Research on the Performance of the Services Sector

The Policy and Strategy Framework for Developing Small and Medium Enterprises in the Tourism Sector

The following sections of the report provide an overview of the policies and legislations in place to assist with the development of small and medium businesses in the tourism industry. These sections discuss the national strategies such as the Marketing Tourism Growth Strategy 2011-2013, the Tourism Act, and the Accelerated and Shared Growth Initiative for South Africa. Furthermore the provincial frameworks, policies and strategies are also discussed for each province in South Africa. An overview of the various support and development programmes within the National government as well as in the provincial departments is also provided in these sections.

National Support Programmes, Policies and Strategies to support SMEs in the Tourism Sector

On a national level South African tourism is managed by The National Department of Tourism. The role of the national government is to agree on policy matters and the implementation of strategies including the monitoring and evaluation of programmes, and to invest in tourism marketing programs. In order to keep up with international tourism markets and the South African tourism market it is the government’s role to conduct necessary research to identify marketing and development opportunities as well as to identify new tourism products. The role of the government is to ensure the coordination of tourism organisations across international, national, provincial and local levels. The National Department of Tourism and the Department of Trade and Industry work in conjunction with funding programs and initiatives to provide funding and assistance towards rural development and investments in small and medium enterprises. There are a number of key policies and strategies that are in place aimed at supporting growth of the tourism sector and these include:

4.11.1. The Marketing Tourism Growth Strategy for South Africa 2011 – 2013

The focus of the Marketing Tourism Growth Strategy is to maximize and identify opportunities and overcome challenges in the tourism industry. This strategy aims to encourage stakeholders to engage in tourism based operations and guide investments behind the tourism brand and growing demand for South Africa. This Marketing and Growth Strategy has an integrated approach involving coordination of different departments to reach tourism goals.

This strategy outlines coordination of a number of players in the tourism industry namely The National Department of Tourism (NDT), South African Tourism (SAT), The Department of Trade and Industry (DTI), the Tourism, Hospitality and Sport Education and Training Authority (THETA). These organizations are involved in achieving the goals set out in the strategy and in accordance with the Tourism Act.

4.11.2. The Tourism Act

The Tourism Act’s mandate is to promote sustainable growth, sustainable job creation, and redistribution and transformation of the tourism industry. This can be achieved by increasing tourist volumes, increasing the amount of time tourists spend in the country which would in turn increase the amount of money they spend, and reducing seasonality.

4.11.3. Accelerated and Shared Growth Initiative for South Africa (AsgiSA)

The two major goals of the Accelerated and Shared Growth Initiative for South Africa (AsgiSA) are to halve unemployment and poverty by 2014. The achievement of these goals can only take place by increasing economic growth by 6% of GDP. ²⁰ This national initiative is supported by all spheres of government to achieve accelerated economic growth by; investing in infrastructure such as power distribution and rail transport, sector investment of which tourism has been identified, skills and educational initiatives, eliminating the second economy through initiatives to address inequalities and, overcoming macro-economic issues such as improving government budgeting. ²¹

In an effort to promote private sector investment, AsgiSA has developed sector strategies. AsgiSA identified tourism as a priority sector along with business process outsourcing (BPO). These sectors are crucial to economic growth as they can be seen as labour-intensive, increasing globally and they have opportunities for BBBEE and the development of small businesses. ²²

AsgiSA outlines the key focus issues in the tourism industry as:

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  Marketing
  
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  Air Access
  
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  Safety
  
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  Skills Development.
  

AsgiSA outlines that through the framework, the tourism sector has already grown to where it can contribute to 8-12% of GDP. AsgiSA states that furthermore the tourism industry is co-dependent i.e. the industry’s major partnerships are government and the private-sector. ²³The collaboration of the private and public-sector will address challenges faced in the industry and furthermore share the weight of overcoming challenges; this can be achieved by ensuring that there is adequate communication and networking between private and public-sector tourism organizations.

To achieve the objectives of AsgiSA, skills and educational initiatives are in place such as the Joint Initiative for Priority Skills Acquisition (JIPSA). This initiative is to identify urgent skills needs and effective solutions for attaining these skills which can be achieved through special training programmes, bringing back retirees, recruiting skills of expats or sourcing skills from abroad.²⁴

4.11.4. Industrial Policy Action Plan 2010/11-2012/13 (IPAP)

The Industrial Policy Action Plan aims to create 43 000 direct jobs and 86 000 indirect jobs in South Africa by 2013. The IPAP is a critical component to growth in South Africa, and deals particularly with value added activities in manufacturing and other high quality services in the country. IPAP has identified key action programmes, outcomes and key milestones for various industries and sectors in South Africa including tourism. The Key Action Plans (KAPs) for tourism are;

KAP1. Niche Tourism Development

This intervention involves the formulation of a Niche Tourism Development Framework. The intention of this framework is to guide niche tourism development in South Africa and identify the high growth and yield niche tourism services and products to be developed. Niche tourism provides the tourism sector with an opportunity to develop new markets and diversify the economy. Furthermore niche tourism has the potential to create skilled jobs as the products and services are more specialised than general tourism products. Generally niche tourism products are located outside of mainstream tourism areas and so the development of niche tourism products could encourage geographical distribution of tourism benefits.

The key outcomes of this KAP are:

The development of the niche tourism framework

Annual market research reports and analyses to identify supply gaps and development opportunities

Support for industry development through funding opportunities and organisations

KAP2. Tourism Export Development and Promotion

This intervention is the establishment of a private sector driven Tourism Export Council along with guidelines for tourism enterprises to access individual Exhibitor Assistance under the Sector Specific Assistance Scheme. The aim of this KAP is to increase market share and promote South African Tourism products and services globally.

The key outcomes of this KAP are:

The establishment of the Tourism Export Council

Participation guidelines for the Individual Exhibitor Assistance programme

Increased tourism arrivals and revenue into South Africa as well as increased market access

KAP3. Airline Pricing Structure Investigation

This intervention is to research and investigate the pricing of airlines and to develop a position paper and to draft regulations for the Consumer Protection Act. The objective is to create transparency for pricing of tickets for consumers and to promote competitiveness.

The key outcomes of this KAP are:

Effective regulations of the Consumer Protection Act to address unfair pricing structures

4.11.5. National tourism Department Medium Term Strategic Plan 2010/11-2014/15

The National Tourism department’s efforts will be geared towards creating a conducive environment for the tourism sector to increase its direct contribution to GDP from R52.38 billion in 2009 to R65.72 billion in 2015, and increase the number of jobs supported directly by the sector from 527 630 in 2005 (as per the 2008 Tourism Satellite Account) to 640 000 in 2015. These will be achieved by, amongst others, increasing the number of foreign arrivals from 9 591 828 in 2008 to 12 068 030 by 2015 and increasing the number of domestic tourists from 13 483 000 in 2008 to 16 000 000 by 2015. The international marketing efforts will concentrate on high yield markets. The GDP growth will further be assisted by increasing total tourism direct spend from R100billion in the 2008 calendar year to R169 billion in the 2015 calendar year.

The department has set out 11 strategic themes, together with the associated objectives, to meet these goals (Medium-Term Strategic Plan, 2010/2011-2014/2015):

People empowerment and job creation: target the unemployed, youth, women, the disabled and SMME’s to promote job creation in these under employed sectors. The Expanded Public Works workers employed by Social Responsibility projects are also economically empowered through projects aimed at improving their skills and capacity levels.

Tourism Sector Transformation: Ensuring that all demographics are represented fairly within the tourism sector.

Sustainable Tourism Growth and Development: Through addressing geographic and seasonal imbalances of tourism; involving rural communities in mainstream tourism; promoting travel amongst South Africans; ensuring that travel and tourism sectors contribute to economic growth; promoting work in the tourism sector; and targeting young people and promoting people development to ensure this sustainability

Responsible Tourism Promotion: Ensure responsible, best practices are upheld in Tourism

Tourism Service excellence: promoting the competitiveness and the good work of the Tourism sector.

Tourism Sector Knowledge and Policy Leadership: The following measures are taken to ensure the Tourism Sector is well managed: Tourism planning and decision making will be informed timeously with relevant tourism information; the tourism sector’s Monitoring and Evaluation system will be uniform and functional; promote policy and legislation enabling tourism growth and development; support growth and development of Local Government Tourism initiatives; manage and conduct tourism growth and development research.

Integrated Tourism Governance: The following measures are taken to ensure that Tourism Governance is effectively and positively promoting the tourism sector: Promote tourism priorities in Local and Provincial government plans; provide information which encourages domestic tourism; and facilitate contributions to the growth of tourism interdepartmentally.

Public Education, Awareness and outreach: promoting a positive image of the Department; encourage a culture of tourism in the country; empower South Africans through access to information about tourism; encourage stakeholders to participate in ownership of the sector; and be an accessible, caring department.

A better Africa and a better World: Encourage a global environment supporting the growth, development and sustainability of South African Tourism; contribute to Good Global Tourism Governance; strengthen Regional, South-South and South-North Integration and cooperation.

Human Capital Management: ensure skilled, capable and competitive human capital is available, while promoting representation of a diverse and happy workforce.

Good Governance: The department aims to efficiently maximise their use of allocated resources towards achieving government mandates, through reducing risk exposure, promoting transformation, ensuring cooperation with Public Entities and ensuring public transparency and accountability.