Making tourism thrivable through strategies that drives demand and makes business sense

Opinion Piece by James Vos MP , Shadow Minister of Tourism 

Never has the opportunity to travel been opened up to so many people, so quickly. And as a major tourism destination, we need to continue to adjust and ensure that we offer attractive and exciting opportunities, whether that’s for travellers or investors. 

To achieve growth in this sector that translates into jobs and economic opportunities, the solution lies in the following:   

Revive stagnant tourism products. Establish effective Destination Marketing strategies. Implement Product Development programs.

Following the budget announcement last week of the additional funding for tourism, I submit that this allocation should be utilized for the establishment of tourism infrastructure and the development of products that drives demand and makes business sense. 

The lesson for government and the Department of Tourism is to make sure that our tourism landscape comprises of products and services that is market ready before spending millions of Rands on marketing. 

This will also contribute immensely to the advancement of entrepreneurs and small business opportunities. The barriers of entry into the tourism sector is very low and therefore programs aimed at bringing more people into this space will create economic opportunities for all communities. 

Having said this, I truly believe that every town and community throughout the country has tourism potential. Therefore this additional funding must be allocated towards programs that develop skills, knowledge, and business opportunities while developing tourism products and infrastructure that drives demand and makes business sense. 

SHOCKING statistics released by StatsSA revealed that unemployment in South Africa has risen to 36%.

While some other industries are shedding jobs, tourism is steadily gaining them. But the reality is that tourism could contribute so much more to the economy.

Part of the problem is that tourism is being allowed to rest on its laurels. Since tourism is doing well, largely thanks to private
enterprise and the business sector – the government thinks that is enough. But this is a mistake.

I have seen and experienced how the lack of government support for regional tourism, which typically supports small town economies around the country, impacts on the ability of such places to generate much needed revenue and economic opportunities.

Our tourism industry helps us sell South Africa, helps contribute to economic growth and helps drive investment.

The figures speak for it.

The value of tourism and how this could benefit our country is clear in the following numbers: this tourism industry created 32 186 new jobs in 2015, raising the tourism workforce from 679 560 individuals in 2014 to a total of 711 746 individuals.

Currently, one in 22 employed people in South Africa work in the tourism industry, representing 4,5% of the total workforce.

Domestic tourism is the main contributor to total tourism spending, with local travellers having contributed R140,9 billion to the economy in 2015.

Here in the Western Cape we are working with industry to ensure that our province remains a destination of choice for travel and trade.  

In the past few years we have made great strides in getting our economy to work for the people of the Western Cape. Our key focus in the coming year will be promotion. We need to export our goods to world markets and to draw even more investment and visitors to our region.

Our produce and our tourism industry are achieving international acclaim. Last year, the Groot Constantia wine farm produced a Chardonnay, which was named the best in the world. A few months ago voters on Tripadvisor again ranked Cape Town amongst the top ten visitor destinations. This shows that we are already doing a great job marketing our province. And last year the Cape Town International Airport welcomed a total of 10 million passengers. I am sure that you will agree with me that these successes should not be limited to one province and therefore I’m putting forward proposals to expand on these milestones the other parts of our country. 

We know that tourism is our fastest-growing sector, employing over 200 000 people and generating R17bn for our province’s economy each year.

Through a dedicated Air Access strategy, the province is targeting the development and initiation of new direct routes from key strategic markets. Cape Town Air Access is a partnership between the Western Cape Government, the City of Cape Town, Wesgro, Airports Company of South Africa and Cape Town Tourism. To date, the team has secured six new routes and eight route expansions, resulting in over half a million more two-way direct seats coming into Cape Town. Since July last year, this additional capacity has generated roughly R3bn in additional tourism spend for the Western Cape.

Tourism is one of the best-performing sectors in our country’s economy. We have a strong competitive advantage in tourism; the exchange rate is in our favour and the global growth in outbound tourism presents us with a magnificent window of opportunity.

Globally tourism is one of the fastest growing industries as well as the major source of foreign exchange earnings and employment for many developing countries, and South Africa is well placed to exploit this opportunity. 

The continued growth, albeit moderate over recent years as a result of the visa and birth certificate debacle has survived the current economic climate.

To make the mistake of only focusing on the international market would be severe.

The exchange rate — favourable to international visitors — is not an extended opportunity. Exchange rates fluctuate and pricing will be adjusted to address international supply costs. 

This, in itself, presents a challenge — local tourism businesses, such as attractions and accommodation venues, risk pricing themselves out of the domestic market if they market themselves to the international exchange rate.

Sustainability within the tourism sector is central to growth: while temporary employment is more favourable, year-round, full-time employment is far more attractive.

There bottom line is know how much tourism brings to your location in the form of goods and services, employment opportunities and adds to the local accommodation, restaurant and entertainment industries.

We fully understand that tourism is a creative industry that should not be suffocated by excessive government regulation. Government should play a largely facilitative role and create a framework and the conditions to build our destination’s competitiveness.  

Tourism should not only generate employment during peak holiday periods, but those working in the industry must drive year-round initiatives that provide job stability.

Skills and talent retention are the results of this, but the secondary goal of transformation is also extremely valuable: providing opportunities and support to historically disadvantaged individuals creates a wider growth opportunity than limiting the growth to formally trained professionals.

It’s not true that tourism is seen as one big happy family; the sector is made up of hardworking business people taking risks, supporting families and focusing on ways in which their business benefit visitors, but, I believe, more should be done in this space to make this industry more inclusive.

The ripple effect that SMEs produces extends to businesses outside of tourism; the more tourism grows as a sector, the bigger the demand for local suppliers and manufacturers.

Additionally, it will encourage spending on goods and services in the surrounding communities, stimulating job creation and small business development.

Given the job losses in the mining and manufacturing sectors, we need the tourism industry to keep South Africans working.

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JAMES VOS, MP