Tourism Sector Strategy for Growth, Development, and Employment

1. Tourism Growth, Development and Employment Sector Strategy • Together we can do more Executive Summary 12 December 2018

2. Tourism sector strategy goals

3. Tourism could be doubled by 2030, adding 2 million jobs

4. SA has high ranking as destination but underperforms 2017, WTTC 2018 Reports 4 4

5. Tourism is too low down priority ranking • Barely mentioned in Jobs Summit • While e-visas already operate seamlessly in many low income countries, SA has not yet taken concrete steps • Significant regulatory barriers, such as for tourism vehicle licensing • Infrastructure in support of tourism is crumbling, eg. roads • Global presence and image deteriorating – messaging overwhelmed by crime rather than positives • Poor coordination with other departments – lack of understanding to tourism value and needs. There are no hard targets in government in support of tourism expansion

6. Tourist Arrival Trends Weak Rand World Cup Drought & Visas & safety Ebola, Unabridged birth certif & Visas

7. Tourism stimulates other industries • One third of tourism spending goes to other sectors such as retail of textiles, leather, clothing and footwear, automotive fuel, household articles and appliances. Direct tourism spend supports 8% of the retail industry. (based on Stats SA tourism TSA). • For every R100 spent directly on tourism, the full effect across the economy is to generate an additional R97 of indirect and induced spend in other sectors (WTTC 2017). These sectors include manufacturing, (for instance of vehicles, linen, crockery and cutlery), agriculture, and other service sectors such as finance and banking, wholesale, marketing and advertising. • If the tourism high road is taken, 2019-2030, the direct tourism GDP impact would be R31bn in 2030 and the indirect and induced GDP impact of tourism on these other sectors of the South African economy would be R633bn (2018 Rand). Over the 12 year period R1.3 trillion would be invested. • An expanded industry would stimulate local production of buses, taxis and other vehicles.

8. Business as usual Vs Potential International Tourist Business as usual Potential • 16 million international tourists by 2030 • CAGR 3,7% (currently 3,9% 2011 – 2018) • Of which 6 million (37%) are not land arrivals from African • About 138k in 2023 and 186k in 2030 from China • About 140k in 2023 and 200k in 2030 from India • About 955k in 2023 and 1.3m in 2030 from targeted non-land African arrivals • 21 million international tourists by 2030 • CAGR of 6% • Of which, 11 million international non-land arrivals (51% versus current 34%) • Expand Chinese tourist arrivals from about 408k in 2024 rising to 1.9 million by 2030 • Expand Indian tourist arrivals from about 438k in 2024 to 1.6m arrivals by 2030 • Expand targeted African air arrival market from about 670k now to 1.2m in 2024 to 1.7m by 2030

9. Growth rates proposed are plausible • Growth rates have been projected by SA Tourism hub market by year • Rates of growth decrease in core traditional markets as the base grows • India, China and Russia high growth rates - base adjustment as we are underweight in these markets

10. Tourism – business as usual vs potential domestic tourists Business as usual Potential • 7,9 million domestic leisure tourists by (out of total 43 million adult trips ) • CAGR 1,8% • Overall penetration of LSM 4-10 ±56% • 1,5 trips on average per person • Leisure tourists percentage of total remains 18% • 9,8 million domestic leisure tourists by 2030 out of total 45 million adult trips) • CAGR 3,7% • Overall penetration of LSM 4-10 61% • 1,8 trips on average per person • Leisure tourism moves to 22% of total 10

11. Expanded tourism sector will create more jobs

12. These targets are possible • We have stress tested these targets with key stakeholders: • Aviation • Our growth proposals can be accommodated by current bilaterals, runway and terminal capacity until 2023 • Planning would be needed to expand capacity through building and operational improvements to service the significantly higher arrivals thereafter, but are ‘do-able’ • Hotels • Expanded international tourism strategy would require about 179 additional establishments by 2023 and 725 by 2030 • Expanded domestic strategy would require 66 new establishments by 2023 and 197 by 2030. • The hotel industry would welcome this, and it is consistent with historical growth rates in accommodation supply • Safety and security aspects need to be addressed

13. Attention has been given to critical areas in this initial high level strategy

14. Visas are a first top priority

15. Transformation way forward

16. 2 million new jobs could be created in tourism Critical dependencies and strategic steps In near term In medium term • E-visas – significantly faster movement on this and roll out to all markets. For eg consider bringing in experts who installed evisa system in Ethiopia, Vietnam, New Zealand or other leading countries. • Must be in multiple languages – especially Mandarin • Intelligent (AI) core system with exceptions reviewed/investigated • Tourism crime, and crime generally – tourism police or monitors at all key tourist nodes • Increased promotion in key markets - more forceful shaping of messages to key markets (core & new) • Address bottlenecks and delays in tourist vehicle licensing • Transformation, especially in ownership • Aviation - airlift • Training – including in languages • Product and Investment (including Tourism Development Zones) • Promotion and marketing • Stimulate linkages • Tourism related infrastructure

17. Resources will have to be mobilized through partnerships led by private sector • Fast track e-visa • Tourism safety ramp up • Marketing and communications alignment • Infrastructure upgrades to support tourism • Tourism Development Zones • Domestic tourism resorts – eg. old Overvaal In government, coordination is challenged by the dispersed mandates, such as visas or vehicle licenses. New ways of setting tourism related targets and monitoring implementation will be needed.

18. Next steps

19. Thank You