PRINCIPLES OF PRODUCT DEVELOPMENT IN AFRICA AN HONEST SOUTH AFRICAN PERSPECTIVE

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1 PRINCIPLES OF PRODUCT DEVELOPMENT IN AFRICA AN HONEST SOUTH AFRICAN PERSPECTIVE HLENGIWE MAGUDULELA

2 Overview Introduction Policy Mandate Republic of South Africa National Department of Tourism (NDT) National Mandate Tourism Whitepaper Social Responsibility Implementation (SRI) and Expanded Public Works Programme Nine Point Plan Challenges, how are fixing them A successful community owned lodge: Nahakwe Lodge THE END 2

3 Introduction South Africa aspires to be a sustainable, economically prosperous and self-reliant state that safeguards its democracy by meeting the fundamental human needs of its people, by managing its limited ecological resources responsibly for current and future generations, and by advancing efficient and effective integrated planning and governance through national, regional and global collaboration Progress to date indicates that the tourism sector has significantly enhanced its collaboration, and shows good signs of influencing other, external factors under different sector mandates in and around Africa. The Republic continues to develop products through enhancing systems for integrated planning and implementation We strive to achieve economic development through investing in sustainable tourism infrastructure Responding appropriately to emerging human development, economic and environmental challenges

4 National Mandate The vision of NDT is Leading sustainable tourism development for inclusive economic growth in South Africa. Tourism Act No. 3 of 2014 makes provisions for the development and promotion of sustainable tourism for the social, economic and environmental benefit of South African citizens. Tourism Act No embraces the National Tourism Sector Strategy (NTSS) as part of the legislative framework for the management and development of tourism. The Act enables the sector to address gaps pertaining to the lack of knowledge and information about the sector; the lack of adequate structures for the management of tourism; SMME transformation and the lack of service excellence in the sector. The objectives of Tourism Act No. 3 of 2014 include: Promotion of responsible tourism practices; Provisions for the effective marketing of South Africa, both domestically and internationally through South African Tourism (SAT);Promotion of quality tourism products and services; Promotion of economic growth and development of the sector; Establishment of concrete intergovernmental relations to develop and manage tourism

5 Social Responsibility Implementation (SRI) and EPWP The tourism white paper makes strong provision for the development of specific community based tourism products. Over the past few years, NDT through its SRI unit has accelerated tourism development aimed at supporting local communities through various initiatives in response to the market needs and resource shortages in the sector. NDT s SRI EPWP programme has been developing rural tourism as a product through funding community owned tourism establishments since its inception in These products are in the form of lodges, resorts, safari lodges, campsites, caravan parks, heritage sites and tourism visitor information centres. NDT further supports tourism product development through training programmes aimed at addressing skills shortage in the hospitality (food and beverage sector) in the country. These initiatives are funded as proposed by the community organisations through the provincial offices.

6 Nine Point Plan NDT receives funding application Project Planning: ID Stakeholders, Allocate Resources, Objectives, Business Plan, Risk Management Plan, Gantt Chart, Appointment of implementer, develop business model, Quality, stakeholder meetings Project Implementation: Construction as per business plan, M&E, Budget management, quality control, reporting, stakeholder meetings NDT reviews application and performs due diligence Project applicants are notified of result. If approved, project planning begins Project Review and Launch Preparation. Verification of assets, snag items identified and fixed. Stakeholder meetings Feasibility assessments are conducted. Depending on the outcome of the feasibility assessment, recommendation is made and sent to the Director General and Ministry Project close out and launch by Minister or Deputy Minister of Tourism

7 Challenges Challenges and Solutions Solutions Poor location of tourism projects No bulk infrastructure (water, access roads, electricity, signage) Poor planning (budget, quality, stakeholder, risks, time, poor resource allocation, grading) Tourism establishments are now being developed in areas where there are activities to sustain the facility Relevant authorities are now brought in to be part of the project from the beginning, and commit to All projects are assessed prior planning using a sustainability checklist, followed by a PiP upon approval Lack of capacity: Owning agencies No feasibility or viability assessments conducted Products developed not in response to markets Lack of interest from Hotel/Lodge/Resorts operators Training programmes through NDT training unit are developed with other academic institutions to provide relevant training for these owning agencies All projects prior approval are subject to feasibility assessments to assess the commercial viability for the project The department is developing products in line with the future tourism trends and demands in partnership with hotel groups Create incentives and providing operational funding support. Partnering with NEF, IDC and other financial institutions to offer funding post implementation

8 Nahakwe Lodge Nahakwe Lodge offers fresh, modern event facilities and accommodation in Limpopo Province. Situated just 90 minutes north of Polokwane, it is ideally placed for meetings and events that attract delegates from all over the Limpopo province It s comfortable with 4*-standard accommodation in free-standing chalets with air-conditioning and en-suites. Nahakwe Lodge is ideally situated for adventure travellers who want to explore Limpopo Province. Owned by the local community of the Mamaila Kolobetona Traditional Authority, the Lodge was opened on 26 September 2015 by the Minister of Tourism, Mr Derek Hanekom, as a showcase of a modern community-owned tourism enterprise.

9 Nahakwe Lodge The total amount of the grant funding was R28.5million, thus creating 90 temporary jobs throughout the construction of the lodge. Throughout the construction phase, beneficiaries on site received accredited and non accredited training. The aim of these trainings is to ensure that they will be employable after construction. NDT appointed a management company to operate the lodge on behalf of the community, and provided R13.8million in grant funding for operations. Part of the agreement includes skills transfer from the operator to the community, mentorship, job creation and implementation of the social plan.

10 Operational Progress Marketing is being undertaken internationally, nationally and regionally and interest in the Lodge is increasing. While it is early days to assess the full impact of the marketing effort, regional interest in the Lodge is improving as local groups and organisations are targeted in direct marketing effort by the staff at the Lodge. Development of activities at the Lodge and in the surrounding areas is part of the product development effort. These include walking trails, mountain bike trails and birding at the Lodge. In the surrounding areas they include the Cycad forest at Modjadji, the Elim art and crafts route, and village events. The Lodge employs 19 locally based staff and is currently under the oversight of the TFPD Group Operations Manager. The lodge is currently in the process of introducing wildlife, and becoming a safe haven for rhino s. After 12 month of operations, the lodge is at 17% occupancy and slowly showing steady growth.

11 Nahakwe Lodge, Limpopo

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24 THANK YOU Ms. Hlengiwe Magudulela: Business Enterprise Support SRI Tel: Cell:

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