4870 [Tuesday, 29 October 2013changed in the second quarter <strong>of</strong> the year, when performancedipped to an index <strong>of</strong> 88.2, only to recover in the last two quarters <strong>of</strong>the year.The TBI is fairly optimistic about the prospects for 2013. In thisspecific edition, respondents were asked additional questions toassist in establishing the industry’s outlook for the year ahead.Respondents were asked to indicate their expected employmentlevels, capacity growth, which markets they believe had the mostpotential for growth in 2013 <strong>and</strong> the biggest constraints they haveidentified to doing business in 2013.On balance, the accommodation respondents to the survey expecta fairly similar overall annual performance at a -0,6 percent,however, this balance statistic has been improving steadily everyquarter from a low <strong>of</strong> -70,3 in Q3 2011. Other Tourism Businessesare on balance +37,6 percent positive about the outlook for theyear, which is significantly higher than in Q4 2012 <strong>and</strong> the highestever positive outlook recorded. A large number (41,5 percent) <strong>of</strong> therespondents believe that their businesses will perform better thannormal in the next year.Notwithst<strong>and</strong>ing positive gains in 2012, the industry has cited thefollowing as specific constraints to doing business in 2013:• The accommodation <strong>and</strong> other Tourism Businessrespondents, cited as major threats to business in 2013, theglobal economic recession, the political uncertainty <strong>and</strong>labour/community unrest in South Africa <strong>and</strong> the negativeperceptions this has created, pr<strong>of</strong>iling South Africa as anunsafe destination to foreign visitors.• Rising operational costs, especially municipal rates, fuel <strong>and</strong>electricity prices.• The Accommodation Sector identified price wars within thesector as a major threat to the industry, with many operatorsundercutting rates. Competition from European destinationswith accommodation operators <strong>of</strong>fering top st<strong>and</strong>ardaccommodation at very low rates was mentioned by some <strong>of</strong>the respondents.• Lack <strong>of</strong> direct air access <strong>of</strong> international flights to CapeTown was highlighted by many respondents as a challengefor 2013.• The other Tourism Businesses, especially the operators inthe transport industry, believe e-tolls to be a major constraintto business in 2013, increasing operational costs <strong>and</strong>decreasing the disposable income <strong>of</strong> their customers.• Other constraints <strong>and</strong> threats mentioned by more than onerespondent include a lack <strong>of</strong> destination marketing by SouthAfrican Tourism <strong>and</strong> other Destination ManagementOrganisations (DMOs), a lack <strong>of</strong> municipal service delivery,labour strikes, increase in competitive establishments <strong>and</strong>ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013
Tuesday, 29 October 2013] 4871businesses, the corporate <strong>and</strong> business travel marketreducing their spend on travel, reduced disposable incomefor the domestic market, exchange rates, slow debtrepayment by customers <strong>and</strong> bad weather conditions.• Exposure to the growing Asian <strong>and</strong> African markets <strong>and</strong> lack<strong>of</strong> Destination Marketing Organisations.• Maintaining market share as online travel portals make iteasy for tourists to book direct, thus cutting out the need fora tour operator or travel agent.• Long haul destination making access to South Africaexpensive <strong>and</strong> difficult.These issues therefore need attention <strong>of</strong> both the Department <strong>of</strong>Tourism <strong>and</strong> South African Tourism. Some <strong>of</strong> the issues raised bythe private sector were also raised by stakeholders during publichearings. These issues are very important for the sector <strong>and</strong> shouldbe taken seriously. The Committee recommends that theDepartment investigates issues raised by the private sector <strong>and</strong>consider them their marketing campaigns. It must be acknowledgedthat the private sector is the one in the forefront <strong>of</strong> providing atourist experience in the country <strong>and</strong> their perspective is based onpractical industry experience. A comprehensive approach inaddressing these issues will however need coordination <strong>of</strong> allstakeholders, public <strong>and</strong> private sector, <strong>and</strong> all spheres <strong>of</strong>government. This also means tourism need more budget to addresssome <strong>of</strong> the pertinent issues.5.3 Concluding comments on service delivery performanceJudging by the increase in the number <strong>of</strong> arrivals in South Africa,both the Department <strong>and</strong> South African Tourism performed fairlywell. However, the Committee is concerned about a trend <strong>of</strong>continuous decline in domestic tourism. The Committeeacknowledges that tourism is a sector that depends on a number <strong>of</strong>other government departments <strong>and</strong> that the national Department <strong>of</strong>Tourism alone cannot provide holistic service delivery. A morecoordinated approach to tourism development in the country isneeded amongst all the stakeholders.Despite the Committee being generally satisfied with servicedelivery to communities, a number <strong>of</strong> service delivery issuesemanating from poor coordination <strong>of</strong> resources amongst the threespheres <strong>of</strong> government were observed. The Department should useall intergovernmental forums to create synergy amongst all spheres<strong>of</strong> government <strong>and</strong> the private sector.ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 147─2013
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