Thought leadership.

Johannesburg, 28 March 2023, Tourism Industry in Crisis: Can Patricia de Lille Save the Day?

The tourism industry in South Africa is at a critical juncture, with the recent appointment of Patricia de Lille as the new Minister of Tourism. Whilst her energy and fighting spirit are encouraging, the challenges facing the industry are significant, and the time frame for action is limited.

 As Founder of BON Hotels, I have witnessed the significant impact and contribution that our industry has on our economy, contributing up to 6% of the national GDP. This is higher than the construction industry and more than agriculture, utilities, and construction combined. With such a significant impact, I really do believe that we must insist that the industry receives the attention and resources it deserves.

In her first week as Tourism Minister, de Lille highlighted job creation within the industry as a key priority. However, many in the tourism industry are sceptical of her ability to deliver on that promise. The reality is that the tourism and hospitality industries in South Africa are currently not operating in a growth environment. With tourism numbers down (with the exception of Cape Town) and margins under constant pressure, job creation in the current environment is unlikely if not impossible and perhaps even “pie in the sky!”

Despite the massive challenges we face as an industry, I am optimistic of Lille’s fighting spirit and energy and that this will help drive the industry forward. Her history as a whistle blower in the early 2000s is evidence of her determination and willingness to take on controversial issues. However, the question remains whether there is enough time to make a significant impact on the tourism industry. With elections coming up in 2024, there is a possibility of a new government and a new tourism minister, meaning de Lille has just one year to make an impact.

To make the most of her limited time, I suggest that de Lille focus on the areas that will have the greatest impact on the industry. First and foremost, she should consult with SATSA. This organisation is well-positioned to provide the most accurate picture of the challenges facing the industry, including both inbound and domestic travel, hotels, and restaurants. The minister can get a sense of the transport issues, visa problems, and other challenges that need to be addressed. In a frank conversation, David Frost, CEO SATSA, will be able to give the minister a good overview of the ten points he has highlighted for the past ten years with little or no support from the government.

Secondly, since de Lille has limited tourism experience, it will be crucial for her to appoint a properly constituted board that includes people who are currently in the industry and who understand the challenges it faces. This board can provide the necessary advice and perspective, including on ideas like tiered pricing structures.

While de Lille has indicated that the government is considering making tourism more affordable for locals with the introduction of tiered pricing, the impact on recovering tourism establishments of offering further ‘discounts’ would be disastrous. The minister needs to consult widely on this issue before making any decisions.

It is unnecessary for the minister to reinvent the wheel. Instead, she should revisit some of the amazing ideas that were discussed in 2020 when the tourism recovery plan was launched. This plan, which is inconceivably South Africa’s best-kept tourism secret so far, was developed in consultation with private players in the industry and could be an essential tool for the minister to help the industry recover. Similarly, the minister needs to look at the tourism safety and security program, which was talked about at the same time. Law enforcement agencies need to work closely with the industry to improve crime prevention, especially as crime is the number one negative factor impacting on South Africa’s attractiveness as a tourism destination.

Finally, I would like to see the government provide our tourism players with financial concessions, incentives, taxation relief and relaxation of impediments to help provide much needed tourism related stimulus. As an industry, we are all ready, willing, and able to work with the minister, provided that she listens to us and acts on some of the ideas we put on the table.

The new Minister of Tourism has a significant role to play in addressing the challenges facing the industry. By focusing on the areas that will have the greatest impact and working closely with industry players, de Lille can help to drive the industry forward and ensure that it receives the attention and resources it deserves.

by Guy Stehlik, CEO, BON Hotels

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