Research on the Performance of the Services Sector

Tourism Sector

Overview of the Tourism Sector

The South African tourism industry remains one of the fasted growing sectors of the economy. This sector has a great potential to significantly contribute to direct and indirect to employment in the country. It is ideally placed to create jobs and add value to the country’s rich natural and cultural resources. The tourism sector is characterised by low barriers to entry and include a range of enterprises that provide opportunities for economic linkages. Best practices indicate that the tourism sector is most successful when driven by the Private sector; however, the public sector also has a main role to play in terms of influencing investments to achieve certain policy objectives. Tourism continues to be an economic driver in many regions throughout the world.

Defining Tourism

Tourism is defined by SA Tourism as the activities of persons travelling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes not related to the exercise of an activity remunerated from within the place visited⁶. The tourism sector is a multifaceted industry and contributes to a number of economic sectors in South Africa. Tourism has been identified as an economic driver in South Africa as it is labour intensive and has the capacity to create job opportunities.

The UNWTO defines tourism as the activities of persons travelling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes. In essence, the definition of tourism encompasses the following aspects (Phillips & Govender, 2001):

• 
  The movement of people , other than moving from home to work, and what people do during this movement
  
• 
  It is the temporary movement of people
  
• 
  It is a voluntary activity
  
• 
  The purpose of the movement differ (e.g. leisure, business, etc.)
  

The tourism sector is very broad and comprises of various components which mainly encompass the following:

Hotel and accommodation

These incorporates lodges, resorts, tourist houses, eating establishments, boutique hotels, guesthouses, self-catering units, bed and breakfast units, back packer hostels etc.

Transportation Services

Includes air, water, road, rail and foot

Entertainment services

Consists of casinos, social halls or clubs, festivals, events, churches and mosques

Information services

Entails travel agencies, tour operators, field guides etc.

Attraction Services (Natural and built or Man Made)

Involves national parks and reserves (wildlife), waterfalls and lakes, dams and other water catchment areas, beaches, caves, rock formations, scenic, vistas and other areas of impressive beauty, heritage, sport, adventure, culture,

Government tourism agencies

These are the various agencies set by the government to promote tourism in the country so that it contributes to economic growth and job creation.

Education and Research

These are the various organizations and institutions which promote the development of tourism and hospitality education and research to support sustainable tourism

Stakeholders

Includes tourism shareholders, local community and the government

The following figure shows the cross-sectional nature of the tourism industry.

Figure : The Schematic Cross Sectional nature of Tourism

Source: WTO, 2009

NB:Tourism Industry: refers to all establishments whose principal productive activity is a tourism characteristic activity, i.e. the sum of all tourism characteristic activities, e.g. accommodation establishments, tour operators, travel agencies, etc., while the tourism Sector consists of a set of institutional units whose principal economic activity is a tourism characteristic activity e.g. transport, retail, laundry, security etc. Both the tourism sector and tourism industry constitutes the tourism economy

There are four different types of tourism outlined by the UN namely⁷:

Domestic Tourism: the tourism of resident visitors within the economic territory of the country of residence.

Inbound Tourism: A tourism of non – resident visitors within the economic territory of the country of reference

Internal Tourism: Tourism of a resident visitor who visits within the economic territory of the country of residence.

Outbound Tourism: The tourism of travel visitors outside the economic territory of the country of reference.

Tourism Trends

The following discussions provide a snapshot of the trends of the tourism sector both at international and national levels. It provides insights into present trends and future developments of the tourism sector. Existing empirical data on tourism sector trends and latest consumer trends are presented.

4.3. International Trends

The international tourism sector is extremely large and diverse and the current challenges in terms of determining the exact size of the industry. the number of people travelling across the world are not always documented and in many cases the number of people travelling domestically are not recorded regularly and the amount of money spent in the informal markets is not recorded, this makes it difficult to determine the size of the global tourism industry. During 2010, the number of international tourist arrivals worldwide amounted to 940 million. The number of international tourist arrivals grew by 6.6% from 2009⁸. International tourism receipts in 2010 were estimated to be US$ 919 billion. The table below indicates the expenditure of outbound tourists. This provides an overview of the amount of money being spent by tourists outside of their home countries. The table shows that the highest expenditure is from the US tourists while South African tourists spend very little in comparison. Although this table only provides a small indication of the tourists, it includes two source countries for tourists into South Africa as well, namely the US and UK.

Table 12: Outbound Tourism Expenditure

Country	Year 2008	Year 2009	Year 2010
	($)6, 905, 000, 000	($)6, 420, 000, 000	($)8, 139, 000, 000
United Kingdom	($)83, 584, 000, 000	($)61, 133, 000, 000	($)60, 469, 000, 000
USA	($)118, 643, 000, 000	($)106, 081, 000, 000	($)110, 134, 000,000
Thailand	($)6, 700, 000, 000	($)5, 659, 000, 000	($)6, 573, 000, 000
China	($)40,987, 000,000	($)47,108,000,000	($)59,840,000,000

Source: World Bank Indicators http://data.worldbank.org/indicator/ST.INT.RCPT.CD 2011.

During 2010 the number of international tourist arrivals reached 940 million⁹, the top three visited countries were, France, the United States and China. The countries that receive the most tourists are in Europe, followed by a growing number of Asian countries, however the United States received the second highest number of tourists.

Table 1: Top Ten Countries for International Arrivals in 2010

Rank	Country	International Tourist Arrivals (2010)	International Tourist Arrivals (2009)	% Change 2009 - 2010
1	France	76.8 million	76.8 million	0.0%
2	United States	59.7 million	55.0 million	+8.7%
3	China	55.7 million	50.9 million	+9.4%
4	Spain	52.7 million	52.2 million	+1.0%
5	Italy	43.6 million	43.2 million	+.9%
6	United Kingdom	28.1 million	28.2 million	-0.2%
7	Turkey	27.0 million	25.5 million	+5.9%
8	Germany	26.9 million	24.2 million	+10.9%
9	Malaysia	24.6 million	23.6 million	+3.9%
10	Mexico	22.4 million	21.5 million	+4.4%

Source: UNWTO World Tourism Barometer 2010

China experienced an increase of 9.4% in international arrivals from 2009, and replaced Spain as the third most visited country in 2010. The country in the top ten with the highest increase in international tourist arrivals from 2009 to 2010 was Germany with an increase of 10.9%. International tourism arrivals across the globe grew by 4.5%, the total number of arrivals reaching 671millionin the first eight months of 2011. Despite the economic volatility in Europe, the tourism industry is proving to be an essential economic driver by providing foreign exchange to the economies. Asia also experienced growth rates of 6% while the Americas reached 5%. In Africa arrivals were down by 4%¹⁰. Europe remains the largest source market for international travel and generates more than half of international arrivals worldwide; following this is Asia and the Pacific with 21% of international arrivals, the Americas with 16%, the Middle East with 4% and Africa with 3%¹¹.