that would accelerate delivery of services in the tourism sector. The hosting of the 2010 FIFA World Cup meant that service excellence, quality product development and responsible tourism had to be on top of the list so as to generate economic benefits for local people and enhance living conditions for hosting communities.[4] Outlined below are the strategic objectives of the Department as stated in the 2010/2011 Strategic Plan.[5]


          To grow the travel and tourism sectorís absolute contribution to GDP by more than average GDP growth;

          To achieve transformation within the travel and tourism sector;

          To provide excellent people development and decent work within the travel and tourism sector;

          To entrench a culture oftravel amongst South Africans;

          To deliver a world class visitor experience; and

          To address the issue of geographic, seasonal and rural spread.


Amongst the above mentioned objectives the biggest drive is to positively contribute towards Gross Domestic Product growth and increase the contribution of tourism towards job creation through foreign tourism and domestic tourism growth with an increase in tourism investment and foreign earnings.In order to drive the transformation of this sector the Department needs to invest more energy and resources in the development of Small, Medium and Micro Enterprises (SMMEs), and also promote mentorship programmes by established businesses for emerging entrepreneurs. Attention to training needs in order to further the goal of service excellence needs to be intensified if South Africa is to compete with global players in attracting tourists to the country.


Supporting product development in rural areas for tourist consumption will be a critical tool in tourismís role in rural development. In line with the above mentioned points, the implementation of programmes at the local level of government is very critical with regard to rural tourism development, thus the Department needs to actively engage with municipalities, especially in targeted areas and contribute towards tourism product development in areas where there is the possibility of a feasible project.


3.                   Analysis of the Departmentís Prevailing Strategic and Operational Plan


The following provides a breakdown per programme on key performance indicators, targets and actual performance:


3.1††††††† Programme 1: Administration


In terms of empowerment of South Africans through access to tourism information, the average monthly traffic target on the departmentís website by external people had been set at 15 000, the actual figure achieved was 296,192 hits. The number of stakeholder engagement initiatives target was set at 1, while the actual achievement was 5.


With regards to facilitating conducive global environment that supports growth, development and sustainability of tourism in South Africa, the percentage of negotiated international agreements on tourism growth, development and knowledge service signed target was set at 50%; while the actual performance was lower at 25%. In terms of ensuring the availability of adequate human capital, the percentage of vacancy rate was set at 30%, while the actual vacancy rate was 19%. Representation of designated groups in the workforce, the percentage of women, disabled persons and blacks targets were set at 50%; 2% and 75% respectively. The actual figures achieved were 53%, 2% and 91%.


Regarding the use of government procurement to promote transformation, the percentage of expenditure on procurement from broad based black economic empowerment BBBEE or black economic empowerment enterprises target was set at 58%, while actual percentage achieved was 59%.


3.2††††††† Programme 2: Tourism Development


With regards to the contribution to job creation through the use of labour-intensive methods targeting the unemployed, youth, women, people with disabilities and the SMMEs, the number of full time equivalent jobs created from the Medium Term Expenditure Framework Baseline budget target was set at 9 861, while the actual jobs created was 8 090. The numberof accredited training person days created from MTEF Baseline budget target was 17 629 days while the actual figure achieved was 25 390 days.


In terms of ensuring demographic representativity within the tourism sector, the percentage of black owned tourism enterprises in line with the Tourism Charter target was set at 30%. Research conducted indicates 22.8% of large enterprises comply; 21.3% were Qualifying Small Enterprises (QSE) and 17.7% of Exempt Micro Enterprises (EME) complied with the 30% ownership target.


In terms of the increase in the number of black women in executive positions and ownership of businesses, the target was set at 20%. The Tourism Enterprise Partnership (TEP) for the mentoring of women which would result to women being allocated international mentors to support them in the development and implementation of their business plans had been agreed to. To address the imbalanced geographic spread and seasonality of tourists and visitors, the number of accommodation and conferencing facilities developed in less visited provinces, 8 were initiated and the actual performance achieved was 10.


To ensure involvement of rural communities in mainstream tourism, the number of sustainable tourism products and experiences in rural areas target had been set at 5. To date a draft rural tourism strategy has been developed. A Memorandum of Understanding (MoU) between the Department of Tourism and the Department of Rural Development and Land Reform has been vetted and is ready to be signed.


3.3††††††† Programme 3: Tourism Growth


To ensure provision of decent work within the tourism sector, the number of South Africans as a percentage of the total workforce in the tourism sector target was to have a baseline and framework in place. The actual performance was that a concept document had been developed. The target for the number of educators trained to better understand tourism was set at 100, while the actual figure achieved was 805.


As part of providing excellent people development within the tourism sector targeting young people, the target for the number of people exposed to international and local training opportunities was set at 180, while the actual performance figure was 242. The number of tourism graduates placed for experiential learning target was 50, the actual figure sat at 300.


The percentage of tourism graduates placed for experiential learning employed had a target set at 5% while the actual percentage employed was 39%. The target for the number of school leavers who register for tourism qualification at higher learning institutions was set at 200 while the actual performance figure was at 7 557.


In terms of ensuring responsible tourism best practices, the percentage of tourism establishments adopting and implementing Universal Accessibility minimum requirements was to have a target of having minimum requirements in place. The target was not achieved.


To ensure competitiveness of the tourism sector, the percentage of tourist guides registered in the new system had a target of 20% while the actual performance percentage was at 25.3%. The number of participants on service excellence training, target was 250 000, while actual performance was that 14 000 frontline staff were trained towards 2010 FIFA World Cup.††††††† ††††††††††


3.4††††††† Programme 4: Policy, Research, Monitoring and Evaluation


Policy development and Evaluation facilitates sector policy development, planning, monitoring and evaluation: It is meant to ensure that the tourism policy environment is conducive to sustainable growth and development. To inform tourism planning and decision making with timeous and relevant tourism, the number of impact evaluation reports for tourism sector initiatives including major events had a target of 1 which was achieved. The target was set to have a Draft Annual State of Tourism Report for 2009/10. To date a proposal to develop the state of tourism was developed and data sourcing had commenced. A target had been set for a framework to be approved for the percentage compliance with sector monitoring and evaluation. A draft monitoring and evaluation framework for the National Tourism Sector Strategy (NTSS) had had been developed.


In terms of creating an enabling policy and legislative environment for tourism growth and development, the department had intended for tourism related policies / strategies / legislation to be finalized. A draft bill has been approved by MinMEC and the Minister for Cabinet. Comments from the State Law Advisor had been received. The number of tourism policies / strategies achieved had been met. The target set and those achieved was 2.


To support local government tourism growth and development, the target for the number of district and local municipalities supported to develop tourism plans, strategies and programmes was set at 3. The department had for efficiency purposes clustered the districts per province. All districts in 3 provinces (Eastern Cape, Free State and Limpopo) were supported to use the Local Government Tourism toolkit and draft NTSS implications.

Regarding human capital management and development, the department staff complement is at 310 persons. Workforce representativity as at the end of 2010/11 financial year reflected the following percentages: Africans (83%), Colourds (6%), Indians (3%), and Whites (8%).††††††††††††††

Africans at senior management level are at (64%), women at senior management level are at (53%), and people with disabilities are at (2%) of the department workforce. Staff turnover rate is at (9%).


4.                   Analysis of Section 32 Expenditure Reports


The aggregate spending and allocations: At the end of the 2010/11 financial year, the department spent R1.1 billion or 97 per cent of the total budget of R1.2 billion.


Economic classification spending trends

Goods and Services: The goods and services budget allocation increased from R98 million to R118 million, of which 96 per cent was spent by year end.

Current Payments: The department has spent R214 million or 98 per cent of its current payments allocation.

Transfers and subsidies: At the end of the 2010/11 financial year, the department transferred R913 million or 98 per cent. Transfers and subsidies amounted to 80 per cent of the departmentís expenditure by year end.


A breakdown of the spending trends for each of the programmes reflects the following:


4.1               Programme 1: Administration


Spending in this programme amounts to R170 million which is 90 per cent of the total allocation. The slow spending is due to unspent funds committed to the departmentís new head office building (R19 million) for use in the 2011/12 financial year. This was requested as a rollover was and approved by National Treasury.


4.2               Programme 2: Tourism Development


The R307 million or 94 per cent of the allocated R328 million was spent by the end of the fourth quarter. The slow spending was due to funds relating to Extended Public Works Programme Incentive (R21 million) which was not authorized for withdrawal by the Department of Public Works due to poor performance.


4.3               Programme 3: Tourism Growth


The R653 million or 100 per cent of the appropriated budget for this programme was spent. A large portion of these funds (97 per cent) went to South African Tourism.


4.4               Programme 4: Policy, Research, Monitoring and Evaluation


The R13 million or 100 per cent was spent by the end of the financial year.

5.                   Analysis of the Departmentís Annual Report and Financial Statements


The Department acknowledges the contribution of the 2010 FIFA World Cup towards the surpassed growth targets in terms of arrivals and Gross Domestic Product (GDP) contribution. There is also mention of the enhancement of the Black Economic Empowerment (BEE) Charter through the establishment of compliance monitoring systems.These systems are critical in achieving the goal of transforming the tourism industry and it is along those lines that a study to assess transformation in the industry was commissioned.[6] The Department has also gone further by incorporating an element that seeks to assist young people who have an interest in the tourism industry to gain the relevant experience; and for such, the Youth Chef programme was initiated and the training of 14 000 volunteers was concluded. The overall achievements of the Tourism Programme include the following:[7]


          The launch of the National Tourism Sector Strategy (NTSS) which will be used as a tool to accelerate inclusive tourism industry growth from 2010 to 2015.

          The training of 14 000 youths as tourism ambassadors prior to the 2010 FIFA World Cup.

          The 6.6 percent positive tourism growth experienced, with tourist arrivals growing by 15.1 per cent as a result of the 2010 FIFA World Cup during the 2010/2011 financial year.

          Positive media coverage of the ministry and the Department as a whole.

          The creation of 8090 fulltime equivalent jobs.

          The creation of 25 390 accredited training person days through MTEF Baseline Budget and creation of 6050 accredited training person days through MTEF Wage Incentive to improve the capacity and skills of employees employed under the Social Responsibility projects.

          The growing popularity of domestic tourism among South Africans and 79 per cent of the South African tourist volumes was derived from domestic tourism. An increase in the frequency, length of stay and overall spend was experienced.

          The successful hosting of the Imvelo Awards and the Hospitality Investment Conference for Africa (HICA) was achieved in partnership with the Federated Hospitality Association of Southern Africa (FEDHASA) and the Tourism Business Council of South Africa (TBCSA) respectively.

          The Department surpassed all targets with respect to human capital management and development. This is commendable as it will hopefully allow for the quick and efficient roll out of programmes.

          The successful hosting of the 2010 Indaba which was the biggest event in the African tourism calendar with a turnout of 1813 exhibitors.

          A revision of the grading criteria, which will greatly assist in curbing corrupt practices in the hospitality sector and assist industry to be a global player in terms of service standards.


          Training of enterprises received a lot of attention as enterprises were more upfront and interested in tourism opportunities and competitiveness training. In addition, more enterprises were supported to the start-up project stage.


          Skills availability in the sector has been a challenge but the Department managed to meet about 60 percent of its targets with respect to skills development.


          The Department also successfully ensured that a substantial increase was recorded with regards to the rand value of annual transactional linkages between SMMEs and established tourism enterprises that were created.


          Efficient utilisation of the new tourist guide registration system was achieved, with 25% of tourist guides effectively transferred to the new system.


          The achievements acquired with regards to product development in the sector, and the support of SMMEs through programmes such as the Emerging Tourism Entrepreneur of the Year Awards (ETEYA), and Identity Development Funding (IDF) and business workshops are impressive and a step towards the expansion of the tourism sector in the country.


Whereas the Department has managed to register a number of victories they still have some challenges that must be addressed for the industry to realise its potential and these challenges include:[8]


          The department failed to meet their target in relation to the percentage of negotiated international agreements on tourism growth, development and knowledge services signed - the target was not met and the Department has conveniently shifted the delay in meeting targets onto other parties.


          The department also failed to meet its target with regards to the percentage of participation and representation in the international forums.


          Getting establishments to adopt and implement universal accessibility minimum requirements.


          The targets with regards to the percentage of New Partnerships for Africaís Development (NEPAD) Tourism Action Plan Initiatives implemented were not met and this was due to reliance on other role players for core funding.


          The failure to meet the set targets with regard to the number of fulltime equivalent jobs created. The Department failed to attract enough projects in order for the set target to be realised.


          The inexcusable failure of the Department with regards to the implementation and monitoring of the Expanded Public Works Programme.


          Although a number of SMMEs have been graded with the assistance of TEP, the standards are not truly reflective of what the grading process should reflect. This then raises questions about the quality of the grading process.


          The delayed progress made by the Department with respect to the quality of tourism product and services is worrisome, as the Department has also decided to defer other responsibilities to the 2011/2012 financial year.


6.                   Consideration of Report of Standing Committee on Public Accounts (SCOPA)


For the year under review, the department did not receive any invitation to appear before the Standing Committee on Public Accounts. The SCOPA prioritizes departments which received a qualified audit opinion or which had disclaimer or received an adverse audit opinion from the Auditor General.




For the year under review, the committee interacted with a number of government departments, public entities and tourism industry stakeholders. In all these engagements, the committee made the following observations:


7.1   Institutional arrangements: The implementation of the Tourism Growth Strategy requires substantial institutional support, as the Constitution defines tourism as a Schedule 4 competence. This therefore, means that national and provincial governments jointly have authority over tourism activities. This implies that national and provincial governments have the power to structure and arrange tourism at national and provincial levels, while adhering to the principles of cooperative governance. Tourism should be institutionalized at local government level.


7.2   Tourism and Local Government: Local government does not have legislative and / or regulatory powers pertaining to tourism, but local tourism is a local authority function. Local authorities are important contributors to the success of tourism activities in terms of community driven tourism philosophy. Their efforts should be coordinated within the provincial tourism strategy.


7.3   Provincial and Local Tourism Authorities: Like in most other countries, South Africa needs to create a culture of more domestic travel as that is the biggest contributor to sustainable businesses and jobs in the tourism industry.


7.4   Tourism Budgets: The successful implementation of the tourism growth strategy requires substantial financial resources. The current national and provincial tourism budgets are extremely limited and do not allow for the successful implementation of the tourism strategy. It also does not compare favourably with the budgets of other countries, such as Spain, Australia etc. Innovative models will have to be found to supplement the current budget.


7.5   Domestic tourism growth strategy: Domestic tourism focus had been on the upper-middle class of society in the past, therefore the departmentís strategy should be finalized as soon as it is practically possible so that domestic tourism should form the backbone of tourism in South Africa.


7.6   Marketing: The committee found that using the existing or limited marketing budget allocated for tourism, posed various challenges to the ability of the provinces and municipalities to optimize on the opportunities.


7.7   Safety and Security of tourists: Research confirms that this represents the biggest deterrent to aggressively growing tourist arrivals to South Africa over the next 5 years. To continue the work with stakeholders in government and private sector to address these challenges.


7.8   Strengthen partnerships: Within the provincial tourism industry, a number of important interventions to enable tourism growth. A provincial structure to enhance this partnership, and to create an effective communication channel between the different tourism structures in the province, is proposed to enhance the provincial growth strategy and local government assistance where applicable.


7.9   Land Reform / Restitution processes: The prolonged land reform processes, linked to inadequate after care programmes in the wildlife and tourism business sector hampers investment opportunities in tourism sector.


7.10            Lack of adequate integrated land use planning: At provincial level, this has contributed to and resulted in uncoordinated development that directly impacts on provincial tourism icons and therefore on tourism growth.


7.11            Signage: Poor secondary road infrastructure and proper signage impacts on the access to tourism products based in rural areas.


7.12            Skills Development: The committee found that there is a need for dedicated resources to be set aside to recapitalize FET colleges. This is to ensure that they develop and offer appropriate training programmes to support rural economies with tourism being at the centre of development. There is a need to support FET colleges and Sector Education and Training Authorities to be linked to business, industry and other advanced education and training programmes.


7.13            Small, Micro and Medium Enterprises (SMMEs): All spheres of government should work towards strengthening competitiveness and promotion of SMMEs and cooperatives as they remain the cornerstone for growth of the economy and the creation of decent work opportunities. Government to facilitate market access and entry into value chain by small business and cooperatives and reduce the regulatory burden on small businesses.


7.14            Provincial and Local Government capacity: There is a need for improvement of provincial and local government capacity to plan for and maintain infrastructure to ensure continued efficient delivery of economic and social services.


8.       Conclusion


The Committee has expressed satisfaction across the board that the Department and SA Tourism received unqualified audit reports. This is the first-ever presentation of the Annual Report of the newly formed department. Following, the announcement by President Jacob Zuma in May 2009 that the Department of Tourism should be a standalone department, the mandate of the National Department of Tourism broadened as the Tourism sector has been identified as a job driver in South Africaís New Growth Path.


During the presentation, the Committee was taken through programmes and policies aimed at increasing jobs and entrepreneurial opportunities in the tourism sector.The department reported that 8,090 full-time equivalent jobs were created from the Medium-Term Expenditure Framework (MTEF) Baseline Budget.


In addition the Department succeeded in its employment equity targets, ensuring representation of designated groups in the workforce. The committee recognises the strides that have been made by the department, but on the issue of transformation and ownership need to be speeded up. However cognisance is taken of the fact that this not just the responsibility of the Department but also other role-players.


Whilst the Committee commended the department for excelling in human capital development; it also posed the question as to whether this was happening at provincial and local level.The committee noted that the Department spent 96% of its total budget in this financial year.


The Committee also expressed its wish to interact with the Auditor-General and request that they audit national, provincial, local and entities to ensure that they use the graded establishments as per the Cabinet directive. This is important when viewed against the background that Tourism has been identified by government as a critical sector in the South African economy, particularly because of its potential for contributing to job creation.


Although concern was raised by the Committee that the jobs creation projects under the Expanded Public Works Program (EPWP) projects, were not all achieved and money would be returned to National Treasury, the Committee accepted the explanation that the EPWP funding was ring fenced and Treasury regulations required that it could not be utilised for any other purposes.


The Committee further noted the institution of a forensic audit by the Department into the management of EPWP projects by third parties and would follow progress around developments with interest. Preliminary investigations had already resulted in charges being laid against one individual and a†† further three are still pending.


9.       Recommendations


9.1††††††† Leadership


The committee notes with concern the lack of monitoring controls to ensure adherence to contractual requirements and internal controls over the expanded public works programme that were not sufficient to detect and prevent control deviations and non-compliance with laws.


The department should put measures in place to deal with this challenge and report to the committee.


9.2††††††† Governance


The committee notes the existing concerns about the nature, extent and frequency of managementís assessment of controls in place, relating to the expanded public works programme, to prevent and detect fraudulent activities.


The committee recommends that it be updated regularly on some of governance issues, particularly on EPWP projects.


9.3††††††† Investigations


          The committee notes and is in support of the forensic investigations initiated by the accounting officer of the department in respect of the EPWP projects and would follow the investigations with keen interest; and

          The criminal cases that have been opened with South African Police Service (SAPS) in respect of the EPWP projects.


          The department should take the necessary precautionary measures to save public funds.


9.4††††††† Tourism Budget


The Department of Tourism and South African Tourism should receive a higher budgetary allocation, given the legacy of the 2010 FIFA World Cup; the need to develop domestic tourism growth Ė which is less prone to international fluctuations as recent experiences like H1N1 flu epidemic and the Iceland volcano ash have shown; the emergence of new markets like Brazil, India and China which would need more resources to promote and the higher focus on tourism that has been indicated by government promoting tourism into a fully fledged department. These increases in the expenditure will be offset by revenue that will be generated by the increase in tourism.


9.5††††††† Extended Public Works Programme projects


          Progress on cooperative work between the Department of Tourism and the Department of Public Works should focus towards identifying projects that would have maximum benefit to poor communities.

          There should also be greater focus on monitoring the outputs and outcomes of the EPWP as it holds the potential for poverty relief and providing first level skills and opportunity for productive citizenry.††


9.6††††††† Use of graded establishments by government departments


The Committee notes the complaints received from other tourism industry stakeholders that despite having graded their establishments they are not receiving any businesses from local, provincial and national government, yet some which are not graded continue to enjoy business from state departments.††


In order to encourage SMMEs and other tourism enterprises to register businesses in terms of the new grading system, the use of graded establishments by government departments is encouraged or the Cabinet directive of 2006 would need to be enforced.

9.7††††††† Intergovernmental relations


Tourism is a concurrent competence, and requires good coordination and mutual support between the three spheres of government, particularly in view of the diverse nature of tourism.


          The national, provincial and local governments should place more emphasis on the important role of municipalities in developing tourism, and the extra-ordinary contribution this sector would make to socio-economic development; and

          An integrated approach should be established by the three spheres of government to enhance their relationship and coordination.


9.8††††††† Job creation at local level


The committee notes that tourism is a demand-driven sector; therefore the volume and value of demand inform investment in supply and job creation.


          The maintenance and development of public tourist attractions should be prioritized.

          Provision of public infrastructure supporting local economic development and tourism is improved. Municipalities should focus on Local Economic Development (LEDs) initiatives that are skills creating, employment generating and domestic production and consumption promoting. In this regard Local Government should be strengthened and resourced to support local entrepreneurs.

          Provision of public amenities such as parking, ablution facilities, public transportation be made where necessary.

          Local and district municipalities maintain the general safety, cleanliness and beautification of the local area.


9.9††††††† Local government

For the municipalities to be able to deliver on tourism targets, the committee recommends the ††following:


          The intensification of effective tourism planning and capacity on tourism planning is critical and should be prioritized.

          The integration of local initiatives (IDPs) with provincial and national strategic frameworks.

          The provision of tourism support services, such as human capital development for the sector at local level; and

          Synergic linkages should be developed at all spheres of government so as to promote local tourism activities, organizations and strategic partnerships.


9.10††††† Signage and road infrastructure


The committee notes the poor road signage and proper infrastructure impact negatively on access to tourism products, especially in rural areas.


          The cooperative work between the Department of Tourism and the Department of Transport be reported to the committee within three months after the adoption of this report.


9.11 †††† Transformation of tourism sector


The committee notes that the tourism sector in the country is mostly private sector-driven and the role of private should not be undermined as it plays a huge role in the growth and development of the sector. ††


The committee recommends that department should:


          Accelerate transformation of the sector to be at the centre of departmental programmes in the medium term;

          Ensure that the benefits of tourism are equitably shared amongst South Africans.

          Take specific initiatives for empowerment of youth, women and people with disabilities through enterprise, entrepreneurship and people development; and

          Take deliberate actions to support implementation of BBBEE as well as assisting to form Public Private Partnerships that would allow SMMEs in the sector to grow.

9.12 †††† Geographic spread


The department should place more emphasis on the importance of growing domestic tourism in order to sustain the industry and create more sustainable jobs. This would also address the geographic spread and seasonality aspects. It is also necessary to grow the Africa market to promote regional tourism.



10.††††††† Appreciation


The committee would like to extend special appreciation to the Ministry, the Director General, programme managers and heads of entities for providing support to the committee throughout the financial year.


Report to be considered.





[1] National Department of Tourism (2010) Strategic Plan.

[2] True Crime Expo (2010).

[3] Estimates of National Expenditure (2010).

[4] Department of Tourism Strategic plan (2010).

[5] Ibid.

[6] Department of Tourism Annual Report (2010/2011).

[7] Ibid.

[8] ibid