Tourism Leads Job-Creation Charge

Business Day (Johannesburg)
NEWS
October 22, 2004
Posted to the web October 22, 2004

By Trade And Industry Correspondent
Johannesburg

Industry has made fourth-highest contribution to GDP, and promises more

SA's tourism industry has moved to the centre stage of economic development, says a recent study of global tourism competitiveness.

"Tourism is big business," says SA Tourism's newly- appointed CEO Moeketsi Mosola.

The study was conducted by SA Tourism and the department of environmental affairs and tourism It shows that tourism is the only one of seven key industries that has shown both employment growth and an increase in contribution to gross domestic product (GDP) Tourism made the fourth-highest contribution to the country's GDP between 1998 and 2002, increasing by 4,1%.

The motor industry had the highest increase, at 8,9%, largely due to the success of the Motor Industry Development Programme.

Over the same period, sectors such as machinery, agroprocessing, and metals saw no increases in job creation. Most of them shed jobs The study reveals that between 1998 and 2002, tourism enjoyed the highest employment growth rate, at 1,6% a year.

In 2002, the industry employed 521 000 people, making it the biggest private sector employer in the country.

"Our message to government and the private sector is simple - if you want to grow the economy while creating jobs at the same time, you know where to put your money," Mosola says.

According to the 2002 figures, tourism added R72,3bn to the national economy, making it the biggest contributor to the GDP.

But Mosola stresses that the competitiveness study was not a search for answers.

"Before we embarked on the study we did market research. We knew what domestic and international tourists wanted. We knew that we needed to devote more resources to skills development and training," he says.

"The study was about how we go about fixing what needs to be fixed in order to make SA competitive on the global stage."

Mosola's appointment was approved by the cabinet on Wednesday. He was previously chief operating officer at SA Tourism.

He says the study also magnifies the role of support industries such as banks.

"As we bring in millions of tourists into the country, we rely on the support industries to do their bit. For instance, we know that international tourists need bureaux de change facilities," Mosala says. "It therefore does not help that most of these facilities close on Sundays."

Mosola says SA Tourism had discussions with financial services institutions, and these are yielding results. "They are taking tourism seriously now."

He says that government officials who come into contact with tourists also have a responsibility to portray their country as a tourist-friendly destination.

But while the industry is performing well in employment and in its contribution to GDP, there are reasons for concern.

As highlighted during the third national conference on tourism recently held in Midrand, the industry is still fragmented with weak linkages.

In his address to the conference, Environmental Affairs and Tourism Minister Marthinus van Schalkwyk said fragmentation would eventually undermine the industry's growth.

"We as government want to engage with an industry consolidated and united within a single organisation that is 100% sectorally representative," he said.

"We do not want to talk to different organisations with different agendas. Industry must talk with one voice."

Meanwhile, Mosola also admits that "alignment, especially in the private sector" is still a problem.

By its own admission, the tourism industry has not moved as fast as it should to transform

A recent study commissioned by the department of environmental affairs and tourism showed that only 6% of Johannesburg Securities Exchange SA-listed tourism companies are black-owned.

In her presentation at the recent tourism conference, outgoing SA Tourism CEO Cheryl Carolus was blunt in her criticism of the slow pace of transformation.

"Excluding 80% of national talent is just plain stupid when the potential is so great," she told delegates.

"The lack of transformation is bad for business. Tourists desire real experiences with all South Africans."

The tourism industry has drawn up a transformation charter. A government-appointed steering committee is currently developing a balanced scorecard.

The draft scorecard proposes 40% black ownership of companies and 50% black representation in management positions by 2014.

The steering committee, chaired by broadcaster Tim Modise, is expected to submit recommendations to Van Schalkwyk by year-end.

Van Schalkwyk expects the tourism industry to accept the recommendations "because they own the process leading to the development of the scorecard".