M van Schalkwyk on launch of Tourism Month

21 August 2007

Tourism Month launched with exciting foreign tourist arrivals for the first
five months

Tourism Month is an annual celebration held in September to focus on the
importance of tourism to the economy of South Africa. "During Tourism Month we
showcase the unique and diverse tourism experiences offered by the country's
nine provinces" said Minister van Schalkwyk.

The launch of Tourism Month took place on Tuesday, 21 August 2007 at the
Nelson Mandela Museum in Qunu, Eastern Cape. Countries around the world will
celebrate World Tourism Day (WTD) on 27 September 2007. The worldwide theme for
2007 is "Tourism opens doors for women."

The Minister said that "Tourism has become a fiercely competitive business,
especially with women having a particularly important role to play in the
development of tourism and being part of the country's economic mainstream. Our
message for tourism month is to embrace participation of women as they bring a
unique voice to the industry by showcasing their businesses and innovation.

It will be important to focus on a number of issues when we reflect on the
month that lies ahead. Firstly, our Tourism Month celebrations have received
and early boost with exciting foreign arrivals in the first five months of
2007."

Foreign arrivals statistics for the period January to May 2007

The Minister announced that "South Africa is following the global trend with
a rise in travel and tourism to our country. Overall foreign arrivals grew by
10% from January to May 2007. The positive trend in foreign arrivals is
reflected in arrivals from air markets, which increased by 4,4% during the
first five months of 2007 compared to the same period in 2006 and across all
the regions in which South African Tourism markets. According to statistics
released by StatsSA, 2007 saw the highest number of recorded arrivals for the
first five months of a year since 1998.

In markets where SA Tourism focuses its marketing efforts:

The growth in Africa air markets was led by healthy increases out of Nigeria
at 22,5% and Kenya at just over 12%. Arrivals from the Americas have shown
consistent annual growth since 2002, with nearly 7 000 more visitors arriving
from the United States (US) bringing the total figure to 141 674 for region
which includes Canada and Brazil. This represents an increase of five percent
over the same period in 2006.

Arrivals out of Europe are up 1.8% for the year to date driven largely the
significant increase of 11.5% out of France. We believe that this is due to the
turnaround strategy implemented in this market. Although, air capacity issues
may constrain growth going forward.

There was a loss of over four percent in arrivals out of Germany as a result
of market-specific economic activity. The German government increased VAT by
three percent, which has affected German travel purchase behaviour but the
economy is expected to normalise in the second half of the year.

Growth out of Asia and Australasia was led by growth in two key markets,
those being India at 10,3% and Australia at 6,8%. We continued to see a decline
in China while Japan increased by 3,3%. The increase in arrivals from across
all the regions of the world and in particular air markets reflects not only
the growing awareness of South Africa as a tourism destination but also the
success of the airlift strategy passed by Cabinet last year that resulted in
increased access to the South African market for foreign carriers." Secondly,
international tourists are important but local tourists are just as important
and therefore we need nurture our domestic market.

2006 Domestic Statistics

"Domestic travel increased by 2,7% in 2006 as 37 million domestic trips were
undertaken. About 42% of the South African adult population travelled (i.e. 12
million domestic tourists), which means that fewer South Africans travelled
more (i.e. took on average 3,1 domestic trips in 2006). This was down from 14
million people who took a domestic trip in 2005," the Minister reflected.

Approximately 29 million trips were taken for the purpose of visiting
friends and relatives, while holiday travel accounted for seven percent at 2,8
million and business travel was at five percent with 1,9 million trips being
undertaken. The major beneficiaries of domestic tourism in 2006 were
KwaZulu-Natal and Gauteng, with both provinces being the source and destination
of the majority of domestic trips.

One of the challenges in growing the domestic market is making it a
lifestyle choice so that it is not just driven by the purpose of visiting
friends or family. Thirdly, what is the contribution of this sector to job
creation in our country?

Job creation

Last year, South Africa received nearly 8,4 million tourists. Tourism's
contribution to job creation in 2006 amounted to 947 530 jobs. This was an
increase of 9,6% over 2005. It is also easy to see why the tourism industry has
been given such high priority in terms of AsgiSA's plan to reduce poverty and
unemployment and to raise the level of economic growth. Tourism's estimated
contribution to Gross Domestic Product (GDP) increased from 4,6% in 1993 to
8,3% in 2006. However, we are ambitious and would like to see the GDP
contribution of tourism rise to 12% by 2014. We are confident that we can build
on the achievements of a solid partnership between government, the statutory
bodies and the tourism industry.

The Minister said that "the jobs and business opportunities created in
tourism have special significance for economies such as ours. They help to
spread opportunities beyond our major metropolitan areas to provinces like the
Eastern Cape where we are today. They create incentives not only to remain in
rural areas, but also to develop, take pride in, and showcase local hospitality
and culture. We see evidence of this in the entrepreneurs from all nine
provinces that will be receiving Emerging Tourism Entrepreneur of the Year
Award (ETEYA) awards at World Tourism Day on September 27th."

Fourthly, there is a need to ensure that everyone benefits from the growth
of tourism in our country.

Tourism and Black Empowerment Economic (BEE)

"We are working hard to convince the industry that it should see
transformation from the responsible tourism point of view. Internationally,
tourists are more inclined to choose a destination that encourages
participation by local people and that ensures that the benefits are shared
equitably. Transformation should not only be seen as a political imperative. It
should also be seen as a process aimed at providing tourists with an integrated
South African experience, which can only be attained if significant numbers of
black people participate meaningfully."

We are putting in place interventions that are aimed at ensuring industry
complies with the Tourism BEE Charter, thus enabling beneficiaries to benefit
from the enabling environment created by the Charter. The interventions are
also intended to assist the public sector and organs of state to use their
procurement and regulatory powers to influence change," the Minister said.

There has been progress with regard to BEE when it comes to large
enterprises, both listed and unlisted. According to the outcomes of the
baseline study undertaken by the Tourism BEE Charter Council in 2006, large
enterprises exceeded targets for 2006. However, there were huge challenges when
it came to small and medium sized enterprises, which make up more than 90% of
the sector. The small and medium sized enterprises have not done well in
implementing the seven elements of the Charter. I must mention that though
there was overall progress among larger players, there were some challenges
related to ownership and strategic management, mainly in the area of appointing
skilled black women to executive management positions.

We have also consulted extensively with the industry on how best we can
align the Tourism Charter to the Codes of Good Practice. One unique feature
that we are proposing in the sector codes is that it should be mandatory for
QSE (Qualifying Small Enterprises) to include at least one of the human
development element indicators to demonstrate their commitment to investing in
people and therefore service. Our competitiveness as a sector is defined by how
the service is delivered. If we encourage more players to invest in human
resources development, we can achieve excellence and we can also fast track
black participation and advancement in the sector.

The Tourism BEE Council is also urging industry to know their BEE status by
using the self-assessment tool, which is available for free. Beneficiaries are
encouraged to take advantage of programmes that are being put in place by the
Tourism BEE Charter Council such as the Black Talent Project, Matchmaking
Database, funding and advisory options, enterprise development case studies and
database of empowered businesses. Fifthly, addressing skills will be crucial to
meet our targets in terms of AsgiSA.

Tourism Skills Development

"The solution lies in acknowledging the problem, understanding where it
comes from and putting programmes in place to resolve it. The Deputy President
took the lead, at a national level, by setting up the Joint Initiative on
Priority Skills Acquisition (Jipsa), which features commitment and involvement
by private and public sector partners.

Similarly, we have adopted a partnership approach in the tourism sector. In
partnership with the Tourism, Hospitality and Sport Education and Training
Authority as well as the National Business Initiative, our department conducted
a skills audit from February to April this year.

Most respondents viewed the South African tourism industry as having made
major strides in the last ten years in terms of marketing and the development
of globally competitive tourism attractions, but the concomitant skills and
service ethic required to deliver on the marketing promise are seen as largely
absent. In particular, the poor quality of skills and training and as a result,
poor service in the South African tourism industry was articulated.

The limited availability of qualified and experienced black management (all
sub-sectors except gaming and lotteries) and to a lesser extent, the ability of
South Africans to deal with non-African language speaking tourists, were viewed
as important scarcities, " the Minister said.

Skills defined as critical across the board were largely in conflict
management, teamwork, Information Technology (IT) skills, the ability to
function fluently in English and overall, good communication and service
skills. The most important challenges faced by the sector in addressing scarce
and critical skills is that of improving collaboration between stakeholders in
order to meet the goals of growth, inclusivity and improved service delivery.
It is equally important that this be done quickly and in a very practical
way.

In this regard the national tourism skills conference of October 2006 which
resulted in the Mogale City declaration on tourism skills signed by government,
communities, organised labour and business laid a basis for improved
co-operation and co-ordination of efforts by various social partners. The
National Tourism Skills Development Forum a co-ordination mechanism to oversee
tourism skills development initiatives has been formed comprising all the
social partners.

Now that it is understood where the current challenges lie, a strategy for
dealing with these will need to be finalised. Moving from strategy to action
and from words to implementation will be the underlying principle of work to be
done in the forthcoming five years. Part of this effort will be to integrate
the findings of the tourism skills audit into the revised National Skills
Development Strategy (NSDS) and sector skills plan.

In moving from strategy to action, DEAT has placed seven unemployed tourism
graduates in India and four in the United Arab Emirates for experiential
learning. Thirteen Gauteng tour guides have been trained and are currently
placed in China for two months to undergo experiential learning. The Chinese
government has agreed to extend training to three other provinces. One hundred
and forty-two tour guides around the country are continuing with their second
level of training in the French language. A pilot group of 34 tour guides have
commenced training in Spanish. Negotiations are underway for more training in
foreign languages that will help us to serve key markets. These include German,
Italian, Japanese, Arabic, Russian and Portuguese.

Conclusion

The Minister concluded by saying that "South Africa is acknowledged as one
of the fastest growing destinations in the world. The growth rate of
international arrivals to South Africa far outstrips the rest of the world. In
fact, over the past few years, the African continent has been the fastest
growing region, achieving more than twice the average global growth rate for
international arrivals. Africa's arrivals growth rate was around 10%, while the
global average was around 4,5% in 2006.

Over and above the numbers, we are aware of our internal challenges and we
continue to work on them. I would like to encourage everyone that will be
participating in the 2007 Tourism Month celebrations to make the best of this
wonderful opportunity and to take our tourism industry to even greater heights.
If I weren't lucky enough to call this beautiful country home, I'd be sure to
visit here as a tourist."

Enquiries:
Mava Scott
Cell: 082 411 9821

Riaan Aucamp
Cell: 083 778 9923

Issued by: Department of Environmental Affairs and Tourism
21 August 2007