The Minister of Tourism, Marthinus van Schalkwyk, today said South Africa’s hosting of the 2010 FIFA World Cup was one of the most important keys in the short term to help the country ride out the recessionary storm.
The Minister today addressed tourism and business leaders at an event hosted by the Chairman of the Trustees of the British Museum, Mr Naillm Fitzgerald KB, and South African Tourism (SAT) at the Sainsbury African Galleries at the British Museum. He also yesterday participated in a Tourism Society Debate with the United Nations World Tourism Organisation (UNWTO) on Travel and Tourism: Stimulus for G20 Economies.
At the events, Minister van Schalkwyk said South Africa was extremely fortunate to be hosting the World Cup next year. “It will be the first ever African Soccer World Cup and the biggest sporting spectacular in the world. Our successful hosting of the FIFA Confederations Cup, the DLF Indian Premier League and the British Lions Tour in the last few weeks reconfirmed our readiness to host this world class event. The British Lions Tour attracted 40 000 international supporters, mainly from the United Kingdom, with an estimated revenue of over R1 billion to the fiscus.”
The Minister said it is estimated that the World Cup will contribute R50 billion to the economy from construction investment alone, with a further estimated R15.6 billion generated by tourism. During the 2010 FIFA World Cup, South Africa expects 3.5 million participants, of which 1.3 million are expected to be tourist participants. A third of the tourist participants (445 000) are expected to be foreign arrivals. “In South Africa, we have more than 100 000 rooms that are star graded in line with international grading standards and these will be far more than sufficient to meet the expected demand for graded rooms,” the Minister said.
“The World Cup affords us an once-in-a-lifetime chance to showcase the best we have as a tourism destination, namely our people, our natural heritage, our world class infrastructure and a sense of place that fills all of us with pride.”
The Minister said in this respect SAT had made significant investments in global media deals that include advertising, online marketing, editorial endorsement and targeted promotional campaigns. “Together with exposure to billions of television viewers, 2010 provides an unparalleled opportunity to enhance the brand awareness of South Africa as a premier tourist destination.”
He said that South Africa already has world class physical infrastructure and access, but this would be taken to new heights in the next eleven months. “We are witnessing not only huge public sector investment in stadium and precinct development, transport, telecommunications, safety and security and ports of entry infrastructure, but also massive new investment adding up to some R20 billion in hotel and resort developments by the tourism industry itself. These investments will also leave a lasting legacy beyond 2010. Likewise, 2010 brings a myriad of opportunities for small, medium and micro enterprises (SMMEs) and emerging tourism entrepreneurs.”
Minister van Schalkwyk noted that the effects of the global economic downturn were certainly being witnessed in the tourism industry. According to the International Monetary Fund (IMF), global gross domestic product (GDP) is forecast to shrink by 1,3% in 2009 – the most dramatic decline since the Second World War, he said. He pointed out that during the last six months of 2008, at a global level, international tourist arrivals decreased to 2007 levels and hotel occupancy rates declined by close to 10%. During the second half of 2008 global tourism declined by some 2%, following the outstanding growth of 6% during the first half of last year.
This negative growth trend seems to be worsening as we progress into 2009. Provisional figures from the UNWTO’s “World Tourism Barometer” indicate a decline of 8% in international arrivals for the first four months of 2009 at a global level, with international tourist arrivals down from 269 million to 247 million compared to the same four months in 2008. By year end the best case scenario would seem to be a decrease in international tourism of 4%, with more realistic forecasts predicting a decline of at least 6% in global tourism in 2009, Minister van Schalkwyk said.
“There is clearly no denying that the marketplace for tourism today looks dramatically different to a year ago. Although this sector is not as hard hit as, for example, the construction or car manufacturing sectors, demand is down and for many in the tourism industry the times are tough. We therefore need to ask ourselves some critical questions on the resilience of and new opportunities in this sector.
“In South Africa our tourism sector has proved to be more resilient than some other economic sectors, but we are surely not immune. Some of the impacts will only become more visible in the next few months as the full consequences of the global economic meltdown settles in. However, in 2008 we bucked the overall negative trend with 5.5% growth in foreign arrivals. In the rest of Africa the trend has followed a similar pattern with increases in arrivals of between 3% and 5%.
“Yet, even though we have thus far been spared the worst impacts and remained in positive territory at least during 2008, we are not complacent and cannot ignore the fact that our figures will likely echo the international trend during 2009 as many of our primary markets remain in recession. Early indications point to negative growth in foreign arrivals in the first quarter of this year and subdued occupancy rates.
“Fortunately, in the face of these challenges, we understand the importance of planning better and of getting the fundamentals right. Let me refer to three inter-related challenges that occupy our minds as we continue to confront the impacts of the economic downturn and seek new opportunities to unlock the benefits of our “new gold” to the benefit of all our people.
“The first challenge is to learn from the experience of the tourism sector following the financial meltdown as we strategise to build greater resilience against future external economic shocks. In South Africa we will build on the solid foundations of our strong domestic and African tourism market, our stringent quality control regime that ensures value for money and the unique selling points of our natural heritage.
“But we understand that we can do even more through improved market analysis, product diversification, skills development, maintaining and expanding affordable and more competitive air access and sound long term policy. From a risk management perspective we will continue to build, in a balanced way, our domestic, regional and long haul markets.
“The second challenge is to ensure that the tourism sector benefits from economic stimulus measures and large-scale infrastructure investment by government and the private sector. The 2010 FIFA World Cup has provided tourism in South Africa with a springboard to capitalise on new investment. Together with improved, more focused marketing and brand alignment – both globally and domestically, the opportunities created by 2010 will undoubtedly stimulate the more rapid recovery of foreign tourism demand in our region.
“The third challenge - and opportunity - is to promote tourism as part of the “green recovery”. In South Africa tourism is a sector fundamentally dependant on our natural resource-base. Besides the obvious benefits of conserving this base, I believe there are massive job creation and efficiency improvement co-benefits locked up in pro-actively positioning tourism to capitalise on the shift to a greener and cleaner economy,” Minister van Schalkwyk said.
Enquiries:
Ronel Bester
Cell: 083-242-7763
Tel: 021-465-7240
E-mail: rbester@deat.gov.za
Issued by: Ministry of Tourism
15 July 2009
