Economic Update

19 Apr, 2018

Marketing efforts in South Africa’s tourism industry have picked up on several fronts in recent months as officials look to tap traditional source markets on the back of positive sector growth last year.

The latest of these moves has seen South African Tourism, the marketing arm of the Department of Tourism (DoT), partner with KLM Royal Dutch Airlines (KLM) to roll out advertising on 100 taxis in the UK cities of Birmingham, London, Manchester and Newcastle this month.

The campaign specifically promotes the South African safari experience and the “Big Five” game animals, as well as KLM’s daily flights between the aforementioned UK cities and Johannesburg via Amsterdam.

UK holidaymakers are South Africa’s largest source of international travellers, accounting for 48,700 or 19.9%, of the 244,700 overseas tourists who visited in January 2018, according to Statistics South Africa (StatsSA).

Another major source market is the US, which contributed 23,500 visitors to the January total. Efforts there saw the implementation of a co-marketing agreement in February between Cape Town Tourism and NYC & Company, the official marketing and tourism organisation of the City of New York.

The deal, originally inked in August of last year, aims to boost tourism and business between the two cities via reciprocal promotional work. In New York, this has involved marketing Cape Town’s offerings on 1000 LinkNYC kiosks – Wi-Fi capable communication stations – and 62 bus shelters.

The Scandinavian market has also been a focus of recent campaigning, with South African Airways, South African Tourism and other local marketing agencies organising for 85 tour operators from Denmark, Sweden, Finland and Norway to vist tourism hotspots around the country.

The seven-day familiarisation trip, which took place in early March, introduced the group to a variety of provinces and experiences, such as safari drives and visits to wine estates, some of which were provided by local micro-, small, medium-sized enterprises (MSMEs).

MSMEs key to development prospects of the sector

The DoT sees the MSME segment as particularly important to GDP growth and job creation in the tourism sector, and is working to support such businesses via the Tourism Enterprise Development and Support Programme (TEDSP), which comes under the aegis of the broader National Tourism Sector Strategy 2016-26.

The overarching goal of the TEDSP is to encourage sustainable development and growth among tourism enterprises, and as regards MSMEs, to ensure adequate information and funding resources are available.

Part of this effort has seen the creation of four tourism business incubators across the country. Two of these were launched last month by Elizabeth Thabethe, the deputy minister of tourism, one in the Ba-Phalaborwa Local Municipality of Limpopo and another in the Dawid Kruiper Local Municipality in the Northern Cape Province.

MSMEs will have access to remote training and mentorship from experienced business advisors, with the goal of enhancing the potential and viability of such enterprises.

Two other incubators were set up in recent years, in Pilanesberg in North West Province and Bushbuckridge in Mpumalanga Province, and according to Thabethe, these have already seen success.

Pursuing sustainable tourism amid drought concerns

The DoT is also looking to promote sustainable development among MSMEs through its Green Tourism Incentive Programme (GITP). The initiative offers grants to cover between 30% and 90% of the cost of retrofitting facilities with energy-efficient systems, with the spending cap set at R1m ($82,800); and 90% of the cost of conducting an energy-efficiency audit or the entire cost of reviewing an existing one. The first application window ran from November last year until January, and a second window launched at the start of this month will run until the end of June.

Eco-friendly development has come more into the spotlight of late due to the severe drought that hit the southern and western regions of South Africa, including the capital Cape Town. The problem has been labelled a national disaster, with the water allowance for residents of the city reduced from 87 to 50 litres per day at the beginning of February.

While the move has seen the city push back “Day Zero” – the point at which Cape Town’s authorities will be forced to switch off the water supply – from August this year to 2019, the hospitality sector has already been significantly impacted by the shortage. Many operators have put water-saving methods in place, including removing bath plugs to encourage showers and filling swimming pools with salt water.

Figures from StatsSA show a 2.4% increase in tourist arrivals last year, to 10.3m; much of this growth came from international visitors, whose numbers rose by 7.2% to 2.7m. With the National Tourism Sector Strategy aiming to bring total arrivals to 15m by 2020, sustainable development, and the ability to balance available resources with sector growth targets, will be a key determiner of the success of this goal and others under the plan.