Thursday, 2 November 2017

Wanted: Radical economic transformation in tourism, government has R10bn to spend

This is the year of sustainable Tourism for Development, which is an initiative to mobilise the tourism industry, its stakeholders and partners from all spheres of government, international organisations and the private sector towards the development of tourism that is economically beneficial, environmentally friendly, socially equitable and culturally responsive. 

With yourselves as part of the leadership of this sector, we want to have this conversation on radical economic transformation, popular or unpopular, in order to translate our discussions into practical action to achieve socio-economic transformation.

In the 2016/17 financial year, the department ,together with the Tourism B-BBEE Council, embarked on a new baseline study project to establish the current state of transformation in the tourism sector.

The findings of the study show that, generally, the tourism sector whilst having made strides, is still performing poorly on transformation, particularly around the priority elements such as Ownership, Skills Development and Enterprise and Supplier Development of the Tourism B-BBEE Codes.

The report highlights that the majority of tourism enterprises do not comply with the set ownership targets. The study further indicates that the accommodation and travel-related sub-sectors still have a lot of work to do to meet the targets. It further indicates that there are some encouraging signs of progress in the Hospitality sub-sector.

Under management control, it is evident from the study that tourism enterprises within the hospitality and travel related sub-sectors are performing better in terms of board, senior and middle management representation. However, the accommodation sector is still lagging behind in this element. 

It is also clear that black women are still the least represented at senior and executive management level. Furthermore, the study indicates that we collectively still have a lot of work to do when it comes to enterprise and supplier development.

The sector growth that we have enjoyed for six consecutive years, will be meaningless if it is not based on inclusivity. It is for this reason that we are accelerating Radical Economic Transformation in our sector. In this regard, the department, working with sector stakeholders, has put in place a number of tools in line with our vision of “Leading sustainable tourism for inclusive economic growth in South Africa,” which would enable our contribution to the country’s National Development Plan (NDP) – vision 2030. 

As government, we do have some levers to drive transformation. These are:

• Operations and management opportunities through concessions in government owned facilities;
• Operating licences in areas such as gaming, tour operators etc.;
• State purchasing power, estimated by National Treasury to be worth R10 billion per annum.

These levers must be effectively used to drive transformation, as they are within the public sector’s control. 

Government cannot achieve transformation by itself. The private sector has a significant role to play. This includes direct empowerment through the implementation of the codes.

One of the critical success factors of our transformation agenda is access to strategic land parcels, be they at local government level or within communal properties. I welcome the presence of both the COGTA Minister and Amakhosi present as key role players as we engage in this very important discussion. 

Economic transformation is not simply the mimicking of the status quo by the new social class leadership. It should not appear to be an act of seeking affirmation by the new social class leadership from those who previously occupied and held the levers of power. Transformation should be about responding to hard questions, having constructive conversations, agreeing on impactful resolutions – but most importantly ACTION. 

I do want to point out quite critically that the outcomes of the latest industry assessment, looking at the state of transformation of the tourism sector have left those of us who drive transformation feeling concerned.

It is against this background that I have convened this Tourism Transformation Summit, in order to create a platform for a robust and frank engagement on how black people should also derive meaningful benefits in the tourism sector. 

Through some of the departmental initiatives including the establishment of the Tourism Transformation Fund (TTF), which I will be launching in the not so distant future, the department will address and directly contribute to two elements of the Government’s 9-Point Plan, namely:

• To encourage private sector investment and
• To unlock the potential of small, medium and micro-enterprises, cooperatives and township enterprises. 

The National Development Plan highlights tourism as a sector where millions of jobs can be created, small businesses can be developed, and spin-off investments can take place as more and more tourists visit South Africa. I would therefore like to challenge black tourism enterprises, particularly women, youth as well as cooperatives to participate in the tourism value chain, as suppliers across the tourism value chain. As your government, we have the responsibility to create the enabling environment, it is up to you to be creative, to work hard and to seize the opportunities. 

Tourism in South Africa is on the rise.  We cannot however, grow it without our communities. Let’s all be part of that growth.
Let’s all Do Tourism!

-This is an edited version of a speech delivered by Tourism Minister Tokozile Xasa at the inaugural tourism transformation summit

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