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The Development and Promotion of Tourism in South Africa

Government of South Africa
Department of Environmental Affairs and Tourism

May 1996

Table of contents

Abbreviations

Definition of Terms

The Policy Formulation Process

PART I: THE ROLE OF TOURISM IN SOUTH AFRICA

1.1 South Africa's Tourism Potential

1.2 Role in the Economy

1.3 Recent Performance

PART II: THE PROBLEMATIQUE

2.1 A Missed Opportunity

2.2 Key Constraints

PART III: TOWARDS A NEW TOURISM

3.1 Tourism and the RDP

3.2 Why Tourism?

3.3 Any Kind of Tourism?

3.4 Responsible Tourism

3.5 Effects of Irresponsible Tourism

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PART IV VISION, OBJECTIVES AND PRINCIPLES

4.1 Vision

4.2 Guiding Principles

4.3 Critical Success Factors

4.4 Key Objectives

4.5 Specific Targets

PART V: IGNITING THE ENGINE OF TOURISM GROWTH

5.1 Safety and Security

5.2 Education and Training

5.3 Financing Tourism

5.4 Investment Incentives

5.5 Foreign Investment

5.6 Environmental Conservation

5.7 Cultural Resource Management

5.8 Product Development

5.9 Transportation

5.10 Infrastructure

5.11 Marketing and Promotion

5.12 Product Quality and Standards

5.13 Regional Cooperation

5.14 Youth Development

PART VI: ROLES OF THE KEY PLAYERS

6.1 Role of the National Government

6.2 Role of the Provincial Government

6.3 Role of Local Government

6.4 Role of the Private Sector

6.5 Role of Labour

6.6 Role of Communities

6.7 Role of Women

6.8 Role of NGOs

6.9 Role of the Media

6.10 Role of Conservation Agencies

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PART VII ORGANISATIONAL STRUCTURE

7.1 Ministry of Environmental Affairs and Tourism

7.1.1 Department of Environmental Affairs and Tourism

7.2 National Tourism Organisation

7.2.1 Responsibilities of National Tourism Organisation

7.2.2 Representation and Reporting Relationships

7.2.3 Committees of the Board

7.2.4 Establishment of the National Tourism Organisation

7.3 Provincial Tourism Organisations

7.4 The Way Forward

Abbreviations

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Definition of Terms

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The policy formulation process

In October 1994, the Minister of Environmental Affairs and Tourism appointed the Interim Tourism Task Team (ITTT) with the mandate of drafting a tourism discussion paper as a basis for a future national tourism policy. Representing the business sector, labour movement, provincial governments, community organisations and the national government, the ITTT produced a Tourism Green Paper in September 1995. The Tourism Green Paper was widely distributed for comment, whereafter the European Union was approached to provide technical assistance to the Government of South Africa in developing a Tourism White Paper. An international tourism specialists was appointed by the European Union for this purpose, in October 1995. It was recognised that the process of arriving at a White Paper for tourism is as important as the White Paper itself. As such, a great deal of emphasis was placed on developing the White Paper in such a way as to facilitate maximum participation by all. To this end, the process involved a number of research methods and strategies as follows:

1. A number of ITTT meetings were held to monitor progress and provide comments on the process followed and the content of the document.
2. Ten workshops were held country-wide to discuss the Green Paper and obtain inputs for the White Paper. More than 500 persons participated in these country-wide workshops.
3. Nearly 100 expert interviews and one-on-one consultations were carried out with key stakeholders in the industry.
4. More than 100 written submissions were received and reviewed.
5. A number of strategic meetings were attended, including meetings of MINMEC, IPTC, Hotel Industry Liaison Group, the Strategic Tourism Security Workshop, Museum Workshop and the national tourism workshop held on 4 March 1996.
6. Local consultants were appointed by the lead consultant to assist in carrying out secondary research and analysis of the tourism industry as well as the development of strategies and implementation programmes.
7. The consultants drew upon a number of reports by SATOUR and other organisations, White Papers of other government departments and other relevant documents.

The White Paper provides a policy framework and guidelines for tourism development in South Africa. It will be followed by an implementation strategy which will contain a number of key actions in order to effectively implement the guidelines contained in the White Paper

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PART I: ROLE OF TOURISM IN SOUTH AFRICA

1.1 Tourism potential

With a population of approximately 41 million and a land area of 1.27 million sq. km (nearly five times the size of the UK), South Africa's resource base for tourism is phenomenal. The country's tourism attractiveness lies in its diversity. Some of the features which make South Africa an incredibly attractive tourism proposition include: accessible wildlife, varied and impressive scenery, unspoiled wilderness areas, diverse cultures (in particular traditional and township African cultures), generally sunny and hot climate, no 'jet lag' from Europe, a well-developed infrastructure and virtually unlimited opportunities for special interest activities such as whale-watching, wild water rafting, hiking, bird-watching, bush survival, deep-sea fishing, hunting and diving. In addition, unique archaeological sites and battlefields, the availability of excellent conference and exhibition facilities, a wide range of sporting facilities, good communication and medical services, internationally known attractions (Table Mountain, Cape of Good Hope, Sun City, Kruger National Park, Garden Route, Maputaland) and unrivaled opportunities to visit other regional internationally known attractions (e.g. Victoria Falls and the Okavango Swamps) make South Africa an almost complete tourist destination.

Tourism has become a fiercely competitive business. For tourism destinations the world over, as indeed for South Africa, competitive advantage is no longer natural, but increasingly man-made - driven by science, technology, information and innovation. As such, it is not simply the stock of natural resources of South Africa that will determine her competitiveness in tourism, but rather, how these resources are managed and to what extent they are complemented with man-made innovations. In this regard, South Africa scores well on three important fronts. First, the already well-established network of national parks (covering some 6.3% of the surface area of the country) and private nature reserves are very much 'on trend' with the demands of the increasingly environmentally sensitive visitor. Second, some companies are already leaders in global 'best practice' in ecotourism, while others have created Disneyland-like attractions in South Africa, boosting the country's name internationally. Third, the recent successful political transformation in South Africa has virtually 'opened' the country's tourism potential to the rest of the world and indeed to the previously neglected groups in society. It is not surprising that the World Tourism Organisation in its 1995 review of African tourism considers South Africa to be "one of the most promising tourism destinations of the African continent". The Horwath 1995 Worldwide Hotel Industry Review concluded that South Africa's tourism potential "is outstanding, providing peace and harmony remain".

Notwithstanding all the abovementioned advantages, South Africa has not been able to realise its full potential in tourism. As such, the contribution of tourism to employment, small business development, income and foreign exchange earnings remains limited.

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1.2 Role in the economy

Tourism currently plays a relatively small role in the economy of South Africa. The Economist Intelligence Unit estimates the value added of tourism in South Africa to be no more than 2% of Gross Domestic Product (GDP) in 1994. Kessel Feinstein and SATOUR estimate that in 1995, tourism's contribution to GDP was in the vicinity of 4%, which is very low by any standard. The World Travel and Tourism Council estimated that in 1995, tourism contributed 10.9% to the GDP of the world economy; 10.5% to the US economy; 13.4% to the European economy; 12.3% to the British economy and 31.5% to the Caribbean economy. SATOUR estimates that 480,000 jobs are directly and indirectly created by tourism. Tourism is the fourth largest earner of foreign exchange in South Africa.

The potential for South Africa to grow its tourism industry, to triple its contribution to national income and to at least double its foreign exchange earnings by the year 2000, is very real. If contributed 10% to the GDP of South Africa, as it does in the US, the industry would generate some R40b annually and create 2 million jobs.

1.3 Recent performance

In 1995, South Africa received 4.48 million international visitors. Africa continues to generate the bulk of international arrivals to South Africa (73%) with Europe accounting for about 15%. North and South America, the Middle East, Australasia and the Indian Ocean Islands continue to be very marginal contributors, together accounting for not more than 12% of total international arrivals. In 1995, South Africa received just under 1,1 million overseas visitors (originating from outside Africa). In addition it is estimated that there are some 7.9 million domestic tourists who took a total of 17 million holidays in 1994. The potential for South Africa to increase both arrivals and expenditures from all three markets -overseas, regional and domestic - is substantial, considering that the majority of the previously neglected groups in society have not traveled and that the neighbouring African markets have good potential for further development.

Domestic tourism plays a specially important role in the South African tourism industry. This market will continue to grow as previously neglected people become tourists and travelers themselves. International tourism is also a vital element of the South African tourism industry - overseas and Africa air arrival visitors spend an average of R14,000 (including airfare). The Reserve Bank conservatively estimates that African land arrival visitors spend on average R600 when they visit South Africa. Within the international tourism market, the business travel market, the conference, incentive and leisure segments are of critical importance to the South African tourism industry. Following the democratic elections of April 1994, extremely positive growth in visitor arrivals from both the regional and overseas markets was recorded. Overseas visitors to South Africa are expected to double by the year 2000.

While there is no doubt that growth will continue under the pressure of regional and overseas demand, there is no guarantee that growth will be sustainable, or that the tourism industry will be fully able to act as an engine of growth for the economy, or achieve the socio-economic objectives set by the new Government. Key actions, policies and strategies are necessary to ensure that South Africa realises its tourism potential as well as avoid the mistakes that other destinations have made.

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PART 2: THE PROBLEMATIQUE

2.1 A missed opportunity

Tourism development in South Africa has largely been a missed opportunity. Had its history been different, South Africa would probably have been one of the most visited places in the world. The tourism industry in South Africa has been woefully protected - protected from foreign competition (limited international investment in tourism facilities), protected from demanding, long-stay tourists (limited flow of international visitors) and protected from itself (suppliers cater to a largely homogeneous and predictable clientele, i.e. the easily identifiable needs of the privileged class). As such, the potential of the tourism industry to spawn entrepreneurship, to create new services (e.g. local entertainment, handicrafts, etc.), to "drive" other sectors of the economy, to strengthen rural communities, to generate foreign exchange and to create employment, has not been realised.

Yet tourism, perhaps more than any other sector, has the potential to achieve the objectives of the Reconstruction and Development Programme (RDP) of the new government. Tourism creates opportunities for the small entrepreneur; promotes awareness and understanding among different cultures; breeds a unique informal sector; helps to save the environment; creates economic linkages with agriculture, light manufacturing and curios (art, craft, souvenirs); creates linkages with the services sector (health and beauty, entertainment, banking and insurance); and provides dignified employment opportunities. Tourism can also play a strategic role in dynamising other sectors of the economy - the agriculture sector that benefits from the tourism industry (increased demand for new agricultural products and services such as organic agriculture, farm tourism); the manufacturing sector (the supply of furniture and fittings, construction, linens, pots, pans, etc.) as well as crafts (wood-working, curios, fine art). Perhaps the weakest economic linkages with the tourism industry in South Africa exist in the services sector (entertainment, health and beauty services, banking, insurance).

Many international tourism destinations have successfully used the tourism industry to encourage other sectors of the economy and to generate new and innovative employment opportunities. In Jamaica, for example, Jamaicans teach tourists to speak Jamaican and dance reggae; in Barbados, one of the most profitable activities - hair-braiding - takes place in the informal sector; in a Budapest hotel a dental check-up is included in the price of the room; and local live entertainment is the norm at most hotels in the world - from Berlin and Boston to the Bahamas.

The tourism industry in South Africa has been, and continues to be, faced with a number of impediments to its further growth and development. Key constraints facing the industry as well as immediate problems are identified below.

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2.2 Key constraints

A number of factors limit the effectiveness of the tourism industry to play a more meaningful role in the national economy. Some of the key constraints are identified below:

• tourism has been inadequately resourced and funded
• myopic private sector
• limited integration of local communities and previously neglected groups into tourism
• inadequate tourism education, training and awareness
• inadequate protection of the environment
• poor service
• lack of infrastructure, particularly in rural areas
• a ground transportation sector not geared to service tourists
• lack of inclusive, effective national, provincial and local structures for the development, management and promotion of the tourism sector

In addition to these constraints, an immediate problem facing the industry is the growing levels of crime and violence on visitors

These are explained below:

1. Inadequately resourced and funded tourism industry

   One of the problems facing the tourism industry is that the Government has had a limited view of the potential of the industry and, as a result marginal resources have been devoted to developing and promoting the sector. Tourism is still narrowly viewed as tourists and hotels. In many quarters, the tourism industry is still seen as a thing of the past - a plaything for the previously privileged class. The true wealth-creating potential of the sector has not been fully grasped by policy-makers (refer to Section 3.3 - Why Tourism). Unless tourism is seen as strategically important to the economy of South Africa and the necessary plans, policies, actions and resources to support this initiative are put in place, tourism will continue to be a missed opportunity.

2. Myopic private sector

   Another major problem facing the South African tourism industry is a short sighted private sector. Hotels, and indeed many other tourism establishments, tend to have a rather limited view of the product they offer - only goods and services within their four walls. If a visitor is harassed on the road; over-charged by a taxi driver; the environment destroyed by insensitive development; or schools are dilapidated , it is not considered the hotel's concern. Experience indicate that hotels that have taken a much broader view of their product tended to be more successful:

   • Curtin Bluff Hotel in Antigua has virtually adopted its surrounding community. Locals from the village, for example, are provided with opportunities to become tennis pros and many are sent abroad for training.
   • Half Moon Hotel in Jamaica has adopted half a mile of highway surrounding its hotel and is committed to maintaining and beautifying it. The hotel is also in the forefront of environmental conservation.
   • Hotels in St. Lucia in the Caribbean have pioneered an 'adopt a farmer' programme. The advanced orders that hotels place provide farmers with the necessary collateral for them to obtain bank loans to invest in production.

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   In South Africa, signs of a more forward-looking private sector are emerging. Various ecotourism companies and conservation agencies are increasingly promoting meaningful community participation and shareholding in tourism ventures. These initiatives are, however, still the exception and hotels and other tourism establishments need to play a far more active role in influencing the quality of the total visitor experience. It is through taking a broader view of the product offered, and building partnerships with the government, local communities and other private sector interests, that the highest levels of customer satisfaction can be achieved.

3. Limited development scope due to past political policies

   The past apartheid policies have placed severe constraints on the development scope of the industry. While the attractiveness of South Africa as a tourism destination has always been acknowledged, this potential could not effectively be realised due to many tourists not wanting to travel to country in protest to such policies. The current growth of the industry could largely be ascribed to the political changes of the past few years and the resultant freedom of movement.

4. Limited involvement of local communities

   Another major problem facing the South African tourism industry is the poor involvement of local communities and previously neglected groups in the industry. While this has been largely due to the previous Government's policies, the need to reverse this situation is of urgent importance. The tourism industry, perhaps more than any sector, provides a number of unique opportunities for involving previously neglected groups, including:

   Operators of tourism infrastructure:

   • Small guest houses or bed and breakfast establishments
   • Taverns, shebeens, bars and restaurants
   • Transport - taxi services, tours, trips, airport and other transfers
   • Attractions - township experiences, apartheid and struggle history
   • Museums - traditional culture and history
   • Entertainment - music, dance, theatre, story-telling, etc.
   • Other - florists, art galleries, hair salons, beauty parlours, craft shops

   Services to the industry

   • Tour operator services
   • Travel agencies
   • Tour guides
   • Marketing services
   • Booking services
   • Training services

   Suppliers to the industry

   • Laundry services -ironing only, full laundry, sewing and repairs
   • Portering services
   • Production and selling of crafts
   • Interior decor - rugs, wall hangings, furniture, textiles, art
   • Construction - collection of materials, thatching, building trades
   • Maintenance services - vehicles, plant and equipment
   • Environmental services - gardening, bush clearing, composting
   • Specialty agriculture - herbs, organically grown produce
   • Specialty tourism products - traditional hunting, traditional medicines and herbs

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   Despite these obvious and available opportunities, however, many factors limit the meaningful involvement of local communities in the tourism industry. These include:

   1. lack of information and awareness;
   2. lack of know-how and training;
   3. lack of finance;
   4. lack of interest on the part of existing establishments to build partnerships with local communities and suppliers; and
   5. lack of incentives to reward private enterprise that build or develop local capacity and create job opportunities.

   The concerns and anxieties of the previously neglected groups need to be understood and adequately addressed in building a successful tourism industry in South Africa. Some of these concerns are:

   • "Tourism is a white man's thing and not for us" - tourism is perceived as catering to the predominantly white upper and middle classes. There is a belief that "tourism is what whites do when they go to Kruger Park or the beach in Durban", and certainly not within the reach of the previously neglected.
   • The majority of South Africans have never been meaningfully exposed to the tourism industry and have not benefited from the country's vast resources.
   • Suspicion and mistrust - most protected areas were proclaimed without consultation with, or the approval of, affected rural communities. Communities bore the cost of reduced access to natural and cultural resources but did not perceive, or receive any direct benefits.
   • Complete lack of knowledge and understanding of what tourism really is - there is a perception that tourism refers only to people traveling around and staying in hotels. The wider opportunities offered by tourism are not appreciated.
   • Lack of training opportunities for previously neglected groups in society effectively limits meaningful participation in the tourism industry.
   • Inability to access finance to take advantage of entrepreneurial opportunities provided by the tourism sector.
   • Lack of involvement - the majority of South Africans have not been involved in the planning, decision-making, investment, development or promotion of the tourism industry. Communities have not been involved or consulted in respect of major investment decisions or developments proposed for areas in which they live.
   • Inequalities - past inequalities and abuse of power have led to the exploitation of local cultures and community groups.
   • Language barriers - the English language seems to be the established language of tourism communication, effectively excluding a majority of the population of South Africa where 11 official languages are in vogue.
   • Negative attitudes - negative attitudes exist within the industry towards community tourism products which are sometimes viewed with skepticism and regarded as inferior. There is often a view that what is white and Western is best. The value of the previously neglected people, their culture and their products often tend to be depreciated.
   • Lack of market access - local communities lack access to the lucrative tourism markets as visitors are kept within the hotels and resorts and venture out only to 'sanitised' places of interest. For the local shebeens or the local craft vendor, a visitor sighting is a rare occasion.
   • Barriers to entry - these are caused by very large companies and corporate structures which control the market. Businesses in South Africa are either very large or very small - a middle segment is only slowly emerging. The cost of capital furthermore prevents many small operators from entering the market.

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   A great deal of work has to be done by both the government and tourism private sector to redress previous imbalances, to win back the support of the previously neglected groups and to demonstrate that tourism in the new South Africa can benefit all South Africans.

   To succeed, any tourism development policy of South Africa must, as a priority, seek the meaningful involvement of the previously neglected communities, not only in the supply of their labour services, but also in entrepreneurial activities. As will be demonstrated in Section 3, responsible tourism is not a luxury for South Africa, but an absolute necessity if the country has to build a successful and sustainable tourism industry.

5. Inadequate training, education and awareness

   Perhaps the greatest deficiency in the tourism industry in South Africa is the absence of adequate education, training and awareness opportunities. The previously neglected groups in society are highly disadvantaged and the job of leveling the playing field is a massive one. One of the key vehicles for doing so is education and training - a basic necessity that the majority of the population has not had access to.

   The tourism industry in South Africa directly and indirectly employs an estimated 480,000 persons, a figure which is expected to double by the year 2000. At the tertiary level, training in tourism and hospitality services is offered at a limited number of public and private institutions. Skills training at the lowest levels (e.g. barmen, cleaners, porters) is mainly done on an in-house basis.

   With a total training capacity of some 10,000 and an industry expected to require 100,000 additional persons per year in the next five years, training capacity falls far short of the needs. This is not to mention the general need for community-wide tourism awareness programmes as well as the urgent need for a wide range of basic skills among persons who are the first line of contact with the customer. The data suggest that South Africa is not capable with present output to satisfy more than 10% of its training needs.

   It is important to note also that training capacity, what little there is, is very unevenly spread among the provinces, with Gauteng, North-West and the Western Cape Province leading the field. Northern Cape in particular, and to a lesser degree the Northern Province, and Mpumalanga, have little to show in terms of facilities. The discrepancies become more marked as one moves to institutions of higher learning such as universities and technikons.

6. Inadequate environmental management

   Environmentally, South Africa is an incredibly unique and rich country. The World Wide Fund for Nature: South Africa estimates that South Africa is the third most biodiverse country in the world, has one third of the plant species in the world and 8% of the world's plants. The country has a well-maintained network of protected areas and is globally renowned for its conservation practices. However, despite this excellent record in conservation, South Africa is also one of the environmental "hot spots" in the world with 2,000 plant species on the endangered list.

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   Some of the main environmental problems and issues have been identified by Grossman and Associates in their 1996 report:

   • Unequal land distribution and landlessness - which has forced the majority of the population to live on 14 % of the land, has resulted in serious overcrowding and a resultant major effect on the quality of the natural resource base
   • Soil erosion - is causing lakes, dams, rivers and, most importantly, coastal estuaries to silt up, thereby depriving these natural resources of the leisure and aesthetic potential to attract tourism
   • Deforestation. In 1994, it was estimated that 24 million people live in non-electrified homes and use mainly coal or wood for cooking and heating. Some 17 million people rely exclusively on fuelwood for cooking and heating, contributing to severe deforestation, especially in former homeland areas.
   • Water shortages and pollution - South Africa is a water-scarce country and shortages and pollution of groundwater, rivers and estuaries pose one of the major threats to the country's environment.
   • Air pollution - concentrated in areas like the Gauteng region and Mpumalanga Highveld region, where acid rain is a factor.

   In addition, poor coastal zone management and, in certain instances, unplanned development, aggravate the environmental problems. South Africa also has no formal requirements for environmental and social impact assessments to be carried out. A major threat to the further development of the tourism industry and indeed the sustainability of the population of South Africa is the rapid degradation of the environment. Among the population at large, there is an alarming disregard for the environment; litter has become a national problem; there is little awareness of the benefits of conserving the environment among the majority of the population; and for many, environment conservation is rather a luxury - finding jobs and food to eat take priority. South Africa does not as yet have an integrated approach to environmental development and conservationists consider the country to have an extremely poor record in land-use planning. The poor protection of the environment in South Africa will continue to curtail the tourism sector's development.

7. Poor service

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   There is a general culture of poor service in the tourism industry and related sectors. There is little excitement in delivering service or to go the extra mile to satisfy the customer. The problem is that this seems to be an accepted norm by the bulk of domestic tourists. Even worse, because many establishments are performing well as a result of the unexpected new demand, many owners and managers believe that the product they offer is acceptable. According to the Kessel Feinstein State of the Industry Report, "The South African hotel industry has been characterised by a limited degree of competitiveness. The limited number of hotel groups and the majority of typically non-discerning South African customers have resulted in mediocre levels of service".

8. Lack of infrastructure, particularly in rural areas

   It is often said that South Africa has a First World infrastructure. However, there is a lack of infrastructure in the rural areas, which severely limits the participation of rural communities in the tourism industry. In addition, the absence of adequate transportation services effectively prevent rural communities from participating in the industry, both as potential suppliers of products and services, and as tourists themselves.

9. Lack of appropriate institutional structures

   The lack of commitment to the tourism industry in South Africa is partially evident from the institutional provisions made for the sector. At the national Government level, tourism shares the portfolio with Environment under a Ministry of Environmental Affairs and Tourism. While, at first sight, these two may seem to be ideal partners, in reality, environment and tourism exist under one roof, but do not work closely together. The environmental division of the Department over-powers the Tourism division - there are some 1,000 staff members in the environmental section while the tourism division, until July, 1995, has largely been a one-man show. Inadequately staffed and resourced, the tourism division has not been able to provide anything beyond skeletal liaison and administrative functions. As such, the South African Tourism Board (SATOUR) has attempted to fill the gaps, in many instances carrying out the functions of both national government and statutory body - grading and classification of hotels, licenses, research and development, training, marketing, promotion and product development.

   SATOUR is the statutory body mandated with the marketing and promotion of tourism in South Africa. SATOUR also has representative offices in the international marketplace. In the provinces, SATOUR offices have largely been disbanded and are being replaced by Provincial Tourism Organisations.

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   SATOUR performed the function of marketing of South Africa in a period where travel restrictions were in place and in an environment not wholly conducive to tourism development. SATOUR has come to be associated with the old South Africa and the old privileged tourism and is still undergoing restructuring to accommodate a new reality - greater representation of the previously neglected groups, greater authority and autonomy of the provinces and the general restructuring of the industry.

   At the provincial level, tourism organisations are still in disarray, with some provinces way ahead in terms of their tourism structures, marketing, promotion, etc. Provincial autonomy has unfortunately created a situation in which provinces are going abroad to market themselves individually. This situation is creating confused destination images, not to mention the inefficient use of resources and the missed opportunity to reinforce South Africa's name in the international marketplace. At the same time, the resources and opportunities to penetrate new and emerging markets and market niches are wasted or missed. Consumers, on the other hand, are bombarded with a number of new destinations with no clarity as to how they will satisfy their specific needs.

   At the private sector level, there are many bodies representing specific interests - from car rental and tour operators to guest houses and hotels. February 1, 1996 marked the formation of the Tourism Business Council of South Africa - a body which will hopefully become a truly representative private sector body in tourism, where the industry will be able to speak with one voice.

   It is critically important and necessary to develop inclusive, effective national, provincial and local structures for the development, management and promotion of the tourism sector in South Africa. The exact nature and organisation of these structures must be influenced by the new mandate, vision and objectives set for the sector.

10. Tourism security

    In addition to the above-mentioned problems, a rather more immediate problem needs to be addressed - that of tourism security.

    Kessel Feinstein estimates that "the major constraint to overseas tourism growth is the actual and perceived levels of ongoing violence and crime". Well-publicised incidents involving tourists as well as high levels of crime affecting the local population who invariably play host to significant numbers of foreign visitors, significantly constrain overseas tourism growth.

    To address this threat, a Strategic Tourism Security Workshop was convened by the Minister on November 6, 1995. The workshop produced a number of strategies and short-term projects. The long-term solutions - those of involving the local communities, creating employment, training and awareness programmes - represent a considerable challenge. Tourism can contribute significantly to the solution of these problems. However, a new tourism needs to be developed.

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PART III: TOWARDS A NEW TOURISM

3.1 Tourism and the RDP

The Reconstruction and Development Programme (RDP) is the strategy of the Government of South Africa for the fundamental transformation of the country. The RDP is based on the notion that reconstruction and development are parts of an integrated process. The RDP integrates growth, development, reconstruction, redistribution and reconciliation into a unified programme. It is a pragmatic and proactive programme that has already won the support of funding agencies worldwide. Six basic principles underpin the RDP:

Integration and sustainability - integrating all facets of the country: national, provincial and local, business and civic organisations in a coherent strategy, and developing economically and environmentally sustainable programmes

• People-driven - active involvement of all citizens irrespective of age, sex, financial status, urban or rural in the shaping of their own future
• Peace and security - a national drive for peace and the combat of various forms of violence, particularly violence on women
• Nation-building - on the basis of unity in diversity and consolidation of national sovereignty
• Meeting basic needs and building the infrastructure - meeting basic needs of the people of South Africa and opening up previously suppressed economic and human potential in urban and rural areas.
• Democratisation - participation by all in decision-making
• Assessment and accountability - creating standards of measurement accepted by society by which progress towards phased achievements can be judged.

The specific programmes of the RDP include:

• Meeting of basic needs - from job creation, land and agrarian reform to housing, water and sanitation, energy supplies, transport, nutrition, health care, the environment, social welfare and security.
• Developing human resources - integrating the energies of all education and training institutions, abolish discrimination and focus on life-long learning, arts and culture, sport, youth and particularly training of young women
• Building the economy - reversing distortions, removing barriers, securing worker rights, regional cooperation.
• Democratising state and society - building democratic institutions and practices

The RDP is a bold and innovative programme of the Government of South Africa. Although the delivery of some programmes was slower than the population would like, considerable progress is being made in meeting basic needs and the democratisation of state and society.

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The provision of basic needs is, by nature, consumptive - a user rather than a creator of national resources. There is an urgent need to create sustainability of the RDP programme, i.e. create legs for it to walk on. The population needs to be provided with meaningful employment and entrepreneurial opportunities so as to be able to afford housing, water and sanitation, electricity, transport and health care. The tourism industry, more than any other industry, can provide sturdy, effective and sustainable legs for the RDP to walk on.

3.2 Why tourism?

Tourism can be an engine of growth, capable of dynamising and rejuvenating other sectors of the economy. There are eighteen good reasons why. Consider that:

1. Tourism represents a significant opportunity for South Africa

   Employing 212 million people world-wide, generating $3.4 trillion in world gross output and contributing $655 billion of Government tax revenues, travel and tourism is the world's largest industry. In Britain, Germany, Japan, and the USA, more adults have traveled than visited a library, attended a sporting event or have gone to see a play or concert. The tourism industry is expected to grow by 50% by 2005 by which time the industry will be worth US$7 trillion to the world economy.

2. Tourism is the world's largest generator of jobs

   The World Travel and Tourism Council estimates that travel and tourism is now the world's largest generator of jobs. In 1995, the industry provided direct and indirect employment for 212 million people; accounted for 10.7% of the global work force and provided one in every nine jobs. Between 1995 and the year 2000 travel and tourism will add one new job every 2.5 seconds and create 125 million new direct and indirect jobs. Tourism already creates 480,000 jobs in South Africa. The potential for South Africa to create 2 million jobs by the year 2000 is very real.

3. Tourism can provide immediate employment

   Properly organised and focused, the tourism sector can create many jobs within a short period. If one quarter of the 8 500 tourist accommodation establishments (not to mention restaurants and fast food outlets) in South Africa began to offer live entertainment to guests, at an average of three entertainers per group, thousands of entertainers can be employed within days; and if large resorts opened their doors one day per week to encourage craft providers to market their products to the visitors (on condition that everything sold is actually made by the entrepreneur, with a working demonstration of the skills) many employment and business opportunities will be created for surrounding local communities. The provision of weekly market days at the resort (at no rental charges) is already done by the Sandals Resorts group in the Caribbean. Visitors view the market as a prime attraction that they look forward to.

4. Tourism is labour-intensive

   The tourism industry has the lowest ratio of investment to job creation. Thhs means that more jobs can be created per unit of capital invested and many tourism activities are within the reach of the small operator.

5. Tourism employs a multiplicity of skills

   From accountants and hairdressers to tour guides and trackers, the tourism industry draws upon a multiplicity of skills. Moreover, the potential for on-the-job training is enormous.

6. The tourism industry creates entrepreneurial opportunities

   The tourism industry accommodates a thriving and dynamic informal sector - from craft and fruit vendors to beach vendors, chair rentals, and others. Apart from the opportunities provided in the informal sector, there are many business opportunities to involve previously neglected groups in the tourism business: entertainment, laundry and transportation services, craft rental; arts, craft and curios sales; tour guides and walking tours of places of interest; teaching of African languages and customs to interested visitors; restaurants emphasising local cuisine; guest houses; beach manicures and pedicures; and much more.

7. Tourism brings development to rural areas

   Many of the prime tourism attractions are not located in the city centres but in the rural areas. Tourism allows rural peoples to share in the benefits of tourism development, promoting more balanced and sustainable forms of development. Tourism provides an alternative to urbanisation, permitting people to continue a rural family existence, enfranchising both women and the youth.

8. Well-managed tourism is kind to the environment

   Unlike the mining and other smoke stack industries, well-managed tourism can help to save the environment. Many forms of tourism development rely on maintaining and even repairing the landscape and its natural features (lakes, rivers, estuaries and wildlife areas). Wildlife tourism - especially in arid regions of the country - is dependent on the restoration of natural vegetation and soil cover. Many state and private sector projects have spent large amounts on rehabilitating land damaged by commercial farming and other forms of land-use. Tourism which is responsibly practiced furthermore allows for the protection of biodiversity on land used for its purpose.

9. Tourism builds cross-cultural relations and is a vital force for peace

   Through its inherent message of goodwill, hospitality, trust, service without servility, tolerance, interaction and communication, tourism is a most effective mechanism for fostering national and international cultural exchange and understanding among people. It is, therefore, an effective nation-builder and a strong incentive and reason for peace.

10. Tourism is a final good

    Tourism is not a primary export item (like coal, copper and iron ore) that adds little value. Tourism is a final good. This means that all the final touches (value) have to be added in South Africa - be it a taxi ride from the airport, a basket of fruit or flowers in the hotel room, wildlife viewing, binocular rental, helicopter tour, dive instruction or a meal in a restaurant. This means that the value added in final stages of production is created in South Africa.

11. Tourism is a foreign exchange generator par excellence

    International tourism is the only export item which is exported without leaving the country. This means that every taxi taken, every banana, lychee, mango, orange eaten, every chair sat on or bed slept in, brings in valuable foreign exchange. A recent OAS study estimated that the tourism industry accounted for over 45% of Jamaica's gross foreign exchange inflows for 1992.

12. Tourism brings a ready market

    South Africa welcomes every year well over 4 million regional and overseas visitors. These visitors bring a ready market right to the doorstep of the country.

13. Potential to influence visitor tastes and create export markets

    Through tourism, South Africa becomes the supermarket or boutique to which visitors are drawn. Apart from the normal consumption of sun, sand and sea, wildlife, wine and water sports, tourism allows its clients to inspect other goods and services for sale in South Africa. Tourists to South Africa have the opportunity to sample the local fare (e.g. wine, beer, food, craft, entertainment, etc.). Moreover, they have the leisure, time, usually the money as well as the convenience (plastic cards) to pay for local goods and services. The potential for South Africa to influence visitor tastes and create permanent export markets is very real.

14. Tourism demand is continuous

    The consumption of travel takes place over one's lifetime. A holiday taken today does not reduce the demand for the holiday next year, next month or next weekend. This means that the potential market for tourism will continue to grow.

15. Tourism has a multiplier effect

    The impact of tourism is greater than the initial expenditure by visitors. In the Caribbean, for example, it is estimated that the sum of direct and indirect local value added generated per dollar of tourist expenditure was around 1.6 times the value of the initial input of visitor spending.

16. Enormous potential for linkages

    The tourism industry provides enormous potential to create linkages and dynamise other sectors of the economy - agriculture, manufacturing and services. South Africa, more than any other country in the rest of Africa or in the developing world, has the potential to supply almost every need of the tourism industry - from meat and poultry, beverages and wines, to vehicles, machinery, furniture, cut flowers, jewelry, diamonds and more. Tourism will generate demand and production in other sectors of the South African economy.

17. South Africa is already a global leader in ecotourism
    

    Various South African companies and conservation agencies are already involved in ecotourism ventures, a factor which could act as a catalyst for further development in this field.

18. Limited exploitation of the tourism potential

    While the potential for the development of tourism in South Africa is great, the tourism industry represents a vastly under-utilised opportunity

Conclusion:

The tourism sector could provide the basis for and sustain the RDP programme of the South African government. To achieve this mandate, however, tourism must be developed as a strategic industry. A 'wait and see what happens' approach pervades the industry. However, unless tourism is viewed and developed as a strategically important industry - the greatest engine of growth for the South African economy - the true wealth-creating potential of the tourism sector will never be realised.

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3.3 Any kind of tourism?

To achieve the true potential of the tourism industry it must be clear that any old tourism will not work. A new tourism is required that would boost other sectors of the economy and create entrepreneurial opportunities for the previously neglected groups; that would be kind to the environment; that will bring peace, prosperity and enjoyment for all South Africans.

3.4 Responsible tourism

Based on an assessment of the problems, constraints and opportunities facing the South African tourism industry, the imperatives of global change as well as the ideas and concerns raised in the country-wide workshops in South Africa, the concept of "Responsible Tourism" emerged as the most appropriate concept for the development of tourism in South Africa.

This White Paper proposes Responsible Tourism as the key guiding principle for tourism development. Responsible tourism implies a proactive approach by tourism industry partners to develop, market and manage the tourism industry in a responsible manner, so as to create a competitive advantage. Responsible tourism implies tourism industry responsibility to the environment through the promotion of balanced and sustainable tourism and focus on the development of environmentally based tourism activities (e.g. game-viewing and diving). Responsible tourism means responsibility of government and business to involve the local communities that are in close proximity to the tourism plant and attractions through the development of meaningful economic linkages (e.g. the supply of agricultural produce to the lodges, out-sourcing of laundry, etc.). It implies the responsibility to respect, invest in and develop local cultures and protect them from over-commercialisation and over-exploitation. It also implies the responsibility of local communities to become actively involved in the tourism industry, to practice sustainable development and to ensure the safety and security of the visitors. Responsibility to visitors through ensuring their safety, security and health is another consequence of responsible tourism. Responsible tourism also implies the responsibility of both employers and employees in the tourism industry both to each other as well as to the customer. Responsible trade union practices and responsible employment practices will be the hallmarks of the new tourism in South Africa. Responsible tourism also implies responsible government as well as responsibility on the part of the tourists themselves to observe the norms and practices of South Africa, particularly with respect to the environment and culture of the country.

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Key elements of responsible tourism are:

• Avoid waste and over-consumption
• Use local resources sustainably
• Maintain and encourage natural, economic, social and cultural diversity
• Be sensitive to the host culture
• Involve the local community in planning and decision-making
• Assess environmental, social and economic impacts as a prerequisite to developing tourism
• Ensure communities are involved in and benefit from tourism
• Market tourism that is responsible, respecting local, natural and cultural environments
• Monitor impacts of tourism and ensure open disclosure of information

Responsible tourism has emerged as most appropriate because

1. it recognises the responsibility of the government and private sector to involve the previously neglected in the tourism industry
2. responsible tourism is 'on trend' with the demands of the international marketplace - today, enlightened travelers want to know that their activities do not destroy the environment, but rather, help to conserve the environment and sustain local communities
3. responsible tourism is a new concept - a fresh approach that South Africa can take to the marketplace
4. responsible tourism offers South Africa the opportunity to be a leader in the 'new tourism'; it has a chance to define global best practice in responsible tourism and set the standard for the rest of the world to follow, rather than follow the initiatives that others have developed
5. responsible tourism is all-embracing, involving proactive participation and involvement by all stakeholders - private sector, government, local communities, previously neglected, consumers, NGOs, the media, employees and others
6. responsible tourism is not a luxury for South Africa. It is an absolute necessity if South Africa has to emerge as a successful international competitor

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The key challenge is to develop the commitment to responsible tourism on the part of all stakeholders and most importantly, implement it. The government is committed to the principle of responsible tourism and will undertake the following actions to facilitate its implementation:

1. work closely with international funding agencies, the local and international private sectors, NGOs and other relevant partners to define responsible tourism and establish a standard for it
2. identify an agency, possibly an NGO, that will take on the responsibility of certifying responsible tourism providers and monitoring their performance
3. actively market and promote South Africa as the premier responsible tourism destination
4. provide incentives for responsible tourism providers, through government procurement policies (for example the Government should purchase services from responsible providers only), encourage international organisations and agencies to follow suit. The government should consider allowing preferential access to national marketing funds for responsible tourism providers.
5. encourage the development of partnerships between the tourism private sector and local communities
6. sensitise the tourism private sector to the importance of involving communities in the development of responsible tourism
7. use the local and international media to recognise and promote establishments that take actions to become socially and environmentally responsible
8. support the employment of a cadre of persons to act as 'doormen' between the private sector and local communities to create business opportunities for communities
9. work closely with to assist local communities to identify and develop their tourism potential
10. encourage successful responsible tourism suppliers to champion the cause of the communities and the spread of responsible tourism
11. encourage joint ventures in which communities have significant ownership of and a substantial role in the management of tourism plant. Land claims and communal ownership of land offer forms of equity in these kinds of schemes
12. encourage visitors to try out local bars and restaurants and participate in tours to local areas, bringing business to local communities
13. encourage the provision of opportunities at hotels and other establishments for advertising local attractions and other products and services offered by local communities
14. encourage tour operators to include shebeens, local museums, arts and craft shops in their tour itineraries
15. encourage tour guides and tour operators to be more innovative with respect to the itineraries offered

3.5 Effects of irresponsible tourism

If a responsible approach to tourism is not adopted and the industry is not adequately planned a number of negative impacts can occur. These include environmental degradation; skewing of job creation to prostitution and vice industries; seasonality and unemployment during the off-season; the use of seasonal and contract labour at the expense of permanent employment; leakage of foreign exchange earnings; increased urban/rural polarisation; concentration of wealth in the hands of owners of tourism plant at the expense of population as a whole; and exploitation of local cultures and community groups.

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PART IV: VISION, OBJECTIVES AND PRINCIPLES

4.1 Vision

Our vision is to develop the tourism sector as a national priority in a sustainable and acceptable manner, so that it will contribute significantly to the improvement of the quality of life of every South African. As a lead sector within the national economic strategy, a globally competitive tourism industry will be a major force in the reconstruction and development efforts of the government.

4.2 Guiding principles

The following principles will guide the development of responsible tourism in South Africa:

1. tourism will be private sector driven
2. government will provide the enabling framework for the industry to flourish
3. effective community involvement will form the basis of tourism growth
4. tourism development will be underpinned by sustainable environmental practices
5. tourism development is dependent on and the establishment of cooperation and close partnerships among key stakeholders
6. tourism will be used as a development tool for the empowerment of previously neglected communities and should particularly focus on the empowerment of women in such communities
7. tourism development will take place in the context of close cooperation with other states within Southern Africa
8. tourism development will support the economic, social and environmental goals and policies of the government

4.3 Critical success factors

For South Africa to achieve its vision for tourism, a number of key conditions must be met, as identified below:

1. sustainable environmental management practices
2. involvement of local communities and previously neglected groups
3. a safe and stable tourism environment
4. globally competitive practices, by offering quality services and value for money
5. innovative and responsive to customer needs
6. focus on product enhancement and emphasise diversity
7. effective tourism training, education and awareness
8. creative and aggressive marketing and promotion
9. strong economic linkages with other sectors of the economy
10. appropriate institutional structures
11. appropriate supportive infrastructure

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4.4 Key objectives

In accordance with the tourism vision, a united, sustainable and competitive tourism industry in South Africa will lead global 'best practice' in socially, environmentally and culturally responsible tourism. This vision is supported by the following objectives:

Economic objectives

1. To generate economic growth and foreign exchange, by aggressively developing and promoting tourism
2. To establish tourism as a national priority
3. To create sustainable employment opportunities and contribute to the well-being of all the people of South Africa
4. To optimise opportunities for SMME's, specifically emerging entrepreneurs
5. To use tourism to aid the development of rural communities
6. To promote domestic tourism amongst all South Africans
7. To encourage tourism growth and cooperation in Southern Africa
8. To facilitate balanced tourism development in South Africa
9. To create a conducive tourism investment climate
10. To encourage linkages between tourism and other industries in order to curb leakages and stimulate the multiplier effect
11. To lengthen the tourism season in order to minimise the negative effects of seasonality on the industry

Social objectives

12. To develop tourism with dignity - encouraging mutual respect for all cultures and eliminate all forms of discrimination on the basis of language, religion, culture, race, sex, age, wealth, ability, or other.
13. To provide appropriate tourism education, training, awareness and capacity building programmes, especially aimed at previously neglected groups
14. To encourage participation by all South Africans in tourism planning and policy formulation
15. To promote pride in the cultural resources of the country
16. To use tourism as a catalyst for human development, focusing on gender equality, career development and the implementation of national labour standards
17. To promote through tourism nation-building and peace amongst the people of South Africa as well as internationally, and promote greater respect for human life
18. To encourage the active participation of all South Africans in tourism development, particularly at local level
19. To empower community structures through, for example, involvement in the marketing of cultural experiences and practices to tourists
20. To ensure that all South Africans have equitable access to travel opportunities and tourism attractions
21. To encourage community participation in the planning, development, implementation, management and implementation of tourism projects
22. To monitor and minimise potential adverse social impacts of tourism

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Environmental objectives

23. To make the tourism industry in South Africa a leader in responsible environmental practices
24. To require integrated environmental management principles for all tourism projects and all major economic development projects
25. To encourage the conservation and sustainable usage of tourism resources
26. To contribute to the development of a coordinated country-wide environmental strategy

4.5 Specific targets

1. To increase the contribution of tourism to GDP to 8% by 2000 and 10 % by 2005
2. To sustain a 15% increase in visitor arrivals over the next ten years
3. To create 1 million additional jobs in tourism by 2005
4. To increase foreign exchange earnings of tourism, from approximately R10 billion in 1996 to R40 billion per annum in 2005
5. To welcome 2 million overseas visitors and 4 million visitors from the rest of Africa by 2000
6. To develop a tourism action plan to implement the strategies, objectives and targets of the tourism policy during 1996
7. To identify and execute at least 5 national priority tourism projects by 1998, endorsed by President Mandela.
8. To establish tourism as a subject in the school curriculum by 1998.

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PART V: IGNITING THE ENGINE OF TOURISM GROWTH

To ignite the tourism engine of growth in South Africa a number of key policies must be developed and actions taken in the following areas:

1. Safety and security
2. Education and training
3. Financing tourism and access to finance
4. Investment incentives
5. Foreign investment
6. Environmental management
7. Product development
8. Cultural resource management
9. Transportation - air and ground
10. Infrastructure
11. Marketing and promotion
12. Product quality and standards
13. Regional cooperation
14. Youth development

The guiding principles and policy guidelines for each of the above are identified below.

5.1 Safety and security

The government of South Africa is committed to ensuring the safety and security of all tourists. The following policy guidelines shall apply:

1. undertake both short and long term actions and strategies to reduce crime and violence on tourists in collaboration with relevant organisations such as the South African Police Service
2. provide adequate information to visitors that will help to improve their safety and security
3. ensure that adequate resources are devoted to providing for the safety of tourists
4. institute appropriate legal procedures that would facilitate speedy and effective prosecution for cases where tourists are involved
5. coordinate cooperation among appropriate stakeholders to work together to ensure the safety and security of all tourists
6. carry out appropriate research concerning tourism security trends and monitor the effectiveness of safety and security measures

5.2 Education and training

While the tourism industry has tremendous potential to create jobs, the Government recognises that appropriate skills and experience are necessary to facilitate employment growth as well as international competitiveness. With the projected staffing needs of the tourism industry and the current lack of physical and financial capacity to deliver education and training, the industry will increasingly be faced by a critical shortage of skills. Tourism education and training is one of the fundamental pillars of the development of a new responsible tourism in South Africa. The main principles governing the approach to education and training are as follows:

• promote the involvement of the private sector and private sector institutions in the provision of education and training
• encourage the tourism private sector to increase its commitment to training
• encourage capacity building among the previously neglected groups and address the specific needs of small, micro and medium-sized businesses (SMMEs) and emerging entrepreneurs
• make training more accessible to the previously neglected groups of society
• promote tourism awareness at all levels of society
• develop and invest in an education system that will lead to self-sufficiency and reduce reliance on imported skills
• encourage the local media and NGOs to become partners in the tourism education and awareness process in South Africa
• ensure that training is accessible to the previously neglected groups in society in terms of the appropriateness, affordability, location, duration, costs, packaging (not with unnecessary additions as to render them too costly) and language of instruction
• execute of training as a joint responsibility of the national and provincial governments.

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The government is committed to the promotion of human resource development through the following policy guidelines:

1. support the provision of introductory/bridging courses to facilitate entry into the industry by previously neglected groups and others
2. improve access to training opportunities through a system of scholarships, student revolving loans, incentive schemes (e.g. for training institutions to enrol the previously neglected)
3. support the improvement of design, marketing, production and packaging skills of craft producers
4. develop appropriate skills programmes at the introductory level as well as more specialist shorter courses for accreditation (e.g. tour guide training for a specific activity such as whale-watching or cultural area such as the Malay Quarter)
5. create a dedicated funding mechanism for training, taking into consideration the experience and practices of countries such as Australia and Kenya as well as the specific needs and requirements of the South African tourism industry
6. review and evaluate the existing tourism education and training system with a view to strengthening institutional capability and efficiency in delivering the quality and quantity of appropriate education and training required
7. ensure the establishment of a tourism education and training data base to facilitate planning, development and co-ordination of training activities as well as carry out needs assessment for the industry
8. assess the current training curricula to ensure that standards comply with industry requirements
9. establish an effective coordination forum for tourism training and education, where all institutions involved in the field are represented
10. effectively coordinate the efforts of government departments involved in tourism training and education, e.g. Departments of Labour, Education and Environmental Affairs and Tourism.
11. develop a series of linked and accredited courses in accordance with the National Qualifications Framework
12. support on-going efforts to ensure that school programmes and curricula are specifically targeted to include sections on tourism
13. improve skills training at all levels including communication skills and the range of languages for tour guides and information officers
14. institute a system of practical training through summer jobs, internships and practical attachments within the tourism industry. Develop placement schemes for trainees.
15. through consistent and continuous investments in tourism education and training, create a major new avenue of export earnings through the export of education and training services

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5.3 Financing tourism

1. Funding tourism development

   The availability of finance to develop and promote the tourism industry is critically important for the industry's further growth and development. A number of policy guidelines should guide the increased financial commitment to the development of tourism in South Africa. While the exact nature and extent of these should be properly assessed and evaluated, the following measures should be considered:

   1. conduct an urgent review of the government's financial contribution to tourism as well as the process of determining such contribution
   2. consider a large initial capital injection by the government to 'kick start' a major tourism development thrust over the next three years. Such contribution should be in accordance with the programmes and projects identified in the implementation strategy to follow the White Paper
   3. investigate the broadening the tourism funding base in a practical and uncomplicated fashion, by considering a single departure tax
   4. coordinate the collection of tourism levies nationally and revert a percentage back to the provinces
   5. promote partnerships for the provision of funding between and among government, local and international private sectors and donor agencies
   6. facilitating access to RDP and donor funds for the tourism industry - particularly for the purpose of pump-priming small business, community tourism projects as well as demonstration projects
   7. promote active forms of community partnership, especially via joint ventures in which communally owned land forms the basis of equity for community partnerships with the private sector and state conservation agencies
   8. review the current levy system with a view to de-linking the levy from the grading system.

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1. Access to finance

   A major problem limiting tourism development is the unavailability of finance on favourable terms over a long period of time to invest in tourism development. While the Industrial Development Corporation has been operating two tourism financing schemes since 1992, namely the Ecotourism Scheme (aimed at large game lodge developments) and the General Tourism Scheme (primarily aimed at the refurbishment and upgrading of accommodation facilities), the conditions have been largely market related, aimed at the larger operator and requiring substantial collateral before loans are approved. The lack of access to funding is even more acute for the previously neglected groups. Specific factors limiting their access to finance include: the requirement of substantial security and collateral; the lack of assets in the form of land or home ownership that would act as security for loans; administrative red tape; request for submissions such as business and marketing plans and little 'technical assistance' or guidance in the preparation of such; lack of localised institutions that provide funding. The government could consider the following policies and actions aimed at improving the access to finance by neglected groups as well as making investment funds more widely available to the tourism sector:

   1. establish a dedicated tourism development fund to provide funds for tourism enterprises and activities not catered for by existing state financing agencies. Such fund should be managed in a transparent fashion and should be subject to regular auditing and scrutiny
   2. ensure that state funding is accessible to the wider business community, emerging entrepreneurs, micro enterprises, sole traders and the informal sector
   3. consider creating a subsidised financing facility to accommodate the entry of the previously neglected into the tourism industry
   4. ensure that technical assistance is provided to potential entrepreneurs, utilising as far as possible existing institutions, such as the Ntsika Enterprise Promotion Agency (NEPA)
   5. encourage existing private enterprises to assist in guaranteeing loans of small entrepreneurs through, for example, the advance purchase of their services
   6. encourage the reform of land holding and property rights to allow previously neglected groups to obtain collateral to facilitate loan acquisition.

Institutionally, three options for increasing the access to finance could be considered:

Option 1

Disburse tourism funds through dedicated tourism windows at existing institutions that could champion lending as well as provide specific tourism technical support to potential entrepreneurs. Such existing institutions include: the Industrial Development Corporation, the Development Bank of Southern Africa, Khula, the Independent Development Trust, the Small Business Development Corporation, the Kagiso Trust, the provincial Development Corporations, commercial banks, community-based organisations and others.

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Option 2

Explore the feasibility of establishing a dedicated institution for financing tourism projects and facilitating the involvement of the previously neglected.

Option 3

A combination of 1 & 2

Advantages and disadvantages of the three options

The advantage of option 1 is that the institutions already exist, many of which already have distribution channels at the levels of the provinces and local communities. With this option, much more of the funding could be disbursed rather than diverted to the creation of another institution with accompanying high administrative costs. On the other hand, many of these institutions have had a very poor record in funding the tourism industry, particularly the entry of the previously neglected into the tourism industry. Other government departments consulted (Trade and Industry, Finance) have indicated a preference for this option.

The disadvantage of option 2 is that it involves the creation of a new institution which in itself could be costly and consume a lot of the funds that could be used as investment capital. On the other hand, there may be some advantages to the establishment of an institution with the specific responsibility of addressing the financial needs of those previously neglected groups wishing to become involved in the tourism industry. This option will be more costly and may need to be initially subsidised.

In the final analysis, a combination of both might be necessary. However, if a subsidy is involved, it may well be the case that an existing institution may want to consider the provision of this dedicated facility. If the creation of a new institution can be avoided, but the objectives of improving access to finance by the previously neglected can be achieved, this will be optimal. What may be needed is not a new institution, but a subsidised financial mechanism. The possibility of empowering the National Tourism Organisation and/or provincial tourism organisations to supply funds to deserving projects should be considered: provided that in exercising this function, the projects are not only screened on merit, but the entrepreneurs are subjected to specialised advice and training (if this is deemed necessary) to ensure a higher success rate of such new ventures.

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5.4 Investment incentives and casino licenses

The history and practice of hotel incentives for the tourism industry in South Africa has been a mixed one. The hotel sector has been the main target of incentives. Tax concessions were made available almost exclusively to five, four and three-star hotels which included the write-off of building costs over 9, 12 and 14 years respectively. In 1988, the accelerated tax write-offs were removed and replaced by a 20 year write-off of building costs, irrespective of star category. The 1993 budget provided for a five-year refurbishment allowance

The current levels of incentives for tourist accommodation development are "so little as to be meaningless in encouraging any development" (Kessel Feinstein ). Whether, and the extent to which, incentives are necessary for the hotel sector remains a hotly debated issue. Some of the major hotel groups oppose incentives; the World Bank came out against S.37E-type allowances (trading of tax losses for cash), government policy-makers believe that other cases are more deserving and past incentives have created an over-supply of five-star properties. It is therefore important that the need for and nature of incentives be thoroughly investigated before decisions in this regard are made. Proposed tourism incentive schemes should be in accordance with overall government policy in this regard. The current thinking encourages a movement away from tax related incentive schemes, towards "on budget" subsidies and grants. It is important that a broader view of the tourism should industry be taken. Incentives should not be limited to hotel and the tourist accommodation sector and should be particularly aimed at previously neglected entrepreneurs. As a basic principle, they should not be made available to projects that would happen anyway and their allocation should be directed by identified market failures in the tourism industry. While the exact nature and types of appropriate incentives for the tourism industry are still being considered, it is proposed that the following aspects should be investigated:

1. assistance in order to stimulate the provision of accommodation capacity during the next two to three years, should there exist a shortage of capacity due to the fact that a number of additional facilities are being developed, but will only become operational after this period. Such assistance could be specifically directed towards the refurbishment of and additions to existing facilities (guest houses, hotels, etc.), where the basic infrastructure and management capacity exists.
2. incentives be considered to assist new tourism ventures during the first five years of operation, while establishing themselves in the marketplace.
3. assistance be provided for the development of SMME's, particularly those which stimulate local community involvement and capitalise on the attractions and products which are indigenous to their areas.
4. assistance be provided to effectively organised communities towards the development of community based tourism projects.

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The following criteria could be used to evaluate the allocation of incentives to proposed ventures:

• the failure of the market mechanism to ensure the feasibility of ventures which are potentially viable, but of which the immediate feasibility is impeded by external environmental factors
• nature and extent of investment in rural areas
• nature and extent of investment in education and training
• application of appropriate environmental management procedures in order to become more green (environmentally friendly).
• nature and extent of investment in community projects and incurring related socially-responsible tourism expenses
• provision of facilities for the disabled

The allocation of casino licenses according to well considered, tourism orientated principles could be regarded as an indirect incentive for entrepreneurs to create new tourism infrastructure. If managed correctly, casinos can significantly contribute to meeting demands with regard to tourism capacity. Although gambling as such may not be of primary interest to tourists, the availability of casinos can in many ways facilitate the creation of other tourist related infrastructure. However, the potential of the gambling industry in relation to tourism will only be realised if it is introduced within a very specific framework of sound principles. Specific tourism related principles could include that:

1. the granting of casino licenses should be focused on what additional advantages relating to tourism infrastructure (hotel, conference facilities, sport and other recreation facilities) could be created through the proposed development
2. the focus should be on a credible, well run, professional industry and should thus call for effective steps against illegal gambling in any form
3. the emphasis should be on new developments and increasing tourism infrastructure. The issuing of licenses should thus not serve as a life boat for existing dilapidated and run-down facilities
4. casino licenses should be allocated on a properly planned, broad geographical basis and not be concentrated in only a specific area. This is in support of the draft legislation on gambling which proposes a provincial distribution
5. casinos should be placed in areas where the additional tourism infrastructure will compliment other potential tourism opportunities.

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5.5 Foreign investment

The government of South Africa recognises the importance of attracting foreign investment in order to achieve the growth and development objectives of the tourism sector. Foreign investment will increase competition and improve standards as well as create employment and facilitate economic growth. The government should establish a climate of political stability, economic growth and profitability, and provide transparent, stable and consistent policies to attract foreign investment. The government should encourage foreign investments that meet the following criteria:

1. investors and companies that will develop, promote and implement responsible tourism
2. investors that invest in rural communities and less developed geographic areas
3. investors that develop products that help to diversify the tourism product e.g. cruise tourism, ecotourism, heritage tourism, Afro-tourism, etc.
4. investments that will result in the transfer of skills and technology to locals
5. joint ventures with local partners and local communities
6. investors in tourism plant who have a proven track record in the industry
7. consider the creation of a 'one stop shop' for the processing of foreign investment

Foreign investment will not be encouraged in small, micro-enterprises or the ancillary services sector which are clearly within the reach of the local entrepreneurs and businesses. Concessions offered to investors, such as franchise arrangements, package tour arrangements and other forms of transfer provision should ensure that substantial leakages do not occur and acceptable social standards apply.

5.6 Environmental management

A well-managed tourism industry has the potential to ameliorate, rather than contribute to, South Africa's environmental problems. To achieve this, however, a number of actions are necessary. Specific principles and policy guidelines for environmental management as it relates to the tourism industry are as follows:

1. sustainable and responsible tourism development should be promoted and encouraged, inter alia by means of incentives to private enterprises and communities
2. make mandatory the conduct of Integrated Environmental Management procedures for all new tourism projects
3. encourage ongoing social and environmental audits of tourism projects conducted in an inexpensive, rapid and participatory way
4. encourage tourism development in areas where tourism offers a competitive form of land-use and ensure that tourism is integrated into land-use plans for such areas
5. explore creative means of ensuring that neighbouring communities participate in and benefit from economic activities generated in and around conservation areas
6. encourage the creation of successful pilot tourism programmes which demonstrate, in tangible ways, the benefits that ecologically sensitive tourism schemes can have over other, more damaging forms of land use
7. promote sustainable and responsible consumption of water and energy in tourism plants, using readily available technology and encouraging sustainable waste disposal, green packaging and recycling
8. support mandatory environmental management practices in ecologically sensitive areas such as the coastal zone, wetlands, etc.
9. ensure tourism plant does not deprive communities of access to coastal resources needed for their livelihoods

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5.7 Cultural resource management

Apart from its biodiversity South Africa also has a unique cultural diversity. There exists little knowledge about the cultural resources within the environment and consequently the unconscious destruction of these natural assets poses a major threat.

The cultural environment includes much more than museums and unique archaeological sites. It also includes mission settlements, sites of slave occupation, urban space used for ritual purposes, rock art sites, rock formations and natural landscapes which have national and international cultural significance. The Government is committed to effectively managing and conserving the cultural resources of South Africa. The following guidelines should apply:

1. ensure tourism takes note of cultural heritage resources within specific communities and environments.
2. cultural resources should be managed to the negotiated benefit of all interested parties within the communities.
3. access to management of cultural resources should be as broad as possible within specific communities and should promote co-operation between all affected parties.
4. landuse planning and development projects for tourism should include effective protection and sustainable utilisation of cultural resources.

5.8 Product development

There are 8 495 tourist accommodation establishments in South Africa with 166 165 rooms/units and 609 825 beds. Of these, camping and caravan sites are in the majority, accounting for 28% of the total, followed by hotels (25%) holiday flats (11%), resorts (11%), guest houses and farms (9%) and game lodges (6%). National and provincial parks account for a mere 2% of visitor accommodation (4% including camping sites). Bed and breakfast establishments, hunting lodges, serviced executive apartments and youth hostels also constitute South Africa's tourism accommodation mix. While these figures seem impressive, it must be cautioned that they are less indicative of the quality and international marketability of establishments available. In further developing the tourism product of South Africa, the following guidelines should apply:

1. emphasise the diversity of the product of South Africa and not over-market and over-develop the known attractions
2. where appropriate, deregulate the industry to encourage wider access by the previously neglected groups
3. emphasise the development of products that offer good potential for development, for example cruise tourism, Afro-tourism, sports tourism, cultural forms of tourism, ecotourism, conference and incentive travel, wildlife safaris, hunting and others
4. foster the development of community-based tourism products
5. foster innovation and creativity in the products being developed
6. developments should be promoted that are appropriate to the structures and strategies of provincial governments and local communities. Every attempt should be made to ensure that local peoples and cultures are not over-commercialised or over-exploited.
7. encourage the sensitive and sustainable development of underdeveloped, environmentally sensitive areas
8. highlight previously neglected areas of tourism development as a result of political influences, for example, struggle-related monuments and attractions
9. encourage both new and existing suppliers of tourism products to provide facilities (accommodation, attractions and other services) for the disabled
10. encourage the granting of casino licenses to responsible tourism developments that offer excellent potential for development and job creation. Negative social and cultural impacts should be considered as well as the overall image and positioning of the destination
11. encourage the development of sports tourism and encourage the provision of facilities, training, marketing and promotion to give emphasis to the development of this segment of the industry
12. pay specific attention to the emerging domestic tourism market and facilitate the provision of appropriate recreation centres and facilities to cater to this market
13. consider the role of the private sector in the provision of tourism facilities and services at national parks and protected areas

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5.9 Transportation

1. Air transportation

   The successful development of any tourism destination is dependent on reliable and, in many cases, affordable air transportation. South Africa is fortunate to have its own national carrier - South Africa Airways (SAA). SAA is the giant among African airlines and the only airline in Africa to be among the world's top 50 airlines in terms of annual revenues. In the financial year ending March 31, 1995, SAA carried 4.48 million passengers, produced 11.1 million revenue passenger kilometres and R220 million operating profit. More than 50 international airlines serve South Africa. The domestic air transportation environment in South Africa is fully de-regulated.

   The objective of the tourism sector - to bring as many tourists as possible - is at times not consistent with those of the airlines whose objectives are to maximise profit and manage yield. In the interest of the further growth and development of the tourism industry, the following policy measures are proposed:

   1. to progressively liberalise the airline industry in South Africa and aim for complete liberalisation by 2000
   2. to continue to build strategic alliances with other global players (SAA has already formed a strategic alliance with Lufthansa)
   3. to encourage more open competition
   4. to use the presence of a strong national carrier to promote the growth and development of the South African tourism industry
   5. to supply air transportation in accordance with tourist demand and to provide services that are competitive and tailor made to the needs of clients
2. Ground transportation

   There are 33 car hire companies with a total fleet of some 25,000 vehicles; there are 15 major coach charter firms and about ten smaller ones with a fleet size of about 500; there are 135 inbound tour operators and group handlers who service about 222,000 visitors per year. In further developing the ground transportation sector in South Africa, the following guidelines should apply:

   1. consider training taxis and other disadvantaged transport operators in order to enhance their services and allow them to play an important role in the tourism industry
   2. encourage entrepreneurship in the provision of transportation services
   3. improve standards and quality control among all forms of transportation
   4. improve the linkages and coordination among different forms of transportation
   5. encourage more open competition
   6. encourage strategic alliances with other stakeholders in the industry
   7. expand the range and accessibility of different transportation options to visitors
   8. consider the safety and standards of ground transportation services to satisfy the needs of tourists (domestic and international)
   9. work closely with the Ministry of Trade and Industry to review the current import restrictions applicable to the coach industry and other types of vehicles
   10. work closely with the Department of Transport to improve ground transportation services for both the domestic and international tourism industry and eliminate bottlenecks that may arise
   11. consider the formation of a Tourism Transportation working group to address and coordinate all issues of mutual interest (applicable both to air and ground transportation)

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5.10 Infrastructure

The infrastructure for tourism is critically important and wide-ranging. It includes telecommunications, rail and road networks, signage, information centres, convention and conference facilities, etc. The following policy guidelines apply to the provision of infrastructure:

1. continuously maintain and upgrade existing infrastructure in order to improve accessibility and mobility
2. consider improving the accessibility and infrastructure of rural areas to allow these areas to unleash their tourism potential
3. creatively and aggressively utilise modern computer and communications technologies to effectively market, promote and distribute travel and tourism products, services and information domestically and internationally
4. facilitate the funding of major tourism infrastructure projects that would have considerable impacts on the development of the South African tourism industry
5. consider the regional Southern African tourism potential in the development of major tourism-related infrastructure projects
6. work closely with the Department of Transport in improving transportation services for both the domestic and international tourism industry and eliminating bottlenecks that may arise
7. consider the review of current road signage policy to ensure maximum customer satisfaction
8. consider the expansion of tourism infrastructure as part of a long-term strategy rather than on an ad hoc basis
9. work closely with the Departments of Transport, Public Works and Land Affairs in coordinating the provision of tourism infrastructure.
10. give attention to negative environmental impacts which are associated with the provision of bulk infrastructure for tourism (especially in remote and ecologically sensitive areas)

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5.11 Marketing and promotion

An important success factor in the development of the new tourism in South Africa is effective and creative marketing and promotion of the country. At present, with tourism being a provincial responsibility, there is a grave danger of diluting the marketing and promotional efforts at the international level with the consequent wastage of valuable resources. To be performed effectively, the marketing and promotion of South Africa as an international destination requires a coordinated and structured approach that applies across the nine provinces.

International marketing should mainly be the responsibility of the national tourism organisation. However, marketing and promotion plans for South Africa as a whole should be developed jointly with the provinces and the private sector. Domestic marketing should be a provincial responsibility. The following policies and initiatives should apply:

1. aggressively market and promote tourism to all South Africans, encouraging citizens to take holidays in their own country
2. market and promote attractions and experiences to visitors who are already in South Africa and encourage visitors to increase their expenditure locally
3. adopt a consumer sensitive pricing strategy, thereby ensuring that value for money becomes a major drawcard and that favourable exchange rates are applied to the advantage of the overseas consumer
4. in addition to focusing on the domestic market, continued emphasis should be placed on other key generating markets such as international business travelers, the conference and incentive travel market
5. public relations efforts should be targeted at the domestic market, promoting travel opportunities. A national domestic public relations programme should be considered by the provinces with appropriate participation at the national level
6. marketing and promotion should focus not only on the well-established sites, but should also emphasise new and emerging products and attractions
7. cooperative advertising and promotion opportunities should be pursued
8. more resources should be devoted to the marketing and promotion of tourism, particularly overseas tourism where per capita expenditure is greatest
9. relentlessly develop new markets and exploit new market niches (honeymoon, hiking, mountain-biking, back packers, and others).
10. establish mechanisms to monitor the effectiveness of promotion expenditures
11. consider changing the visual way in which South Africa is being projected, marketed and promoted
12. ensure the coordination of tourist information provision among provinces. National information should be provided at the provincial level
13. encourage initiatives by provincial tourism organisations to make national information more widely available through the development of a generic brochure, familiarisation trips among provinces as well as reservation capabilities
14. facilitate the provision of facilities (including transportation) that would encourage domestic travel by the previously neglected
15. encourage travel by school children
16. As part of the marketing and promotion efforts, emphasis should be placed on developing and improving the product on a national level. It is suggested that a percentage of the annual marketing budget be spent on a major project/projects that will have a significant impact on the quality of the visitor experience. Such could include programmes aimed at reducing crime and violence, improving attitudes to visitors, nation-wide programmes to encourage tourism industry employees or school children to be a tourist in their own country, and others.

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5.12 Product quality and standards

The government is committed to ensuring and maintaining high standards of service and facilities. The following policy guidelines should apply:

1. promote the development and promotion of quality tourism standards in a consultative manner
2. apply standards to all tourism activities and do not limit it to the accommodation sector
3. review and reform the existing structure and system of standards and grading to make it more effective and equitable in application
4. introduce flexibility, consumer relevance and the interests of labour to grading and standards procedures
5. ensure that standards and their related costs do not act as barriers to entry of the previously neglected
6. encourage all establishments, particularly smaller establishments and previously neglected entrepreneurs, to upgrade their standards of service

5.13 Regional cooperation

South Africa is committed to working with other countries in Southern Africa in developing its tourism industry. South Africa will collaborate with regional tourism organisations such as SADC and RETOSA in the development of tourism in Southern Africa. Appropriate bi-lateral relations will also be established with neighbour countries. A number of areas of cooperation should be actively encouraged:

1. environmental conservation and the development of related products such as trans-border protected areas
2. international marketing, e.g. joint international marketing campaigns with SADC countries
3. education and training
4. cruise tourism
5. handicraft and curios production
6. the easing of visa and travel restrictions for bona fide visitors
7. cooperation with other countries in Africa (outside of Southern Africa) shall be encouraged.
8. regional tourism health information and disease control progra