SOUTH AFRICA

THE IMPACT OF TRAVEL &TOURISM

ON JOBSANDTHE ECONOMY
CHAIRMAN: Henry Silverman Eurostar Group Krishna Kumar Per Setterberg
Sir Ian Prosser Chairman & CEO Managing Director CEO
Chairman Cendant Corporation Bernard D. Frelat The Taj Group of Hotels Global Refund Holdings A.B.
Six Continents PLC President & CEO
Jonathan Tisch Rail Europe Group, Inc. Hans Lerch Mr Eric Speck
VICE CHAIRMEN: Chairman & CEO President & CEO Executive Vice President
Donald Carty Loews Hotels William H. Friesell Kuoni Travel Holding Ltd Group President,Travel
Chairman, President & CEO Chairman & CEO Marketing & Distribution
American Airlines Brett Tollman Diners Club International Fabio Mantegazza Sabre Holdings Corporation
Vice Chairman Chairman
Jean-Marc Espalioux The Travel Corporation Dato’ Gan Eng Kwong AVRO Plc Barry Sternlicht
Chairman of Management Group Chairman Chairman & CEO
Board & CEO Reliance Pacific Berhad Paolo Mantegazza Starwood Hotels & Resorts
Accor S.A. GLOBAL MEMBERS: President & CEO Worldwide, Inc
Akbar Al Baker Laurence Geller Globus & Cosmos Inc
André Jordan CEO Chairman & CEO Lalit Suri
Chairman Qatar Airways Strategic Hotel Capital Manuel Martin Chairman & Managing
Lusotur S.A. Partner Director
Giovanni Angelini Maurice H. Greenberg CyberDodo Productions Ltd Bharat Hotels Ltd
Jonathan S. Linen CEO & Managing Director Chairman & CEO
Vice Chairman Shangri-La Hotels & Resorts American International Isao Matsuhashi Ian Swain
American Express Company Group, Inc. Chairman of the Board Chairman & CEO
David Babai JTB Corp. Swain Travel Services Inc
Vincent A.Wolfington Chairman Philip Haan
Chairman Gullivers Travel Associates Executive VP International, Paul McManus Kathleen Taylor
Carey International, Inc. Sales & Information Services President & CEO President,
Phil Bakes Northwest Airlines The Leading Hotels Worldwide Business Operations
Chairman & CEO of the World Four Seasons Hotels and
EXECUTIVE COMMITTEE: FAR&WIDE Travel Anthony Harris Resorts
Peter Armstrong Corporation Chief Executive Mark Miller
President & CEO Hilton International President & CEO José Antonio Tazón
Rocky Mountaineer Railtours Ted Balestreri Galileo International President & CEO
Chairman & CEO Richard Helfer Amadeus Global Travel
Philippe Bourguignon Cannery Row Company Chairman & CEO Alan Mulally Distribution
Chairman and CEO Raffles International Ltd President & CEO
Club Méditerranée Henrik Bartl Boeing Commercial Airplanes Jeffrey Toffler
Vice President, International James Hensley Chairman
Stephen Bollenbach Hotel Finance President John M Noel Coventry Partners
President & CEO Aereal Bank AG Allied Europe President & CEO
Hilton Hotels Corporation Travel Guard International Mustafa Türkmen
Gordon Bethune Stephen Holmes CEO & Managing Director
Sebastián Escarrer Chairman of the Board & CEO Chairman & CEO, Tom Nutley Enternasyonal Tourism
Vice Chairman Continental Airlines Hospitality Division Managing Director Investments, Inc.
Sol Meliá Cendant Corporation Reed Travel Exhibitions Yapi Kredi Bank of Turkey
Paul Blackney
Edouard Ettedgui President & CEO Raimund Hosch Alan Parker Patrice Vinet
Managing Director Worldspan President & CEO Managing Director Partner
Mandarin Oriental Hotel Messe Berlin GmbH Whitbread Hotel Company Accenture
Group Régis Bulot
President Dieter Huckestein Jean Gabriel Pérès Trevor de Vries
Maurice Flanagan CBE Relais & Chateaux President, Hotel Operations, President & CEO Deputy Managing Director
Group Managing Director Owned & Managed Mövenpick Hotels & Resorts Mondial Assistance S.A.
Emirates Marilyn Carlson Nelson Hilton Hotels Corporation
Chairman & CEO Dionísio Pestana Jurgen Weber
Michael Frenzel Carlson Companies, Inc Xabier de Irala Chairman Chairman
Chairman Chairman & CEO Group Pestana Lufthansa German Airlines
Preussag A.G. Alun Cathcart Iberia
Deputy Chairman Stefan Pichler
David House Avis Europe Plc Clive Jacobs Chairman & CEO CHAIRMAN EMERITUS:
Group President, Global Chairman & CEO Thomas Cook AG James D. Robinson III
Network and U. Gary Charlwood Holiday Autos Group General Partner
Establishment Services Founder, Chairman & CEO David Radcliffe RRE Ventures
American Express Company Uniglobe Travel José Martins de Jesus Chief Executive
(International) Inc. Chief Operating Officer Hogg Robinson plc
Richard R. Kelley Sonae Turismo Gestao Servicos IMMEDIATE PAST
Chairman Cheong Choong Kong Jay Rasulo CHAIRMEN:
Outrigger Enterprises, Inc Deputy Chairman & CEO Nuno Trigoso Jordão Chairman & CEO Harvey Golub
Singapore Airlines President & CEO. EuroDisney S.C.A. Retired Chairman & CEO
Geoffrey J.W. Kent Sonae Turismo Gestao Servicos American Express Company
Chairman & CEO Jennie Chua Carl Ruderman WTTC Chairman
Abercrombie & Kent President & COO Sol Kerzner Chairman (1996 - 2001)
Raffles International Ltd. Chairman Universal Media
J.W. Marriott, Jr. Kerzner International Ltd Robert H. Burns
Chairman & CEO Dinesh Dhamija Teresa Santos Chairman
Marriott International, Inc Chairman & CEO Nigel Knowles Managing Director Robert H Burns Holdings
ebookers plc Managing Partner Group Espirito Santo Limited
David Michels DLA WTTC Chairman
Chief Executive Lloyd Dorfman Bruno Schöpfer (1994 – 1996)
Hilton Group plc Chairman & Chief Executive Craig Koch CEO
Travelex plc President & CEO Mövenpick Group
P.R.S. Oberoi The Hertz Corporation PRESIDENT:
Chief Executive Rod Eddington Robert Selander Jean-Claude Baumgarten
The Oberoi Group Chief Executive President & CEO
British Airways plc MasterCard International Correct as at June 14 2002

© 2002 WORLD TRAVEL & TOURISM COUNCIL

1-2 QUEEN VICTORIA TERRACE.SOVEREIGN COURT.LONDON E1W 3HA. UNITED KINGDOM
TEL: +44 (0) 870 727 9882 or + 44 (0) 207 481 8007 • FAX: +44 (0) 870 728 9882 or + 44 (0) 207 488 1008 • enquiries@wttc.org • www.wttc.org
THE WORLD TRAVEL & TOURISM COUNCIL (WTTC) IS THE BUSINESS
LEADERS’ FORUM FOR TRAVEL & TOURISM, WORKING WITH
GOVERNMENTS TO RAISE AWARENESS OF THE IMPORTANCE OF THE
WORLD’S LARGEST GENERATOR OF WEALTH AND JOBS.
With the Chief Executives of more than one hundred of the world’s leading companies
in membership, WTTC has a unique mandate and overview on all matters related to
success in Travel & Tourism.

This report is the second set of research that WTTC has specifically
produced for South Africa.The first, commissioned by the South African
Department of Environment Affairs and Tourism, was completed in
1998. This latest research was commissioned by WTTC Members and
builds on the previous work. It updates the historical results, estimates the
current performance of South Africa's Travel & Tourism, and provides
forecasts based on the most recent national and international data sources
and econometric models developed by Oxford Econometric Forecasting.
This new TSA research quantifies all aspects of Travel & Tourism
demand, from personal consumption to business purchases, capital
investment, government spending and exports. It then translates this
information into economic concepts of production, such as gross domestic
product and employment, which can be compared with other industries
and the economy as a whole to provide credible statistical information that
will assist in policy and business decision processes.
The message from this report is surprisingly lacklustre. Although
Travel & Tourism is one of the highest priority industries and employers
for the South African government, it is only expected to generate a
middle-of-the-road 3.0 per cent of GDP and 492,700 jobs in 2002.
Looking ahead, the forecast is healthy but modest with expectations of 4.8
per cent real growth per annum between 2002 and 2012.The difference
between this 2002 research and our previous research is a significant
downgrading of expectations, as targets have been consistently missed.
WTTC’s research highlights the need for South Africa to address
mission-critical issues such as strengthening tourism mangement,
enhancing the national tourism organization and clarifying aviation
policy. South Africa is a nation with outstanding Travel & Tourism
resources and, with the information and recommendations in this report,
has a golden opportunity to make the most of these assets.
We hope that by raising awareness of previous performance and the,
as yet unrealized, potential of Travel & Tourism in South Africa, this
report will act as a catalyst, encouraging industry and government to
continue to work together to create the conditions necessary to upgrade
a modest outlook to one of high expectations.

Jean-Claude Baumgarten Sir Ian Prosser

President,World Travel & Tourism Council Chairman,World Travel & Tourism Council
Chairman, Bass plc

The World Travel & Tourism Council would like to express its sincere gratitude to Members of WTTC’s South Africa Steering Committee, listed on the back inside cover of this
report, who helped guide this project to fruition. We would also like to thank the many individuals and organizations that contributed their knowledge, insight and
data/information to the policy review effort. A complete list of contributors can also be found on the back inside cover. Special thanks are also due to Grant Thornton Kessel
Feinstein, which contributed the report section entitled South Africa's Travel & Tourism: Overview of Recent Trends and Developments.
CONTENTS

EXECUTIVE SUMMARY ____________________________________________________________________________ 4

ECONOMIC IMPACT _________________________________________________________________________________________ 6
GROWTH____________________________________________________________________________________________________ 7
FUTURE PROSPECTS _________________________________________________________________________________________ 8
REALIZING THE POTENTIAL__________________________________________________________________________________ 12

SOUTH AFRICA’S TRAVEL & TOURISM

AN OVERVIEW OF CURRENT TRENDS AND DEVELOPMENTS__________________________________________________ 15

TRAVEL & TOURISM SATELLITE ACCOUNT

TOURISM SATELLITE ACCOUNTING __________________________________________________________________________ 22
TSA CONCEPTS & STRUCTURE _______________________________________________________________________________ 24
TRAVEL & TOURISM’S ECONOMIC IMPACT ___________________________________________________________________ 26
TOTAL DEMAND _____________________________________________________________________________________________ 28
EMPLOYMENT _______________________________________________________________________________________________ 29
GROSS DOMESTIC PRODUCT ________________________________________________________________________________ 30
CAPITAL INVESTMENT ______________________________________________________________________________________ 31
PERSONAL & BUSINESS_______________________________________________________________________________________ 32
EXPORTS ____________________________________________________________________________________________________ 33
GOVERNMENT ______________________________________________________________________________________________ 34

THE POLICY FRAMEWORK ____________________________________________________________________ 35

APPENDIX
SATELLITE ACCOUNT TABLES ________________________________________________________________________________ 50
 EXECUTIVE
SUMMARY
IS TRAVEL & TOURISM ON THE THRESHOLD OF
SIGNIFICANT GROWTH?
SOUTH AFRICA HAS THE POTENTIAL TO BECOME ONE
OF THE WORLD’S GREAT NEW TOURISM DESTINATIONS
FOLLOWING ITS TRANSITION TO DEMOCRACY AND
ENTRY INTO MAINSTREAM ECONOMIC AND POLITICAL
CIRCLES. ALTHOUGH MANY OF THE STRATEGIC AND
OPERATIONAL PIECES APPEAR TO BE IN PLACE,
INSUFFICIENT FOCUS ON IMPLEMENTATION HAS
LIMITED THE RETURN ON INVESTMENT AND CAUSED
TARGETS TO BE CONSISTENTLY MISSED.
The isolationism of the old ‘apartheid’ system has
delayed South Africa’s entry onto the world stage in
many areas including Travel & Tourism. In some ways
this late emergence has protected its resources from
excessive exploitation and inferior development. In
other ways it has also limited the benefits that Travel &
Tourism could deliver economically and socially.
Nevertheless, while government officials and
industry analysts have long been predicting that South
Africa is on the verge of a tourism boom, its actual
performance over the past several years has been
disappointing and has certainly not lived up to
optimistic and aggressive targets set in 1996.
The main problem seems to be that, although
significant progress has been made in assembling the
nuts and bolts of South Africa’s Travel & Tourism
business, the strategic vision and leadership necessary to
bring all the pieces together has not yet materialized.
Poor implementation has compounded the situation
and, as a result, South Africa’s Travel & Tourism has not
yet met its earlier promises to generate employment at
the speed of light, or extend development opportunities
to the farthest reaches of the nation.
Nevertheless, the future prospects for Travel &
Tourism in South Africa remain extraordinary.There is
widespread recognition, although somewhat more
realistic and pragmatic, of its current and potential
4
contribution to the national economy and, more
importantly, of the limiting factors that are constraining
its potential. In truth, the South African Government
has measurably higher priorities on its agenda than the
development of Travel & Tourism – notably
transformation, black empowerment, HIV/AIDS,
poverty elimination, housing, and education and
training for vast communities that have previously been
disadvantaged.
However, what this research and report make clear
is that all these vitally important issues, on top of the
government’s agenda, require a catalyst or set of catalysts
for advances to take place. Travel & Tourism does not
purport to be the saviour for all the ills and injuries that
have beset South Africa, but it does offer significant
hope for the challenges that need to be addressed.
Travel & Tourism offers enormous potential as a
catalyst for future economic and social development
across the whole of the country. Measures already
undertaken by the government augur well for the
sustainable development of Travel & Tourism –
achieving a healthy balance between business
imperatives, the protection of cultural heritage and
environment, and the well-being of local communities.
Additional measures recommended in this report set
the stage to help ensure the larger rewards that Travel &
Tourism can bring.
ECONOMIC IMPACT
IN 2002, SOUTH AFRICA’S TRAVEL & TOURISM IS EXPECTED TO GENERATE
R108.5 BILLION (US$10.8 BILLION) OF ECONOMIC ACTIVITY (TOTAL
DEMAND).THE INDUSTRY’S DIRECT IMPACT INCLUDES:

492,700 jobs ___________________ representing 3.0 per cent of total Employment.

R31.1 billion (US$3.1 billion) ______________________ of Gross Domestic Product (GDP)

equivalent to 3.0 per cent of total GDP.

HOWEVER, SINCE TRAVEL & TOURISM TOUCHES ALL SECTORS OF THE

ECONOMY, ITS REAL IMPACT IS EVEN GREATER. SOUTH AFRICA’S
TRAVEL & TOURISM ECONOMY DIRECTLY AND INDIRECTLY ACCOUNTS
FOR:

1,148,000 jobs _____________ representing 6.9 per cent of total Employment.

R72.5 billion (US$7.2 billion) of GDP ____________ equivalent to 7.1 per cent of total GDP.

R43.8 billion (US$4.4 billion) of Exports, services & merchandise _______________________

or 12.5 per cent of total Exports.

R 17.1 billion (US$1.7 billion) of Capital Investment ____ or 10.3 per cent of total investment.

R 920 million (US$92 million) of Government Expenditures ___________ or a 0.5 per cent share.

6
GROWTH
OVER THE NEXT TEN YEARS, SOUTH AFRICA’S TRAVEL & TOURISM IS
EXPECTED TO ACHIEVE ANNUALIZED REAL GROWTH OF:

5.1% ______________________in Travel & Tourism GDP, to R84.8 billion (US$9.3 billion) in
2012 for the industry directly and to R194.3 billion (US$21.3 billion)
for the Travel & Tourism Economy overall (direct and indirect expenditures).

3.3% __ in Travel & Tourism Employment, to 679,200 jobs directly in the industry, and 3.1% to
1,555,300 jobs in the Travel & Tourism Economy overall (direct and indirect) in 2012.

4.8% _______ in total Travel & Tourism Demand, to R288.5 billion (US$31.7 billion) in 2012.

4.7% _________________ in Visitor Exports, rising to R86.2 billion (US$9.5 billion) by 2012.

5.2% ___ in terms of Capital Investment, increasing to R47.0 billion (US$5.2 billion) in 2012.

1.6% ______ in terms of Government Expenditures to R1.8 billion (US$197 million) in 2012.
 FUTURE
PROSPECTS
THE BASELINE FORECASTS FOR SOUTH AFRICA ARE
GENERALLY POSITIVE. TRAVEL & TOURISM DEMAND IS
PROJECTED TO INCREASE IN LINE WITH FORECAST
GDP GROWTH OVER THE NEXT FEW YEARS.
The annualized rates of growth for Travel & Tourism demand and visitor
exports are also in line with projections for sub-Saharan Africa as a whole.
However, WTTC believes that South Africa’s Travel & Tourism growth
potential is greater than for the region overall, as well as for major
competing destinations, and that the baseline scenario forecast could easily
be surpassed. At the same time,WTTC maintains that there are a number
of weaknesses hindering growth and preventing South Africa from
attaining its true Travel & Tourism potential.

TOURISM MANAGEMENT White Paper have been wholly or partially overcome

South Africa’s Travel & Tourism through the development of outstanding programmes

potential will much more likely be and initiatives. However, there are new constraints

realized if the management of contributing to limiting Travel & Tourism growth.

tourism is centralized through the Moreover, previous economic targets set in 1996 need

establishment of an autonomous, to be recast more realistically to establish and meet a

highly visible and influential new set of expectations for future growth. Most

Ministry of Tourism. importantly, the updating of the Tourism White Paper

This re-engineered and significantly re-funded ministry
should have greater resources and oversight of collateral
government agencies/departments such as arts, culture,
recreation and sport, aviation, public transport and
parks, in order to guarantee synergies of programmes
and resources. This will help ensure an integrated
approach to Travel & Tourism development in South
Africa and will appropriately position government
institutions so they can contribute collectively to
achieving the country’s economic development goals.
TOURISM PLANNING
The 1996 White Paper ‘The
Development and Promotion of
Travel & Tourism’ is outdated and
must be re-assessed and brought up to
date to meet a new set of challenges
over the next five to ten years.
Many of the constraints to tourism growth identified in
the Department of Environmental Affairs and Tourism’s
provides a golden opportunity for all levels and
functions of government to join forces with the private
sector and local communities to take stock of the
achievements and failures of the past six years. It is now
up to them to set the stage for a well-orchestrated effort
to attain Travel & Tourism’s economic potential.
INDUSTRY
MEASUREMENT
Travel & Tourism research and
forecasting in South Africa needs
significant improvement, both in
terms of quantity and quality.
This is especially true of economic and market
intelligence data on the industry, such as statistics
obtained through tourism satellite accounting and
tourist expenditure patterns. The lack of good data
makes it difficult to measure trends in Travel & Tourism
demand and reduces the industry’s ability to ensure
accurate forecasts of future trends. This weakens both

8
government’s and the industry’s ability to plan ahead to
adapt supply to demand. South Africa needs to establish
a fully fledged Tourism Forecasting Council, as well as
investing in developing a more sophisticated research
capability and ensuring close collaboration between the
industry and national and provincial statistical institutes.
NATIONAL TOURISM
ORGANIZATION
South African Tourism’s (SAT’s)
portfolio of responsibilities should be
significantly expanded.
A reconstituted SAT, which currently focuses almost
exclusively on international marketing and promotions,
needs to take on the broader role of a national tourism
organization.This would also include responsibility for
domestic tourism, assisting in a full range of product
development activities, serving as a national convention
bureau, providing a much needed co-ordination role
with and between provinces, and producing and
communicating Travel & Tourism research, forecasts,
market intelligence and information management.
MARKETING &
PROMOTION
Experience has shown that demand for
any tourism destination grows sharply
when marketing and promotions are
effective, well funded and sustained.
SAT’s budget has increased significantly in recent years
and is approaching a level of competitive funding.
However, a competitive, sustained promotional
campaign is critical – not only to clarify and enhance
South Africa’s image in traditional and emerging source
markets, but also to raise awareness of Travel &
Tourism’s important contribution to federal, provincial
and local economies and the spin-off benefits to all
stakeholders.
THE MICE MARKET
South Africa should aggressively pursue,
market and promote the meetings,
incentives, conventions and exhibition
(MICE) business.
South Africa already has several major conference
venues. But the opening of the Cape Town
International Convention Centre will signal the
culmination of infrastructure development necessary to
establish South Africa among world-class venues for the
MICE business. A restructured SAT and a new
National Convention Bureau – as recommended in this
report – should serve as a focal point of contact,
distributing leads, allocating business and raising the
level of professionalism necessary to put South Africa
on the world's MICE map.
AVIATION POLICY
& OPEN SKIES
South Africa’s aviation policy should
be reviewed, revised and implemented
with the involvement of all stakeholders,
primarily as a tool for the broader
development of Travel & Tourism and
job creation.
Greater efforts should be made to open up South
African air transport markets, so as to attract more long-
haul services and develop/improve regional networks.
The Ministry of Transportation should continue to
liberalize aviation agreements (scheduled and charter)
and provide for greater commercial viability of routes,
especially those on which capacity increases are falling
behind the growth in demand.
SOUTH AFRICAN AIRWAYS
South Africa should continue to
pursue privatization of South African
Airways (SAA) and the Airports
Company South Africa (ACSA).
Both efforts should be pursued in a measured,
programmed and responsible manner with all
stakeholders clearly informed about short- and long-
term plans, objectives and time frames.Whether SAA’s
future role is that of a competitive global carrier, a
strong regional carrier, or a dominant domestic feeder
airline – or all three – the ultimate outcome for Travel
& Tourism and the nation as a whole should be lower
prices, improved quality of service, greater economic
development and greater employment opportunities.
However, this also assumes that government does its job
enforcing anti-competitive regulations.
TRANSFORMATION
Travel & Tourism should provide
every opportunity for long-term
career development for previously
disadvantaged South Africans.
For the new generation of South African children, basic
education and training should play an important role in
shaping and developing eager minds that embrace the
skills and opportunities offered by a growing Travel &
9
 Tourism industry. For the generation of aspiring youth,
sustained focus must be provided through capacity
development and outcomes-based education within
the school/college system and the tourism industry. For
the adult generation, black economic empowerment
programmes geared to the tourism industry should
provide for a more equitable distribution of jobs, skills,
income and ownership opportunities.
HIV/AIDS
Travel & Tourism companies and
stakeholders in South Africa must
adopt a proactive approach to
addressing HIV/AIDS head on.
There is no doubt that HIV/AIDS will have an
enormous impact on South Africa and its people.Travel
& Tourism stakeholders should seek help and assistance
and follow celebrated examples of education and
HIV/AIDS management strategies, which can save a
large percentage of the workforce and mitigate the
impact of this horrific disease on the lives and well-
being of South Africa’s people.This is not only a moral
issue, but also one of survival.
GOVERNMENT
EXPENDITURES
Government expenditures on Travel &
Tourism services are relatively low by
comparison with other countries in
the region and major competitive
destinations around the world.
The cost of providing individual and collective services
to the South African Travel & Tourism industry, visitors
and the community at large, is estimated at 0.5 per cent
of total expenditures. This share falls well short of the
level of government expenditures on Travel & Tourism
services (3.8 per cent) in the world generally. More
significantly, the 1.6 per cent forecast annual growth in
government expenditures on Travel & Tourism may not
be rapid enough for South Africa to maintain – let
alone gain – competitive advantage.
10
SUSTAINABILITY
South Africa is a relatively unspoilt
destination although the country
certainly presents examples of over-
exploitation of natural resources.
One can also find other disruptive impacts of tourism
on the local environment and cultural heritage. The
elaboration of South Africa's National Ecotourism Plan
reflects the commitment by the federal government to
try to ensure the sustainable development of tourism.
The plan should recognize that tourism is private sector
led, but it should also recommend roles for all sectors of
federal, provincial and local government, private
businesses, non-government organizations and other
players. Priority must now be given to producing and
implementing the plan and to involving all stakeholders
in the management of tourism. If this is not assured, and
growth is allowed to develop in an unplanned/
uncontrolled fashion, there is a risk of excessive strains
on the infrastructure and on natural resources.
SAFETY & SECURITY
Although South Africa's image as a safe
and secure destination has considerably
improved since September 11 2001, the
maintenance of this image cannot be
assured.
Whether or not justified,Travel & Tourism demand has
been negatively impacted by incidents affecting the
country's overall perceived safety and security. These
have included car-jackings, armoured car robberies and
visitor muggings. No matter how distorted media
reports of these incidents are, they clearly discourage
visitors who have a plethora of alternative travel
destination options. The federal government, through
South African Tourism, should address these concerns
as a matter of urgency, clearly communicating the
extent of the problems, and explaining what the
government is doing to combat them.
 REALIZING
THE POTENTIAL
IN ORDER TO ACHIEVE OR – EVEN BETTER – SURPASS
THE BASELINE FORECASTS, CERTAIN KEY FACTORS
NEED TO BE ASSURED.
These include, most importantly, an autonomous, prestigious, highly
visible and well-funded tourism ministry supported by an effective
national tourism organization with expanded responsibility for marketing
and promotions and demand-based research. In addition, there needs to be
increased focus on domestic tourism, enhanced product development and
diversification, improved education and training, and greater attention to
addressing the issue of visitor safety and security. Clear plans should be
drawn up as to the future strategy and activities of key government
parastatal bodies and these must be communicated to all stakeholders. All
this presupposes close co-ordination between the national, provincial and
local governments, as well as with the private sector.
Against this background WTTC has made certain policy recommendations to the South African
Government, detailed in the report under the section entitled The Policy Framework. These
recommendations are summarized below:
PLAN FOR THE FUTURE.
■ Update the National Tourism Policy (Tourism White ■ Re-engineer existing convention bureau efforts and
Paper 1996) in consultation with provincial and local establish a National Convention Bureau to manage all
governments and the private sector. aspects of meetings, incentives, conferences and
■ Monitor trends in Travel & Tourism demand by exhibitions (MICE) business for South Africa.
establishing a dedicated research unit so as to anticipate, ■ Market and promote more competitively and
and adapt products to, changing demand. effectively to spread the benefits of tourism to all parts
■ Focus on market and product diversification in order of the country and to all stakeholders.
to reduce the heavy dependence on traditional markets, ■ Continue to work closely with the private sector to
as well as to increase yield. address existing concerns and develop public-private
■ Expand recent efforts to develop a sustainable sector partnerships in areas such as marketing and
domestic tourism business. promotions, product development, and education and
■ Stimulate growing product development efforts in training.
ecotourism and the cruise lines.

HIGHLIGHT THE STRATEGIC IMPORTANCE OF TRAVEL &

TOURISM.
■ Recognize Travel & Tourism’s impact across the
wider economy, its ability to diversify South Africa’s
economy, and create employment opportunities, and
ensure that this is measured on an annual basis by means
of a national tourism satellite account.
■ Reflect Travel & Tourism in mainstream policies for
employment, trade, investment and education, ensuring
that the underlying policy framework and federation of
diverse government agencies are conducive to dynamic
growth.
■ Communicate the strategic importance of Travel &
Tourism to all levels of government and industry, as well
as to local communities.

12
DEVELOP THE HUMAN CAPITAL REQUIRED FOR GROWTH.
■ Promote a positive image of the Travel & Tourism industry as a
provider of jobs and career opportunities for all South Africans with a
special focus on economic empowerment of the black community.
■ Take advantage of Travel & Tourism’s potential to provide jobs for
previously disadvantaged young people, first-time job seekers and
women looking for part-time employment.
■ Recognize that Travel & Tourism employment is concentrated in
small businesses and local communities throughout the country and
ENCOURAGE OPEN MARKETS AND SKIES AND REMOVE BARRIERS TO GROWTH.
■ Progressively liberalize trade, transport and communications, both
through regional trading regimes such as the South African
Development Community (SADC) and the World Trade
Organization’s General Agreement on Trade in Services.
■ Open up air transport markets by providing increased incentives
to attract more long-haul services, and improve regional networks
by expanding liberal aviation accords.
■ Upgrade marketing and promotions to match prevailing
MATCH PUBLIC AND PRIVATE INFRASTRUCTURE TO CUSTOMER DEMAND.
■ Develop an agreed process for forecasting Travel & Tourism
infrastructure demand – especially in the transport sector, which will
have high credibility with the industry and with the investment and
financial community.
■ Continue to expand infrastructure, especially public and mass transport
systems, and restructure networks to better support previously
disadvantaged communities.
■ Co-ordinate with provincial governments and with operators of the
Spatial Development Initiatives (SDIs) to improve road networks across
the country, especially in the rural areas, opening up new areas for
tourism development.
■ Encourage state governments to improve land-use planning and
FAVOUR TECHNOLOGICAL ADVANCEMENT.
■ Provide support for local South African companies so that they can
develop access to technological advances and compete more effectively
with foreign-owned companies.
■ Continue leadership in the development of national and provincial
PROMOTE RESPONSIBILITY IN NATURAL, SOCIAL AND CULTURAL
ENVIRONMENTS.
■ Focus on the delivery of an ecotourism development plan and ensure
that the procedures and guidelines for planned and sustainable tourism
expansion incorporated in the plan are communicated to all stakeholders
and implemented as widely as possible.
■ Adopt the principles of Agenda 21 for the Travel & Tourism Industry
developed by WTTC, the World Tourism Organization and the Earth
Council after the 1992 Rio Earth Summit.
■ Ensure that the socio-economic, cultural and environmental benefits
across the whole employment spectrum.
■ Continue to place education and training at the forefront of Travel &
Tourism development, introducing it in grammar schools and the high-
school curricula, and adopting measures to improve skills.
■ Adopt a head-on approach to tackling HIV/AIDS by educating
employees about AIDS, as well as implementing an effective HIV/AIDS
management strategy.
competitive approaches and ensure that South African Tourism
continues to grow as a public-private sector partnership, co-
ordinating national, provincial and local efforts.
■ Build safety and security provisions and communications into
national, provincial and local strategies, and place special emphasis
on Travel & Tourism in overall security/policing strategies.
■ Develop fiscal regimes that encourage tourism growth, exports,
investment, infrastructure, business innovation and job creation.
protection to ensure that the patterns of flow do not adversely affect the
natural or built heritage.
■ Introduce increasing incentives for the rapid modernization and
upgrading of South Africa’s rural infrastructure in order to spread the
benefits of Travel & Tourism across the country.
■ Highlight the dangers of excessive, unplanned development, which
can result in unhealthy competition, declining operating performances
and profits.
■ Develop access to capital resources and encourage capital investment
in South Africa’s Travel & Tourism industry from domestic and foreign
sources.
tourism portals, together with partners from the private sector, so as to
improve distribution of South Africa’s tourism products and develop e-
marketing skills.
of Travel & Tourism are spread equitably across the population in all parts
of the country, and actively encourage local community engagement and
empowerment.
■ Introduce new financial programmes to provide incentives for local
community-based sustainable tourism enterprises.
■ Seek branding for South Africa’s key natural and cultural resources
through international designations, and create new national designations.
13
SOUTH AFRICA’S
TRAVEL & TOURISM
OVERVIEW OF RECENT TRENDS AND DEVELOPMENTS
The following section of the report has been kindly contributed by
Grant Thornton Kessel Feinstein,Tourism Hospitality & Leisure Specialists.

TOURISM: KEY TO SOUTH AFRICA'S Windhoek

Z I M B A B W E

ECONOMIC DEVELOPMENT? B O T S W A N A
MOZAMBIQUE

NORTHERN TRANSVAAL
South Africa is one of the richest and economically most advanced N A M I B I A
Gaborone

countries on the African continent. For decades, however, the country's 1 Pretoria

apartheid regime prevented it from achieving its potential, leaving NORTH WEST
GAUTENG MPUMALANGA Maputo

Mbabane
SWAZILAND

widespread disparity and poverty in its legacy, and resulting in a high

level of socio-economic inequality. FREE STATE
NORTHERN CAPE KWAZULU-NATAL
Maseru

In 1994, at the end of the apartheid era, the South African LESOTHO

Government announced an ambitious campaign to make tourism the

2

country’s number one industry in the creation of new jobs and generation EASTERN CAPE
1 PRETORIA WITWATERSRAND VEREENIGING

of foreign earnings by the year 2000. However, eight years on – while it 2 EASTERN CAPE

WESTERN CAPE

has grown substantially and is now poised to overtake mining in respect

of contribution to GDP – South Africa’s tourism industry has not
delivered the ambitious job creation and economic growth anticipated.
In the late 1990s, recognizing that South Africa’s tourism industry
could only really develop through a concerted effort, government and
the private sector rallied together to create an environment conducive to
growth in international tourist arrivals and receipts. Tourism was
positioned as one of the top five economic sectors in the country and,
through this repositioning, it has (finally) become a priority for
development. At the same time, having identified tourism as an
important sector with growth potential, the general business community
has committed significant resources and support to the industry.
There is a developed and active tourism private sector in South
Africa with a strong emphasis on fostering skills development for
tourism. This should stand South Africa in good stead to maximize
tourism growth opportunities and achieve the ambitious job and foreign
exchange targets set.
A DIVERSE COUNTRY…
South Africa occupies the southernmost part of the African
continent.The country is bordered by the Indian Ocean to the east and
south, the Atlantic Ocean to the west, the countries of Namibia,
Botswana and Zimbabwe to the north, and Mozambique and Swaziland
to the northeast. Lesotho, located in the southeast, is completely
enclosed by South African territory. South Africa has a long coastline of
3,000 kilometres.
The country comprises nine provinces, the largest being the
Northern Cape and the smallest and most affluent being Gauteng, in
which both Johannesburg and the capital city, Pretoria (now renamed
Tshwane), are located.
South Africa and its Nine Provinces
South Africa’s largely semi-arid land of 1.2 million square kilometres
is unusually rich in flora and fauna and the country is well known for its
large game, including elephant, lion, leopard, rhinoceros and buffalo. It
has one of the highest levels of bio-diversity in the world due to the
broad range of climate, geology, soil and landscape forms found in South
Africa. Some ten per cent of South Africa’s land area is conserved.
Average annual temperatures are quite uniform throughout the
country, which is largely characterized by comfortable dry and sunny
weather. However, further north along the coastline there is increased
heat and humidity.
South Africa is a multicultural society with distinct sub-groups
defined by skin colour and origin.The mingling of these sub-groups in
South Africa’s urban areas means that old cultures are fading and new
customs are emerging. However, traditional black cultures are still strong
in most of the rural areas.
Although South Africa is home to a great diversity of cultures, most
were suppressed during the apartheid years.The nation is in the process
of reinventing itself and, with such a large proportion of the population
marginalized from the economic mainstream, this is being created on
the streets of the townships and cities through contemporary and
traditional art and media.
There are 11 official languages in South Africa and the use of these
languages is a constitutional right “whenever practical”. However,
English is widely spoken.
More than 50 per cent of all South Africans (22 million) live in
poverty.Among these, 94 per cent are African and about 70 per cent live
in rural areas. Alongside poverty the key problems are unemployment,
poor education and health sector deficiencies.

15
… WITH A WIDE RANGE OF TOURIST
ATTRACTIONS
South Africa has an extremely diverse range of tourist attractions,
including its unparalleled scenic beauty, its African wildlife, unspoilt
wilderness areas, diverse cultures and attractive climate. In addition,
tourists are drawn by the country's contemporary political and social
history – the change from apartheid to a non-racial democracy – as well
as by the fact that it offers good value for money, and there is minimal
time change from major European generating markets. South Africa has a
wide range of good sporting facilities and is a premier sporting destination
on the African continent. It also offers excellent retail shopping.
Special interest attractions offered by South Africa include, inter
690,000 from overseas) to 5.7 million in 1998 (4.3 million African and
1.4 million overseas). This represented an annual average growth of 17
per cent in international tourists and 27 per cent in overseas tourists
over the six years.
Since then, tourism growth has been depressed. In 2001,
preliminary figures suggest that South Africa attracted 5.8 million
foreign visitors – marginally higher than the number recorded in 1998
but down on 1999 and 2000.
International Tourist Arrivals in South Africa, 1993-2000
(‘000)
African Overseas
1993

alia: adventure activities (hiking, mountain biking, river-rafting, bungee-

1994
jumping, bush survival, hiking, para-gliding, deep sea fishing, diving,
etc); whale watching; historic battlefields from the Boer and Zulu wars; 1995
winelands and winemaking; flora, fauna and bird watching (many
1996
unique and rare species); unique archaeological and palaeontological
sites; and steam trains. 1997
Important for the business market is South Africa's first-world
infrastructure, including excellent communications and wide range 1998

of convention and conference facilities and support services. It is a

1999
sophisticated financial market and is the diplomatic hub of southern, and
to some extent, all of Africa. South Africa has a diverse economic base. 2000

It is a world leader in some primary economic sectors, such as mining, 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500

and has well-developed secondary and tertiary sectors compared with

Source: South African Tourism (SAT)
the rest of Africa, so it is an ideal export base for the continent.
In addition to South Africa’s diverse attractions, a few specific Major markets
strengths underpin growth and potential for the domestic holiday Among the overseas arrivals, Europe has been and will continue to
market. There is growing affluence among sectors of the black be the major source of visitors to South Africa because of its relative
population coupled with significant, if unquantified, unexplored holiday geographic proximity and past socio-political relations with the country.
demand from these sectors.There is an increasing desire within the black Europe accounts for about a 66-67 per cent share of total overseas
community to see and understand different aspects of the country. The arrivals. European arrivals grew from 0.8 million in 1996 to over one
main attraction for the domestic market is still sun, sea and sand and South million in 2000 – a steady growth of eight per cent per annum.
Africa has good beach products. The weak Rand also encourages the North America (USA and Canada) and India/Indian Ocean Islands
domestic market to stay at home as opposed to taking holidays abroad. are the two other source regions recording significant annual average
Domestic business tourism is a very important component of the growth of 10.3 per cent and 9.9 per cent, respectively, between 1996
tourism industry, although it is largely driven by local economic growth and 2000.
and not dependent on any specific strengths of the country. The
conference and incentive sector is the only exception to this, and South Visitor Arrivals by Major Source Regions, 1996-2000
(‘000)
Africa has a very good conference venue infrastructure largely aimed at
Average
the domestic market and is developing a good base of incentive 1996 1997 1998 1999 2000 Annual
products.The weak Rand is again a strength for the domestic conference Growth %
Overseas 1,172 1,274 1,428 1,491 1,532 7.4
and incentive industry as it discourages local associations and companies
Europe 771 846 950 998 1,023 7.9
from taking incentives and conferences to foreign destinations.
North America 137 158 194 193 202 10.3
Australia 62 63 69 69 70 3.1
INTERNATIONAL TOURISM TRENDS Asiaa 118 111 109 122 122 1.2
Arrivals India/Indian
Ocean Islands 27 31 34 38 40 9.9
As shown by the dramatic increase in foreign tourist arrivals
Africa 3,607 3,527 4,184 4,272 4,222 5.1
between 1993 and 1998, there is a strong correlation between South
Others b 221 241 192 198 193 2.0
Africa’s international tourism and its political stability. Following the
Total 4.944 4.976 5,732 5,891 5,872 5.5
peaceful elections in 1994, South Africa’s international arrivals increased
a Excludes India; b Central & South America, Middle East and unspecified
significantly – from 3.1 million in 1993 (2.5 million from Africa and
Sources: Statistics South Africa; Grant Thornton Kessel Feinstein

16
 The UK dominates European arrivals with a share of some 32-34 Breakdown of International Air Arrivals by
per cent, a testimony to its past and continuing strong socio-political Province, 1997-2000

relations. Germany ranks second with an average share of 21-25 per

Northern
cent, followed by the Netherlands and France with 8-9 per cent each. Cape 1997 1998 1999 2000

As highlighted in the following table, visits to friends and/or Free State

relations (VFR) and business combined account for a higher share than
Northern
leisure for the UK and Australia, reflecting their past close socio-political Province
associations under the British Commonwealth. Leisure is generally
North
dominant in other Western markets – Germany, Netherlands and the West

USA. Eastern
Cape

Purpose of Visit by Long-haul Source Markets Mpumalanga

(%)
KwaZulu-
Purpose of Visit Natal
Source Market Leisure VFR Business Other
Western
UK 45 36 16 3 Cape

Germany 63 26 8 3 Gauteng

Netherlands 66 21 10 3 0% 10% 20% 30% 40% 50% 60%

USA 52 22 20 6 Source: SAT

Australia 40 27 18 15
Not surprisingly, business travellers have the highest daily
Japan 85 3 4 9
expenditure (R1,277), followed by holiday travellers (R1,185). VFR
VFR = visits to friends and/or relations
Source: SAT tourists spent an average of R550 a day in 2000.

Foreign air arrivals Accommodation

Twice a year, in January and August, South African Tourism Hotels are still the most popular form of accommodation, used by
undertakes a survey of foreign tourists departing by air from 63 per cent of international air tourists to South Africa in 2000. The
Johannesburg, Cape Town and Durban International Airports. The homes of friends and relatives are the second most popular, with a 31
survey only applies to overseas and African tourists to South Africa who per cent share, followed by game lodges – down from 23 per cent in
travel by air, ie 1.8 million tourists in 2000 – 1.5 million from overseas 1999 to 21 per cent in 2000. Bed & breakfast accommodation,
and 280,000 African air arrivals. guesthouses and self-catering attract around 18 per cent, 17 per cent
In 2000, 41 per cent of air travellers, or around 742,000, visited and 14 per cent respectively.
South Africa for holidays. A further 28 per cent visited the country for Backpacker hostels and caravan/camp sites were included in the
business and 21 per cent for VFR. 2000 survey for the first time. Around nine per cent of foreign air
Interestingly, although the Western Cape is perceived as South arrivals made use of backpacker hostels and eight per cent stayed in
Africa’s 'tourism capital', the province attracts slightly fewer foreign air caravan/camp sites.
arrivals per annum than Gauteng – a 51 per cent share as against
Gauteng's 59 per cent. However, average length of stay is longer in the
Accommodation used by International Tourists a, 1999-2000
Western Cape – 11 days versus nine in Gauteng. KwaZulu-Natal is the
third most popular destination region in the country, attracting a quarter Holiday
resorts 1999 2000
of all foreign air arrivals in 2000.
Camping/
The trend towards shorter stays in South Africa is evident. In 1996 caravaning
Backpackers'
foreign air arrivals stayed an average of 18.2 days in South Africa but, by hostels
Self-catering
2000, average length of stay in the country had fallen to 15.4 days.This
Country/
can be attributed to a decline in the proportion of VFR visitors and an guest houses
increase in real holidaymakers. Bed &
breakfast
Game lodges
Expenditure Friends &
relatives
In 2000, average expenditure per foreign air arrival in South Africa
Hotel
was R14,801 (at around R10 to US$1) – covering accommodation,
0% 10% 20% 30% 40% 50% 60% 70%
food, drink, shopping, transport and recreation (including pre-paid
aInternational tourists arriving in South Africa by air
expenses). If airfares are included, average trip spend was R24,500. Source: SAT

17
Main attractions Destinations Visited by South Africa’s Domestic Tourists,
2000
Scenic beauty and wildlife remain the main attractions for
international air travellers to South Africa – cited by 44 per cent and 27
per cent respectively. Seeing South Africa after the political change seems Northern Cape 2.7%
Mpumalang 5.7%
to be declining in importance as a drawcard, although it is still cited as a
Gauteng 19.6% Free State 6.7%
main reason for visiting by 15 per cent of travellers to South Africa.
North West 7.9%

Top Ten Attractions Visited by International Tourists a KwaZulu-

in South Africa, 1999-2000 Natal 19.0%
Western Cape 12.5%
Robben
Island 1999 2000
Durban Northern
Beachfront Province 12.9%
Ostrich Eastern Cape 12.8%
Farms
Kruger
Park
Source: South African Domestic Tourism Survey, 2001
Kirstenbosch
Garden
Route
Wine
Route
Domestic tourism spending
Table Average expenditure per capita per trip for all types of overnight
Mountain
Cape Point domestic travel is R437, of which R182 (42 per cent) is spent on
V&A transport, R97 (22 per cent) on accommodation, R105 (24 per cent) on
Waterfront
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% food, R34 (eight per cent) on entertainment and R20 (five per cent) on
a International tourists arriving in South Africa by air gifts. The Western Cape has the highest average expenditure per
Source: SAT
domestic tourist of all the provinces.
Eight of South Africa’s top ten attractions are located in the
Western Cape. The most popular tourist attraction for foreign air Same-day travel
tourists is the V&A Waterfront in the Western Cape, attracting some 42 The South African Domestic Tourism Survey found that, from
per cent of all foreign arrivals to South Africa in 2000, followed by Table May 2000 to April 2001, domestic tourists took 57 million day trips.
Mountain (34 per cent) and Cape Point (33 per cent). Some 13 per cent Same-day travellers, or excursionists, originated from the Eastern Cape
visited the Kruger National Park. Robben Island was the only one of (22 per cent), Gauteng (20 per cent), Northern Province (14 per cent)
the top ten attractions that saw an increased share of foreign visitors in and the Western Cape (13 per cent). Central Gauteng, the Wild Coast
2000 – up from 12 per cent in 1999 to 13 per cent. and Cape Metropole were the most popular destinations for same-day
travellers.
DOMESTIC TOURISM Day visitors to the Western Cape have the highest average
Unlike many developing countries, South Africa has a strong and expenditure per person per trip, followed by KwaZulu-Natal and the
well-established domestic tourism industry. In 2001 South African Free State.
Tourism commissioned a South African Domestic Tourism Survey – the
largest of its type ever undertaken in the country, which included TRANSPORTATION
interviews with 9,527 respondents, detailing their day and overnight According to Statistics South Africa, 78 per cent of the 1.8 million
trips taken from May 2000 to April 2001.The study found that, in the air travellers to South Africa in 2000 entered the country via
12-month period, domestic tourists took 33.5 million overnight trips Johannesburg International Airport, 20 per cent via Cape Town
and 57 million day trips. International Airport and fewer than two per cent through Durban and
other international airports combined.
Purpose of trip and destinations visited Statistics released by the Airports Company South Africa (ACSA),
VFR was the main purpose of travel accounting for a 59 per cent meanwhile, indicate that 2.7 million passengers departed from South
share of total trips. Africa for international destinations between April 2000 and March
Some 21 per cent were for holidays, 14 per cent for religious 2001. These passengers included both South Africans travelling abroad
purposes and four per cent for business. Gauteng province attracted the (41 per cent) as well as foreign visitors returning home (59 per cent).
highest number of business trips and is the most popular destination for Some 6.8 million domestic passengers also passed through ACSA
overnight trips overall – largely due to a high predominance of VFR airports.
travel – followed closely by KwaZulu-Natal. Due to the re-acceptance of South Africa into the global
KwaZulu-Natal attracts the highest proportion of domestic holiday community, the liberalization of international air routes and a healthy
trips, followed by the Western Cape. Gauteng is only the fourth most growth in demand for air travel, the number of international airlines
popular destination for overnight holiday trips. serving South Africa increased significantly in the 1990s – from 21 in

18
1991 to over 60 in 1999. There are currently around 40 international A new national grading system was recently developed by the
airlines serving South Africa. Tourism Grading Council of South Africa, a council commissioned by
Although the number of airlines has decreased, the number of the Minister of Tourism in late 2000. The accommodation component
frequencies and seat capacity to South Africa have increased significantly of the grading system was launched in November 2001.
since the September 11 2001 terrorist attacks. This is the result of Hotel trading statistics are collected and compiled by Statistics
international airlines redeploying aircraft from less favourable routes to South Africa on behalf of the industry. Since many hotels are not graded,
South Africa. The country is considered to be reasonably well served the statistics are only meaningful if analysed on a national or area basis.
with international services to most continents. South African Airways Hotel performance has been poor, with occupancy levels consistently
(SAA), the national carrier, is the dominant international airline. lower than international norms. Although 2001 occupancies were higher
As yet there are no large charter flight operations bringing foreign than those achieved from 1990 to 1994 – when they dropped below 50
tourists to South Africa. There are seven major domestic airlines per cent – the 53 per cent average for the country cannot be viewed as
operating regional routes – SAA, British Airways/Comair, Kulula.com, good.Average room rates have seen consistent growth over the last decade
Nationwide, SA Airlink, SA Express and Sun Air. Of these SAA is by far but, in the last four years, they have declined in real terms.
the largest.
In addition to having a good airport infrastructure, South Africa's Hotela Room Occupancies and Average Room Rates,
road and rail transport systems are well developed.There are a significant 1995-2002
number of specialized tourist train services catering to the high end of
1995 1996 1997 1998 1999 2000 2001
the market, including the world-famous Blue Train.
Occupancy (%)
South Africa 56 56 54 52 52 51 53
ACCOMMODATION Cape Town 72 72 71 65 57 60 59
Since there is no compulsory registration of tourist accommodation Johannesburg 44 45 40 41 41 51 50
facilities required, the actual number of tourist accommodation Durban & Umhlanga 66 66 60 62 67 67 70
establishments in South Africa is not known. However, estimates put the
number of establishments at just over 11,000 and the total number of Average room rate (R)
South Africa 166 207 233 249 263 279 293
units in all types of accommodation at 168,700.
Cape Town 206 239 287 295 304 342 362
Johannesburg 147 194 247 237 267 337 343
South Africa’s Tourist Accommodation Capacity a, 2000 Durban & Umhlanga 166 198 204 220 250 256 273

Type No. of Establishments No. of Units/Rooms a All grades of hotel

Youth hostel/backpackers 70 500 Source: Statistics South Africa, Hotel Trading Statistics, 1995-2001

Executive apartments 34 2,000

The pressure on rates and occupancies is mainly the result of
National and provincial parks 95 2,900
increased supply. Between 1994 and 2000, South Africa saw significant
Timeshare 167 6,100
capacity increases, which outstripped the growth in demand. In fact
Hunting and game lodges 745 12,600
Bed and breakfasts 3,700 13,000
lower demand growth has been experienced in the last two years than

Guesthouses and farms 3,300 23,100 would have been predicted when the new hotels were being planned
Self-catering & resorts 1,950 48,500 and built.This is particularly true for Cape Town, which achieved good
Hotels 1,000 60,000 occupancy levels from 1995 to 1997, but which also received most of
Total 11,061 168,700 the additional room supply coming on stream from 1998.
a Estimated Occupancies and rates are not expected to improve significantly
Source: Grant Thornton Kessel Feinstein until demand growth is sufficient to absorb the current room over-
supply in South Africa.
Hotels
An estimated 30 per cent of hotel establishments and 60 per cent Other types of accommodation
of hotel rooms in South Africa are in hotels that have an affiliation to a Guesthouses
chain or group. The major hotel groups in South Africa are locally Guesthouses tend to be small (with a maximum of 25 rooms),
owned groups, such as Sun International (which includes the limited individually owned and run by their proprietors. Guest farms are usually
service brand City Lodge and serviced apartment brand, Courtyard), adjuncts to a core farming business. Most guesthouses are fairly unique
Protea and Southern Sun (which includes the Holiday Inn and Formule and individualistic and some are located in fine old residences. No
1 brands). Although several international brands have established hotels formal statistics are collated in respect of this sector.
in South Africa in recent years - ie Hilton, Sheraton and Hyatt - these
hotels have struggled to penetrate the South African market.The main Bed & breakfast accommodation
reason for this is said to be an underestimation of loyalty to local brands. In the 1980s there were considered to be no bed & breakfast

19
(B&B) establishments in South Africa and in the early 1990s there were
only a few. In the last ten years, however, B&Bs have grown significantly.
Although still growing, the level of growth is finally slowing down,
with only the more serious operators (rather than the part-time and
whimsical) now entering the sector.
Self-catering
The self-catering industry has never been regulated in any way, nor
has there been any proper research or statistics collated for it. The self-
catering market includes a range of type of establishments, such as
holiday apartments, resorts with chalets or flats, boutique self-catering
holiday establishments and serviced apartments. The sector is
characterized by independent operators rather than groups.
Self-catering accommodation is more popular with holiday rather
than business travellers and with domestic rather than foreign tourists.
However the use of self-catering establishments by foreign tourists is
growing. Self-catering is cheaper than traditional hotel accommodation
– particularly for families or groups – and it provides flexibility,
independence and privacy.
Game lodges
Game lodges are small establishments – the average size being 30
rooms – that have grown substantially in numbers over the last ten years
as they are popular products and satisfy the growing trend for eco-based
leisure tourism. Most game reserves offer game viewing only, but some
offer a combination of game viewing and hunting. There are also a
significant number of hunting-only establishments in South Africa.
Game lodges are found on small, medium and large game reserves.
The large game reserves involved are often share-block entities,
syndicates or simply joint-venture agreements between owners, which
enable a large reserve to have one or more lodges that can be privately
owned and successfully exploited. Private game lodges vary in standard
from mid- to very up-market. Both domestic and foreign tourists use
the mid-market lodges, while the luxury lodges almost exclusively cater
to foreign tourists. Virtually all private game and hunting lodges are
independent, although there are one or two small groups operating
game lodges in South Africa.
On average, game lodges achieve annual occupancies from 40-85
per cent, depending primarily on location. Mid-market lodges operate
near or at full capacity over weekends, but mid-week occupancies are
much lower. Lodges catering primarily to the foreign market have less
fluctuation in occupancies. Hunting-only lodges achieve very low
occupancies as these lodges typically only operate in the hunting season
(South African winter months).
There are many new game lodges and some new hunting lodges
coming onto the market every year, as land owners and farmers consider
the operation of these ecotourism facilities to supplement their income
or start a new business. Because of the large number of primarily
independent operators and the current growth in supply, game lodges
and hunting tends to be very competitive. Private lodges are also
experiencing greater competition from national and provincial parks.
20
THE MICE MARKET
Conference facilities
South Africa boasts a large number of conference venues and the
sophistication of these venues has improved significantly in the last
decade. In total, there are 1,500 venues that can host events in South
Africa. Together, the Western Cape, Gauteng and KwaZulu-Natal
provide 72 per cent of the country’s conference facilities.
Some 65 per cent of South Africa’s conference venues are located
within accommodation establishments. Only a small percentage are
purpose built, specialized centres located outside accommodation
establishments. However, South Africa now offers two international
convention centres (in Durban and Sandton, Johannesburg) and a third
is being constructed in Cape Town.
It is estimated that venues in South Africa have a capacity for 1.4
million conference room days and 100 million delegate days per year.
MICE Travel Demand for South Africa, 1999
Events Delegates Delegate Days
Number % share Number % share Number % share
International 1,548 1.5 110,059 1.0 259,988 1.8
Domestic 99,797 98.5 10,953,186 99.0 14,511,932 98.2
All events 101,344 100.0 11,063,245 100.0 14,771,920 100.0
MICE = meetings, incentives, conferences and exhibition travel
Source: Grant Thornton Kessel Feinstein
The South African Tourism Conference Industry Study carried out
in 1999/2000 established that South Africa hosted just over 101,000
events in 1999. These represented 11.1 million delegates and 14.8
million delegate days. The bulk of conference demand emanates from
the domestic market.
Performance
According to the results of the study, the conference room
utilization rate is 9.3 per cent and the delegate seat utilization rate 14.8
per cent (Dutch utilization rates were 28 per cent for rooms and 16 per
cent for seats in 1991).This utilization rate is calculated over all venues
in South Africa. If only the venues that account for the majority of the
meetings, incentives, conferences and exhibition (MICE) business in
South Africa are included – ie the most popular and frequently used –
conference room utilization rises to 44.3 per cent and delegate day
utilization to 25 per cent.
The South African MICE industry is estimated to have grown at
around five per cent per annum over the last few of years. Demand is
expected to continue to grow but, given the ongoing increase in
capacity supply, utilization levels will remain much the same, possibly
even declining slightly with the advent of new and larger venues.
TOURISM ROLES AND
RESPONSIBILITIES
The South African Government’s tourism responsibility is
structured at three levels – national, provincial and local.
At national level, the Department of Environmental Affairs and
Tourism (DEAT) leads and directs tourism policy formulation and
implementation towards national tourism growth in partnership with
South African Tourism (SAT) – formerly Satour – the provincial and
local governments, the provincial and local tourism authorities, the
tourism industry and other relevant stakeholders.
SAT is the official international marketing agency of tourism in
South Africa with the primary goal of marketing South Africa
internationally as a preferred tourism destination. It has undergone
many transformations over the years and has recently been restructured
under the latest legislation of 1996, according to which the organization
is responsible for spearheading international marketing, research and
information management. The chief executive officer of SAT has
changed many times over the past few years with the latest taking up the
position in October 2001.
Provincial governments have, according to the national
constitution, a concurrent role in the development and promotion of
the tourism industry in South Africa. The provincial governments,
through provincial tourism organizations, have responsibility for
developing, marketing and promoting their destinations. Provincial
governments also have the responsibility of marketing their provinces to
the domestic market in competition with other provinces. In general,
the success of tourism marketing, promotion and development varies
significantly between the nine provinces. This is largely due to
ineffectiveness driven by poor budgets, lack of policy and lack of – and
changes in – appropriate structure/strategy.
Local government has specific tourism functions including local
policy implementation, environmental planning and land use, product
development, marketing and promotions. Due to the recent redefinition
of boundaries for local government, these entities are still in a state of
flux. Tourism at this level is still in the planning rather than the
implementation phase.
If the weaknesses and/or threats are addressed and the state policy framework is
conducive to dynamic growth, South Africa’s Travel & Tourism could have an
even greater impact than the baseline scenario suggests.
Communities are also expected to play a vital role in the
development of tourism. Many communities and previously neglected
groups – particularly those in rural areas – have not actively participated
in the tourism industry, yet have significant tourism resources.
The Tourism Business Council of South Africa is an umbrella body
representing all private sector aspects of tourism. Its aim is to ensure that
the business sector is comprehensively, cohesively and effectively
represented at national and provincial levels. There are many different
private sector associations representing different players in South Africa’s
tourism industry. Many of these associations are linked to the Tourism
Business Council, which acts as one voice for the industry.
CURRENT OUTLOOK
The events of September 11 2001 have had a positive impact on
South Africa’s international tourism. Although detailed results are still
not available for 2001, preliminary estimates suggest that, during the first
three months of 2002, foreign tourist arrivals increased by more than
nine per cent over the same period in 2001. Overseas arrivals rose by as
much as 16 per cent – reminiscent of growth levels recorded in the mid-
1990s.
The change in general perception of South Africa – to that of a
'safer' destination – the need for tourists to seek alternative holiday
destinations (away from potential terrorist target areas), and an increase
in flight capacity to South Africa post-September 11, have been the
primary reasons for this surge in demand. Whether this surge is
sustainable still needs to be seen.
As highlighted by WTTC in the Policy Recommendations
contained in this report, there are a number of weaknesses, or threats,
which could dampen the growth in demand for South Africa as a
tourism destination. However, if these weaknesses and/or threats are
addressed and the state policy framework is conducive to dynamic
growth, Travel & Tourism could have an even greater impact than the
baseline scenario suggests – both in terms of advancing economic
prosperity across the country, and in enhancing quality of life for all
South Africans.
21
TRAVEL & TOURISM
SATELLITE ACCOUNT
TOURISM SATELLITE ACCOUNTING
THIS REPORT FOLLOWS THE CONCEPT OF SATELLITE ACCOUNTING
DEFINED IN THE TOURISM SATELLITE ACCOUNT: RECOMMENDED
METHODOLOGICAL FRAMEWORK (TSA:RMF), AND DEVELOPED UNDER
THE AUSPICES OF THE WORLD TOURISM ORGANIZATION.
Over the last three decades, countries have estimated the economic impact of Travel & Tourism through a range
of measures using a variety of definitions and methodologies. Such approaches have prevented meaningful
comparisons among nations. Even for the same nation over different periods of time, they have frustrated business
and government attempts to draw valid conclusions about the nature and course of Travel & Tourism demand in
national economies.This regime has obscured the substantial, positive role the industry plays in national economies
and has thwarted business and government attempts to optimize economic programmes and policies.
The World Travel & Tourism Council (WTTC) recognized the dearth of crucial Travel & Tourism intelligence
from the time of its establishment in 1990 and it published the first detailed estimates of world tourism's economic
impact that same year.
Since then WTTC has worked to improve its methodologies and to encourage individual countries to enhance
their measurement and understanding of tourism’s impact on their national economies. Furthermore, in the spirit
of joining forces to enhance world comprehension of the role of Travel & Tourism in national economies,WTTC
has strongly supported the programmes of the World Tourism Organization (WTO) to improve tourism statistics
worldwide.

WTTC’S RESEARCH
WTTC and its economic consultants/research partners – DRI•WEFA (from 1990-1999) and Oxford
Economic Forecasting, OEF (since 1999) – have developed and published research on the economic contribution
of Travel & Tourism to the world, regional and national economies.
Starting in 1990,WTTC’s research team has been working to develop practical, real-world models to illustrate
Travel & Tourism’s economic contribution based on the needs of private sector leaders, public sector policy-makers
and industry researchers, and on the interpretation of the system of national accounts. The research is now firmly
anchored in the international standard for tourism satellite accounting that was developed by WTO, OECD and
Eurostat, and approved by the United Nations Statistical Commission in 2000. It was launched at the TSA
Conference held in Vancouver in May 2001 and published as the Tourism Satellite Account: Recommended Methodological
Framework (TSA:RMF) in 2001.
Since 1999, WTTC's research has assumed the conceptual framework of the UN-approved standard with a
number of discretionary extensions, and it combines the most sophisticated economic modelling and forecasts available
with the most up-to-date, publicly available data to generate a comprehensive implementation of Travel & Tourism
satellite accounting.
The 2002 update of the WTTC TSA research is the second annual update undertaken for WTTC by OEF. In
carrying out the work, OEF has drawn extensively on the methodology developed over the years by WTTC and
DRI•WEFA to develop TSAs as operational tools. However, it has also taken the opportunity in a number of areas
to review and enhance the modelling techniques, assumptions used and data sources applied.

22
WTTC’S APPROACH TO TOURISM SATELLITE ACCOUNTING
WTTC has endeavoured to implement and
produce the most comprehensive TSA provided for
within the TSA:RMF – by developing the narrow
concept of the ‘Travel & Tourism Industry’ in addition
to the broader concept of the ‘Travel & Tourism
Economy’.WTTC advocates full implementation of the
TSA as defined in the TSA:RMF in order to achieve the
highest level of benefits for industry and governments.
These include:
■ A wealth of customer and consumer information on
tourism-related purchases (before, during and after
trips – whether domestic or international, imported
or exported – as well as services, durables and non-
durables) that has never been identified until now;
■ Comprehensive documentation and analysis of
the full tourism-product service chain and
government’s ability to deliver quality and timely
service to visitors;
■ Linkages between Travel & Tourism and other
sectors of the economy such as agriculture and
manufacturing to illustrate the flow-through of
spending;
■ Complete outlook for public works that benefit
visitors and Travel & Tourism companies in order
to leverage public sector plans and priorities for
growth;
■ Focused opportunities for domestic production, as
SOUTH AFRICA
Travel & Tourism Employment
(‘000 Jobs)
Economy Industry
1,200
1,000
Direct and indirect impact of visitor activities, capital
800
600
400
200
0 0
1998 1999 2000 2001 2002 2003
well as incentives from the public sector, to aid in
the growth of businesses that help alleviate trade
balance issues;
■ Demand- and supply-side information on
employment that allows for human resource
planning and development.
WTTC has worked towards developing a
comprehensive TSA – not because it is eager to
exaggerate the size of Travel & Tourism’s impact, but
because the information that can be garnered from the
exercise by governments and industry is crucial for
making intelligent and informed policy and business
decisions. WTTC believes that history will document
its pioneering implementation of the simulated TSA as
one of the most important turning points for Travel &
Tourism’s long overdue economic recognition.
In the WTTC research, no country receives special
treatment or favours. WTTC uses internationally
available data sources and the same scope of tourism
satellite accounting for all countries, as well as the same
basic assumptions through the same system of models.
WTTC’s TSA research utilizes a universal and internally
consistent modelling framework and generates
harmonized results and forecasts for 160 countries
around the world. Details of the methodology used by
WTTC/OEF in its TSA research are available on
WTTC's website (www.wttc.org).
Travel & Tourism Gross Domestic Product
(1990 Constant US$ bn)
Economy Industry
10
T&T ECONOMY 8
investment, exports and government services.
6
4
T&T INDUSTRY
Direct impact of visitor activity (transportation, 2
accommodation, food and beverage, recreation,
entertainment and travel services)
1998 1999 2000 2001 2002 2003
23
TSA CONCEPTS
& STRUCTURE
Year 2002 (R bn, ’000 Jobs)

Personal Travel Business Travel Government Visitor Government Capital Exports

& Tourism Expenditures Exports Expenditures Investment (Non-Visitor)
(Individual) (Collective)

37.3 9.4 0.3 33.1 0.6 17.1 10.7

Travel & Tourism Consumption

80.0

Travel & Tourism Demand

108.5

Travel & Tourism Industry Supply Travel & Tourism Economy Supply (Residual)

80.0 28.4

Imports
Travel & Tourism Industry GDP 30.4
(Direct Only) Travel & Tourism Economy Supply
T&T Industry GDP (Indirect)
31.1 18.6
108.5

Comp. Indirect Operating Depreciation Travel & Tourism Economy GDP Imports
(Direct and Indirect)
Taxes Surplus -
Subsidies 72.5 36.0

T&T Property
T&T Industry Economy Taxes
Employment Employment

1148.0
492.7

Personal Indirect Corp.

Income Taxes Taxes Taxes

Travel & Toursim Taxes

24
 Travel & Tourism Satellite Accounting research for South Africa
reflects a comprehensive simulation of the new international
standard adopted by the United Nations following the Enzo Paci
World Conference on the Economic Impact of Tourism (Nice,
France, June 1999), ten years of model development and TSA
experience by WTTC and Oxford Economic Forecasting (OEF), and
application of OEF’s latest macro-economic forecasts.
TSA Economic Concepts
The Travel & Tourism Satellite Account is based on a ‘demand-side’
concept of economic activity, because the industry does not produce or
supply a homogeneous product or service like traditional industries
(agriculture, electronics, steel, etc). Instead, Travel & Tourism is an
industrial activity defined by the diverse collection of products (durables
and non-durables) and services (transportation, accommodations, food and
beverage, entertainment, government services, etc) that are delivered to
visitors.There are two basic aggregates of demand in the TSA:
I Travel & Tourism Consumption represents the value of
products and services that have been consumed by visitors. It is the
basic demand-side aggregate used to construct an explicitly defined
production-side ‘industry’ equivalent for comparison with all other
industries.Travel & Tourism Consumption includes:
• Personal Travel & Tourism, more formally known as consumer
expenditures, which captures spending by South Africa residents
on traditional Travel & Tourism services (lodging, transportation,
entertainment, meals, financial services, etc) and goods (durable
and nondurable) used for Travel & Tourism activities.
• Business Travel by government and industry, which mirrors
Personal Travel & Tourism’s spending on goods and services
(transportation, accommodation, meals, entertainment, etc), but
represents intermediate inputs used in the course of business or
government work.
• Government Expenditures (Individual) by agencies and
departments which provide visitor services such as cultural (art
museums), recreational (national park) or clearance (immigration/
customs) to individual visitors.
• Visitor Exports, which include spending by international
visitors on goods and services.
II Travel & Tourism Demand builds on Travel & Tourism
consumption to include Travel & Tourism products and services
associated with residual components of final demand. It is used to
construct a broader ‘economy-wide’ impact of Travel & Tourism.
The residual elements of Travel & Tourism demand are:
• Government Expenditures (Collective) made by agencies
and departments associated with Travel & Tourism, but generally
made on behalf of the community at large, such as tourism
promotion, aviation administration, security services and resort
area sanitation services.
• Capital Investment by Travel & Tourism providers (the private
sector) and government agencies (the public sector) to provide
facilities, equipment and infrastructure to visitors.
• Exports (Non-Visitor) which include consumer goods sent
abroad for ultimate sale to visitors (such as clothing, electronics
or petrol) or capital goods sent abroad for use by industry service
providers (such as aircraft or cruise ships).
By employing input/output modelling separately to these two
aggregates (Travel & Tourism Consumption and Travel & Tourism
Demand), the Satellite Account is able to produce two different and
complementary aggregates of Travel & Tourism Supply: the Travel &
Tourism Industry and the Travel & Tourism Economy.The former
captures the explicitly defined production-side ‘industry’ equivalent,
direct impact only, for comparison with all other industries, while the
latter captures the broader ‘economy-wide’ impact, direct and indirect, of
Travel & Tourism.Through this process, the Satellite Account is also able
to determine that portion of supply, which it Imports from abroad.
Next, the satellite account breaks down both aggregates of supply
(Industry and Economy) into the direct and indirect impacts of Gross
Domestic Product (GDP), the main descriptor of economic
production, as well as the various components of GDP (Wages &
Salaries, Indirect/Transaction Taxes, Operating Surplus,
Depreciation and Subsidies). Beyond the regular TSA accounts, a
separate analysis is also provided of Personal Income Taxes paid by
Travel & Tourism generated employment and Corporate and
Property Taxes paid by Travel & Tourism companies.
Finally, one of the most important elements of the Travel & Tourism
Satellite Account are the Employment results, which can now be
quantified for the basic Travel & Tourism Industry and the broader
Travel & Tourism Economy.
• T&T Industry Employment generally includes those jobs with
face-to-face contact with visitors (airlines, hotels, car rental,
restaurant, retail, entertainment, etc).
• T&T Economy Employment includes T&T Industry
Employment plus those faceless jobs associated with:
• Industry suppliers (airline caterers, laundry services, food
suppliers, wholesalers, accounting firms, etc).
• Government agencies, manufacturing and construction of capital
goods and exported goods used in Travel & Tourism.
• Supplied commodities (steel producers, lumber, oil production,
etc).
25
TRAVEL & TOURISM’S
ECONOMIC IMPACT
TRAVEL & TOURISM – ENCOMPASSING TRANSPORT,ACCOMMODATION,
CATERING, RECREATION AND SERVICES FOR VISITORS – IS ONE OF
SOUTH AFRICA’S HIGHEST PRIORITY INDUSTRIES AND EMPLOYERS.
Worldwide in 2002, it is expected to post US$4.2 trillion of economic
activity (Total Demand) and this is forecast to grow to US$8.6 trillion
by 2012.
Travel & Tourism Total Demand in sub-Saharan Africa is expected to
total US$32.9 billion in 2002, growing to US$87.6 billion in 2012.
In South Africa, in 2002, Travel & Tourism is expected to post R108.5
billion (US$10.8 billion) of economic activity (Total Demand), growing
to R288.5 billion (US$31.7 billion) by 2012.
In 2002, the Travel & Tourism Industry should contribute 3.6 per cent
to worldwide GDP. The broader Travel & Tourism Economy should
contribute 10.0 per cent to world GDP in 2002.
In sub-Saharan Africa, the Travel & Tourism Industry is expected to post
a GDP contribution of 2.4 per cent in 2002, while the Travel & Tourism
Economy contribution will be 6.2 per cent.
In South Africa, the Travel & Tourism Industry is expected to contribute
3.0 per cent to GDP in 2002 (R31.1 billion, or US$3.1 billion), rising
to R84.8 billion, or US$9.3 billion (3.5 per cent of total), by 2012.The
Travel & Tourism Economy contribution should grow from 7.1 per cent
(R72.5 billion, or US$7.2 billion) to 8.1 per cent (R194.3 billion, or
US$21.3 billion) over the same period.
Travel & Tourism is a high-growth activity, which is forecast to increase
its total economic activity by 4.5 per cent per annum worldwide in real
terms over the next ten years.
In sub-Saharan Africa, Travel & Tourism is expected to post average
annualized gains of 5.7 per cent between 2002 and 2012.
For South Africa,Travel & Tourism economic activity is expected to grow
by 4.8 per cent per annum in real terms between 2002 and 2012.
Travel & Tourism is human resource intensive, creating quality jobs across
the full employment spectrum. In 2002, one in 12.8 jobs is generated by
the Travel & Tourism Economy.The Travel & Tourism Industry accounts
for 2.8 per cent of global employment.Today there are 71.7 million Travel
& Tourism Industry jobs and 198.1 million jobs in the Travel & Tourism
Economy, and these will rise to 90.8 million Travel & Tourism Industry
jobs and 249.5 million Travel & Tourism Economy jobs by 2012.
The sub-Saharan Africa Travel & Travel Industry is expected to generate
4.0 million jobs in 2002 (2.9 per cent of total employment), while the
broader Travel & Tourism Economy will account for 10.5 million jobs
(7.4 per cent of total employment).
26
In South Africa, in 2002, Travel & Tourism Economy employment is
estimated at 1,148,000 jobs, or 6.9 per cent of total employment. By
2012, this should grow to 1,555,300 jobs – 7.9 per cent of total
employment.The 492,700 Travel & Tourism Industry jobs will account
for 3.0 per cent of total employment in 2002 and are forecast to rise to
679,200 jobs, or 3.4 per cent of the total, by 2012.
Travel & Tourism is a major exporter, with inbound visitors injecting
foreign exchange directly into the economy.Travel & Tourism exports in
sub-Saharan Africa are expected to represent 11.1 per cent of total
exports in 2002.
In South Africa, exports make up a very important share of Travel &
Tourism’s contribution to GDP. Of total South African exports, services
and merchandise,Travel & Tourism is expected to generate 12.5 per cent
(R43.8 billion, or US$4.4 billion) in 2002, increasing to R108.6 billion,
or US$12.0 billion (14.2 per cent of total exports), in 2012.
Travel & Tourism is a catalyst for construction and manufacturing. In
2002, the private and public sectors combined are expected to spend
US$642.2 billion in new Travel & Tourism capital investment worldwide
– 9.2 per cent of total investment – rising to US$1.3 trillion, or 9.5 per
cent of the total, in 2012.
Sub-Saharan Africa Travel & Tourism Capital Investment is expected to
total US$5.1 billion in 2002, or 8.8 per cent of total regional capital
investment.
Year 2002 capital investment in the South African Travel & Tourism
Economy is estimated at R17.1 billion (US$1.7 billion) or 10.3 per cent
of total investment. By 2012, this should reach R47.0 million (US$5.2
billion) or 10.6 per cent of total.
Travel & Tourism is both a generator and receiver of government funds.
Globally, in 2002, Travel & Tourism is expected to generate US$714.9
billion of taxes - 10.2 per cent of total taxation – while channelling
US$203.6 billion of government expenditures, or 3.8 per cent of total
expenditures. By 2012, taxes should increase to US$1.4 trillion – 10.8
per cent of the total – and government spending on Travel & Tourism to
US$360.0 billion – 3.9 per cent of total government expenditure.
Government Travel & Tourism operating expenditures in South Africa in
2002 are expected to total R920 million (US$92 million) or 0.5 per cent of
total government spending. In 2012, this spending is forecast to rise to R1.8
billion (US$197 million), or 0.6 per cent of total government spending.
 SOUTH AFRICA ESTIMATES AND FORECASTS
2002 2012
R bn % of Total Growtha R bn % of Total Growthb
Personal Travel & Tourism 37.3 5.7 1.0 102.4 6.7 5.2
Business Travel 9.4 --- -12.8 28.7 --- 6.4
Government Expenditures 0.9 0.5 0.4 1.8 0.6 1.6
Capital Investment 17.1 10.3 3.7 47.0 10.6 5.2
Visitor Exports 33.1 9.4 13.9 86.2 11.3 4.7
Other Exports 10.7 3.1 14.2 22.4 2.9 2.4
Travel & Tourism Demand 108.5 --- 4.2 288.5 --- 4.8
T&T Industry GDP 31.1 3.0 2.2 84.8 3.5 5.1
T&T Economy GDP 72.5 7.1 3.2 194.3 8.1 4.9
T&T Industry Employmentc 492.7 3.0 1.8 679.2 3.4 3.3
T&T Economy Employmentc 1,148.0 6.9 2.7 1,555.3 7.9 3.1

a2001 Real Growth Adjusted for Inflation (%); b2002-2012 - Annualized Real Growth Adjusted for Inflation (%); cEmployment in '000 Jobs

SUB-SAHARAN AFRICA ESTIMATES AND FORECASTS

2002 2012
US$ bn % of Total Growtha US$ bn % of Total Growthb
Personal Travel & Tourism 12.0 5.2 2.5 32.9 6.5 5.9
Business Travel 2.2 --- -11.7 6.6 --- 6.8
Government Expenditures 0.8 1.8 3.3 1.8 1.9 4.3
Capital Investment 5.1 8.8 5.1 12.3 9.2 4.5
Visitor Exports 8.5 7.4 2.7 23.2 7.9 6.2
Other Exports 4.2 3.7 -0.8 10.9 3.7 6.0
Travel & Tourism Demand 32.9 --- 1.3 87.6 --- 5.7
T&T Industry GDP 7.5 2.4 -1.0 20.6 2.9 6.0
T&T Economy GDP 19.7 6.2 0.2 52.1 7.3 5.6
T&T Industry Employmentc 4,017.3 2.9 -3.3 6,062.8 3.4 4.2
T&T Economy Employmentc 10,485.0 7.4 -5.9 16,021.0 9.0 4.3

a2001 Real Growth Adjusted for Inflation (%); b2002-2012 - Annualized Real Growth Adjusted for Inflation (%); cEmployment in '000 Jobs

WORLD ESTIMATES AND FORECASTS

2002 2012
US$ bn % of Total Growtha US$ bn % of Total Growthb
Personal Travel & Tourism 2,039 9.9 -0.9 3,875 10.6 3.8
Business Travel 379 --- -3.5 738 --- 4.1
Government Expenditures 204 3.8 3.2 360 3.9 3.0
Capital Investment 642 9.2 -0.4 1,265 9.5 4.2
Visitor Exports 515 6.5 -4.9 1,303 6.6 6.5
Other Exports 433 5.4 -0.3 1,073 5.4 6.3
Travel & Tourism Demand 4,211 --- -1.3 8,614 --- 4.5
T&T Industry GDP 1,195 3.6 -1.6 2,271 3.8 3.8
T&T Economy GDP 3,283 10.0 -1.1 6,352 10.6 4.0
T&T Industry Employmentc 71,709.5 2.8 -2.5 90,819.1 3.1 2.4
T&T Economy Employmentc 198,098.0 7.8 -1.6 249,486.0 8.6 2.3

a2001 Real Growth Adjusted for Inflation (%); b2002-2012 - Annualized Real Growth Adjusted for Inflation (%); cEmployment in '000 Jobs

27
TOTAL DEMAND
TRAVEL & TOURISM IN SOUTH AFRICA IS EXPECTED TO TOTAL R108.5
BILLION (US$10.8 BILLION) OF TOTAL DEMAND IN 2002, INCLUDING:

■ R37.3 billion (US$3.7 billion) of Personal
Travel & Tourism consumption by residents
of South Africa (5.7 per cent of total
personal consumption);
■ R9.4 billion (US$935 million) of Business
and Government Travel by resident
companies and government employees;
■ R920 million (US$92 million) of
Government Expenditures, 0.5 per cent
of total government spending in South
Africa, to provide individual and
collective services to the South African
Travel & Tourism Industry and its visitors;
■ R17.1 billion (US$1.7 billion) of Capital
Investment, 10.3 per cent of total capital
investment in South Africa, in personal,
commercial and public Travel & Tourism
facilities, equipment and infrastructure by
residents, Travel & Tourism companies
and government agencies;
■ R33.1 billion (US$3.3 billion) of Visitor
Exports, or 9.4 per cent of total exports in
South Africa, generated from international
visitor markets; and
■ R10.7 million (US$1.1 billion) of
Merchandise Trade Exports, 3.1 per cent
of total exports in South Africa.
This breakdown of South Africa Travel &
Tourism demand clearly illustrates the fact
that, even though international visitor
spending accounts for more than 30 per cent
of the South African Travel & Tourism
Economy, personal consumption by residents
makes up the largest share at 34 per cent of
total demand. This would suggest that equal
focus be given to domestic and international
Travel & Tourism.
Over the past 14 years (1988-2001),
South Africa’s Travel & Tourism activity has
grown by a healthy, if not modest, 46.8 per
cent in real terms. This compares with 63.9
per cent cumulative growth over the same
period for sub-Saharan Africa and with 43.2
per cent growth for the world overall.
The long-term outlook for growth in
South Africa’s Travel & Tourism Demand is
expected to be strongly positive following the
political transition of the early 1990s and a
minor economic blip in 1999. It is expected
that the strong growth in visitor exports for
2002 will provide necessary support for
personal Travel & Tourism, capital investment
and government expenditures – which are
growing, but growing slowly – and for
business travel, which is still in decline.
Overall, South Africa’s Travel & Tourism is
expected to grow by 3.2 per cent in 2002.
Over the next ten years, growth in South
Africa’s Travel & Tourism Demand is expected
to average 4.8 per cent per annum.This would
just exceed expected worldwide growth of 4.5
per cent per annum, but would be slightly
slower than the 5.7 per cent annual average
growth projected for sub-Saharan Africa.

SOUTH AFRICA SOUTH AFRICA SOUTH AFRICA

Travel & Tourism Total Demand Travel & Tourism Total Demand Travel & Tourism Total Demand
(2002 US$ mn) (1990 Constant US$ bn) (Cumulative Real Growth, %)

Personal Travel & Tourism (3,710.1) 15.0 200

Other Exports (1,068.0)
175
14.5
150
14.0
125

13.5 100

75
13.0
50
Visitor Exports (3,291.5) 12.5
25
Capital Investment (1,698.6)
12.0 0
Government Expenditures (91.5)
Business Travel (935.4) 1998 1999 2000 2001 2002 2003 1990 1995 2000 2005 2010

SUB-SAHARAN AFRICA SUB-SAHARAN AFRICA SUB-SAHARAN AFRICA

Travel & Tourism Total Demand Travel & Tourism Total Demand Travel & Tourism Total Demand
(2002 Est. US$ mn) (1990 Constant US$ bn) (Cumulative Real Growth, %)

Personal Travel & Tourism (12,032.0) 50 200

Other Exports (4,244.6)
175

45 150

125

40 100

75

35 50
Visitor Exports (8,488.3)
25
Capital Investment (5,124.3)
Government Expenditures (845.7) 30 0
Business Travel (2,187.5) 1998 1999 2000 2001 2002 2003 1990 1995 2000 2005 2010

28
EMPLOYMENT
THE TRAVEL & TOURISM INDUSTRY IN SOUTH AFRICA IS EXPECTED TO
DIRECTLY YIELD 492,700 JOBS IN 2002.

A total of 1,148,000 jobs (direct and indirect)
are expected to be generated across the
broader spectrum of the Travel & Tourism
Economy encompassing:
■ travel company employment,
■ government agency employment, and
■ supplier company employment.
The first category represents Travel &
Tour ism Industr y jobs, while all three
categories represent Travel & Tourism
Economy jobs.
Travel & Tourism Industry jobs in South
Africa totalling 492,700 in 2002 represent 3.0
per cent of the country’s workforce. By 2012,
Travel & Tourism Industry employment is
expected to increase by 186,500 jobs to 3.4
per cent of total employment in South Africa.
The 1,148,000 Travel & Tour ism
Economy jobs in South Afr ica in 2002
represent 6.9 per cent of the total workforce.
By 2012, Travel & Tourism Economy
employment is expected to increase by
407,300 jobs in South Africa to 7.9 per cent of
total employment.
Over the past 12 years, Travel & Tourism
in South Africa has created more than 446,370
jobs. In 2002, due to continued strong growth
in visitor exports and weaker growth in other
elements of demand, the employment outlook
for Travel & Tourism is positive, albeit nowhere
near the record levels of the mid-1990s.
However, assuming a continuation of positive
economic growth over the next few years,
there is strong potential over the next decade
to create 40,000 new jobs every year.The total
number of jobs in Travel & Tourism is
expected to increase by just over 3.1 per cent
per annum between 2002 and 2012.
The charts below highlight a few points
of interest. First, South Africa’s Travel &
Tourism employment growth was strongly
positive following the political transition of
the mid-1990s, and nominally flat during
periods of economic uncertainty. Second, if
Travel & Tourism employment as a percentage
of total employment in South Africa is
compared with the respective shares in other
parts of sub-Saharan Africa, South Africa only
ranks in the middle tier of the list. More
importantly, it comes well down the list of 160
countries whose performances are estimated
by WTTC/OEF. Finally, the growth rate
projected for South Africa’s Travel & Tourism
employment over the next ten years is on the
low end of the regional list, as well the list of
160 countries. This tends to suggest that,
contrary to conventional thinking that Travel
& Tourism is an employment panacea for
South Africa, its significant employment
potential will only be realized if greater
attention is paid to the industry.

SOUTH AFRICA SOUTH AFRICA WTTC LEAGUE TABLE EXTRACT

Travel & Tourism Employment Travel & Tourism Economy Employment Travel & Tourism Economy Employment
(‘000 Jobs) (Cumulative Real Growth, %) (2002, % of Total Employment)

Economy Industry
1,200 200 40 Seychelles ............................................14.1
175 47 Namibia ................................................12.3
1,000
59 Madagascar ..........................................10.5
150
800 70 Zambia ..................................................10.0
125
79 Botswana ................................................9.2
600 100
108 Zimbabwe ..............................................7.5
75 117 South Africa ..............................6.9
400
50 121 Kenya ......................................................6.8
200 25 140 Swaziland ................................................5.5
0 142 Malawi......................................................5.5
0
1998 1999 2000 2001 2002 2003 1990 1995 2000 2005 2010 147 Lesotho ..................................................5.0

SUB-SAHARAN AFRICA SUB-SAHARAN AFRICA WTTC LEAGUE TABLE EXTRACT

Travel & Tourism Employment Travel & Tourism Economy Employment Travel & Tourism Economy Employment
(‘000 Jobs) (Cumulative Real Growth, %) (10-Year Real Growth, Annualized, %)
Economy Industry
12,000 200 3 Seychelles................................................6.9

175
4 Botswana ................................................6.8
10,000
11 Malawi......................................................5.6
150
8,000 16 Zimbabwe ..............................................5.1
125
24 Zambia ....................................................4.9
6,000 100
25 Madagascar ............................................4.9
75 31 Kenya ......................................................4.7
4,000
50 79 Namibia ..................................................3.5
2,000
25 82 Lesotho ..................................................3.4
0 0 92 South Africa ..............................3.1
1998 1999 2000 2001 2002 2003 1990 1995 2000 2005 2010 118 Swaziland ................................................1.9

29
GROSS DOMESTIC
PRODUCT
THE TRAVEL & TOURISM INDUSTRY IN SOUTH AFRICA IS EXPECTED TO
DIRECTLY PRODUCE R31.1 BILLION (US$3.1 BILLION) OR 3.0 PER CENT
OF TOTAL GROSS DOMESTIC PRODUCT (GDP) IN 2002.
The broader Travel & Tourism Economy
(direct and indirect) is expected to produce
R72.5 billion (US$7.2 billion), or 7.1 per cent
of total GDP. The long-term expectations for
Travel & Tourism GDP growth are positive –
5.1 per cent annualized real growth. By 2012,
Travel & Tourism Economy GDP is forecast to
gain one half of a percentage point to total 3.5
per cent or R84.8 billion (US$9.3 billion).
The Travel & Tourism Economy results
and forecasts illustrate the massive economic
stimulus of Travel & Tourism. The first set of
charts (stacked bar) shows how the tourism
industry acts as a leading economic catalyst as
its contribution permeates through South
Africa’s Travel & Tourism Economy. These
charts also illustrate how positive and negative
changes in the Travel & Tourism Industry
result in a much larger impact on the broader
Travel & Tourism Economy. In general, the
short-term results for sub-Saharan Africa's
Travel & Tourism GDP have followed regional
uncertainties and rebounds.
In the second set of charts (Cumulative
Real Growth), South Africa’s Travel & Tourism
Economy shows little if any growth pre-1994,
followed by dynamic growth from 1994-96 and
more modest growth since 1997.Also evident is
the positive, albeit continuing modest, outlook
for growth over the next ten years. Overall, this
level of modest, yet stable, growth is indicative of
the overall South African economy, which
continues to post positive incremental gains.
Although previous forecasts may have suggested
more dramatic future growth for South Africa's
Travel & Tourism, the WTTC/OEF 2002
research points to a more conservative, yet still
healthy, growth outlook.
The third set of charts (right) compares
South Africa with WTTC estimates for its
neighbours, comparing respective Travel &
Tourism Economy GDP as a percentage of
total GDP. Ranked at number 112 of 160
countries – between Madagascar at number
106 and Swaziland at 133 – South Africa is
clearly among the mid-tier tourism-intensive
countries. In addition, the second league table
extract illustrates how South Africa’s prospects
for GDP growth are just below average within
the world ranking – in 99th position, and well
down the regional ranking.

SOUTH AFRICA SOUTH AFRICA WTTC LEAGUE TABLE EXTRACT

Travel & Tourism GDP Travel & Tourism Economy GDP Travel & Tourism Economy GDP
(1990 Constant US$ bn) (Cumulative Real Growth, %) (2002, % of Total GDP)

Economy Industry
10 200 9 Seychelles................................................45.2
175
40 Namibia ..................................................13.6
8 84 Zambia ......................................................9.1
150
86 Lesotho ....................................................9.0
6 125
88 Kenya ........................................................8.7
100
106 Madagascar ..............................................7.5
4
75 112 South Africa ................................7.1
50 133 Swaziland ..................................................5.4
2
25 134 Botswana ..................................................5.4

0 0 136 Zimbabwe ................................................5.3

1998 1999 2000 2001 2002 2003 1990 1995 2000 2005 2010 157 Malawi........................................................2.4

SUB-SAHARAN AFRICA SUB-SAHARAN AFRICA WTTC LEAGUE TABLE EXTRACT

Travel & Tourism GDP Travel & Tourism Economy GDP Travel & Tourism Economy GDP
(1990 Constant US$ bn) (Cumulative Real Growth, %) (10-Year Real Growth, Annualized, %)

Economy Industry
30 200 7 Botswana ..................................................8.0

175
14 Zimbabwe ................................................7.2
25
19 Zambia ......................................................7.0
150
20 20 Malawi........................................................7.0
125
48 Madagascar ..............................................5.9
15 100
51 Seychelles..................................................5.8
75 57 Kenya ........................................................5.6
10
50 77 Namibia ....................................................5.3
5
25 78 Lesotho ....................................................5.3

0 0
99 South Africa ................................4.9
1998 1999 2000 2001 2002 2003 1990 1995 2000 2005 2010 132 Swaziland ..................................................3.6

30
CAPITAL
INVESTMENT
IN 2002,TRAVEL & TOURISM CAPITAL INVESTMENT IN SOUTH AFRICA IS
EXPECTED TO TOTAL R17.1 BILLION (US$1.7 BILLION) OR 10.3 PER CENT
OF TOTAL INVESTMENT.
The largest component of capital
investment originates from the private sector
in new plant and equipment, while the public
sector invests in new Travel & Tourism
infrastructure.
This represents a slowdown in capital
investment growth when compared with 2001,
but this period of slower growth is only
expected to be a short prelude to continued
long-term growth, illustrating a revival in
optimism about South Africa’s overall economy.
Over the next ten years (2002-2012), the
contribution of Travel & Tourism to South
Africa’s capital investment account is expected
to increase at a strong rate of 5.2 per cent per
annum in real terms.
Examination of Travel & Tourism Capital
Investment results and forecasts lends greater
insight into the market forces at work in a given
economy and the expectations by the public
and private sectors to meet the challenges and
opportunities in the years ahead. For the most
part,Travel & Tourism Capital Investment tends
to be cyclical, with strong links to major public
policy initiatives, the business/market cycle,
major events (such as natural disasters) and
significant socio-political changes.
Worldwide, Travel & Tourism Capital
Investment is expected to total 9.2 per cent of
total investment in 2002. The expectation for
global growth for 2002-2012 is 4.2 per cent per
year (in constant US dollars). In the sub-Saharan
Africa region, the respective figures are 8.8 per
cent of total capital investment in 2002 and 4.5
per cent real growth over the coming decade.
The charts below illustrate several
interesting points. First, South Africa’s Travel &
Tourism Capital Investment is expected to
continue to register positive, if slow, growth
following the 1999 dip. Second, when compared
with neighbouring sub-Saharan African
countries, South Africa ranks midway in
investment percentage terms for 2002. At 10.3
per cent of total investment, South Africa is
placed in 86th position, between Lesotho in
77th position and Botswana in 89th.
However, in contrast to its ranking in
terms of GDP growth, South Africa’s Travel &
Tourism Capital Investment growth (prospects
for 2002-2012) places it at the highest level of
the WTTC league table for sub-Saharan Africa
and the world – in first and 24th position
respectively. This ranking sends a strong
message to Travel & Tourism operators at
home and abroad that South Africa is set to
attract new ventures.

SOUTH AFRICA SOUTH AFRICA WTTC LEAGUE TABLE EXTRACT

Travel & Tourism Capital Investment Travel & Tourism Capital Investment Travel & Tourism Capital Investment
(1990 Constant US$ bn) (Cumulative Real Growth, %) (2002, % of Total)

2.5 200 43 Kenya ......................................................16.2

175 57 Seychelles................................................13.4
2.4
150 58 Madagascar ............................................13.4
74 Zambia ....................................................10.9
2.3 125
77 Lesotho ..................................................10.7
100
86 South Africa ..............................10.3
2.2 75
89 Botswana ................................................10.1
50 91 Zimbabwe ..............................................10.1
2.1
25 99 Namibia ....................................................9.4
2.0 0 152 Swaziland ..................................................5.2
1998 1999 2000 2001 2002 2003 1990 1995 2000 2005 2010 154 Malawi........................................................4.5

SUB-SAHARAN AFRICA SUB-SAHARAN AFRICA WTTC LEAGUE TABLE EXTRACT

Travel & Tourism Capital Investment Travel & Tourism Capital Investment Travel & Tourism Capital Investment
(1990 Constant US$ bn) (Cumulative Real Growth, %) (10-Year Real Growth, Annualized, %)

10 200 24 South Africa ................................5.2

175 32 Botswana ..................................................4.9
9 150 57 Madagascar ..............................................4.3
66 Malawi........................................................4.1
125
70 Kenya ........................................................4.1
8 100
72 Zimbabwe ................................................4.1
75
81 Namibia ....................................................4.0
7 50 85 Zambia ......................................................3.9
25 86 Lesotho ....................................................3.9
6 0 113 Swaziland ..................................................3.3
1998 1999 2000 2001 2002 2003 1990 1995 2000 2005 2010 155 Seychelles..................................................1.6

31
PERSONAL & BUSINESS
IN 2002, SOUTH AFRICA IS EXPECTED TO GENERATE R37.3 BILLION
(US$3.7 BILLION) OF PERSONAL TRAVEL & TOURISM CONSUMPTION BY
RESIDENTS, OR 5.7 PER CENT OF TOTAL PERSONAL CONSUMPTION.
In South Africa, business travel in 2002 is place abroad, the satellite account generates a on Travel & Tourism as illustrated in the
expected to total R9.4 billion or US$935 corresponding 'import credit', providing for an stacked bar and cumulative growth charts
million (87 per cent corporate, 13 per cent accurate assessment of Travel & Tourism below.
government). ‘produced’ in South Africa and Travel & Nevertheless, the cumulative growth
Unlike visitor exports, which depend on Tourism ‘produced’ by the rest of the world. charts for South Africa and sub-Saharan Africa
international markets for consumers, the Analysis of South Africa’s results below illustrate the strong future growth
business generated in these two categories highlights a few interesting points. First, South outlook for South Africa and regional Travel
depends on the South African economy itself. African residents have recently spent about 5.7 & Tourism spending. If, as expected, the
As the South African economy grows, South per cent of their personal expenditures on economy continues to show positive growth,
African consumer and business travel follows Travel & Tourism.This percentage is well below South Africa's residents’ spending on personal
suit. Since 1988, South African Personal Travel the world average of 9.9 per cent and only and business Travel & Tourism is also likely to
& Tourism has grown by a modest 32 per cent slightly higher than the regional sub-Saharan accelerate. Finally, the league table extracts
– clearly indicative of the economy’s recent Africa average of 5.2 per cent. Generally, the reinforce this message of cautious positive
difficulties. Over the next decade (2002-2012), level of personal Travel & Tourism spending is spending. South Africa ranks in the middle of
Personal Travel & Tourism in South Africa is directly linked to the development of the the world and regional tables in terms of
expected to grow at an annual rate of 5.2 per cent, resident economy. As per capita income current Travel & Tourism spending vis-à-vis
while Business/Government Travel is expected to increases, so does Travel & Tourism spending. total personal consumption, and it is also
grow at an annual rate of 6.4 per cent. Second, South Africa’s overall macroeconomic projected to rank in the middle of those tables
Although most of this Travel & Tourism situation since the political transition of the in the future and the future in terms of
occurs within South Africa, a portion takes early 1990s has manifested itself in positive, growth in Travel & Tourism spending.
place abroad. When the spending does take but cautious, South African resident spending

SOUTH AFRICA SOUTH AFRICA WTTC LEAGUE TABLE EXTRACT

Personal & Business Travel & Tourism Personal Travel & Tourism Personal Travel & Tourism
(1990 Constant US$ bn) (Cumulative Real Growth, %) (2002, % of Total Personal Consumption)

Business Personal
7 200 3 Seychelles................................................21.3
6 175
54 Swaziland ..................................................8.4
90 Namibia ....................................................6.1
5 150
97 South Africa ................................5.7
125
4 109 Kenya ........................................................5.4
100
3
110 Madagascar ..............................................5.3
75 111 Botswana ..................................................5.2
2
50 139 Zimbabwe ................................................3.5
1 25 151 Zambia ......................................................2.7
0 0 154 Malawi........................................................2.4
1998 1999 2000 2001 2002 2003 1990 1995 2000 2005 2010 158 Lesotho ....................................................2.2

SUB-SAHARAN AFRICA SUB-SAHARAN AFRICA WTTC LEAGUE TABLE EXTRACT

Personal & Business Travel & Tourism Personal Travel & Tourism Personal Travel & Tourism
(1990 Constant US$ bn) (Cumulative Real Growth,%) (10-Year Real Growth, Annualized, %)

Business Personal
20 200 6 Botswana ..................................................7.9

175
32 Madagascar ..............................................6.5
16 51 Namibia ....................................................5.7
150
56 Zambia ......................................................5.6
12 125
59 Kenya ........................................................5.6
100
60 Malawi........................................................5.5
8
75 76 South Africa ................................5.2
50 77 Zimbabwe ................................................5.2
4
25 79 Lesotho ....................................................5.1
0 0 82 Swaziland ..................................................5.0
1998 1999 2000 2001 2002 2003 1990 1995 2000 2005 2010 120 Seychelles..................................................4.0

32
EXPORTS
TRAVEL & TOURISM EXPORTS PLAY A LEADING ROLE IN SOUTH AFRICA’S
TRAVEL & TOURISM BUSINESS.

In 2002, Travel & Tourism services and
merchandise exports for South Africa are
expected to total R43.8 billion, or US$4.4
billion (75 per cent by visitors, 25 per cent by
exported consumer and capital goods),
representing some 30 per cent of total Travel &
Tourism Demand. Without question, as this
category grows and contracts, the health and
vitality of South Africa’s Travel & Tourism
sector will follow the same trend.
Over the past ten years, the gains for Travel
& Tourism Visitor Exports have been sporadic,
yet incremental and enormous. In constant
terms, gains for 2000 visitor exports totalled 12.9
per cent, while gains in 2001 totalled 13.9 per
cent. If considered over a longer period,(1988-
2001), South Africa’s Visitor Exports have grown
by 250 per cent in real terms. Over the next ten
years, South African Visitor Exports are expected
to grow by 4.7 per cent per annum, while Travel
& Tourism Merchandise Exports (non-visitor
exports) are expected to lag behind at 2.4 per
cent per annum.
Globally and for sub-Saharan Africa,
visitor exports are expected to grow at 6.5 and
6.2 per cent per annum respectively over the
next ten years (2002-2012).
Clearly, based on these forecasts, South
Africa's Travel & Tourism Visitor Exports'
growth is positive, albeit not quite at the same
level as that of its regional or global peers.
Although long-term expectations for
South Africa’s Travel & Tourism export growth
(2002-2012) are positive these forecasts, like
any others, depend on future events and are
therefore not guaranteed. The events of
September 11 2001 in the USA, for example,
which had a major negative impact on tourism
in the USA and other parts of the world, are a
perfect example of uncertainty inherent in
forecasting.
Examination of the WTTC league tables
reveals that South Africa is placed about
average among its sub-Saharan and world
competitors on the basis of current visitor
exports as a percentage of total exports. In the
second league table, South African visitor
exports’ growth illustrates the difficult job
ahead, since South Africa is ranked near the
bottom of the regional listing and only in
141st place in the global listing at 4.7 per cent
growth per annum. The latter ranking would
indicate that great attention should be paid by
the public and private sectors to maintaining
international visitor growth at higher levels.

SOUTH AFRICA SOUTH AFRICA WTTC LEAGUE TABLE EXTRACT

Travel & Tourism Exports Travel & Tourism Exports Travel & Tourism Visitor Exports
(1990 Constant US$ bn) (Cumulative Real Growth, %) (2002, % of Total Exports)

Other Visitor
6 200 20 Seychelles................................................36.9

175
47 Kenya ......................................................16.9
5
56 Madagascar ............................................14.3
150
4 66 Namibia ..................................................11.7
125
74 Zambia ....................................................10.2
3 100
79 South Africa ................................9.4
75 92 Zimbabwe ................................................7.5
2
50 106 Botswana ..................................................5.8
1
25 109 Malawi........................................................5.7

0 0 111 Lesotho ....................................................5.4

1998 1999 2000 2001 2002 2003 1990 1995 2000 2005 2010 145 Swaziland ..................................................2.2

SUB-SAHARAN AFRICA SUB-SAHARAN AFRICA WTTC LEAGUE TABLE EXTRACT

Travel & Tourism Exports Travel & Tourism Exports Travel & Tourism Exports
(1990 Constant US$ bn) (Cumulative Real Growth, %) (10-Year Real Growth, Annualized, %)

20 Other Visitor
200 7 Botswana ..................................................9.8

175
12 Zimbabwe ................................................8.9
16 18 Zambia ......................................................8.6
150
26 Malawi........................................................8.1
125
12 47 Seychelles..................................................7.3
100
54 Madagascar ..............................................7.1
8 75 68 Kenya ........................................................6.8
50 74 Lesotho ....................................................6.7
4
25 117 Namibia ....................................................5.6
0 141 South Africa ................................4.7
0
1998 1999 2000 2001 2002 2003 1990 1995 2000 2005 2010 154 Swaziland ..................................................3.6

33
GOVERNMENT
IN 2002, NATIONAL AND LOCAL GOVERNMENT AGENCIES IN SOUTH
AFRICA ARE EXPECTED TO SPEND R920 MILLION (US$92 MILLION) OF
CURRENT OPERATING FUNDS FOR TRAVEL & TOURISM.
This represents 0.5 per cent of total
government expenditures and they are
allocated to providing individual and
collective government Travel & Tourism
services to visitors, travel companies and the
community at large. Over the next ten years
(2002-2012), Travel & Tourism Government
Expenditures in South Africa are expected to
increase by an average of 1.6 per cent per year
in real terms.
Globally, the average government is
expected to contribute 3.8 per cent of
government expenditures to Travel &
Tourism-related functions and to increase this
spending by 3.0 per cent per annum over the
next ten years. The corresponding figures for
sub-Saharan Africa are 1.8 per cent of total
government spending and 4.3 per cent real
growth for the coming decade. Based on these
results, South Africa’s 2002 government
contribution of 0.5 per cent suggests that it is
falling well short of its regional and global
competition for Travel & Tourism support and
services.
In this WTTC report, 2002 government
expenditures include: individual expenditures
of R279 million (US$28 million) that can be
linked to individual visitors, such as museum
subsidies or immigration services. But they
also include collective expenditures of R640
million (US$64 million) that are undertaken
for the community at large – such as airport
administration or tourism promotion – but
which have a logical service connection to
Travel & Tourism.
One would naturally assume there should
be a direct link between the impact of an
industry/sector like Travel & Tourism on the
economy (in terms of GDP) and the amount of
funding allocated by governments towards that
industry/sector. In South Africa, the 2002 ratio
of Travel & Tourism GDP (percentage of total
GDP) to government expenditures is 14.2:1.0.
Worldwide and in sub-Saharan Africa, this ratio
is 2.6:1.0 and 3.4:1.0 respectively. This would
suggest that the South African government
authorities are returning significantly less to
Travel & Tourism than governments generally.
The league tables below reinforce this
particular point. First, South Africa's
government expenditures for Travel &
Tourism are currently very low on a regional
scale – last among its neighbours – as well as
on a global scale, in which it ranks 159th out
of 160 countries. In addition, the outlook for
growth is equally discouraging – last among its
regional neighbours and 149th among the
global research list of 160 countries. Although
the South African government clearly has
significant social spending priorities that may
be affecting these results, Travel & Tourism
spending is suffering a significant competitive
disadvantage in the world marketplace.

SOUTH AFRICA SOUTH AFRICA WTTC LEAGUE TABLE EXTRACT

Travel & Tourism Gov’t Expenditures Travel & Tourism Gov’t Expenditures Travel & Tourism Gov't Expenditures
(1990 Constant US$ mn) (Cumulative Real Growth, %) (2002, % of Total Gov't Expenditures)
130
200 5 Seychelles................................................23.7

175
42 Kenya ........................................................6.4
125
54 Madagascar ..............................................4.9
150
76 Namibia ....................................................3.7
125
87 Swaziland ..................................................3.2
120 100
102 Zambia ......................................................2.7
75 111 Botswana ..................................................2.5
115 50 114 Zimbabwe ................................................2.4
25 119 Lesotho ....................................................2.4
110 0 149 Malawi........................................................1.3
1998 1999 2000 2001 2002 2003 1990 1995 2000 2005 2010 159 South Africa ................................0.5

SUB-SAHARAN AFRICA SUB-SAHARAN AFRICA WTTC LEAGUE TABLE EXTRACT

Travel & Tourism Gov’t Expenditures Travel & Tourism Gov’t Expenditures Travel & Tourism Gov't Expenditures
(1990 Constant US$ mn) (Cumulative Real Growth, %) (10-Year Real Growth, Annualized, %)

1,100
200 19 Botswana ..................................................5.2

175
43 Madagascar ..............................................4.6
1,050
52 Malawi........................................................4.4
150
1,000 54 Kenya ........................................................4.4
125
57 Namibia ....................................................4.3
950 100
64 Lesotho ....................................................4.3
75 69 Zambia ......................................................4.2
900
50 77 Zimbabwe ................................................4.0
850
25 94 Swaziland ..................................................3.6
800 0 148 Seychelles..................................................1.7
1998 1999 2000 2001 2002 2003 1990 1995 2000 2005 2010 149 South Africa ................................1.6

34
THE POLICY
FRAMEWORK
POLICY RECOMMENDATIONS
South Africa’s Federal Government is firmly committed to Travel & Tourism growth and
there is clear recognition at the highest levels of government of the pivotal role played by
Travel & Tourism in terms of sustainable growth, employment creation and social
development across the entire national economy.
This is reflected by the prominence given to Travel & Tourism in
the 1996 White Paper entitled The Development and Promotion of Tourism
in South Africa. The importance is underscored by President Mbeki’s
opening speech to the South African Parliament on February 4 2000,
when he said that tourism had enormous potential to create jobs in
South Africa. It is also highlighted by a formal agreement, which
guarantees that the private sector is jointly responsible, with the
government, for South Africa’s tourism policy, strategic direction and
implementation through the auspices of the Tourism Business Council
of South Africa.
WTTC’s forecasts indicate that the growth prospects for South
Africa’s Travel & Tourism are solid – in line with macroeconomic
growth forecasts generally.Yet the potential impact could be even greater
than forecast if the underlying policy framework – both the framework
already in place and that which is currently being formulated or
proposed – were enabled and adopted by national, provincial and local
governments.At the same time this framework needs to be implemented
by the public and private sectors working in partnership.
While the private sector can and must play an increasingly proactive
role in developing quality products and services geared to international
and domestic demand, the federal government needs to show leadership
by increasing the stature, portfolio and funding of the tourism authority.
Most importantly, it needs to establish a separate Ministry of Tourism
with responsibility for overseeing collateral government agencies/
departments that have a direct or indirect link to tourism.These might,
for example, include the arts, culture, recreation and sport, aviation,
public transport and parks. This single action will ensure a more
integrated approach to tourism development and management and help
focus the industry on achieving more aggressive Travel & Tourism targets.
South Africa should also expand the marketing and promotional
portfolio of South African Tourism (SAT) without delay. It should
include a broader focus on domestic tourism and responsibility for
product development in its broadest sense. In addition, SAT should serve
as a fully fledged national convention bureau and take on a co-
ordinating role with the provinces, as well as producing and
communicating Travel & Tourism research, market intelligence and
information management. The full terms of reference for a national
tourism organization were set out in the 1996 Tourism White Paper, and
they are as valid today as they were when they were originally drafted.
Business confidence in the potential growth of demand has
generated significant private sector interest and investment following the
political transition of 1994. Continued efforts should be made to
encourage increased and accelerated Travel & Tourism demand, which
will require rethinking the strategy and operation of key government
parastatal assets, including South African Airways, Airports Company
South Africa and South Africa’s aviation policy in general. This is
particularly important in a world environment of intense tourism
competition, in which price and availability have an enormous influence
on purchase decisions, and in which airlines are featured as enablers of
economic development rather than as flag bearers of national pride.
Above all consumer interest must be maintained in a climate in
which the safety and security of tourists are guaranteed – and, just as
importantly, perceived to be guaranteed. In today’s world of discerning
customers and competitive destinations, reputations have to be built
carefully and creatively, and maintained with great care.Yet, with instant
global communications, they can be quickly lost.This is a high priority
challenge if South Africa wants to compete against equally attractive
destinations that also offer significant value for money.
Against this background WTTC recommends that the South
African Government:
PLAN FOR THE FUTURE
Long-term Tourism Planning
South Africa's future tourism development requires an updated
long-term National Tourism Policy that assesses performance to date,
identifies new issues requiring attention and sets new targets and
objectives.The previous National Tourism Policy plan was produced in
1996 as the Department of Environmental Affairs and Tourism’s
(DEAT's) White Paper. Since that time, many of DEAT’s key constraints
identified in the White Paper have been wholly or partly discharged
through excellent programmes and initiatives. However, a number of
new constraints have arisen limiting the progress of Travel & Tourism.
Most importantly, a new set of targets needs to be proposed and agreed
to guide the industry forwards over the next five to ten years.
As Travel & Tourism impacts all sectors of the economy – from
wholesale and retail businesses to real estate and construction – this
planning must involve all levels of provincial and local government and
35
the private sector, as well as local communities.This will help overcome
conflicting inter-governmental objectives, federal and provincial
interests, as well as encouraging growth that is sustainable economically,
environmentally and socially. It will also help spread the benefits
equitably across the country to all stakeholders, thereby stimulating
support and commitment from all sectors.
The new National Tourism Policy – Tourism White Paper II – must
start from a vision of what kind of Travel & Tourism government and the
citizens of South Africa wish to develop, in physical and marketing
terms.The policy must include certain basic elements:
■ Clearly defined goals, objectives and benchmarks;
■ Indications of best practice in tourism development;
■ Incorporation of South Africa’s focus on sustainable development;
■ Measures to support existing industry, as well as to promote new
developments;
■ An articulated strategy for product development and diversification;
■ A long-term strategy for tourism marketing and promotion in line
with the policy’s long-term goals and objectives;
■ Clear branding that reinforces the basic vision for South Africa’s
Travel & Tourism development.
Much of this updated vision can already be found in existing
research, expert opinion and collective industry efforts, such as the
Tourism Clustering Initiative that was overseen by the joint business-
government-labour Tourism Leadership Group in 1999. In this effort, the
36
national initiatives focused on priority issues such as improving access to
finance for tourism businesses, improving awareness about tourism
services, human resources development and marketing. The thematic
clustering process focused on two specific market segments – ecotourism
and heritage tourism. In South Africa there is no lack of informed
opinion and experts ready to provide advice and input into the strategic
vision. In this regard, we encourage all stakeholders to participate.
Monitor Trends in Travel & Tourism Demand
In order to plan ahead better and anticipate changing demand, it is
important to track trends in past and current Travel & Tourism demand.
This implies ensuring good quality statistical data on South Africa’s Travel
& Tourism, including data on international visitor arrivals and departures,
domestic tourism, hotel occupancies, expenditure patterns, attitudes and
preferences, as well as the overall economic contribution of Travel &
Tourism. It is generally agreed that information currently available from
different sources is not adequate, timely or accurate, which makes it even
more difficult to formulate intelligent, well-considered short- or long-
term business and policy decisions.
A national Tourism Forecasting Council (TFC) – established along
the same lines as Australia's successful TFC in which all stakeholders are
well represented – could be a useful tool for ensuring the credibility of
historical results and future demand forecasts. It could also help to
mitigate serious supply shortages or oversupply in the future.
 Monitoring Travel & Tourism trends will also help identify threats to
growth, as well as new opportunities. Examples of threats to growth
include the impact of malaria or HIV/AIDS, which are serious concerns
for South Africa, as well acts of violence against tourists, or perceived
safety and security issues.

Encourage Greater Market and Product

Diversification
After 1994, South Africa realized it was facing intensive competition
from a large number of attractive, well-established and sophisticated
tourism destinations around the world all looking to entice South Africa’s
major overseas markets (UK, Germany, USA, Netherlands and France).
Given the current weakness of the Rand, South Africa currently
represents high value for money relative to its competition, making it
more attractive than it might normally be for visitors selecting a holiday
destination. However, as all good marketing professionals know, price is
never a sustainable advantage. Other destinations could become more
attractive than South Africa in terms of value for money – the Rand
could strengthen, or another currency could weaken, and the advantage
is lost. It is therefore important for South Africa to focus on product and
market diversification to reduce its unhealthy over-dependence on a few
key markets and on an unsustainable price advantage.

Domestic Tourism
South Africa has also recognized the growing importance of
domestic tourism. In addition to generating increased earnings for less
well-known parts of the country, local tourism can promote a greater
understanding of the various lifestyles and cultures of South Africa’s
diverse population, contributing to harmonious living and encouraging
support from local communities for tourism development.The new focus
on domestic tourism is illustrated by Tourism Month, which was initiated
in 2000 to generate Travel & Tourism awareness among South Africans
and encourage them to visit their own country. The theme, ‘Preserve,
Meetings, Incentives, Conferences and Exhibition
Discover and Rediscover Your Country’, provided the backdrop for this
(MICE) Travel
new effort to create 42 million marketers for the country.
South Africa is still a relative newcomer to the world of meetings,
incentives, conferences and exhibitions (MICE) compared with leading
Product Development
US, European and Asian destinations.The MICE business accounts for a
The most promising growth sector is ecotourism, for which South
modest share of arrivals although it is showing strong growth. The
Africa has unique selling appeal. It is also particularly important for the
development of the Cape Town International Convention Centre adds
future well-being of South Africans themselves as it has the potential to
to existing world-class facilities in Durban and Gauteng and should help
ensure economic development and employment in rural areas that would
never attract manufacturing industries. The federal and provincial attract new year-round demand and enable South Africa to compete

governments have already shown leadership in stimulating the more effectively with other leading destinations. South Africa’s recent

development of new nature-based tourism products, providing incentives
and matching funding to that provided by the private sector in these areas,
as well as encouraging buy-in by local governments and communities.
One relatively undeveloped market that South African Tourism
(SAT) would like to expand for international tourists is cruises. Most
cruise business for South Africa is very recent and due to the
repositioning of ships from the Mediterranean following the events of
September 11 2001. However, the coast of South Africa and its famous
port cities of Cape Town, Port Elizabeth, Durban and others make it a
popular cruising ground, and the potential for cruise development in
South Africa would seem to be enormous.
success in attracting high-visibility events such as the Commonwealth
Conference, the World Conference on Racism, the Global Summit of
Women, and the World Summit on Sustainable Development, reflects
the country’s aspirations and intent to make the MICE business a
mainstay of its product offering.
Although these gains are impressive, SAT’s convention bureau
efforts should be significantly expanded, enhanced and perhaps re-
engineered as a National Convention Bureau (NCB) to tap the potential
of this enormous market. The NCB should ensure complete co-
ordination and synergy for the promotion of South Africa’s MICE
business, must position South Africa in the international marketplace as

37
a leading destination, and serve as an initial/focal point of contact,
distributing leads and allocating business transparently.The NCB should
provide conference industry leadership and co-ordination, raising the
level of professionalism, serving as an information clearing house of
convention industry information, exerting influence and linking
industry and government. In so doing, the NCB will raise the level of
the MICE business to that of important economic contributor.
Special Events
Complementing the growth in conferences and exhibitions, South
Africa has also been increasingly successful in selling itself as a special
event destination. This is clearly one sector to develop further in the
future as it is relatively high yield and generates strong visibility for the
destination. Among the leading events hosted over the last few years, or
scheduled for the near future, are: the Rugby World Cup, the African
Nations Cup Soccer, the President’s Cup Golf Challenge, the 2003 World
Cup Cricket, the Durban-Fremantle Yacht Race and International
Gliding Championship.
In order to secure future business with guaranteed economic
returns for all stakeholders, SAT should develop a sophisticated capability
for the evaluation of special events and the related economic returns, in
order to assist in future targeting of events.
Invest More in Effective Marketing and
Promotions
Although the annual marketing and promotional budget of South
African Tourism (SAT) has increased significantly in recent years, it is still
competing in key markets with other leading, deep-pocket tourism
destinations. SAT’s funding for tourism marketing and promotions is
collected from several dedicated sources including the Department of
Environment Affairs and Tourism, the Business Trust and the Tourism
Business Council of South Africa. However, the depreciation of the
Rand against the US dollar and sterling still places a heavy burden on
marketing and promotional budgets.
Following the appointment of a new chief executive at SAT, the
organization has shifted its marketing direction from being product
driven to customer focused. Based on extensive market research
commissioned from Monitor Group, a Cambridge, Massachusetts-based
Travel & Tourism has the potential to diversify South Africa’s economy. It can further
enhance the country’s ‘tourism balance of payments’, stimulate entrepreneurship –
particularly in small businesses – catalyze investment, create large numbers of sustainable
jobs, and help social development in local communities.
firm, SAT has “selected target markets based on market segment attractiveness in
yielding maximum short- and long-term results and indicating the greatest
propensity to receive and act on the messaging that is delivered”.
SAT aims to position itself with its slogan ‘Discover South
Africa…Rediscover Yourself!’ and, in so doing, “position the country as a
unique, world-class destination that combines a wealth of diverse cultures, wildlife
and scenic beauty to deliver the ultimate African holiday experience”.
This campaign is expected to be aggressively implemented over the
next five years and will address increasing tourist volumes, growing
tourism spend, extending length of stay, and improving geographic
spread and seasonality patterns.
Advertising and media marketing are important to sustain demand
in existing markets, as well as to generate demand from new markets and
to promote new products.
The re-building of SAT marketing intelligence, based on hard, fast
facts and information, is an important step forwards. It is now important
to work in much closer partnership with provincial governments and the
private sector to facilitate the process and stretch advertising dollars, as
well as to help promote tourism in the less developed, rural parts of the
country.
A three- to five-year Tourism Marketing Plan should be
incorporated into the National Tourism Policy and updated on an
annual basis, or more frequently if warranted by changing market
demand and the operating environment. A number of countries, such as
Australia and Canada, offer best-practice models of such plans.
HIGHLIGHT THE STRATEGIC
IMPORTANCE OF TOURISM
Recognize Travel & Tourism’s Economic
Importance
Travel & Tourism has the potential to diversify South Africa’s
economy. It can further enhance the country’s ‘tourism balance of
payments’, stimulate entrepreneurship – particularly in small businesses –
catalyze investment, create large numbers of sustainable jobs, and help
social development in local communities.
The government should broaden its highly successful domestic
tourism-awareness initiative, known as the Welcome Campaign, to
ensure that all public and private sector stakeholders recognize Travel &
Tourism’s full impact across the national economy – not just on hotels,
restaurants and retail business, but also on construction, real estate and
other sectors. Even more importantly, stakeholders should be made
aware of its untapped potential and of the spin-off benefits of tourism
that filter down through all levels of the community. The Welcome
Campaign was launched in December 1999 and encourages local
tourism, national pride and care for the environment around the theme
‘Tourism is everyone’s business’.
Make Travel & Tourism a Strategic Priority
Travel & Tourism should be factored into mainstream policies for
employment, trade, investment, education and environmental protection,
ensuring that the underlying policy framework is conducive to dynamic
growth. The strategic importance of Travel & Tourism should be
communicated to all levels of government, industry and local
communities.
All levels of government – federal, provincial or local – affected by,
or impacting on Travel & Tourism development, should be closely
39
involved in elaborating and implementing the National Tourism Policy.
The Department of Environmental Affairs and Tourism (DEAT) has
made plans around an effort dubbed the ‘Tourism Unblocking Strategy’
that hopes to do just that. The programme is scheduled for
implementation in March 2003.
It is thought that this approach reflects the clustering concept built
around the National Economic Development and Labour Council that
was established in 1995 with, among other objectives, to encourage and
promote the formulation of co-ordinated policy on social and economic
matters. This process works well to resolve disputes, disagreements or
inconsistencies between stakeholders, but falls short of proactively
working a cross-departmental issue such as Travel & Tourism into various
areas of government and sectors of society. DEAT’s new effort is
designed to be proactive in this regard.
Implement Satellite Accounting
on an Annual Basis
Travel & Tourism needs to be effectively measured in order to
understand its full impact throughout the economy. As a new industry,
Travel & Tourism is not discretely identified in charts of national or
provincial accounts – its component parts are scattered throughout the
accounts. Public sector analysis and related policies tend to overlook, or
40
understate, the impact of the industry, or deal with its smaller individual
components.
The technique of satellite accounting is designed to measure the new
service sectors. This new tourism satellite account (TSA), developed by
WTTC and Oxford Economic Forecasting (OEF) for South Africa, is a
significant tool for planning and policy development. WTTC urges the
South African Government to follow up on the current discussions
between the Department of Environmental Affairs and Tourism (DEAT),
Statistics South Africa and the South Africa Reserve Bank to conduct a
TSA feasibility study. Ultimately it should develop a TSA of its own and
update it on an annual basis to ensure that adequate data are available to
factor Travel & Tourism into economic and employment strategies.
A number of organizations are available to assist DEAT, Statistics
South Africa, and the Reserve Bank in developing and funding such an
exercise. The simulated TSA work produced by WTTC in 1998 for
DEAT, and the more recent simulated TSA by Grant Thornton Kessel
Feinstein (September 2000) for South African Tourism (SAT), are
excellent examples of how the private sector can provide capacity building
and knowledge transfer to the public sector in this critical area. Other
organizations, such as the Business Trust, which is seeking performance
measures of Travel & Tourism , might also serve as key players in this field.
DEVELOP THE HUMAN CAPITAL
REQUIRED FOR GROWTH
Promote a Positive Image of the Travel &
Tourism Industry as a Provider of Jobs and
Careers
The Travel & Tourism industry directly generates around 3.0 per
cent of total employment in South Africa, or some 492,700 jobs; the
Travel & Tourism economy overall accounts for an 6.9 per cent share, or
1,148,000. Although these shares are significant and are expected to rise
further by 2012, it is important to point out that the annual growth in
job creation will average only a modest 3.1-3.3 per cent. This is well
below the forecast annual rise in Travel & Tourism demand (4.8 per cent)
and capital investment (5.2 per cent) in South Africa.
This level of Travel & Tourism employment is certainly lower than
estimates produced by WTTC in 1998, and lower than estimates
produced by other organizations even more recently. However,
irrespective of the source, it is clear that recent performance has not
matched expectations, promises and targets made just a few years ago
with regard to Travel & Tourism job creation in South Africa. This has
contributed to creating a level of discontent and possibly a negative
perception of the industry.
Take Advantage of Travel & Tourism's Ability
to Provide a Wide Range of Jobs
While acknowledging that previous forecasts of job creation were
certainly overly optimistic, it is still important to point out that career
opportunities in Travel & Tourism can be extremely varied – with
upstream suppliers such as hotel designers or airport engineers, or with
downstream service companies like retail shops, petrol stations, clothing
manufacturers and food suppliers.The former depend on travel company
purchases; the latter are driven by visitor expenditures.There are also jobs
in the public sector catering to visitors – such as border inspectors, air
traffic controllers and museum attendants.
Contrary to conventional wisdom, jobs created by Travel & Tourism
– both directly in and outside the industry – range across the entire
employment spectrum and, in many cases, have characteristics that fit
model employment patterns:
■ The increasing sophistication of the industry means that there are a
growing number of high-level jobs in different sectors;
■ They can be created at low cost, with few barriers to entry, and
faster than most industries;
■ They are service and export related;
■ They provide an avenue for transformation and social cohesion by
counter-balancing the flow of people to the cities from
disadvantaged rural areas;
■ They are often created in small and medium-sized enterprises, or
family-run businesses, encouraging traditional crafts and cultural
activities;
■ They provide significant opportunities for women, many of whom
want part-time jobs;
■ They are ideal for young, previously disadvantaged or first-time
employees;
■ They have good capacity for education, training and skills
development;
■ There are widespread opportunities for long-term careers rather
than mere jobs.
South Africa has recognized all these opportunities, as well as the fit
for Travel & Tourism, especially with regard to creating jobs for
previously disadvantaged South Africans. One organization, the Tourism
Business Council of South Africa (TBCSA) has made a firm
commitment to furthering black economic empowerment specifically in
the tourism industry. In so doing, the TBCSA has made it its fiduciary
obligation to advance a more equitable distribution of jobs, skills, income
and ownership of capital in the industry, through initiatives entailing
business development, opportunities for management, community
development and ownership.
Another organization, the Business Trust, launched in July 1999,
focuses on job creation through tourism and human capacity
development as a result of schooling. Perhaps the most important
element of its work is the Tourism Leadership Project, a public-private
partnership that will increase the skills base for the industry. It is
implemented by the Tourism Hospitality and Sport, Education and
Training Authority (THETA), which is establishing a framework of
standards for outcomes-based education within the tourism industry.
Contrary to conventional wisdom, jobs
created by Travel & Tourism – both
directly in and outside the industry – range
across the entire employment spectrum
Place a High Priority on Education & Training
Given the projected growth in Travel & Tourism demand, it is
important to plan ahead to attract sufficient numbers of employees with
the appropriate skills. Special attention has already been paid to placing
education and training at the forefront of Travel & Tourism
development, introducing it into the school curricula and implementing
measures to improve skills, such as training accreditation programmes.
A nation-wide educational campaign,Welcome, is already in place
to enhance the image of Travel & Tourism, which is perceived by many
as offering low wages and poor working conditions. There should be
increased emphasis on informing all sectors of the community about
the career opportunities available.
WTTC encourages the South African Government to promote
the scale, scope and characteristics of career opportunities created
directly and indirectly by Travel & Tourism, and to factor these into
mainstream employment, trade, investment and education policies.
Perhaps one of the best ways the South African Government has
devised to focus on Travel & Tourism education and training is the
Skills Development Levy System put in place in April 2000. This
system requires companies to contribute one per cent of their total pay
roll to the skills levy. It then allocates 80 per cent of these funds to the
education and training authorities including tourism’s THETA
programme, and 18 per cent to the National Skills Fund for projects
aimed at the unemployed. A large piece of the skills levy can be
claimed back by employers who invest in training and educational
programmes for their workers.
41

MANAGING AIDS
IN THE WORKPLACE
Fedics (Pty) Ltd
Johannesburg, South Africa
The HIV/AIDS epidemic in South Africa is increasingly being
felt by management directly in the workplace. Fedics, South
Africa’s largest black-owned, outsourced caterer, is one
company that appreciates the magnitude of the epidemic. It is
taking strategic steps towards educating employees on how to
avoid contracting the syndrome, as well as how to live with the
disease and cope with the trauma associated with it.
Fedics has realized that, by taking early evasive action against
AIDS, it can attempt to save a large percentage of its workforce
as well as revenue lost through inevitable medical bills. Fedics
is not only committed to educating its employees about AIDS,
but has adopted a positive and proactive approach through an
effective HIV/AIDS management strategy.
The Fedics Group HIV/AIDS policy acknowledges the
sensitivity and complexity of the issue, which cuts across all
economic, gender and race barriers.The biggest challenge is to
eradicate the secrecy and non-disclosure of HIV due to the
stigma and discrimination attached to it.
The Fedics Group aims to promote a non-discriminatory
working environment by enhancing codes of conduct,
confidentiality and disclosure around HIV testing.
We all have to realize that one cannot avoid AIDS, one simply
has to manage it. This is the drive behind Fedics’ approach to
the challenges this epidemic presents. It is not simply a moral
issue but also one of survival.
42
HIV/AIDS
Now that South African President Thabo Mbeki, has promised to take
the lead in fighting HIV/AIDS – a disease afflicting one in nine of his
people – there is no question that the Travel & Tourism industry will need
to act proactively to address the issue as well. Although the horrors of this
disease and its impact can be quite overwhelming, there are equally some
inspirational programmes in place in the Travel & Tourism industry that
offer great hope. One such example is the work of Fedics Ltd, a
Johannesburg-based catering company. WTTC encourages all Travel &
Tourism stakeholders to use Fedics as a leading example, and address
HIV/AIDS head on, seeking out help and assistance when and where
necessary to make a difference for their employees, the industry and
humanity.
ENCOURAGE OPEN MARKETS AND
SKIES AND REMOVE BARRIERS TO
GROWTH
Open Markets and Improve Airline Access
The depreciation of the South African Rand has worked in favour of
South Africa's tourism industry. But there is no guarantee that this trend will
be sustained in the future. A liberal international trading regime, with free-
flowing markets for goods and services, tends to help Travel & Tourism growth
and, in turn, enhance wealth and job creation. Increased trade encourages
business trips, and growing disposable income expands leisure travel.
The establishment of the Southern African Development Community
(SADC) in August 1992 augurs well for free trade within the region as one
of its objectives is to achieve development and economic growth through
regional integration. In September 1998 all member states, with the
exception of Angola, signed the Tourism Protocol. The objectives of the
protocol are to:
■ Use tourism as a vehicle to achieve sustainable social and economic
development;
■ Promote the region as a single but multi-faceted tourism destination;
■ Improve standards of safety and security for tourists in the territories of
member states; and
■ Facilitate intra-regional travel for the development of tourism.
One of the protocol’s current projects is the Univisa system. The
Department of Environmental Affairs and Tourism (DEAT) is working with
SADC to implement this system to make entry into, and travel within, the
member countries including South Africa as smooth as possible for visitors.
Another institution created to aid with the seamless integration of
Travel & Tourism is the Regional Tourism Organisation of Southern Africa
(RETOSA), which was established in 1996 to market and promote the
region in close co-operation with national tourism organizations and the
private sector. RETOSA has been very active in the region and
internationally,
Airline Access,Air Transport Liberalization and Open Skies
Air transport liberalization and the debate on ‘open skies’ continue to
capture the attention and imagination of South Africa’s Travel & Tourism
stakeholders.As the debate wages, there are some who point to ‘unidentified’
travellers having great difficulty in finding available airline seats. This is
especially the case during peak season, and particularly to/from London,
reports suggest, with the usual caveat of “at the right price”. Others argue
that several European carriers have cancelled their South Africa services
citing uneconomic returns, thereby leaving travellers with fewer and fewer
flight opinions.
Others cite an unfortunate situation in which revenues are generally
being captured in a depreciated South African currency, while expenses are
normally paid in more expensive US dollars or sterling.These are the types
of issues, some highlight, to suggest that something must be done to address
the problems.
However, there is another group which asks a more strategic question:
How does aviation policy fit with government objectives of economic
development and job creation now and in the future? In many ways, the
answer to this question is even more difficult and complicated than it would
seem at first glance, because of the lack of clarity over the role of the
parastatals, South African Airways (SAA) and Airports Company South Africa
(ACSA).Also uncertain is how their initial public offerings (IPOs), still to be
scheduled, might change the equation.
Should SAA and ACSA remain government-owned enterprises making
profits for public sector coffers? Or should they be vehicles for economic
development – maximizing job creation potential for the nation as a whole?
As far as the Travel & Tourism industry is concerned, both are valid roles, but
it is necessary for them to be clearly defined and built into the National
Tourism Plan.
Although the subject of liberalization has been studied, researched,
debated and argued more than any other issue affecting South Africa's Travel
& Tourism, it would seem appropriate to restate some of the arguments for
and against liberalization before setting forth our recommendations.

Background
■ Foreign arrivals in South Africa grew significantly between 1994 and
2001.
■ Five source markets (UK, Germany, USA, Netherlands and France)
make up 60 per cent of overseas arrivals.
■ This level of arrivals growth and market development is insufficient to
achieve Travel & Tourism targets and economic and employment
objectives.

South African Aviation

■ Routes and capacity are governed by bilateral agreements, and much
capacity is unused.
■ Foreign airlines see the protection of SAA as a limiting factor for their
own investment in South Africa.
■ Recent service from Europe has been reduced due to regulatory,
logistical and commercial (supply and demand) reasons.
■ The Yamoussoukro Decision, taken by African ministers of aviation in
1999, bodes well for regional integration by gradually liberalizing intra-
African air transport services.

South African Airways

■ SAA is state owned and protected, and considered by some to exhibit
anti-competitive behaviour that restricts growth.
■ Confusion exists within government over the role of SAA.
■ Pre-IPO SAA is seen as neither maximizing tourist arrivals nor acting
as a commercially viable airline.
■ SAA is building a pan-African network to develop South Africa as
a regional hub.

Airports Company South Africa

■ Confusion exists over the role of a parastatal airport company with
respect to the development and growth of tourism, especially given
that 20 per cent is owned by the commercially operated Aeroporti
di Roma.

Arguments/Debate in Favour of Liberalization

■ North American and European Travel & Tourism enjoy the benefits
– economic development and increased employment – that a more
commercial, deregulated and privatized environment brings.
■ Open skies allow supply and demand to determine the aviation
environment and provide consumers with a better product at a
lower price.
■ Freedom to provide greater frequencies/capacity would provide
airlines with commercial flexibility.
■ Successful long-haul tourism destinations such as Australia,
Singapore and Thailand all have open skies policies.

Arguments/Debate Against Liberalization

■ Anti-competitive behaviour may result from unclear competition
rules.
■ Capacity dumping and undercutting of costs may result in a
monopolistic situation.
■ Airline alliances may lead to market concentration.
■ Open skies may lead to a sudden boom/bust scenario.
■ Open skies’ policies need to be carefully structured to work well
for both parties.

Current Situation – Department of Transportation

■ The approach is one of ‘managed liberalization’.
■ The objective is the gradual relaxation of aviation regulations.

Potential Solutions – Aviation Policy

■ Open skies are not appropriate to Johannesburg and Cape Town,
but may be appropriate for Durban and Port Elizabeth.
■ An aviation unit should be created as part of South African Tourism
(SAT) or DEAT to address medium- and long-term issues.
■ A state-sponsored charter airline should be created to focus
specifically on the mass tourism market, providing low-cost, no-
frills service.
■ Government can assist airlines through a variety of financial and
tax incentives including the reduction of the fuel levy and co-
operative marketing campaigns.

Potential Solutions – South African Airways

■ SAA should continue to be subsidized, providing affordable tickets
to serve as a government catalyst for Travel & Tourism growth.
■ SAA should maximize national interest by operating less profitable
routes (subsidized) and spreading Travel & Tourism business.
■ SAA should be treated as a ‘loss leader’ for the short term and be
privatized in the long term.
■ A privatized SAA, unable to compete overseas, should refocus as a
strong intercontinental carrier.
When all the different factors are considered and weighed we
believe that, at the end of the day, aviation must be seen as the driver of
Travel & Tourism development and greater job creation. In this regard,
we recommend that the South African Government make even greater
efforts to open air transport markets to attract more long-haul services
and improve regional networks. It should continue to liberalize aviation
agreements – scheduled and charter – and provide for greater
commercial incentives and viability, paying particular attention to routes
on which capacity is often low and capacity growth lags behind the
growth in traffic demand.
The government should continue to pursue managed liberalization
and the relaxation of aviation regulations. It should continue to pursue
the privatization of SAA and ACSA in a measured, programmed and
responsible manner, keeping all stakeholders informed about short- and
longer-term plans and objectives. It should establish an Aviation Unit at
SAT or DEAT to co-ordinate and implement actions to increase the
number of airlines (scheduled and chartered) and passengers to South
Africa. Most importantly, this unit should work with all stakeholder
groups – ministers of DEAT, the Department of Transportation,
Department of Finance and Public Enterprises, as well as key officials
from SAT, the Tourism Business Council, SAA, ACSA and industry
associations – to develop a comprehensive and integrated strategy to use
aviation as a catalyst for Travel & Tourism and overall economic development.
Restructure the Management and Promotion
of Travel & Tourism
While ultimate responsibility for South Africa’s Travel & Tourism at
the national level should remain with the newly constituted ministry, the
tourism marketing and promotion function undertaken by South
African Tourism (SAT) should continue to be enhanced to match
prevailing competitive approaches.
The South African Government has already re-organized SAT to
take note of the existing, highly successful examples of public-private
sector partnership developed in several countries around the world – in
particular Canada and Australia – for tourism marketing and promotion.
Consideration should be given to further development of SAT as a
public-private partnership, responsible for the co-ordination of national,
provincial and local government tourism efforts.
For this partnership approach to be successful it will be necessary to
ensure the following:
■ Top-level active political support and engagement;
■ A declared strategy – with clear targets and a detailed game plan for
implementation;
■ The involvement of major stakeholders in the development process;
■ Strong public and private sector co-operation with outreach to
partners across the Travel & Tourism economy;
■ Consistent and growing public sector funding and exceptional
inducements to attract matching private sector funding;
■ Private sector leadership in drawing up marketing strategies;
■ An integrated approach across government departments, and
particularly in co-ordinating national, provincial and local
promotional efforts;
■ A continued awareness building and public relations effort by SAT
to raise the profile of the campaign and generate media interest.
Enhance Safety and Security
Public safety and security have been identified by visitors, the
government, the industry, local communities and the media as one of the
key areas of concern for South Africa's Travel & Tourism. Although the
problem may be more one of perception than reality – caused by
intensive media reporting – safety and security provisions should be built
into national, provincial and local strategies, and special emphasis should
be placed on Travel & Tourism in overall policing strategies.
While general consensus suggests that there is a clear recognition of
the need for greater attention and action at the highest government
levels, WTTC believes its pivotal importance should be underlined.
Successful law enforcement could result in a more optimistic forecast
scenario in the medium term. But if the underlying problems are not
addressed, this may negatively impact the baseline forecast.
At the same time health concerns, especially HIV/AIDS, should be
addressed and clear guidelines communicated for dissemination by the
media. All too often, South Africa is too harshly judged by the media,
when open discussion of the perceived problems, the actions already
taken, and programmes in place to address the issues, could so easily
reduce their impact.
Public safety and security have been
identified by visitors, the government, the
industry, local communities and the media
as one of the key areas of concern for
South Africa's Travel & Tourism.
Tax Intelligently
Care should be taken that any new taxes are not excessive, as this
could have a negative impact on demand.There is an increasing tendency
worldwide for governments – whether national or provincial/local – to
target Travel & Tourism as a revenue generator to meet short-term budget
objectives, with little thought to the longer-term consequences on
demand and job creation.
While Travel & Tourism should pay its fair share of taxes, the growth
and prosperity of the industry – including the investment necessary to
generate these future revenue flows – will depend in no small part on the
competitiveness of South Africa’s Travel & Tourism.This also depends on
whether it receives equitable treatment relative to other industries and to
competing destinations.
WTTC urges the South Africa Government to ensure fiscal regimes
that continue to encourage tourism growth, exports, investment,
infrastructure, business innovation and job creation.The ‘User Pays – User
Benefits’ principle should be given priority, with funding collected
earmarked for Travel & Tourism infrastructure and promotion.
New fiscal programmes, such as tax credit schemes, also need to be
developed to encourage tourism growth, exports, investment,
infrastructure, business innovation and job creation.
45
MATCH PUBLIC AND PRIVATE
INFRASTRUCTURE WITH
CUSTOMER DEMAND
Expand Infrastructure
Infrastructure remains a critical component in Travel & Tourism
development if the full potential of employment generation, export
earnings and regional development effects are to be achieved. In most
cases public infrastructure that supports Travel & Tourism expansion will
anyway serve other urban and regional development purposes.
Quality infrastructure is also essential to diversify the product base,
remove bottlenecks, ensure good service and distribute the benefits of
tourism flows around the economy. It is not only a question of coping
with increasing numbers of visitors, but also of making sure that the
patterns of flow do not affect the natural or built heritage, nor run
counter to local interests.
In general, South Africa is well known for
the high quality of infrastructure it has
put in place to serve the nation, as well as
the tourism industry.
In general, South Africa is well known for the high quality of
infrastructure it has put in place to serve the nation, as well as the tourism
industry. All primary urban centres have good transport lines, a superior
road and highway infrastructure, and world-class airport and port
facilities. However, based on inherited patterns of land use and the
dispersion of urban development, South Africa has developed an
increasing dependence on private cars and, as a result, lacks proper public
transport infrastructure in rural areas and in the area of mass
transportation.A number of specific projects have been initiated under the
Moving South Africa (MSA) campaign.This was initiated in June 1997 to
ensure that the transport system and infrastructure meet the 21st century
needs of South Africa generally and Travel & Tourism in particular.
In 1998, 20 per cent of Airports Company South Africa (ACSA)
was sold to an international consortium led by Aeroporti di Roma,
followed by the further sale of shares to a number of South African
empowerment groups. The new ACSA, which runs ten South African
airports, has started to lay the foundation for a sustainable business into
the future that will be ready for an initial public offering (IPO) when
the shareholders feel that the time and circumstances are right.
The mission of ACSA is to remain the dominant and leading
airport company in Africa, and possibly the region, to be a proactive
participant in stimulating domestic and international tourism, and to
champion regulatory and legislative changes necessary for this to
happen. ACSA also intends to invest in the essential infrastructure of
airports, the development of airport-related activities and black
economic empowerment.
WTTC agrees with the conclusions of the MSA project developed
by the Department of Transport, that there is a need to conduct an in-
depth investigation into domestic tourism infrastructure needs and
resources outside the major urban areas, whether air transport, road or
rail infrastructure. This will help open up new areas for tourism
development. Particularly important are Travel & Tourism facilities and
46
transport hubs that move previously disadvantaged people easily to and
from their homes.
Airport expansion and air traffic control (ATC) system
modernization are priorities for Travel & Tourism growth, as well as
streamlined immigration and border clearance facilities.The efficiency of
transport-related infrastructure can play a significant role in customer
acceptance of airport hubbing strategies.
Where land-based ATC systems are currently in use, these should
also be switched to satellite navigation as soon as possible to contain
operating costs, improve safety and reduce congestion.
Improve Land-use Planning and Protection
Land-use planning by provincial governments and local authorities,
and particularly zoning, should be encouraged to protect the character
of the natural environment, which is one of South Africa’s major
attractions for residents and visitors alike.
Admittedly the federal government cannot enforce all types of
legislation, but it can show leadership and encourage buy-in for
legislation by provincial and local governments. Special incentives should
also be proposed for the rapid modernization and upgrading of South
Africa’s rural areas in order to spread the benefits of Travel & Tourism
across the country.
One of the most successful programmes in this area is that of the
Spatial Development Initiatives (SDIs), which are strategically located
development regions aimed at unlocking the economic potential of rural
areas. In several cases, such as Lubombo, the Wild Coast and Maloti/
Drakensberg, the particular focus is on tourism development, assisting in
a wide range of issues including the development of concessions, the
facilitation of sensitive infrastructure, delivering marketing strategies, and
developing investment and promotion strategies.
Experience has shown that investment –
whether foreign or domestic – is
extremely sensitive to economic changes.
Develop Access to Capital Resources and
Encourage Sustained Capital Investment
Capital investment in South Africa’s Travel & Tourism is currently
high, at an estimated 10.3 per cent of total capital investment. Over the
next nine years it is also forecast to rise by about 5.2 per cent a year to
reach 10.6 per cent. However, there is no room for complacency.
Experience has shown that investment – whether foreign or domestic –
is extremely sensitive to economic changes. To guard against this,
continued efforts need to be made, through the development of
incentive schemes, to attract sustained capital investment in the country's
Travel & Tourism industry from domestic and foreign sources.
At the same time, however, it is important to guard against the
dangers of excessive development that bears no relation to existing or
projected demand. This can result in cut-throat competition, leading to
declining operating performances and lower profits. This situation
occurred in the mid- to late-1990s, when hotel construction – especially
in the high-end properties – was encouraged using accelerated
depreciation accounting, while airline seat capacity was simultaneously
constrained by restrictive bilateral agreements.
The state-owned Industrial Development Corporation has
prioritized tourism and increasingly provides the industry with financial
assistance for medium to large commercial projects. Discussions with the
South African Development Bank (SADB) have indicated that, although
these projects produce significant returns for economic development and
job creation, there is a growing opportunity to achieve equally significant
results for small commercial projects, which do not currently qualify for
SADB funding.This is where the Tourism Enterprise Programme run by
the Business Trust steps in to assist previously disadvantaged small,
medium and micro enterprises by promoting commercially viable
business relationships and building capacity, quality and international
competitiveness into South Africa’s tourism enterprises.
FAVOUR TECHNOLOGICAL
ADVANCEMENT
Telecommunications
An increasing share of Travel & Tourism operations – and virtually all
distribution and sales transactions – flow through telecommunications
circuits.Where telecommunications are monopoly controlled,there are often
restrictions on access, high costs and unreasonable operating conditions.
This in turn limits the potential of market-oriented expansion of Travel &
Tourism, with negative impacts domestically and internationally in terms
of cost, operational efficiency and customer service.
WTTC recommends that the South African Government continue
pursuing its policy of open telecommunications markets, which will help
to lower costs and enhance services for travellers and tourism companies.
E-Marketing and Distribution
In today's increasingly competitive global marketplace, there is a real
need for a strong national leadership branding which optimizes resources,
focuses the myriad of interests – public and private sector, national,
provincial and local – and attracts the attention of travellers. This will
require particular emphasis on a co-ordinated approach to internet
marketing and distribution to optimize South Africa's visibility.
South African Tourism has already taken the lead in developing a
national tourism e-business for South Africa.This new strategy is centred
on a newly designed website and national database, collectively
providing an interactive one-stop information shop for potential
travellers to South Africa.
In the Western Cape, the tourism board has joined forces with the
Joint Marketing Initiative to develop a world-class destination
management system. Following extensive investigation into the
information needs of all stakeholders, a provider will be selected to fill the
e-business specification.
Experience in other countries around the world has shown that,
while public sector support for national destination databases is critical,
operation and marketing of these databases are best left to the private
sector. Best-practice models include Ireland and the Netherlands. The
federal and provincial governments should provide support for local
South African companies so that they can promote and distribute their
products through the website, as well as developing access to other
technology advances.This will help them compete more effectively with
foreign-owned companies in South Africa and with suppliers in
competing destinations.
47
 PROMOTE RESPONSIBILITY IN
NATURAL, SOCIAL AND CULTURAL
ENVIRONMENTS
Establish Clear Procedures and Guidelines
Since the Rio Earth Summit in 1992, it has been widely
recognized that sustainability has to be at the core of all policy-making
and development planning. This holds especially true for Travel &
Tourism. With huge increases in the number of people travelling for
tourism purposes over the next decade, there are evident implications
for consumption, waste and resource utilization.
The South African Government, through the Department of
Environmental Affairs and Tourism,, has already taken a number of
major steps forwards in this area. First, it has committed to the
production of an ecotourism development plan that will facilitate
national and provincial participation in the International Year of
Ecotourism, and will provide input into the World Summit on
Sustainable Development. Second, it has committed to producing
guidelines for responsible tourism development focusing on social,
economic and environmental components, highlighting positive case
studies and delivering a manual for implementation.
It is essential that the procedures and guidelines incorporated in
these plans are communicated to all stakeholders and implemented as
widely and as quickly as possible. Implementation of these procedures
and their impact should also be closely monitored.
In addition,WTTC recommends that:
■ The socio-economic, cultural and environmental benefits of Travel
& Tourism be spread equitably across the population in all parts of
the country;
■ Local community engagement and empowerment be actively
encouraged;
■ South Africa adopt the principles of ecological preservation as
outlined in Agenda 21, developed for the Travel & Tourism
industry after the 1992 Rio Earth Summit by WTTC, the World
Tourism Organization and the Earth Council.
Sustainability will need a balance of private initiative, economic
incentives and regulation. Global principles should be reflected in local
action and market-based delivery mechanisms should be encouraged.
Pilot projects should be used to evaluate and demonstrate local
sustainability. It is important for sustainability to be accepted as a policy
across the industry as a whole, and not just as a policy for rural and
nature-based tourism.
One very clear and practical example of this focus is the Blue Flag
programme. This initiative involves a prestigious annual award to
beaches that conform to international standards such as environmental
and tourist friendliness, cleanliness and visible security. South Africa is
the first country outside Europe to be awarded the status of Blue Flag.
Another example of combining a focus on the environment with
benefits for economic development is the new trans-border park of Gaza-
Kruger-Gonarezhou, which has been opened between Mozambique,
South Africa and Zimbabwe. The park is now one of the largest
conservation areas in the world.At 35,000 square kilometres, it is Africa's
biggest wildlife park. Its objective is to promote bio-diversity conservation
across international boundaries, and revive the socio-economic fortunes
of poorer rural communities living in and around the park.

48
 Another important example is the recent launch of the Fair Trade
in Tourism South Africa (FTTSA) trademark that is expected to give a
considerable boost to fair business practices and responsible tourism
development. FTTSA is a non-profit marketing organization under the
auspices of IUCN (The World Conservation Union) South Africa,
which seeks to protect emerging tourism entrepreneurs – notably those
from disadvantaged communities – from exploitation, and to contribute
to a sustainable tourism industry.
Increase Branding through International
and/or National Designations
South Africa boasts several examples of world-class natural and
cultural resources that have recently been awarded World Heritage Site
designation.These include Robben Island, where Nelson Mandella was
imprisoned for so many years; the Greater St Lucia Wetland Park and
Sterkfontein Caves, better know as the cradle of civilization; and the
‘Barrier of Spears’ Ukhahlamba Drakensberg Park.
South Africa has made rapid progress since acceding to the World
Heritage Convention in 1997. It has now become a member of the
World Heritage Committee itself, which highlights the dedication and
commitment it has towards the protection and conservation of the
world’s irreplaceable cultural and natural heritage. The Department of
Environmental Affairs and Tourism is currently facilitating the
preparation of four new nominations: the Cape Floristic Region,
Mapungubwe, the Vredefort Dome (a meteorite on the banks of the Vaal
River), and Prince Edward and Marion Islands.
In addition to this focus on world heritage, the South African
Government should also consider developing and promoting a national
heritage designation, with clearly defined criteria to support quality.
Such a designation should be accompanied by increased government
funding for the development and promotion of identified areas of
particular heritage value.
49
SATELLITE ACCOUNT

1997 1998 1999 2000 2001 2002E 2012P

South Africa Travel & Tourism - R bn
Personal Travel & Tourism 24.82 27.80 29.57 32.52 35.10 37.28 102.44
Business Travel & Tourism 8.72 9.45 10.08 10.98 10.23 9.40 28.70
Corporate 7.48 8.09 8.67 9.51 8.87 8.14 25.58
Government 1.24 1.36 1.41 1.47 1.36 1.26 3.11
Gov't Expenditures - Individual 0.21 0.23 0.24 0.24 0.26 0.28 0.55
Visitor Exports 15.43 18.74 19.10 22.91 27.87 33.07 86.20

Travel & Tourism Consumption 49.18 56.21 58.98 66.65 73.46 80.03 217.88

Gov't Expenditures - Collective 0.50 0.52 0.54 0.56 0.60 0.64 1.25
Capital Investment 11.97 13.49 13.44 14.44 16.01 17.07 47.00
Exports (Non-Visitor) 5.12 5.94 6.20 7.86 9.58 10.73 22.36

Travel & Tourism Demand 66.77 76.17 79.16 89.51 99.65 108.47 288.49

Travel & Tourism Industry Aggregates (Direct Impact Only)

Employment (‘000) 432.54 459.40 456.58 469.48 477.78 492.65 679.19
GDP 19.65 22.11 23.46 26.06 28.46 31.10 84.830.2

Travel & Tourism Economy Aggregates (Direct and Indirect Impact)

Employment (‘000) 1,016.20 1,079.60 1,060.80 1,089.30 1,118.55 1,147.98 1,555.30
GDP 46.16 51.96 54.51 60.46 66.64 72.46 194.25
Note: Employment in ‘000 Jobs

T&T Accounts as % of National Accounts

Personal Travel & Tourism 5.76 5.97 5.92 5.94 5.84 5.74 6.70
Gov't Expenditures 0.56 0.55 0.55 0.55 0.54 0.54 0.56
Capital Investment 10.43 10.41 10.41 10.39 10.36 10.33 10.65
Exports 12.18 12.60 12.31 11.95 11.98 12.46 14.26
T&T Imports 12.79 13.01 13.42 12.57 11.87 11.45 13.15

Travel & Tourism Industry Aggregates (Direct Impact Only)

Employment 2.76 2.89 2.87 2.90 2.90 2.96 3.44
GDP 2.87 3.01 2.95 2.98 2.99 3.04 3.54

Travel & Tourism Economy Aggregates (Direct and Indirect Impact)

Employment 6.48 6.79 6.67 6.73 6.80 6.89 7.88
GDP 6.75 7.07 6.85 6.92 6.99 7.08 8.10

Travel & Tourism Real Growth (% per annum, except 2012 = 10-year annualized)
Personal Travel & Tourism 4.23 4.98 0.37 3.52 1.03 0.74 4.77
Business Travel & Tourism 1.77 1.47 0.66 2.55 -12.77 -12.86 4.73
Gov't Expenditures 26.66 -1.51 -1.87 -3.24 0.43 1.51 1.53
Capital Investment 3.37 5.66 -6.00 1.16 3.73 1.13 4.70
Visitor Exports 5.58 13.81 -3.79 12.88 13.87 12.54 5.33
Other Exports 6.68 8.82 -1.60 19.35 14.15 6.20 2.46
Travel & Tourism Consumption 4.29 7.10 -0.98 6.36 3.17 3.33 4.90
Travel & Tourism Demand 4.44 6.91 -1.92 6.43 4.21 3.24 4.63

50
TABLES

1997 1998 1999 2000 2001 2002E 2012P

Travel & Tourism Industry Aggregates (Direct Impact Only)
GDP 3.38 5.45 0.14 4.54 2.24 3.62 4.97
Employment 8.00 6.21 -0.62 2.83 1.77 3.11 3.29

Travel & Tourism Economy Aggregates (Direct and Indirect Impact)

GDP 3.91 5.47 -0.99 4.39 3.17 3.14 4.71
Employment 8.55 6.24 -1.74 2.69 2.69 2.63 3.03

South Africa Travel & Tourism - US$ bn

Personal Travel & Tourism 5.37 4.90 4.85 4.62 4.02 3.71 11.26
Business Travel & Tourism 1.89 1.66 1.65 1.56 1.17 0.94 3.15
Corporate 1.62 1.43 1.42 1.35 1.02 0.81 2.81
Government 0.27 0.24 0.23 0.21 0.16 0.13 0.34
Gov't Expenditures - Individual 0.05 0.04 0.04 0.03 0.03 0.03 0.06
Visitor Exports 3.34 3.30 3.13 3.25 3.19 3.29 9.47

Travel & Tourism Consumption 10.64 9.91 9.67 9.47 8.41 7.96 23.95

Gov't Expenditures - Collective 0.11 0.09 0.09 0.08 0.07 0.06 0.14
Capital Investment 2.59 2.38 2.20 2.05 1.83 1.70 5.17
Exports (Non-Visitor) 1.11 1.05 1.02 1.12 1.10 1.07 2.46

Travel & Tourism Demand 14.45 13.43 12.98 12.71 11.41 10.80 31.71

Travel & Tourism Industry Aggregates (Direct Impact Only)

Employment (‘000) 432.54 459.40 456.58 469.48 477.78 492.65 679.19
GDP 4.25 3.90 3.85 3.70 3.26 3.09 9.32

Travel & Tourism Economy Aggregates (Direct and Indirect Impacts)

Employment (‘000) 1,016.20 1,079.60 1,060.80 1,089.30 1,118.55 1,147.98 1,555.30
GDP 9.99 9.16 8.94 8.59 7.63 7.21 21.35

Travel & Tourism - 1990 Constant US$ bn

Personal Travel & Tourism 4.51 4.74 4.75 4.92 4.97 5.01 8.29
Business Travel & Tourism 1.59 1.61 1.62 1.66 1.45 1.26 2.32
Gov't Expenditures - Individual 0.04 0.04 0.04 0.04 0.04 0.04 0.04
Visitor Exports 2.80 3.19 3.07 3.47 3.95 4.44 6.97
Travel & Tourism Consumption 8.94 9.57 9.48 10.08 10.40 10.75 17.63
Gov't Expenditures - Collective 0.09 0.09 0.09 0.08 0.08 0.09 0.10
Capital Investment 2.17 2.30 2.16 2.19 2.27 2.29 3.80
Exports (Non-Visitor) 0.93 1.01 1.00 1.19 1.36 1.44 1.81
Travel & Tourism Demand 12.13 12.97 12.72 13.54 14.11 14.57 23.34

GDP
Travel & Tourism Industry 3.57 3.77 3.77 3.94 4.03 4.18 6.86
Travel & Tourism Economy 8.39 8.85 8.76 9.15 9.44 9.73 15.72

51
WTTC’s South Africa Steering Committee
Jean-Claude Baumgarten
President,World Travel & Tourism Council
Peter Bacon
Managing Director, Sun International
*Rod Eddington
Chief Executive, British Airways
Hans Enderle
Executive Chairman, City Lodge Hotels
*William Friesell
Chairman & CEO,
Diners Club International
Jabu Mabuza
Chief Executive Officer,
Tsogo Sun Holdings (PTY) Ltd
Dr Eric Kaub
Chairman of GATO A.G.,
German Tourism Organisation
of Development and Investment
*Geoffrey Kent
Chairman & CEO, Abercrombie & Kent
Carol Scott
Chief Executive Officer,
Tourism Investment Corporation (Tourvest)
Otto Stehlik
Executive Chairman, Protea Hotels (PTY) Ltd
Ron Stringfellow
Executive Chairman, Southern Sun
*Brett Tollman
Vice Chairman,The Travel Corporation
Glenn Van Heerden
Chairman, Zeda Car Rental (PTY) Ltd
Andre Viljoen
CEO & President, South African Airways
* Member of WTTC
WTTC would like to express its appreciation to the following
organizations that contributed their knowledge, insight and
data/information to the policy review effort included in this report.
Airlines Association of Southern Africa
Airports Company South Africa
Association of South African Travel Agents
Avis
Business Trust
Cape Town International Convention Centre
Contact Publications Ltd
Development Bank of Southern Africa
Diners Club International
Embassy of the United States of America
The Federated Hospitality Association of South Africa
Gauteng Tourism Authority
Grant Thornton Kessel Feinstein
Horwath Tourism and Leisure Consulting
ING Barings
Kwazulu-Natal Tourism Authority
Lorton Consulting
Parliament Portfolio Committee on Trade and Industry
Regional Tourism Organisation of Southern Africa
Relias Hotels
Skills Development Solutions T/A
South Africa Department of Environmental Affairs and Tourism
South African Airways
South African Chamber of Business
South African Express Airways
South African Reserve Bank
South African Tourism
Southern Africa Tourism Services Association
Southern Sun Group
Statistics South Africa
Tourism Business Council of South Africa
Tourism Grading Council
Tourism, Hospitality & Sport Education & Training Authority
Victoria & Albert Waterfront
Western Cape Investment and Trade Promotion Agency
Western Cape Tourism
Photos on pages 5,11,38,43,48,49,52
are copyright: South African Tourism