Tourism a growth catalyst, says tourism minister
Tourism Minister Derek Hanekom says Cabinet agrees that South African tourism’s consistent growth is ‘low hanging fruit’ for investment
Cabinet agrees South African tourism’s consistent growth is "low hanging fruit" for investment, approving funds intended to be used to "bid aggressively" for business tourism such as international association conferences and for the improvement of local destinations, Tourism Minister Derek Hanekom said on Tuesday
Speaking to Business Day on the sidelines of Meetings Africa conference in Sandton, Hanekom said a R494m allocation from the Treasury in February — on top of a R2bn annual budget — was part of broader fiscal stance on economic growth, while preserving the social network.
While tourist numbers in 2016 had been boosted in part by the weak rand, further growth was expected due to ongoing global and regional trends and South Africa was expecting to capitalise on this, Hanekom said.
The Treasury has allocated R110m for a new bidding fund to enable the department to attract business events to the country over the next three years. The Treasury has also given the department R494m for the next three years, which would be split between marketing South Africa and improvement of tourist destinations.
Hanekom said in an earlier speech to the conference the bidding would: "enable our National Convention Bureau, and our provincial and city convention bureaus, to support bidding processes and will greatly enhance our chances of winning the rights to host business events. Tourism is probably one of the catalysts, if not the fastest, for growth. The response from tourism is to intensify your marketing, it doesn’t yield dividends years down the line, it yields dividends immediately. So it is seen as somewhat of a low hanging fruit," he said.
The National Convention Bureau has estimated in a three year study business tourism spent R42.4bn in 2015, with the sector supporting 280,000 jobs.
International tourist arrivals in 2016 grew 13% year on year, with more than 2.5-million overseas tourists and 7.5-million tourists from Africa. This took place alongside a 3.9% growth in international tourists globally and 8% in Africa.
The Tourism Business Council of South Africa (TBCSA) had said in response to the budget speech in February the sector was likely to remain under pressure, due to general economic conditions and tax increases in some parts.
Excise duties for alcohol and tobacco would put pressure in the hospitality sector, the tourism transport sector would be under pressure due to increases in the fuel levy and the new income tax – of 45% for high earners – would likely hit those most amenable to international travel, the TBCSA said.
However, Hanekom said the department was also focusing on tourism within low income and middle income segments, which would include marketing and attempts to make travel more affordable.
Unathi Henama, tourism lecturer at the Tshwane University of Technology, said the business tourism market was less price sensitive, with business tourists often accompanied by partners due to defrayed costs.
South Africa, however, still faced issues of air access and in terms of the visa regime was not particularly amenable to business tourists from the continent.
"What is of concern is that for Africans its almost impossible to get visas for South Africa, which means that proposed meetings to be held in Africa would be directed to other countries because South Africa does not have a friendly visa system for Africans," he said