Tourism Incentive Programme
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1 Tourism Incentive Programme Select Committee on Trade and International Relations 29 July 2015 Department of Tourism Slide 1
2 A force for change Tourism brings socio-economic development and growth. Tourism has transformative power to accelerate more inclusive growth. Tourism Incentive Programme is a tool to activate change. The pilot phase introduced this year. Slide 2
3 Desired outcomes Enterprise growth Quality standards Enhance iconic attractions Efficient and renewable energy sources More employment Enhanced visitor experience More competitive destination Energy security, lower input costs Slide 3
4 Pilot phase focus areas Market access support: Subsidise access to new markets. Tourism grading support: Lower the cost of tourism grading. Project sustainability and enhancement: Invest in improved facilities at strategic attractions. Energy efficiency pilot: Retro-fit facilities with renewable energy systems. Slide 4
5 Market access support Nature of support: Partial reimbursement of certain costs incurred in the participation in predetermined international marketing platforms. Capped amounts on airfare, accommodation and exhibition or participation fees. Objectives: Unlock untapped market potential and introduce new players to the market. Reduce cost burden on tourism enterprises to access markets. Facilitate enterprise growth and expansion to stimulate job creation and sector transformation. Slide 5
6 Market access support (2) Process: Published list of marketing platforms to be supported with regular calls for applications. Technical assessment against eligibility and qualifying criteria in programme guidelines. Approval, contracting and participation. Post intervention reporting and reimbursement of agreed amounts. Target audience: Small-and medium-sized inbound tourism enterprises (< R35M). Focus on transformed and market-ready enterprises. Slide 6 6
7 Market access support (3) Identified platforms considered for support: Business tourism platforms - CIBTM (China), IMEX America (USA), EIBTM (Spain). Leisure tourism platforms - ABAV Expo (Brazil), Vakantiebeurs (Netherlands), Swahili Tourism Expo (Tanzania), Magical Kenya, Akwaaba ( Nigeria). SAT Roadshows - Asia Roadshow (China, South Korea, Japan) and the India Roadshow. Additional platforms: Niche markets such as youth tourism (WYSTC), Golf Tourism (IGTM), etc. Consideration for additional trade and consumer exhibitions in Turkey, Russia, Switzerland and UAE. Slide 7
8 Market access support (4) implementation progress Key initiatives and challenges: Finalisation of programme documents and publication on website (March/ April). Calls for Applications issued and Adjudication Committee meetings held (May/ June). Platform Status Applications Approvals Asia Roadshow 27 June-11 July ABAV Expo September Call for applications, adjudication, contracting, participation, reporting underway Call for applications, adjudication, contracting underway CIBTM 5-6 August Call for applications, adjudication 0 0 WYSTC September Call for applications (closes 31/7) 12 to date N/a Totals Requirement for businesses to pay upfront and get reimbursed after participation are limiting the number of applications. Next steps: Amendment and refine programme guidelines to better accommodate small enterprises. Continue to issue Calls for Applications. Slide 8
9 Tourism grading support Nature of support: A structured and incremental system of rebates on annual assessment fees paid to the Tourism Grading Council: 30% rebate on 1st assessment. 35%, 40%, 45%, 50% respective rebates on 1st, 2nd, 3rd, and 4th re-assessment. Continuous 50% loyalty rebate on 5th and subsequent re-assessment. Additional 10% transformation rebate. Objectives: Greater conformity to quality standards through wider participation in the tourism grading system. Enhanced visitor experience and improved destination competitiveness. Slide 9
10 Tourism grading support (2) Process: Application for rebate at the same time as assessment or renewal application to TGCSA. Technical assessment against eligibility and qualifying criteria in programme guidelines. Qualifying rebates processed once star grading awarded by the TGCSA. Target audience: Existing TGCSA members including both newly graded establishments and those that renew their grading and membership. Particular focus will be placed on small and medium-sized accommodation and meeting venues. Slide 10
11 Tourism grading support (3) implementation progress Key initiatives and challenges: Finalisation of programme documents and publication on website (March/ April). Call for applications issued to 2578 establishments graded since January Status of applications for tourism grading support Applications received to date 78 Applications in process (including incomplete information/ ineligible) 47 Applications approved or pending approval. 31 Delays in obtaining information on graded establishments from TGCSA. Slow initial uptake by establishments. Sole proprietors and partnerships not accommodated in guidelines. Next steps: Amendments and improvements to programme guidelines to accommodate sole proprietors and partnerships. Slide 11
12 Project sustainability and enhancement Nature of support: Development assistance grant for projects in which the department is already involved: Operational sustainability support to Social Responsibility Implementation (SRI) projects under the Expanded Public Works Programme (EPWP). Destination development support to enhance and strengthen strategic and iconic attractions to improve the visitor experience and destination competitiveness. SRI project focus and potential areas of support: Independent assessments to identify operational challenges. Management development and mentorship. Skills development and training. Management contracts and operational systems. Market access support.. Slide 12
13 Project sustainability and enhancement (2) Destination development focus Pilot phase proposed destination development projects: Robben Island Museum (World Heritage Site). Wild activity hubs in Kruger National Park (SANParks). Walter Sisulu Botanical Garden (SANBI). Additional destination development projects being considered: Maropeng expansion in the Cradle of Humankind Visitor centre at the Square Kilometre Array (SKA) Potential areas of support: Skills development and training. Operational and visitor management systems. Signage and visitor information services. Marketing and market access support. Tourism product development and expansion. Slide 13
14 Project sustainability and enhancement (3) - Implementation progress Key initiatives and challenges: Sustainability support already provided to Nahakwe Lodge and Steve Biko Centre. Terms of Reference developed for viability assessment of 19 identified SRI projects. Memoranda of Understanding signed with Robben Island Museum, SANParks and SANBI. Project plans received for Robben Island Museum, Kruger National Park Wild Activity Hubs and Walter Sisulu Botanical Garden. Next steps: Finalisation of project plans for all projects. Drafting of Service Level Agreements for all projects. Slide 14
15 Renewable energy retro-fitment pilot Nature of support: Subsidise the retro-fitment of tourism facilities with renewable energy systems to enhance the visitor experience. Objectives: Alleviate pressure on the grid and reduce the sector s carbon footprint. Reduce input cost for tourism operations and ensure reliability of electricity supply. Confirm our status as a leading responsible tourism destination. Solar technology opportunity: Decentralised energy generation with short payback period. Localised production to support Industrial Policy. Slide 15 15
16 Renewable energy retro-fitment pilot (2) - A phased approach Pilot phase focus on state-owned destination areas: World Heritage Sites. National Parks. Botanical Gardens. SRI projects. Subsequent phases: Staggered subsidy to incentivise retro-fitment by private sector tourism enterprises. Larger subsidies for smaller enterprises. Possible financing instruments for non-subsidised portion. Procurement and contracting: In accordance with Public Finance Management Act. Partnership with Development Finance Institutions. Emphasis on localisation to support green economy. Slide 16 16
17 Renewable energy retro-fitment pilot (3) - Benefits Benefits: Tourists - uninterrupted visitor experience. Enterprise lower input cost goes straight to bottom line. Country less pressure on grid, competitive edge. Examples: 500kW PV mini-grid to cover electricity requirement of Robben Island 280kW PV mini-grid to cover peak demand in a visitor camp will save SANParks close to R1 million p.a. 10kW PV-system can save a 15-room guest house more than R5 000 p.m. 65kW PV system can save a 250-room hotel more than R p.m. Slide 17 17
18 Renewable energy retro-fitment pilot (4) - Implementation progress Key initiatives and challenges: Consultation with key government departments and institutions: Department of Science and Technology understanding local renewable energy technology options. Industrial Development Corporation explore partnership and collaboration options. National Treasury confirm correct procurement approach. Obtained access to IDC s Expert Panel on Renewable Energy. Issued Request for Information (RFI) to local equipment manufacturers of renewable energy solutions. Pilot sites being finalised with Robben Island Museum, SANParks, SANBI, etc. Next steps: Appointment of technical advisor. Development of technical specifications for each site. Slide 18
19 Governance and management Follow prescripts of Public Finance Management Act. Adjudication committee appointed by the Director General meets monthly. Typical process: Application technical assessment verification adjudication support. Slide 19
20 Expenditure estimates Pilot phase 2015/16 budget allocation: R Transfer estimate: R Outer years 2016/17 budget allocation: R Transfer estimate: R /18 budget allocation: R Transfer estimate: R Slide 20
21 Stakeholder engagement and awareness Key initiatives and challenges: TIP Launch and presentations to Portfolio Committee (March). Internal awareness sessions (April to June). 1st round industry awareness workshops (May to June). Formal enquiries - tipenquiries@tourism.gov.za (ongoing since March). Next steps: 2 nd round workshops for quarter two in smaller centres in each province underway. Alternative platforms and communication channels being considered. Slide 21
22 Stakeholder engagement and awareness (2) 1 st Round TIP awareness workshops held (Q1) 2nd Round workshops in Q2 Province City/ Town Attendance Centres Eastern Cape Mthatha 42 Port Elizabeth Northern Cape Kimberley 39 Uppington Free State Bloemfontein 108 Clarens Western Cape Cape Town 135 George Saldanha Bay North West Mafikeng 210 Rustenburg Limpopo Polokwane 62 Phalaborwa Thohoyandou Modimole KZN Durban & Newcastle 138 Richards Bay Port Shepstone Mpumalanga Nelspruit 59 Ermelo Emalahleni Gauteng Johannesburg 46 Pretoria Boksburg Indaba TEP SMME workshop National 150 TOTAL 989 Slide 22
23 Looking ahead Pilot Phase: Continued strengthening and improvement of market access and tourism grading support programmes. Facilitate full implementation of destination development and energy retro-fitment projects. Following the pilot phase in 2015/16: Refine and re-align some programme components. Expand and scaling-up of programme components and introduce new programmes. Slide 23
24 Desired outcomes Enterprise growth to support more employment and sector transformation. Quality standards to enhance the visitor experience. Enhanced iconic attractions to improve destination competitiveness. Energy efficiency to drive down input costs, facilitate energy security and become the leading responsible tourism destination. Slide 24
25 Direct further enquiries by to or telephone Slide 25
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