Minister of Finance and Tourism
18 May 2006
Introduction
Speaker, towards the end of last year, South African Tourism announced that
for the first time in the history of our country, the tourism sector has
surpassed gold to become the top earner of foreign exchange. It was also
reported that during the 2004/05 financial year this sector had created 27 000
new direct jobs.
That tourism is a sector with potential to create many more jobs and
alleviate poverty is without doubt. The President and Deputy President have
acknowledged this fact through the Accelerated Shared Growth Initiative of
South Africa (AsgiSA), which identifies two sectors of the economy for priority
intervention, tourism and the Business Process Outsourcing (BPO) sector.
The Western Cape Government is aware of the importance of tourism in driving
our Provincial economy. For instance about 9.6% of our workforce, or 150 000
people, are employed in the tourism sector. It also contributes about 9.8% to
the provincial Gross Domestic Product (GDP).
It is for this reason that we have included Tourism in our Micro-economic
Development Strategy [MEDS]. Tourism is not only a sector with potential for
growth but can be a useful tool in accelerating broad based black economic
empowerment, and alleviating poverty and unemployment.
The 2006/07 financial year is therefore an exciting period for us. We will
for the first time be implementing Tourism's 10 years vision as outlined in the
Micro-economic Development Strategy. This vision is covered in a 7 point plan,
which seeks to implement the following big initiatives:
Have a complete re-look at the Integrated Tourism Development Framework
[ITDF] and to re-formulate the ITDF into one Tourism Implementation Plan. The
ITDF review will be an extensive public process that will be guided by
inclusiveness. As part of broadening tourism's reach meaningfully, we are
currently examining the possibility of developing the False Bay coast as a
tourist route. This will draw in the coastal communities of Vrygrond, Kalk Bay,
Fish Hoek, Simons Town, Strand and Gordons Bay in making sure that those
excluded in the past are now completely part of tourism development.
With regard to Tourism Safety and Security, we have been successful in the
past two years in pioneering the Victim Support Programme and the Tourists in
Distress Campaign. In this fiscal year, we will set up a public private sector
partnership, which will operate on an all-year 24/7 basis. This partnership
will ensure that the Western Cape enhances itsâ reputation as a safe tourist
destination.
As part of a detailed Monitoring and Evaluation Framework, we will be
examining the quality of existing attractions, products and services; and the
quality of routes, information provisioning and tourist orientated businesses.
We will have inspectors who will constantly be reviewing every aspect of the
tourism experience this will be examined from a very high level of global
competitiveness, right down to adequate refuse receptacles at a tourist site.
Implementation will be in the second half of this fiscal year. We will be
releasing reports for consideration to managers and controllers of sites;
individual tourism businesses; etc.
Skills Development is key to successfully intervene in the tourism industry,
and we will through the establishment of the Tourism People Development Forum
and its chambers focus on a collective way to determine strategy and key
interventions for skills development in the tourism industry.
Massification of our very successful Tourism Enterprise Development
programmes. For this year, will particularly focus on survivalist and micro
enterprises. We are establishing a fund for the development of new small
tourism businesses in the five District Municipalities. Already we have
undertaken successful Initiatives, and our aim is to extend this greatly.
With regard to Social Tourism, we aim to roll-out a big campaign to help the
people of the Western Cape understand their role in tourism; and to also get
them to experience tourism.
2005/06 Highlights
Speaker, we will launch this 7-point plan on the back of a successful
2005/06 financial year, which saw us implementing schemes that sought to
develop and promote the tourism sector. Most importantly during this period we
also identified and implemented interventions that would enhance the equity and
shared growth that is so pivotal to our general economic development.
Some of the interventions and projects that we identified and implemented
included the:
* The establishment of a Tourism Business Forum that strengthens our support
to entrepreneurs.
* The Tourism Business Management Programme: We built the capacity of a
total of 801 entrepreneurs during the previous fiscal year.
* We successfully piloted a new coaching programme called Fast Track: Fast
Track's objective is to lead 20 fledgling, survivalist businesses closer to
profitability through one-on-one coaching.
* We launched a Tourism Mentorship Programme: The success of this programme
has been such that the Provinces of KwaZulu/Natal and the Northern Cape have
launched similar projects.
* The Integrated Tourism Entrepreneurship Support Programme [ITESP], which
was successfully launched in April 2005, provides further integrated support to
small tourism businesses [from previously disadvantaged groups] that have come
through the Tourism Tiered Support System.
* We successfully hosted a Tourism Youth Indaba and Awards in Oudtshoorn
during July 2005.
* And of course we have the Tourism Safety and Security Campaign. This
programme seeks to provide assistance to tourists during times of distress
while they are holidaying in the Western Cape. During the 2004/05 festive
season our victim support programme handled 49 incidents of distress involving
tourists. One of these was the robbery of a group of German tour operators on a
tour bus in Khayelitsha. It is my pleasure to announce Mr Speaker that the tour
operators were so impressed with the Victim Support Programme, that when they
returned to Germany they collected an amount of R72 000 to which donations will
be made to four different township charities in Cape Town.
Cape Town Routes Unlimited (CTRU):
Of course Mr Speaker these interventions are premised on the assumption that
tourists are and will continue to visit the Western Cape. Cape Town Routes
Unlimited, the Provinceâs destination marketing organisation, has consistently
ensured that the Western Cape retains its title of being the jewel in the
countryâs tourism crown.
Some of CTRUâS highlights during the past financial year include:
* Developing the Provinceâs first cross-border initiative, i.e. Cape to
Namibia Route. This route packages the West Coast of South Africa and Southern
Namibia. The Cape to Namibia Route aims to target the 190 000 South Africans
who visit Namibia by road. In addition, the initiative will have significant
spin off benefits for international tourists who combine South Africa and
Namibia on their itineraries.
* Marketing Route 62 in the UK. This followed initial discussions at the
World Travel Market in London. As a result the Cape Town Routes Unlimited
entered into a joint promotion with UK operator Trail Finders who e featuring a
new Route 62 products in their brochure for the first time. Route 62 was
marketed to more than 600 tour operators in the UK.
MTEF Budget
Mr Speaker if anything, my input indicates that in order to build a strong
tourism sector, we need a strong foundation. The 2004/05 fiscal year was a
period of constructing the strong foundations that allow this sector to
flourish.
When delivering the Western Cape Budget speech, on 17 February 2006, I
highlighted the elements that will lead to job creation and a growing economy.
I identified Tourism as a sector with the potential to achieve these goals.
In the 2005/06 fiscal year, R36,1 million was allocated to tourism from the
total R142,4 million that was made available to Vote 12.
In the current 2006/07 fiscal year, R44,1 million has been allocated to
Tourism. This is 18% more than the amount allocated to tourism in the 2005/06
fiscal year.
In the 2007/08 fiscal year, a provision has been made for R44,6 million,
followed by an amount of R46,9 in the 2008/09 fiscal year. This represents an
increase of some R10,8 million or 30% more over the coming medium term than the
province provided for tourism in the 2005/2006 fiscal year.
2006/2007 Background:
The Micro-economic Development Strategy's draft Implementation Plan, updated
as at 6 February 2006, contains an outline of our approach to the tourism
sector.
Post the Department's Phase 1 of implementation and the Micro-economic
Development Strategy's draft Implementation Plan, we have in the first two
months of this fiscal year, spent a considerable amount of time in refining our
approach to tourism as outlined in the MEDS's draft Implementation Plan. To do
this we undertook an exercise, which examined the following:
* A zero-based look at the Western Cape tourism experience from the
perspective of the consumer. The question is what needs to be in place in order
for the consumer to have a world-class experience in the Western Cape?
* What role does government [including business, labour and civil society] play
to ensure that all the elements required for a world-class tourism experience
in the Western Cape is in place?
* Is the MEDS offering a comprehensive set of recommendations in order to deal
effectively with government's optimal role?
* Are the projects a bold response to the role required, particularly that of
government in this revised strategy?
The outcome of this exercise resulted in a comprehensive set of functions
detailing the territory that must be covered to successfully intervene in the
tourism sector. Broadly, we have categorised these functions along the
following six themes:
1. Planning
2. Growth
3. Competitiveness and Skills Development
4. Participation
5. Fair Business and Regulatory Environment
6. Social and Environmental issues
To ensure efficient and effective delivery, we have reorganised our human
resources to reflect the above themes and to align the structure
appropriately.
And to ensure integration and alignment, we are currently refining the
tourism component of the MEDS's draft Implementation Plan to reflect the areas
across the above themes.
2006/2007 Project Prioritisation:
To ensure that we intervene with significant impact on the tourism sector,
we have asked the following questions:
* What are our highest priorities in terms of achieving our strategic plan
for tourism?
* What interventions will we put in place to achieve these?
* What will it cost to make these interventions effective?
In our role of Provincial Government as coordinator/facilitator, we have
identified our highest priority as that of establishing a public sector Tourism
Development Forum, consisting of the public sector bodies, this means,
Provincial Government [the Department], Cape Town Routes Unlimited, the City
and the five District Municipalities in order to drive a common agenda for
tourism in the Western Cape. The public sector Tourism Development Forum will
move away from the currently fragmented approach and will ensure joint
planning, budgeting and implementation in the public sector.
Our priorities across the six themes are as follows:
Within planning, we will:
* Undertake a detailed review of the Integrated Tourism Development
Framework [ITDF]. The ITDF, which is now in its 5th year of implementation,
essentially focuses on spatial elements in addressing the benefits of tourism
being spread evenly throughout the Province. In addition, to the ITDF, other
areas of tourism work in the Department had separate plans. As part of the
refinement process, the ITDF and these separate plans will be consolidated,
reviewed, and honed to incorporate all the micro-economic development elements
as detailed across the six themes into one Tourism Implementation Plan.
* Undertake Research via the MEDS research process. For this fiscal year, we
will firstly conduct a study that will define how we measure tourism and
consider the best measuring instruments that could be used to understand
measurement of tourism at regional level.
Within growth, we will:
* Play a strong advocacy role in addressing Air Access and Public Transport
issues.
* Address Investment Recruitment by examining the various elements that
could be packaged into investment opportunities for the Western Cape, as well
as an examination of available funding instruments. In this process, we will
ensure that packaged investment opportunities are completely in line with the
Department's RED Initiative.
* Formulate a comprehensive strategy for Route Development that will
encompass the development of new sub-sectors and products; further development
of existing sub-sectors, sites and products; and the even distribution of
product and tourist flows. This includes the proposed Eden Gateway intervention
identified in the ITDF, to which we are committing R1 million for
infrastructure development; and the examination of the False Bay coastline in
terms of development for tourism.
As part of growth, our biggest allocation is the earmarked funding of R22, 9
million to Cape Town Routes Unlimited [CTRU] to whom we have outsourced our
Marketing and Promotion function. Cape Town Routes Unlimited has identified the
following priorities for this fiscal year:
* Seasonality: Tourism growth in the Western Cape will largely be influenced
by the region's ability to address seasonality. We are focusing on positioning
the Cape Town and the Western Cape as a year-round destination for the leisure
market and a thriving business destination for the Meetings, Incentives,
Conferences and Exhibitions market.
* Regional spread: Via the Regional Tourism Organisations Forum, we will
pro-actively promote joint marketing, development and research initiatives.
* 2010: After 2006 World Cup tournament, we will embark on an intensive
marketing programme aimed at positioning the Western Cape as a prime venue for
major soccer matches.
* Focussing on new and emerging markets will drive transformation, and
linking these unexplored markets to emerging entrepreneurs.
* Market focus will be on domestic tourism, African markets such as Nigeria
and Kenya, established overseas markets such as Germany, the United Kingdom,
the United States, and new markets such as China and India. Our strategy is to
mine existing markets, grow emerging new markets, and promote leisure, business
and events travel.
Within competitiveness and skills development, we will:
* Address issues of competitiveness for the destination as a whole,
including seasonality and global business intelligence.
* Set up a Tourism Safety and Security private sector partnership, to which
we are seeking co-funding and are committing R1 million from the Department in
providing an all-year 24/7 operation including a Tourism Victim Support
Programme. In addition, we will extend the service to include information
provisioning [directions; products/services available] to tourists on a 24/7
basis.
* Develop and implement a Monitoring and Evaluation framework for the
destination, which will include a resource audit and quality inspections on
existing attractions, products and services. Our focus is on the evaluation of
all the elements that make up a tourism experience, with a focus on quality
service excellence.
* Build a skills partnership in tourism through the establishment of a
Tourism People Development Forum. The Forum will also address BEE and Social
Tourism.
Within participation, we will:
* Continue to drive enterprise development to which we have committed an
amount of R3 million; these interventions include the Tourism Business
Management Programme, Fast Track, the Tourism Mentorship Programme and the
Tourism Business Forum.
* Continue to support the Integrated Tourism Entrepreneurship Support
Programme [ITESP], which provides support to Tourism Small Medium
Micro-Economic (SMMEs), including access to capital, skills and markets. The R3
million earmarked funding will provide support to 20 entrepreneurs and will
particularly address the processing of larger transactions.
* Drive transformation through the Tourism People Development Forum and
specifically target large organisations to commit to real transformation in the
tourism sector.
Within the fair business and regulatory environment, we will:
* Continue to actively engage with the industry to address illegal tourist
guiding in reducing the number of illegal tourist guiding operatives.
* Play a strong advocacy role in addressing the blockages experienced with
Tour Operating Licenses.
Within social and environmental issues, we will:
* Upscale our current interventions in terms of our citizenry awareness
campaigns and our social tourism initiatives.
Mr Speaker as previously stated this budget vote not only ensures we set the
foundation that builds a strong and competitive tourism sector, but one that
benefits the majority of the people of our Province. To make this budget a
reality however, all the social sectors of our Province need to work together
in a manner that maximises the benefits from Tourism. Only by doing this, will
we be able to make the Western Cape a truly prosperous home for all.
Thank You.
Issued by: Finance and Tourism, Western Cape Provincial Government
18 May 2006
