Community comes first in tourism development
Although South Africa has weathered the global economic storm comparatively well, it has not been immune to the diminished spending power of traditional tourist markets, particularly Europe. Figures for 2011 released by SA Tourism show a 3.5% year-on-year decline in visitors from this key market and a 5.5% decline in visitors from the Americas.
In response, the Industrial Development Corporation's (IDC's) tourism business unit has turned its attention to developing tourism products and projects that have a far more inward-looking focus.
"The IDC is a significant player in the tourism sector and has invested almost R5-billion in the industry since 1993, which helped to create about 13 500 jobs. It has a current exposure of around R2.6-billion to 90 clients and in the past year alone invested R233-million in various projects, creating 447 direct jobs", says Christine Engelbrecht, head of the business unit.
Until now, however, the bulk of this investment has been directed at creating tourism infrastructure to attract international visitors. Under the new strategy, the tourism business unit is "actively looking to fund niche projects, specifically in underdeveloped regions, and those with strong community participation and empowerment.
"In the build-up to 2010 there was a lot of capacity added in Johannesburg, Cape Town and Durban, but in the aftermath of the event and the global recession, there is over-capacity in those areas," says Engelbrecht.
"In line with the national department of tourism's sector strategy, we are now focusing on how we can enhance the product offering. South Africa has a lot to offer, but it's not well developed or appropriately packaged," she says.
Domestic tourism is being touted as a well of untapped potential, and the development of attractions that are affordable for local visitors but also appeal to the international market seems to be the sweet spot. The IDC is therefore looking to fund projects in niche tourism sectors such as adventure and sports, birdwatching, backpackers, heritage and culture, and natural attractions.
"We believe there is still a need for mid-range, affordable accommodation in the developed nodes, but the four- and five-star market is over-supplied," says Engelbrecht.
The domestic tourism market is by far the largest contributor to visitor numbers, accounting for more than 26-million domestic trips in 2011, according to SA Tourism's most recent annual report. The domestic tourist numbers may be bigger, but with international visitors having spent more than R72-billion last year, 2011's domestic tourism spend of just over R20-billion pales in comparison.
Engelbrecht says the IDC's tourism strategy is based on the national tourism sector strategy that was released last year by Tourism Minister Martinus van Schalkwyk. The strategy aims to create 225 000 new jobs by 2020 and is itself informed by the New Growth Path and the Industrial Policy Action Plan 2, which identified the sector as one expected to contribute to the development of rural areas and jobs.
In line with the national strategy, the IDC therefore tries to identify inherent strengths or attractions that can be develop to build a sustainable tourism venture, Engelbrecht says.
"To this end, the IDC is busy evaluating a number of unique developments, including an adventure sports centre in the Northern Cape, a beach resort in KwaZulu-Natal and even the possibility of a sky-walk at God's Window in Mpumalanga. These and other proposals are in feasibility or pre-feasibility stages, which is a process that falls within the IDC's funding mandate," she says.
The second leg of the tourism unit's strategy is to promote and facilitate community participation. "This has been demonstrated to greatest effect in the Witsieshoek Lodge in the Drakensberg area, in which the Batlokoa community of the Free State own a significant stake."
Engelbrecht says the IDC is often approached by communities to fund projects in which they have or will have a stake, but also proactively looks for communities or areas that could benefit from development.
"This in the case of the proposed beach resort in KwaZulu-Natal, where we have been involved from the get-go and have acted as intermediary between the community and the local municipality to negotiate the provision of basic services to the community, not only the project," says Engelbrecht.
In addition to project and developmental funding, training and support services are provided to such projects to ensure their continuing sustainability. The IDC also plays matchmaker by linking communities with tourism operators and suppliers who can add expertise that may be lacking.
Engelbrecht says that the biggest opportunities lie not only in the niche markets. "There is tremendous potential in developing affordable accommodation." She says the trend in visitor arrivals from neighbouring countries who come purely to shop could provide a lucrative market if approached correctly.
"Tourism is a dynamic industry and my team and I are looking for unique projects to invest in. Projects in townships, on community land with community participation, and strong empowerment and developmental credentials are always welcome," she says.