Lindiwe Sisulu
CAPE TOWN - We have a strong base on which to rebuild and expand the tourism sector in South Africa, and our work is cut out for us.
In the recent past, I’ve had the privilege to truly experience the promise of our tourism sector.
Firstly, our visit to Expo 2020 in Dubai was defined by deep and rich engagements with serious global stakeholders.
We saw hoteliers and airline executives who took the opportunity to meet with us to affirm their interests and commitment to invest in and support our tourism sector.
Since that trip, I was delighted to interact with local stakeholders in Cape Town, an engagement made more remarkable because it was held at a hotel in Khayelitsha owned and run by a black woman.
I was particularly excited to learn that apart from the Spade Boutique Hotel being constructed by locals, many of the elements, such as the furniture, were produced around the Khayelitsha area.
Globally, the travel and tourism (T&T) industry continues to contribute to the lives of millions of people by driving growth, creating jobs, reducing poverty and fostering development and tolerance.
According to the OECD report entitled “Tourism Policy Responses to the Coronavirus”, as one of the most labour-intensive sectors, tourism directly contributes 6.9% of employment on average in OECD countries. In South Africa, the tourism sector contributed about 4,5% of total employment, which was more than mining, which contributed 2,6% of jobs, according to a 2018 StatsSA report.
This tells us that as we emerge from Covid-19 lockdowns, we have the opportunity to grow tourism to contribute as much as the OECD average of 6,9%, or as much as 10% as has been done in other regions. And we can with the right focus.
The construction and opening of the Spade Boutique Hotel, which I referred to, like many other projects, was disrupted and derailed by the Covid-19 crisis.
The question that has occupied my mind since our sector engagement, and indeed the hotel’s opening, is how we place the sector back on the rails, scale achievements of people, like Spade Boutique Hotel, and deliver on the potential and promise of the tourism industry.
The Spade hotel is a good example of why many people have such high expectations of the economic impacts of tourism, and indeed, why we should put serious efforts into promoting local tourism.
Research has shown that tourism has higher than what economists call employment multipliers.
In other words, tourism activity tends to have a higher impact on jobs than other economic activities. For example, for every Spade Hotel we build, jobs will be created for construction workers, hotel service staff, including cleaners, managers, porters and cooks.
Further, in the primary and secondary sectors, Cape Town fishermen can sell more of their catch, and therefore, that industry sees growth, as well as other food producers.
As mentioned, linen and furniture makers can employ more people to supply these hotels. Thus, tourism not only creates jobs in the tertiary sector, but also encourages growth in the primary and secondary sectors of industry.
There is, of course, the danger that we may not fully capture the benefits of tourism if we are not intentional and collaborative as various sectors. A study of tourism 'leakage' in Thailand estimated that 70% of all money spent by tourists ended up leaving Thailand.
This leakage was through foreign-owned tour operators, airlines, hotels, imported drinks and food. The study estimates that for other developing countries, the leakages range from 80% in the Caribbean to 40% in India. This means that we should upscale our efforts to create local content from training local tourist skills to producing local products and other inputs that supply the industry.
We can create more access to economic activity and enterprise. Results from other studies focused on tourism show that the sector tends to have less barriers to entry, allowing easier market access for small businesses, resulting in employment creation and income for the poor in developing regions if promoted through effective policy implementation, even in regions where tourism has not been a traditionally leading sector.
Within this context of growing unemployment and poverty, tourism as an economic sector is widely accepted as a sector that could help marginalised and disadvantaged regions achieve higher growth levels with more employment opportunities.
A paper by researchers from the University of North West demonstrated that “Tourism as a low skilled, labour-intensive industry, has many benefits for local regions including poverty alleviation and a key sector for local economic development”.
Using data focussed on the local regions of the Emfuleni and Metsimaholo municipalities to determine the effects and economic impacts of tourism, the researchers confirmed that “increased tourism activity, such as experienced in the Emfuleni area and to a limited extent in the Metsimaholo area, can lead to higher spending, diversification of the local economy and increased economic growth.
“The study further pointed out that many social issues such as poverty, unemployment and lack of skills training can be improved with growth within the tourism sector of a region”.
We know that it is at the local level where economic development is most needed. Therefore, this is where we will need to focus a lot of our efforts.
Thus, in our efforts to grow employment and economic inclusion, especially of youth and those with low skills, our efforts in tourism should have a local focus, as well as developing local content that service these untapped markets. This will require collaborative efforts. From discussions I have had with various industry players, I am confident that this is all within reach.
* Sisulu is the Minister of Tourism
Cape Times