6 minute read
Identifying weaknesses
Inadequate understanding from government
Although statistics highlight the sizeable contribution of tourism to the South African economy, there is a view that government does not fully recognise the importance of tourism to the country’s economy. Having a national Tourism Ministry is not enough and the success of the industry has relied on various departments working together. There is often a lack of trust between departments, preventing government from operating efficiently.
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Inefficiencies in departments, often other than tourism, can have major implications for the industry. For instance, the Department of Transport’s backlog in issuing operating licence renewals to tour operators, or the regulations imposed by the Department of Home Affairs when it introduced unabridged birth certificates for minor children travelling through any port of entry, can have unintended consequences for tourism.
While government must do more to show its understanding of and appreciation for tourism, the industry is also required to accelerate processes of inclusion and black economic empowerment so that owners and operators better reflect the racial demographics of South Africa.
Although the Covid-19 pandemic has assisted in fostering closer cooperation between the public and private sectors, this is an area that remains of great concern to the industry. There is a lack of collaboration between the Department of Tourism, its marketing arm, South African Tourism (SA Tourism), and the private sector in crafting tourism strategies. For instance, there is a view that marketing strategies are developed from a political angle rather than with a commercial slant and, therefore, lack sufficient opportunism. Focusing too much on BRICS countries (Brazil, Russia, India and China) is perceived to be politically opportunistic, but it does not deliver the commensurate commercial dividends.
Volume over value focus
Government’s tourism growth agenda focuses too much on volume, and not enough on value. SA Tourism’s aspirational target is to reach 21-million tourist arrivals by 2030, although that goal had looked out of reach even before the Covid-19 pandemic. SA Tourism now believes that attracting 14.80-million visitors is a more “realistic target” for 2030 (SA Tourism, 2021).
Identifying weaknesses
However, the consensus was that instead of focusing on visitor numbers and trying to be “everything to everyone”, South Africa must position itself as a destination that attracts “valuable” visitors who spend money throughout the value chain. It must also guard against overtourism or placing its infrastructure under pressure.
Price differentiation strategies
Safari camps, luxury lodges and many other supreme tourist destinations dropped their prices and offered South Africans discounted rates when international travel was not possible while Covid-19 travel restrictions were still in place. To revive the tourism industry, price differentiation strategies must be employed more broadly to encourage South Africans and other Southern African Development Community residents to explore the country. The Industrial Development Corporation, in partnership with SA Tourism and the Tourism Business Council of South Africa, recently launched a travel campaign to that effect. As part of the campaign, South Africans will be able to secure discounted rates of up to 35% to selected destinations across the country (Engineering News, 2022).
Financial constraints mean that more South Africans are opting to take local holidays than travelling overseas. A recent poll by consultancy group Travel Lifestyle Network indicated that 67% of those canvassed have a domestic holiday once a year or more and 22% once every six months. With the rising cost of living, price is going to be a key differentiator to attract consumer spend in the remainder of 2022 and 2023 (Business Day, 2022).
Policy implementation challenges
South Africa has an abundance of policy documents, positions and pronouncements, but often these do not yield the desired results, owing to a lack of consistent implementation. The lead up to the 2024 general election will likely compound implementation challenges, as a new government will be elected in less than a year-and-a-half. Implementation success hinges on continuity and a new administration may pursue or prioritise different interests.
Domestic airline failures
The failure of Comair, the operator of low-cost carrier kulula.com and British Airways, which it operated under a licence agreement, was a major setback for the tourism industry. The company was responsible for 40% of domestic airline capacity before its closure in June 2022 (BusinessTech, 2022).
Identifying weaknesses
Comair failed to secure funding to stay airborne after being impacted on by global pandemicrelated travel restrictions. However, the group’s problems started before Covid-19, when the Boeing 737 Max aircraft was grounded, and its fleet-renewal programme pushed up debt and debt service costs. Placing South African Airways (SAA) in business rescue in 2020 was another major setback for Comair, which at the time was still owed R790-million by the State-owned carrier as part of a Competition Commission settlement. SAA ran an incentive scheme for travel agents in the early 2000s, which was found to penalise Comair. After SAA went into business rescue, it was ruled that Comair could get back only 7.5c in the rand of the R790-million still owned to it by SAA (Fin24, 2022a).
SAA itself resumed operations only in late 2021, having been in business rescue for almost two years, which had a substantial impact on business and leisure travel. SAA’s predicament was caused by several issues, including political interference and leadership turmoil.
The liquidation of Comair has substantially reduced domestic seat capacity, exacerbating a crisis in the industry, which over the past two years also lost low-cost carrier Mango Airlines.
While other operators will eventually fill the gap left by Comair and Mango, capacity constraints have pushed up ticket prices, further hampering the tourism sector’s recovery from the pandemic. Operators of domestic airlines have warned that ticket prices will remain high owing to the price of fuel (Fin24, 2022b).
Identifying weaknesses
Aviation certification delays
Authorities are slow to process aviation certifications, which is a significant obstacle for the air travel industry. Every aircraft that an international airline uses on a route to South Africa must be registered and this process is taking too long. An aviation sector participant in the ISI dialogue indicated that it takes the South Africa Civil Aviation Authority several months to issue an airline operating certificate, compared with six days in Germany, for instance.
Monopolistic tendencies
Some of the key services pertaining to aviation and airports, such as Airports Company South Africa (ACSA) and Air Traffic and Navigation Services, are monopoly State-owned entities. There is no visibility on how ACSA, for instance, is ensuring that it gets the most out of its existing assets.
Brand reputation neglect
There is concern about the ongoing damage to the South African brand as a safe and welcoming tourism destination. Civil unrest and violent crime, especially near popular tourism sites, such as the Kruger National Park, exacerbate perceptions that South Africa is an unsafe destination.
Infrastructure failures
Delipidated road infrastructure and poorly maintained buildings do not support tourism growth.
Many small towns near or on route to key tourist sites are in decay due to poor service delivery and inadequate maintenance resulting from municipal failure. Tourists no longer support towns where streets are riddled with potholes and litter is strewn everywhere.
The poor quality of provincial roads in popular tourist hotspots is also of concern. Tourism industry participants have been complaining for years about the poor state of roads in the picturesque Mpumalanga Lowveld, for instance.
