L Brown: Western Cape Economic Development and Tourism Prov Budget Vote
2007/08

30 May 2007

Introduction

Mr Speaker, I wish to briefly reflect on:

An extract from the President's State of the Nation Address, 9 February
2007, and I quote, "In line with the National Industrial Policy Framework which
has now been completed, we will intensify implementation of customised sector
measures to facilitate investments in business process outsourcing, tourism,
bio-fuels and chemicals."

An extract from the Premier's State of the Province address (SOPA), 16
February 2007 and I quote, "Today in this SOPA, we set the agenda towards
reaching the Millennium Development Goals (MDGs) in 2014, to ensure a different
Western Cape by 2010 when we host the Soccer World Cup and to ensure that in
the upcoming financial year 2007/08, we have used our resources to intensify
the struggle against poverty."

This Budget Vote takes the above fully into account together with the
following insights provided on continental and regional tourism growth as well
as 2010 tourism growth and economic potential:

Africa receives just fewer than 5% of global tourist arrivals and has shown
in the past three years that continental tourism growth is double that of the
world average. Of the 36,7 million tourist arrivals to sub-Saharan Africa in
2005, almost 20% went to South Africa. South Africa recorded a 10,3% increase
in international arrivals from 6,7 million in 2004 to 7,4 million in 2005.
Also, there was a 23,5% increase in Total Foreign Direct Spend (TDFS) from
R43,2 billion in 2004 to R53, 4 billion in 2005.

Trends show that Cape Town and the Western Cape are on the road to beat the
global growth rate in international arrivals. There has been even greater
growth in the traditionally low months between April and September. The Western
Cape achieved 14% growth in international arrivals between April and September
2006 compared to the same period in 2005 and the growth trend is expected to
continue. For 2006, the Western Cape received 1,6 million international
visitors and three million domestic visitors. Also the Western Cape recorded a
R14,9 billion foreign spend and a R1,9 million domestic spend (total R16,8
billion).

The Micro-Economic Development Strategy (MEDS) synthesis report July 2006,
confirms that the Western Cape is often viewed as South Africa's most developed
tourism region, with the contribution of travel and tourism to the provincial
economy close to 10% in value added (gross regional product) and in employment
(compared to about 7,4% for South Africa as a whole). Both the Accelerated and
Shared Growth Initiative for South Africa (AsgiSA) and the MEDS have identified
tourism as a key priority sector for accelerated growth and Broad Based Black
Economic Empowerment (BBBEE).

In terms of the 2010 FIFA World Cup finals, there are huge benefits in
presenting the Western Cape as an attractive tourist and investment destination
from the expected 450 000 arrivals to South Africa (of which the Western Cape
is expected to receive between 250 000 to 350 000 arrivals) and from the
cumulative R40 billion global television (TV) audience.

The positive tourism growth as reflected above and the 2010 tourism growth
and economic potential clearly show that we have an important role to
ensure:

* that the visitor experience is a good one as positive word of mouth
advertising is critical
* that we achieve long term benefits on the marketing spend
* that we have a unified destination brand and consolidated marketing efforts
in order to ensure the success of both established tourism businesses as well
as emerging tourism businesses
* that we take into consideration the need to stream visitors from Cape Town to
other municipalities in the Western Cape
* that new business is spread as widely as possible
* that our communities benefit in terms of environment enhancement and
participation in the tourism experience
* that we foster cooperative governance and funding initiatives to ensure cost
and time efficient use of our collective efforts and resources.

2006/07 highlights

In my 2006/07 tourism budget speech, I spoke to a seven point plan for
delivering on tourism's vision as outlined in the 10-year Western Cape Tourism
Development Framework. Mr Speaker, I wish to report progress as follows.

Firstly, in terms of the Integrated Tourism Development Framework (ITDF) we
have consolidated the Tourism Gateways (the Eastern Gateway will be up and
running by August 2007), finalised the Cape Flats Tourism Initiative (upgrading
the District Six sports exhibition in line with 2010) and provided facility
equipment to the False Bay Ecology Park as part of the development of the False
Bay Coastline. We have also participated in the following major tourism route
development: Cape Namibia Tourism Route, The Whale and Tip of Africa Route in
the Overberg region launched at Indaba 2007 and the three Wine Routes as part
of the West Coast Tourism development Programme. The ITDF review process which
includes a drill down investigation into the sites, attractions, routes and
infrastructure for the city and each of the district municipality will be
conducted in 2007/08.

Secondly, with regard to the Tourism Safety and Support Programme and our
third year implementation of the "tourists in distress" campaign 84 tourism
safety and security incidents were recorded for the 2006 festive season
compared to the 93 incidents recorded for the 2005 year. The incidents mainly
involved assault/robbery and motor vehicle accidents with a marked decrease in
high profile crime against tourists which usually receive major media attention
and contribute to the negative perception of an unsafe destination. Proactive
measures included the distribution of safety tips, safety cards, stakeholder
leaflets, media/publication inserts and networking with key role players like
South African Police Services (SAPS), consulates and the hospitality industry
on a continuous basis. The roll out of the programme also included
comprehensive plans and part time staff for the Cape Metropole, Southern Cape,
Overberg, Central Karoo and Route 62.

Thirdly, as part of the detailed Monitoring and Evaluation Framework for the
Western Cape a number of quality inspections of attractions, products and
services and tourism routes were undertaken. These included inter alia the
Outeniqua Choo Tjoe, Robben Island and the Cango Caves.

Fourthly, we have been actively involved in tourism training and development
initiatives. In the 2005/06 financial year a total amount of R2 204 000 was
spent on training which benefited 1 381 people. In the 2006/07 financial year a
total amount of R3 645 648 was spent on training which benefited 2 518 people.
Tourism training and development initiatives included customer care training to
staff in the industry, tourist guide training, the tourism tiered support
system and bursary funds to beneficiaries studying in the fields of tourism
management, professional cookery, public relations and food and beverage
management.

Fifthly, the tourism tiered support system in the form of the Tourism
Business Management Programme, Tourism Mentorship Programme, Fast Track
Programme and the Tourism Help Desk Programme has been implemented for its
fourth successful year. Besides the 1 639 entrepreneurs that have been through
the Tourism Business Management Programme, Fast Track Programme and Tourism
Mentorship Programme an additional 180 tourism outreach sessions were held
where approximately 3 600 community members attended the sessions. This has
spread the understanding of tourism and how communities can be involved into
almost every corner of our province.

Sixthly, the Integrated Tourism Entrepreneurship Programme (ITESP) was
further refined to ensure that entrepreneurs have real benefit in the
assistance provided and will be form part of the tourism blue chip investment
portfolio.

Seventhly, the Tourism Youth Indaba and Awards, the provincial tourism
schools competition and the access to the Cape campaign were held as part of
our social tourism initiatives.

Mr Speaker, our highest priority was the establishment of a tourism
development forum to which the Western Cape tourism development partnership was
launched and formally constituted in the fourth quarter of 2006/07. This was
the first engagement between the four social partners (being government,
business, labour, civil society) and with education. Discussions were centred
on institutional arrangements of the partnership and the Western Cape tourism
development framework.

We have also coordinated the government delegation of the partnership,
consisting of the Department, the city, the five district municipalities, the
B-municipalities, the regional tourism organisations and the local tourism
organisations [as well as national representation in the form of the Department
of Environmental Affairs and Tourism (DEAT) , South African Tourism and
Department of Trade and Industry (dti) to provide detailed input into a jointly
agreed upon Western Cape tourism development framework].

Some of Cape Town Routes Unlimited's (CTRU's) highlights during the past
financial year include:

* Seasonality and regional spread: the 351 events across the province were
used as a platform to address seasonality and regional tourism spread. During
the months of May to September, 83 events were hosted in Cape Town and 54 in
the other regions of the province. (Of the 351 events, 206 were in Cape Town,
53 in the Winelands, 17 in the Overberg, 34 in the Garden Route and Klein Karoo
and 33 in the West Coast. Regional spread to the Winelands increased from 42%
to 67% and the Garden Route from 37% to 48% by December 2006.

* Small Medium and Micro Enterprise (SMME) development: CTRU has assisted
185 emerging entrepreneurs by exposing them to local and international leisure
and business tourism markets such as the Cape Tourism Showcase, indaba, World
Travel Market, Meetings Africa and South African Tourism India Roadshow.

Mid-Term Expenditure Framework (MTEF) budget

Mr Speaker, in the 2006/07 fiscal year R42,982 million was allocated to
tourism from the total R178,661 million that was made available to Budget Vote
12.

In the current 2007/08 fiscal year, R48,498 million has been allocated to
tourism. The increase in the 2007/08 financial year is a R5,516 million or
12,8% increase on the previous financial year's allocation (i.e. 2006/07).

In the 2008/09 fiscal year, a provision has been made for R50,931 million
followed by an amount of R65,451 in the 2009/10 fiscal year.

In total, it is projected that the tourism budget will increase by an
estimated 35% from R48,498 million to R65,451 million over the coming medium
term.

2007/08 prioritisation for tourism

In our plans to meet the national and provincial priorities of accelerated
and shared growth for our province, we propose the following priorities for
2007/08:

1. The development of tourist sites, attractions, routes and infrastructure.
This will be guided by a reworked version of the ITDF which will emphasise a
wider distribution of tourists within the province.

2. We will pursue a vigorous Tourism Human Resource Development Programme to
develop an appropriately skilled and highly productive workforce. This will
include the implementation of skills development programmes and ensuring that
employers maximise opportunities for employee development.

3. Through the up scaling of the Tourism Enterprise Development Programme,
we will intensify our participatory interventions by implementing a tiered
support strategy that addresses the needs of the full spectrum of
entrepreneurs. These interventions will also promote local tourism development
and will be linked to other departmental and provincial intervention strategies
such as Die Plek Plan. There will be a strong emphasis on the development of an
Economic Empowerment Programme that will focus particularly on women, the
youth, rural residents and persons living with disabilities.

4. We will establish an array of interventions to ensure the competitiveness
of our tourist destination. These will include the promotion of service
excellence and the implementation of a destination monitoring and evaluation
framework together with a quality assurance inspectorate. It will also include
a further roll out campaign to help the people of the Western Cape understand
their role in tourism and to also get them to experience tourism. (Refer to
theme reflected in postcards: Beauty in the Environment.)

5. The role of CTRU as a provincial destination marketing organisation is
being refined to be cost effective and reflective of the organisation moving
beyond the status of a new organisation. The setting of distinct key
performance indicators (KPIs) and the development of focused strategies to
establish and position Cape Town and the Western Cape as a premier destination
for leisure, business and events will be the main focus.

From the above and in gearing up for 2010 and beyond, the key interventions
and budget allocations are:

1. Continuation of the Tourism Safety and Security Programme, including the
establishment of an interactive tourism safety and support website with a
committed amount of R1 million.

2. The development of a 2010 Tourism Accelerated Development Plan with a
committed amount of R2 million, by using the FIFA World Cup in 2010 as a focal
point to accelerate interventions to making the destination world class so that
it can benefit maximally from the global publicity and word of mouth promotion
and cope with the anticipated rapid increase in tourist volumes in the years
immediately after the event.

3. Implementation of the tourism development areas' projects, as arising
from the ITDF review with a committed amount of R2,2 million.

4. Up scaling the Tourism Enterprise Development Programme with a committed
amount of R4,6 million, which includes the tourism tiered support system and
the tourism blue chip investment portfolio that has been developed to
facilitate entry into tourism businesses by suitable tourism entrepreneurs.

5. Our biggest allocation is the earmarked funding of R23 million to CTRU,
of which CTRU has identified the following priorities for this fiscal year:
domestic marketing; international marketing; marketing intelligence; e-business
platform; client and business relations; public relations (pr) and
communications and visitor and membership development.

The above priority interventions will be facilitated and enhanced through
the following mechanisms:

a) The Western Cape Tourism Development Framework, with its defined targets
and outcomes that need to be achieved over a 10-year timeframe. The Western
Cape Tourism Development Framework is the destination vision and strategy for
tourism in the Western Cape and is the sector strategy for tourism that forms
part of the Department's Micro-Economic Development Strategy. The Western Cape
Tourism Development Framework will ensure joint planning, budgeting and
implementation between the three spheres of government in the first instance
and all of the social partners in the second instance.

b) The Western Cape tourism development partnership is the formally
constituted co-operative governance body [as derived from the Western Cape's
Provincial Development Council's (PDC's) tourism task team] that will ensure
that the partners act in an aligned manner to achieve cost effective use of our
collective resources. Each of the delegations (being government, business,
labour, civil society and education) will meet on their own on a quarterly
basis leading up to a quarterly plenary session of the whole partnership. In
addition, we are in the process of constituting the following sub-committees
that will be made up of nominated representatives from each delegation of the
partnership and will meet on a more frequent basis to deal with specific
issues:

* Tourism growth: its mandate is to address all matters related to defining
growth; investment recruitment; increasing employment; marketing the
destination and its tourism products; new possible sub-sectors; niches and
products; increasing the number of direct flights to the province; reducing the
impact of seasonality on both business and labour; co-operative marketing;
co-operation with other sectors to enhance the tourism offering; the
development of enterprises from the start up phase to global competitiveness;
the competitiveness of the destination and the general enhancement of the image
of the destination.
* Tourism human resource development (HRD): its mandate is to address all
matters related to HRD as outlined in the Western Cape Tourism Development
Framework.
* Participation in tourism: its mandate is to address all matters related to
economic empowerment with particular emphasis on women, youth and people living
with disabilities; encouraging new players to establish tourism enterprises;
local economic development; the geographic distribution of the benefits of
tourism; tourism regulation and the enhancement of a supportive and conducive
tourism business environment.
* Tourism infrastructure and transport: its mandate is to address matters
related to the general development of sites; attractions; routes and tourism
enhancing infrastructure. Its specific briefs are:

1. to revise and constantly update the Integrated Tourism Development
Framework (ITDF) and to participate fully in any public participation process
to popularise the plan across the province
2. to develop advocacy positions for the Partnership on public transport as it
affects tourism, tour operator licences and broadband availability
3. to address matters related to road and pedestrian signage as it affects
tourism
4. Tourism 2010: its mandate is to make recommendations on how to place the
industry to benefit maximally from the significantly increased exposure the
Western Cape will receive before, during and after the 2010 FIFA World Cup
finals.

Travel and tourism is seen as one of the most important international
economic activities as well as the fastest growing economic sector in terms of
foreign exchange earnings and job creation. The sector is an important driver
of growth and prosperity and within developing countries for poverty reduction.
In fact, most new jobs in developing countries are created in tourism
industries. Mr Speaker, this Budget Vote aims to build a strong and competitive
sector that achieves both the key tourism objectives of growth and
transformation.

Issued by: Department of Economic Development and Tourism, Western Cape
Provincial Government
30 May 2007