EFTA00578074

Wor ld Travel Tourl m CounLil South Africa's 41 Travel & Tourism Economic Driver for the 21st Century TRAVEL & TOURISM Gmaiins5„ .Jobs EFTA00578074 WTTC MEMBERSHIP Daniel AtToiler* Sebastian Escarrer W James McNerney Jr Ian Swain Chohnum Chief Execuave Office, President & CEO Thesedon Kuoni Travel Holding Limited Sol Melia GEAircraft Engines Swain Travel Services. Inc. Don Carty William R Fall Sandy Miller Ratan Tata Chairman Chaiinuen & CEO Chairman of the Ronal & CEO American Airlines Chairman & Managing Director Canadian Pacific Hotels Budget Rent-a-Car The Taj Group of Hotels Peter Armstrong Bernard D. Frelat Steve Miller Pfesearna & CEO President & CEO Chief Executive Officer Jose Antonio Taxon Great Canadian Railtour Co Rail Europe Group. Inc. Resort Condominiums President & CEO International. Inc. Amadeus Global Travel Praphant Asam-aree William H. Friesell Ptesning Marilyn Carlson Nelson Distribution Choi/num N.C.C. Management & Diners Club International President. CEO and lice Chair Jonathan M. Tisch Development Co.. li d. Carlson Companies, Inc. Haney Golub* President & CEO Ted Balestreri Chairman & CEO Roland Nilsson laws Hotels Chninnon & CEO American Express Company President & CEO Cannery Row Company Scandic Hotels AB Mustafa Turkmen Maurice H. Greenberg CEO & Managing Director Roger Halloo Chairman. President & CEO P.R.S. ()heal* Global Vacation Group Enternasyonal Tourism American International Group Site President and Chairman The Oberoi Group Investments. Inc. James E. Barlett R. Craig Hecuba Yapi Kredl Bank of Turkey Pershing & CEO Frank A. Olson' Chaim/an & CEO Galileo International Chairman & CEO Stanley Tollman Avis. Inc. The Hertz Corporation Chairman Juergen Bartels Robin W. Ingle The Travel Corporation Chairman & CEO James J. O'Neill Chaiinuen Westin Hotels & Resorts President Wolf-Riidiger Uhlig Ingle International Inc. ONEX Food Services. Inc. Paul Blackney Mameging Dann Chairman Xabier de Irak Joaquim Paiva Chaves SRS Hotels XTRA On-Line Chairman & CEO Managing Director Steigenberger Reservation Service Iberia Stephen F. Bollenbach Sonae Thrismo Noel Irwin-Hentschel Leo NI van Wijk President & CEO Alan Parker Chainmen & CEO Pendent Hilton Hotels Corporation Managing Director AmericanTours International KIM Royal Dutch Airlines James Brown Whitbread Hotel Company Chief Operating Officer Clive Jacobs Gary L Paxton Joseph Vittoria Rosewood Hotels & Resorts Chainmen & CEO President & CEO Chairman & CEO Holiday AMOR International Dollar Rent-A-Car Systems Inc Travel Services International Robert H. Burns* Chairman David W. Jarvis Girard Nilsson* Daniel P. Weadock RHB Holdings I.imited Chief Ewe-odor President of the Supervisory Roan( President & CEO Hilton International Accor S.A. Manfred Rosette ITT Sheraton Corporation Chohnum Andre Jordan* Gilles Nilsson Messe Berlin GmbH Chemnudn Jurgen Weber Chairman & CEO LUSOTUR S.A. Chairman Peter Cass EuroDlsney S.A. Lufthansa German Airlines Ptesning Gerhard Kastelic Dionisio Pestana Preferred Hotels & Resorts Pirshlent & CEO Chairman John Wilson Vienna International Airport Group Pestana Chief Executive Alun Cathcart Chahnum & CEO Richard R. Kelley Alberto del Pino Millennium & Copthorne Hotels Avis Europe Chairman Chief Executive Officer plc Gerlach Cerfontaine Outrigger Enterprises. Inc. Allegro Resorts Vincent A. Wolfington• President Geoffrey J.W. Kent Sir Ian Prosser, Chain/um Amsterdam Airport Schiphol Chaiiman Chairman Carey International. Inc. U. Gary Charlwood Abercrombie & Kent Bass PLC Chairman & CEO Ron Woodard Sol Kenner, Reed Travel Gmup Uniglobe Travel (International) Thesidon Chairman Inc. Mandarin Oriental Hotel Group Boeing Commercial Airplane Sun International Group Christophe Charpentier Sir Ralph Robins Herald Klein• Chairman Chabman Member of the Executive Board Hani Yamani Havas Voyages Rolls-Royce plc Chairman Lufthansa German Airlines Cheong Choong Kong Michael D. Rose Hani A Z Yamani Investments Ltd Jonathan S. Linen Chnuman Deputy Chairman & CEO Vice Chairman Promos Hotel Shuichim Yamannuchi Singapore Airlines Limited American Express Company Chairman CorporationMarrah's Robert Collier William W.N. Liu Entertainment. Inc. East Japan Railway Company Mee Chairman Remittent & CEO Carl Ruderman Saturn Overseas Holdino, parent Ulrich 'Berke Abacus Distribution Systems Chairman company of Inter-Continental Chief Execuebe Hotels and Resorts William E. Lobeck Universal Media. Inc. The Thomas Cook Group John H. Dasburg Thrsidem Pave Zupan Ruskovic President & CEO Republic Industries Inc President Northwest Airlines Automotive Rental Group Atlas Travel Agency Honorary Members Jim Davidson Nashirudeen Mallam-Hasham Ivan Michael Schaeffer Sir Frank Moore. AO President & CEO Chairman & Mat aging Mimeo, President & CEO Chairman System One Company Air Mauritius Woodside Travel Trust Taylor Byrne Tourism Group Robert H. Dickinson. CTC J. W. Marriott. Jr.• Robert Selander Chapman & CEO James D. Robinson III President President & CEO Carnival Cruise I.ines Marriott International. Inc MasterCard International Chairman & CEO RRE Investors. LLC Michael J. Durham Sir Colin Marshall* John L. Sharpe Chairman Emeritus. WTTC President & CEO Chanmat President & COO The SABRE Group British Airways PLC Four Seasons Hotels and Resorts Tommaso Zanzotto Sir John Egan• Isao Matsuhashi Fernando Souza Pinto President Chief Executive Chaeirmen of the Board President & CEO T'L Associates BAA plc Japan Travel Bureau Inc. Yang President Elhamy Ellayra James McCrea Ron Stringfellow Geoffrey H. Lipman Chairman & CEO Managing Director Executive Chairman Emma Ravel Air New Zealand Southern Sun Group *Executive Committee Member EFTA00578075 World Tr • v it I September 1998 —6 — Ton fl ans Council President Nelson Mandela Executive Deputy President Thabo Mbeki Eweutive Committee Republic of South Africa Chairman Ramey Golub Anonican Empress Company Viee•Chairmen In support of your South Africa Jobs Summit, the Members of the World Travel & Robot L. Crandall Anonican Airlines Tourism Council, the global business leaders forum, urge you to reflect the significant job creation potential of Travel & Tourism in the Jobs Summit action plan. Sir Cohn Marshall British Ainrays pie This report, based on new concepts of Satellite Accounting being developed through inter- Otani Pelisson Ace°, S.A. national public/private sector collaboration shows the direct economic impact of the South Committee Members African Travel & Tourism industry. It also calculates Travel & Tourism's very strong flow Daniel Attunes through effect across the economy, stimulating employment in upstream suppliers and KfleMi Trawl Holding Limited downstream servicers of travellers and travel companies — construction, telecommunica- Sir John Egan litAA plc tions, retail and manufacturing. Andre Jordan It suggests that by 2010 more than 174,000 new jobs can be created directly by the !mmar S.A. Travel & Tourism industry, and 516,000 jobs can be created, directly and indirectly, Sol Kenner San International across the broader South African economy. ilemat Klein Lufthansa German Airlines These will be good jobs ranging across the employment spectrum from white to blue col- lar. They will pay higher than average wages and be particularly accessible to women, the 1. W. Manion, Alarrunt International. Inc unskilled and new entrants into the job market. They will incorporate high levels of train- P.R.S. ObefOt ing. The majority will be in small and medium-sized enterprises — often in city centres or The (Theroi Group rural areas where structural unemployment is most severe. Prank A. Olson The Herr. Corporation We also set out general policy directions based on our Millennium Vision — which we Sir Ian Prosser believe could help to realise that potential. These are closely aligned to the broad policy Bum plc goals of your government, reflected in the "Tourism in Gear" approach. Vincent A. Mutilation Carey Intonational. Inc. The Members of the World Travel & Tourism Council stand ready to work with you to Immediate Past Chairman create hundreds of thousands of jobs into the new Millennium. RObefl El. Burns ROB Holdings Lamoied Chairman Emeritus lames I). Robinson Ill RRE lawman. LW Respectfully. President Geoffrey II. Lipman Wail,i T.rrrl@ Tourism Council Harvey Golub Geoffrey H. Lipman Chairman President %%Tie Registered Office: 20 Grosvenor Place. London SW1X 71T. U.K. Tel: (444-171) 838 9400 Fax: (444-171) 838 9050 http://www.wac.org e-mail: Creatinglobsecompusent.com A Company- Lamed by Centime. Reputation No. 2506591 TRAVEL &TOURISM: Cre-ati Jobs EFTA00578076 SOUTH AFRICA TRAVEL & TOURISM CREATING JOBS* 1998 2010 T&T Industry Jobs 250,000 420,000 % of Total 2.4 3.1 Jobs Created 175,000 T&T Economy Jobs 735,000 1,250,000 % of Total 7.0 9.3 Jobs Created 516,000 *Baseline Scenario • "figures rounded" EFTA00578077 South Africa's Travel & Tourism - Economic Driver for the 21st Century This Report: Assesses the impact of 'fravel & Tourism - day and stay, business and leisure, domestic and international — in the South African economy. It covers: • T&T INDUSTRY showing the size of the sector — transport, accommodation, catering, recreation and related activities. • T&T ECONOMY showing the impact of Travel & Tourism as it ripples through the wider economy. It uses the modern statistical measurement technique of 'National Satellite Accounting' to identify direct economic effects of travellers and travel companies, as well as the indirect economic effects of suppliers and support services. WTTC/WEFA are at the forefront of international public/private sector research in this area. Develops a range of forecasts about the future of Travel & Tourism: • Baseline — the most likely. • Optimistic — with most favourable circumstances. • Pessimistic — with most unfavourable circumstances. These have been devised with help of a panel of local experts. Unless otherwise specified, the baseline forecast is used throughout. Makes a series of policy recommendations which are designed to help government tap the huge potential benefits that Travel & Tourism offers South Africa. It should be read with regard to wider trends towards globalisa- lion, privatisation, regionalisation and public/private sector driven market economies. In order to become fully competitive South Africa, together with the wider Southern African region, must continue to move towards liberalised markets. TIP OF AN ECONOMIC ICEBERG ACCOMMODATION T&T Industry • CATERING / /0 ENTERTAINMENT • /• RECREAT ION T&T Economy /TRANSPORTATION AND OTHER •- TRAVE :ressioimemmane ELATED SERVICES Services • Oil/Gas Supply • Wholesalers • Printing/Publishing • Utilities • Financial Services • Sanitation Services • Furnishings and Equipment Suppliers • Security Services • Rental Car Manufacturing • Transportation • Administration • Tourism Promotion • Ship Building • Aircraft Manufacturing • Resort Development • Glass Products • Iron/Steel • Computers • Utilities • Concrete • Mining • Plastics • Chemicals • Textiles • Metal Products • Wood EFTA00578078 The Reality of South Africa's Travel & Tourism But ■ Some parts of South Africa are increasingly seen as Travel & Tourism is emerging as a leading global economic unsafe for tourists. driver for the 21st century. In South Africa, it is already an ■ There are gaps in infrastructure and lack of capacity in important contributor to employment and wealth creation, some areas. with a huge flow through effect which touches all sectors of ■ Product quality and service levels do not always meet the economy. In the past three years, Travel & Tourism has international standards. created 187,170 new jobs across the South African economy alone. It has enormous potential as a catalyst for Prospects future economic and social development throughout the entire Southern African region. The future for Travel & Tourism in South Africa could take very different forms, depending on several key factors Travel & Tourism is different from most other industries including government monetary policy, the rise or fall in because travellers are by definition mobile and they crime and the effectiveness of the industry's product generate economic activity at different times and places — development and marketing. often indistinguishably from that generated by local residents. These activities, however, have a huge flow SOUTH AFRICA through effect across other economic sectors. Satellite Travel & Tourism Economy GDP Accounting maps that impact. Pessimistic, Baseline & Optimistic 1988-2010 (Billions of Rand) Today's T&T INDUSTRY represents: 248,141 jobs: 2.4% of total employment 350 Rand (R)16.982m GDP: 2.6% of the total Optimistic 300 Today's T&T ECONOMY represents: 250 Base 737,600 jobs: 7.0% of total employment 200 R53.2bn GOP: 8.2% of total GDP 150 R24.2bn exports: 13.2% of total exports R12.8bn capital investment: 11.4% of total investment 100 Pessimistic (11770WEPA estimates) 50 0 Strengths and Weaknesses 1988 1993 1998 2003 2010 South Africa has tremendous advantages in the global tourism market and some critical challenges. The future SOUTH AFRICA Travel & Tourism Economy Employment prosperity of the sector will be assured only if these Pessimistic, Baseline & Optimistic 1988-2010 advantages are consolidated and the weaknesses minimised. (Thousands of Jobs) ■ The characteristics of South African tourism products 1600 are in line with global market trends for adventure Optimistic tourism, ecotourism, cultural tourism etc. 1400 ■ Since 1994 there has been significant increased 1200 capacity for tourism in accommodation, transport. 1000 airlinks etc. Pessimistic 800 There has been increased coordination of tourism initiatives in Southern Africa for expansion and 600 increased diversity of products. 400 a South Africa represents exceptional value for money 200 for visitors from key origin markets. ■ South Africa has a positive international image for its 0 1988 1993 1998 2003 2010 democratic political transformation. EFTA00578079 South Africa Travel & Tourism Forecast: Baseline Case 1998 2010 Growth Rand % of Tot Rand °/0 of Tot % Real** Consumer Expenditures 23.2 5.8% 79.3 6.4% 3.5% Business Travel 8.8 29.1 3.4% Government Expenditures 0.8 0.5*/* 4.9 1.1% 9.2% Capital Investment 12.8 11.4% 47.8 13.5*/* 5.1% Exports 24.2 13.2% 109.2 17.5% 6.8% T&T Demand 69.8 270.2 5.2% GDP* 53.2 8.2*/* 210.9 10.3% 5.5% Imports* 16.6 9.2*/* 59.3 9.5% 4.6% Taxes* 15.0 8.4*/* 55.1 10.6% 4.8% Employment* (Thous) 737.6 7.0% 1,253.7 9.3% 4.5% •T&T Economy Totals "Annualized Growth All Rand figures are in Billions. In the most likely "baseline scenario," forecast : ■ South African consumers will spend more of their In these circumstances, Travel & Tourism could add more than half a million new jobs across South Africa's economy disposable income on Travel & Tourism which will over the next 12 years. Most of these jobs. will be for grow to 6.4% of total personal consumption by 2010. young people, first time job seekers and women. They will ■ Government Travel & Tourism expenditure will also be strongly concentrated in small businesses and local increase by almost 10% per year. communities throughout the country. ■ The share of private capital expenditure attributed to Travel & Tourism will rise at about 5% per year, and In many cases they fit model employment patterns: will be focused, not only, on major hotel and resort ■ They can be created at low cost, and faster than most development, but also on game parks and guesthouses. industries ■ Foreign visitor spending will continue to grow at double ■ They are service and export related digit rates for the next two years and at more than 6% ■ They stimulate regeneration and cohesion by counter- per year for the first decade of the 21st century. balancing the flow from disadvantaged rural areas To make this baseline a reality, and indeed to reach towards ■ They are often created in small, family run businesses the optimistic scenario, a climate needs to be created to ■ They provide significant opportunities for women encourage a relatively safe and hospitable environment for travellers; targeted marketing and clear branding; incentives ■ They are ideal for young, or first time employees for investment — particularly for improvement of infrastruc- ■ They can provide education, training and skill ture: maintenance of quality; and progressive expansion of development cooperative ventures in the Southern African region. ■ Wages are at or above the economic average South Africa Travel & Tourism Forecast 2010 — Pessimistic and Optimistic Cases ---- Pessimistic ---- Optimistic Rand % of Tot Rand % of Tot Consumer Expenditures 55.3 4.9% 119.1 9.6% Business Travel 20.6 42.9 Government Expenditures 2.9 0.6% 8.7 2.0% Capital Investment 32.3 9.1% 74.3 21.0% Exports 69.2 11.1% 181.7 29.1% T&T Demand 180.3 426.7 GDP* 139.6 6.8% 336.0 16.4% Employment* (Thous) 1,043.7 7.76/0 1,570.5 11.6% •T&T Economy Totals. All Rand figures are in Billions. EFTA00578080 Realising the Potential Tomorrow's T&T INDUSTRY can represent: Travel & Tourism is already a strong and growing force in 422,182 jobs: 3.1% of total employment South Africa — generating wealth, jobs and investment Rand (R) 68.1bn of GDP: 3.3% of the total across the economy and enhancing social development. Its impact will be substantially increased if: Tomorrow's T&T ECONOMY can represent ■ The people of South Africa reap the benefits at the 1,253,700 jobs: 9.3% of total employment community level. R210.9bn of GDP: 10.3% of the total ■ The underlying policy framework is conducive to R109.2bn of exports: 17.5% of the total dynamic growth. ■ The private sector develops competitive products and R47.8bn of capital investment: 13.5% of the total leading edge international standards of service (IVTTCAVEM VS esfinnues) ■ Government creates a climate which attracts invest- ment, streamlines regulation and builds infrastructure. conclusions and the government's Tourism in Gear Strategy ■ Consumer interest and confidence is maintained. Modern travellers are discerning and have an increasing choice of destinations. Reputations have to be carefully and creatively built on a base of quality, but they can be lost overnight. It is vitally important that safety and security is assured. Maintaining consumer confidence should be a top priority for government, if the potential benefits of tourism to the economy are to be realised. There is a growing consensus as to the pivotal role of Travel & Tourism in sustainable economic and social development in the Southern African region. There is, for example, a strong correlation between the concepts contained in WITC's Milleniwn Vision for Africa, the World Economic Forum's recent Namibia summit V lir WTTC AFRICA TOURISM IN GEAR WEF NAMIBIA MILLENNIUM VISION Highlight Travel & Tourism Recognize the full value of Tourism across Develop Tourism as as a strategic economic/ the economy and measure it through a National priority employment priority,based on Satellite Accounts its full economic impact Advance Sustainable growth, regional Establish an internationally recognizable Implement a new International marketing public & private sector marketing, brand, leverage natural wildlife strategy, freshen branding and particularly majoring on Afrikatourism to promote and culture of Southern Africa into develop eco and cultural tourism cultural and natural heritage national strategies Improve quality and quantity of skilled Invest in education and training to Put education and training at manpower in tourism,and upgrade raise operational quality,standards the forefront of national and hospitality front line service and competitiveness regional tourism development. Investigate Infrastructure needs Engage international/regional financial Attract support from international and resources, leverage government institutions in tourism growth, advance financing institutions for programs towards tourism and obtain publicfprivate sector initiatives, develop Travel & Tourism infrastruture special funding allocations. infrastructure for sustainable growth. EFTA00578081 Recommendations Against this background WTTC recommends that the South African Government: 1. Make Travel & Tourism a strategic economic ■ Ensure that sustainable Travel & Tourism strategies take and employment priority into account the need for local community ■ Recognise Travel & Tourism's flow through effect development, engagement and empowerment. across the economy and establish a National Satellite ■ Expand microloans to provide incentives for local Account to measure it. community based sustainable tourism enterprises. ■ Reflect Travel & Tourism in mainstream policies for employment, trade, investment and education. 4. Eliminate Barriers to Growth Build safety and security provisions into national, 2. Move Towards Open and Competitive provincial and local tourism strategies and practice Markets putting a special emphasis on Travel & Tourism in ■ Progressively liberalise trade, transport and overall policing strategies. telecommunications through the World Trade ■ Place education and training at the forefront of tourism Organization and regional trading regimes. development, expanding it in school curricula and ■ Pay particular attention to opening up air transport highlighting its career prospects and role in national markets to attract more long haul services and improve economic rejuvenation: introduce measures to increase regional networks by expanding liberal aviation skills — particularly front-line service. accords, bilaterally and regionally. ■ Expand Infrastructure, particularly for airports, air ■ Upgrade promotion to match prevailing competitive traffic control and streamline border clearance. approaches: restructure SATOUR with adequate funds eliminating visas where possible. along public/private sector cooperative lines and ■ Engage international financial institutions including the coordinate provincial, national and regional marketing. World Bank and the African Development Bank to ■ Consider building on the branding concept of support sustainable tourism infrastructure in lending "Afrikatourism" highlighting South Africa's unique priorities. natural. cultural and wildlife traditions. ■ Develop fiscal regimes which encourage tourism growth, exports, investment, infrastructure, business 3. Pursue Sustainable Development innovation and job creation. ■ Establish clear procedures and guidelines for planned and sustainable tourist expansion as proposed in Tourism in GEAR: pay particular attention to eco tourism and ensure that park facilities are expanded sustainably. ■ Adopt the principles of Agenda 21 for the Travel & Tourism Industry developed by the WTTC, the World Tourism Organization and the Earth Council. Make South Africa a GREEN GLOBE destination and encourage certification. We believe such policies, developed with close public/private sector collaboration would ensure the creation of between half a million and 800,000 new jobs across the South African economy by 2010. EFTA00578082 Satellite Accounting Concepts Demand Supply (Millions of Rand) (Millions of Rand) Direct Indirect Total GDP GDP Imports Supply Other Demand Consumption 50,623 16,982 21,589 12,052 50,623 19,135 6,419 8,160 4,556 19,135 69,758 23,401 29,749 16,608 69,758 4 4 4 Employment (Jobs) Direct Indirect Total Jobs Jobs Imports lobs El Travel & Tourism Consumption - traditionally known as visitor spending, this is the primary measure of Travel 248,141 287,150 N/A 535,290 & Tourism expenditures which includes personal, business and government travel provided by or for visitors. It also captures purchases of travel-related consumer durables. 93,791 108,535 N/A 202,327 1:1 Travel & Tourism Demand - in order to capture the broader impact that Travel & Tourism has on the econ- omy, this concept expands Travel & Tourism Consumption to include related capital and infrastruc- 341,932 395,685 N/A 737,617 ture investment, government spending and exports of manufactured goods used abroad by Travel & Tourism. T&T Industry - is the direct South African value-added and employment associated with Travel & Tourism Consumption (A). Direct producers include airlines, hotels, car rental, tour agents/operators and retail shops, etc. When to Use Which Result/Estimate D. T&T Economy - is the direct and indirect South African A. When illustrating Travel & Tourism's value-added and employment (D1 and D2) associated consumption demand with Travel & Tourism Demand (B). B. When illustrating Travel & Tourism's total D1 Direct producers include C plus aircraft demand in the economy manufacturers, resort developers, highway construction, etc. C. When making GDP and employment com- parisons between Travel & Tourism and D2 Indirect producers include fuel suppliers, food other industries suppliers, paper suppliers and wholesalers, plus steel producers, electrical equipment makers, D. When making GDP and employment wood products, etc. assessments of Travel & Tourism's total economic impact 8 EFTA00578083 South Africa's Travel & Tourism Economic aim Performance and Potential This report follows the concept of Satellite Accounting, It considers two different, but related measurements of developed by public/private sector experts under the Travel & Tourism illustrated in the charts below: auspices of the World Tourism Organization. ■ T&T Industry: The concept of the direct It deals with all Travel & Tourism — day and stay, business Travel & Tourism Industry. This shows the size and leisure, international and domestic according to United of the industry and can be used to compare Nations definitions. Travel & Tourism to other industries in the economy. It identifies, from South Africa's National Accounts, items such as personal consumption, intermediate inputs, govern- ■ T&T Economy: The concept of the direct and ment expenditures, imports/exports, and value-added related indirect Travel & Tourism Economy. This to Travel & Tourism. shows the more comprehensive "flow through effect" that Travel & Tourism has across the The report shows three forecast scenarios — baseline, opti• economy as a whole. mistic and pessimistic. Unless specified the baseline is used. SOUTH AFRICA Travel & Tourism Employment (Thousands of Jobs) 900 Economy r_j Industry 800 700 600 500 400 300 200 100 T&T Economy 0 I I Direct and indirect 1995 1996 1997 1998 1999 2000 T&T Industry from visitor activity, Direct visitor activity capital investment, (transportation, exports and accommodation, SOUTH AFRICA government Travel & Tourism GDP catering, recreation services. (1998 Constant Rand Billions) and travel services) no ■Economy .Industry so 60 40 ao 20 10 0 1995 1996 1997 1998 1999 2000 9 EFTA00578084 Travel & Tourism Potential - The Industry and the Economy at a Glance Travel & Tourism — encompassing transport, accommoda- Travel & Tourism is a major exporter, with inbound visitors tion. catering, recreation and services for travellers — is one injecting dollars and foreign exchange directly into the of the world's largest industries and creators of quality jobs. economy. Worldwide, in 1998 it is expected to generate USS 4.4 trillion of economic activity, forecast to grow to USS 10.0 trillion by In South Africa, exports make up a very important share 2010. of Travel & Tourism's contribution to Gross Domestic Product. Of total exports, services and merchandise, In South Africa, in 1998, Travel & Tourism is expected to Travel & Tourism is expected to generate 13.2% in 1998, generate Rand 69.8 billion - US$ 13.1 billion - of econo- growing to 17.5% by 2010. mic activity, growing to Rand 270.2 billion — US$ 30.0 billion — by 2010. Travel & Tourism is a catalyst for construction and manu- facturing. In 1998. the private and public sectors combined In 1998, the T&T Industry should contribute 4.2% to world- are expected to spend US$ 779 billion in new Travel & wide Gross Domestic Product (GDP), rising to 4.4% by Tourism capital investment worldwide — 11.8% of the total — 2010. The T&T Economy should contribute 11.6% to 1998 rising to US$ 1.8 trillion by 2010 — 12.0% of the total. GDP and 12.5% to 2010 GDP. Current capital investment in South Africa's T&T The South African T&T Industry is expected to Economy is estimated at Rand 12.8 billion — US$ 2.4 contribute 2.6% to GDP in 1998, rising to 33% by 2010. billion — or 11.4% of total investment. By 2010, this The T&T Economy contribution should grow from 8.2% should reach Rand 47.8 billion — US$ 5.3 billion - or to 10.3% in the same period. 13.5% of the total. Travel & Tourism is a high growth activity, which is forecast Travel & Tourism is both a generator and receiver of govern- to increase its total economic activity by 4.1% per annum ment funds. Globally in 1998, Travel & Tourism is expected worldwide in real terms over the next twelve years. to generate US$ 802 billion of taxes — 10.6% of total — while channeling US$ 253 billion of government expenditures — In South Africa, Travel & Tourism economic activity is 6.8% of total. By 2010, taxes should increase to US$ 1.8 expected to grow by 84.3%, in real terms, between 1998 trillion — 11.4% of the total - and government spending to and 2010. That represents 5.5% per annum. US$ 542 billion -7.4% of the total. Travel & Tourism is human•resource intensive, creating Taxes from Travel & Tourism in South Africa in 1998 are quality jobs across the full employment spectrum. In 1998, expected to total Rand 15.0 billion — US$ 2.8 billion — or in 10.7 jobs is generated by the T&T Economy. The T&T 8.4% of total taxation. In contrast, government operating Industry accounts for 3.2% of global employment. Today expenditures are forecast at Rand 0.8 billion, or 0.6% of there are 79.2 million T&T Industry jobs and 231 million in the total. Over the next 12 years, South Africa's Travel & the T&T Economy rising to 116.8 million T&T Industry jobs Tourism taxes are expected to grow to Rand 55.1 billion and 328 million T&T Economy jobs by 2010. or 10.6% of total taxes. During this period, government spending is forecast to grow to Rand 4.9 billion, or 1.1% In South Africa in 1998, T&T Economy employment is of overall expenditures. estimated at 737,617 jobs or 7.0% of total employment, which is 1 in every 14.2 jobs. By 2010, this should grow to 1.254 million, 9.3% of total employment or 1 in every 10.8 jobs. The 248,141 T&T Industry jobs account for 2.4% of total employment in 1998 and are forecast to rise to 422,182 or 3.1% of the total by 2010. 10 EFTA00578085 Potential Driving Forces The following factors are expected to drive the future growth of South African Travel & Tourism. Dependant on their evolution three forecast scenarios have been developed: • Baseline: the most likely. • Optimistic: with most favourable circumstances • Pessimistic: with most unfavourable circumstances Unless otherwise specified baseline forecasts are used throughout. Quantitative assumptions — largely reflecting macroeconomics — are provided by WEFA's internally consistent trade-linked forecast for South Africa and 80 other economies of the world. Qualitative assumptions - socio economic, policy, marketing, etc. - are from local public/private sector sources. Maximising Conditions Minimising Negative Conditions South Africa's tourism depth and diversity of products Perception and reality of personal safety of tourists are in line with evolving global market trends for declining. adventure tourism, ecotourism, cultural enrichment, etc. ♦ Improved safety and security situation, with A Tracking market trends and focusing on priority particular focus on tourism areas. target markets that are in line with South Africa's Tourism related infrastructure and capacity gaps. tourism attractions. ♦ Focusing government infrastructure priorities on ♦ Building on the concept of Afrikatourism, in tourism related services (e.g. public transportation, particular focusing on the sustainable utilisation of road infrastructure, liberalisation of airspace, etc.). natural and cultural resources. Decline in product quality and service levels. A Strategic and innovative marketing of Southern ♦ Effective quality assurance programmes and Africa as a destination. appropriate human resource development. Significant increased tourism capacity in accommodation, transport, airlinks, attractions, etc., building on the momentum gained since 1994. A Targeted marketing to ensure that there is synergy between supply and demand. ♦ Investment promotion and incentives to sustain the momentum of responsible capacity growth. Increased co-operation and co-ordination of tourism initiatives in Southern Africa and resultant expansion of product depth and diversity (e.g. Transfrontier Parks and Spatial Development Initiatives, RETOSA, etc.). A A shared vision for Southern Africa and practical initiatives to address issues of common interest and mutual benefit (e.g. immigration procedures, product quality assurance, co-ordinated marketing etc.). Exceptional value for money relative to key competitors — mainly based on favourable exchange rates. A Responsible pricing strategies. Positive global perceptions of peaceful political transformation in South Africa. A Building on and maintaining the positive political momentum. 11 EFTA00578086 Forecast Scenarios . -MI II Alternatives In forecasting the Travel & Tourism Satellite Account BASELINE: THE MOST LIKELY for South Africa. WEFA has employed its full range of ♦ Increasing per capita income will bring Travel & economic databases and resources to develop a baseline Tourism's share of personal consumption up gradually scenario that it believes has the highest probability of over the forecast period (from 5.7% in 1997 to 6.4% in occurring at this moment in time. However, as the 2010) as non-luxury items such as food and apparel recent and unexpected Rand devaluation illustrates. decline in share. As a result of the Rand's depreciation, a near-term shift occurs within personal consumption major changes are often not predictable. from international expenditures to more domestic WEFA has developed two additional forecasts — travelling. This has no net effect on PCE but does increase Travel & Tourism GDP as the import portion of optimistic and pessimistic scenarios — to illustrate the PCE declines. range of passible results for South Africa Travel & • Government expenditures in Travel & Tourism related Tourism. categories will experience strong growth, approaching Unless otherwise indicated, the figures in this report 10% annually, but will remain relatively low, as major structural shifts in spending are unlikely. These increases represent the baseline scenario . include expected growth in marketing expenditures for basic international campaigns. ♦ Private capital investment in tourism depicts strength in terms of Travel & Tourism's share, registering 11.8% in 1997. This is expected to continue and even increase as major investment items in the hotel, resort, casino and tourism retail market are initiated and completed over the next ten years, bringing Travel & Tourism's share of private investment up to 13.5% by 2010. This growth is supported by capital investment in the smaller sectors of guesthouses and game parks. ♦ Foreign visitor spending (service exports), while not maintaining the remarkable real double-digit growth of the past decade, is expected to continue its strong real growth over the forecast period, registering 12% and 11% in 1999 and 2000, respectively. Steady growth will continue into the next decade, averaging over 6% annu- ally. In the near-term, growth will be enhanced by the increased purchasing power provided by a weaker Rand. In the longer term, visitor expenditure growth will be accommodated by the strong investment taking place in the latter part of the 1990s. South Africa Travel & Tourism Forecast: Baseline Case 1998 2010 Growth Rand % of Tot Rand % of Tot % Real* * Consumer Expenditures 23.2 5.8% 79.3 6.4% 3.5% Business Travel 8.8 29.1 3.4% Government Expenditures 0.8 0.5°/o 4.9 1.1% 9.2% Capital Investment 12.8 11.4% 47.8 13.5% 5.1% Exports 24.2 13.2°/o 109.2 17.5% 6.8% T&T Demand 69.8 270.2 5.2% GDP* 53.2 8.2% 210.9 10.3% 5.5% Imports* 16.6 9.2% 59.3 9.5% 4.6% Taxes* 15.0 8.4% 55.1 10.6% 4.8% Employment* (Thous) 737.6 7.0% 1,253.7 9.3% 4.5% •T&T Economy Totals • •Annualized Growth All Rand figures are in Billions. 12 EFTA00578087 Forecast Scenarios - Alternatives In developing the pessimistic case scenario, the OPTIMISTIC: WITH MOST forecase assumes that the positive conditions are not FAVOURABLE CIRCUMSTANCES met and the negative conditions prevail. ♦ Crime directed towards tourists falls dramatically. The optimistic case scenario assumes that positive conditions are met and the negative conditions are ♦ Government investment and consumption of Travel & minimised. Tourism shares are increased in the short term which provides impetus for increased Travel & Tourism expen- ditures in other sectors. Although the base of government Travel & Tourism consumption is small, real growth of close to 15% annually and an assumed multiplier of approximately 2 helps to boost Travel & Tourism personal consumption up to 7.2% growth in 1998 and 5.9% in PESSIMISTIC: WITH MOST 1999. UNFAVOURABLE CIRCUMSTANCES ♦ In addition to the impact of a weaker Rand on domestic ✓ Government Travel & Tourism expenditure tourism, SA residents' long-term demand increases as a growth remains modest, averaging growth of product of focused marketing and improved infrastructure. less than 5% per annum. This trend, in conjunction with rising per capita income. ✓ Foreign visitor spending real growth slows in brings the T&T share of personal consumption up from 1998 (8.4%) and in 1999 (5.3%), which ripples 5.7% in 1997 to 9.6% in 2010. through the outlook for private capital invest- ♦ Currency depreciation has strong positive impact on ment. dampening growth over the next ten foreign visitor arrivals, and service exports continue years. strong growth over forecast period. Return on interna- ✓ Tight monetary policy in the form of high tional marketing expenditures exceeds expectations. This interest rates constrains tourism spending by increases real growth of Travel & Tourism exports to an South African residents. This contains Travel & average of approximately 10% over the forecast period Tourism personal consumption to less than 1% compared to 6.5% in the baseline forecast. growth annually, as well as domestic invest- ♦ As foreign visitor and domestic tourism spending ment. Total capital investment is dampened from increases, capital investment rises to meet increased 5% growth in the baseline down to less than 2% demand. Above average returns on investment spur on annually. further investment growth in later years, bringing the average real growth to 8% per annum compared with just below 5% in the baseline forecast. South Africa Travel & Tourism Forecast 2010 - Pessimistic and Optimistic Cases ---- Pessimistic ---- -- Optimistic ---- Rand % of Tot Rand % of Tot Consumer Expenditures 55.3 4.5% 119.1 9.6% Business Travel 20.6 42.9 Government Expenditures 2.9 0.6°4 8.7 2.0°k Capital Investment 32.3 9.1°4 74.3 21.0°k Exports 69.2 11.1°4 181.7 29.1°k T&T Demand 180.3 426.7 GDP• 139.6 6.8°4 336.0 16.4°4 Employment* (Thous) 1,043.7 7.7°4 1,570.5 11.6°k •T&T Economy Totals. All Rand figures are in Billions. 13 EFTA00578088 i Total Demand Travel & Tourism in South Africa is expected to produce the T&T Economy, particularly in relation to the limited Rand 69.8 billion of total demand in 1998, including: government support for the sector. ■ Rand 23.2 billion of Travel & Tourism personal con- The bar charts below for the period 1996.2000 show that sumption by residents — 5.8% of total consumer spend- South African Travel & Tourism is consistently posting ing; strong real growth year-upon-year at 5.5% per annum — • Rand 8.9 billion of business and government travel by 50% above the world average. companies and government employees; The longer term perspective shown in the surface chart • Rand 0.8 billion of government expenditures, to provide reveals the leap in total Travel & Tourism demand from individual and collective services to the South African 1995 with the liberalising socio political environment. Travel & Tourism industry and its visitors — 0.6% of total government spending; South Africa Travel & Tourism base case growth is expected ■ Rand 12.8 billion of capital investment in personal, to total 114.9% from 1998 to 2010 compared to the world commercial and public Travel & Tourism facilities, composite of 79.1% real growth. This baseline forecast esti- equipment and infrastructure by residents, Travel & mates total Travel & Tourism demand at Rand 270.2 billion Tourism companies, local and national governments — by 2010. Under the pessimistic scenario this figure would 11.5% of total capital investment; and total Rand 180.3 billion. The optimistic scenario would total Rand 426.7 billion. • Rand 24.2 billion of visitor and merchandise exports generated from international markets — 13.2% of total SOUTH AFRICA Travel & Tourism Total Demand - 2010 exports. (Rand Billions) The pie chart below shows the importance that visitor Pessimistic Case Base Case Optimistic Case exports — 26.5% of total Travel & Tourism demand — has on 180.3 270.2 426.7 SOUTH AFRICA SOUTH AFRICA SOUTH AFRICA Travel & Tourism Total Demand Travel & Tourism Total Demand Travel & Tourism Total Demand (1998 Constant Rand Billions) (1998 Est. Rand Billions) (Cumulative Real Growth, Percent) 80 120 One En:4416G* Wind roffmion 0 2 el l Penatol Goofaut.".(232) 75 II 90 70 65 60 60 30 55 6185r YGON tozOs MG 50 Go/10mM Kolco150036) Gov, Oped.Once..) 0 1995 199e 1997 2000 1988 1993 1998 2008 1010 WORLD WORLD WORLD Travel & Tourism Total Demand Travel & Tourism Total Demand Travel & Tourism Total Demand (1998 Constant USS Billions) (1998 Est. USS Billions) (Cumulative Real Growth, Percent) Govl °Goal tedlenve)(176.1) IMO 80 Capeal karolvn I7n 7I 011icv &ports Oa 0.500 60 0.250 _rose 40 4,000 20 3.750 ri PorsonilOzaWMPISona-021”) 9,500 BUNIOSS TtlY01098.1) 0 Goa 8460ocl (MM) 1X6) 1995 ¶996 1997 1996 1999 2000 1988 1993 1998 2009 20)0 Ifilter °PCS 0 2") 14 EFTA00578089 Employment The T&T Industry in South Africa will directly generate an This long-term growth, averaging 4.5‘,‘ per year. although estimated 248,141 jobs in 1998. and a total 737,617 jobs, strong by world standards, is actually slower than recent directly and indirectly, across the broader spectrum of South history where T&T Economy employment grew by 18.9% Africa's economic activities. These will include: in 1995 alone. Indeed there was a gain of more than one full • Travel company employment, providing private sector percentage point for Travel & Tourism jobs within the South services to visitors and business travellers; African economy between 1995 and 1997. During this two- ■ Government agency employment, providing public year period, more than 120,000 jobs were created, sector Travel & Tourism services to visitors, business increasing the percent of total jobs from 5.4% to 6.5%. travellers, travel companies and the community-at- The employment results for South Africa are measurably large; and effected by the large government and domestic employment • Supplier company employment, providing goods and sector results. Excluding these two sectors from the services (manufacturing, construction, wholesale, equation raises the T&T Economy employment result in financial services, agricultural, etc) to travel companies 1998 from 7.0% to 8.9% of total jobs. and government agencies which serve visitors. The difference between the pessimistic and optimistic case The direct T&T Industry jobs are forecast to grow to 422,182 by 2010 increasing the industry sham of total scenario for employment in 2010 is more than half a million employment from 2.4% to 3.1% of total employment. jobs. The 737,617 jobs in the T&T Economy will account for SOUTH AFRICA T&T Economy Employment - 2010 7.0% of the total workforce, or I in every 14.2 jobs in South (Thousands of lobs and Percent of Total) Africa in 1998. This is forecast to grow to 1,253,700 jobs — Pessimistic Case Base Case Optimistic Cato 9.3% of total employment by 2010 — injecting more than 1,043.7 1,253.7 1,570.5 half a million new jobs into South Africa's economy. 7.7% 9.3% 11.6% SOUTH AFRICA SOUTH AFRICA SOUTH AFRICA Travel & Tourism Employment Travel & Tourism Employment T&T Economy Employment (Thousands of Jobs) (Percent of Total) (Cumulative Real Growth, Percent) 900 640444”/ hd.,1"/ 80 8,93 700 80 400 500 40 400 80 20 200 103 E:crory 0 I 1995 '996 1997 1993 1999 2000 1988 1993 1998 2003 2010 WORLD WORLD WORLD Travel & Tourism Employment Travel & Tourism Employment T&T Economy Employment (Millions of Jobs) (Percent of Total) (Cumulative Real Growth, Percent) 10% 80 250 . SW84' 7 • hthWir 200 150 100 so 0 1 I I 8% 61 4% 21 0% 1995 1996 1997 E:tecry 1993 1999 2000 60 00 20 0 1988 1993 1998 2003 2010 15 EFTA00578090 Gross Domestic Product The T&T Industry in South Africa is expected to produce Comparing internationally, South African T&T Economy Rand 17.0 billion of direct Gross Domestic Product (GDP) GDP is well below the global norms of 11.7% of overall in 1998 - 2.6% of total GDP. This is expected to almost GDP where the Asia / Pacific crisis is having a major effect. double in real terms to Rand 68.1 billion by 2010 — 3.2% of World Travel & Tourism related GDP is expected to show overall GDP. little growth between 1995 and 2000, with pick-up only in The T&T Economy is expected to produce 1998 GDP of the new millennium. Rand 53.2 billion — 8.2% of overall GDP. By 2010, this is This situation offers real opportunity for South Africa. The forecast to gain more than 2.0% percentage points to total pessimistic case scenario for South Africa holds T&T 10.3%, or Rand 210.9 billion. This figure illustrates the Economy GDP to 6.8% of total GDP in 2010. The baseline massive flow through effect of Travel & Tourism. forecast shows an increase to 10.3%. The optimistic sce- The recent results and near-term forecasts — 1995-2000 are nario totals 16.4% of GDP. particularly significant. From 1992 to 1994, South Africa Travel & Tourism GDP posted real negative growth, while in 1995 it recovered with 26.5% real positive growth. Looking forward to 2010, annualised gains of 5.3% are forecast for T&T Economy GDP. Few other countries can match this growth. SOUTH AFRICA T&T Economy GDP - 2010 This growth outlook is exceptionally positive for all ele- (Rand Billions and Percent of Total) ments of the Satellite Account, but it is clear that South Pessimistic Case Base Case Optimistic Case Africa Travel & Tourism exports, growing at 6.3% per year, 139.6 210.9 336.0 is particularly significant. 6.8% 10.3% 16.6% SOUTH AFRICA SOUTH AFRICA SOUTH AFRICA Travel & Tourism GDP Travel & Tourism GDP Travel & Tourism GDP (1998 Constant Rand Billions) (Percent of Total) (Cumulative Real Growth, Percent) 10, 525 70 Ail 60 100 50 7s Hifi! 40 so 30 2$ 20 0 10 ECtrytr, frou,1 25 0- 0 lags 1996 11497 1996 1999 2000 1988 1993 1998 2003 2010 WORLD WORLD WORLD Travel & Tourism GDP Travel & Tourism GDP navel & Tourism GDP (1998 Constant USS Billions) (Percent of Total) (Cumulative Real Growth, Percent) 124 80 4.000 •Economy • Mosby 3.600 10•- 60 3,000 2.500 40 2.000 1,500 20 1.000 500 ■ Economy ■Industry 0 0 1995 1996 1997 1996 1999 2000 1988 1993 1998 2003 2010 16 EFTA00578091 Capital Investment Examination of Travel & Tourism capital investment results Looking forward to 2010, Travel & Tourism capital invest- and forecasts lends greater insight into the market forces at ment in South Africa is forecast to grow 5.5% per year in work in the economy and the expectations by the public and constant Rand. The comparable global growth expectation is private sector to meet the challenges and opportunities in 4.5% per year. the years ahead. Noticeable from the graphs below is South Africa Travel & In 1998, Travel & Tourism capital investment in South Tourism's increasing share of total capital investment — Africa is expected to total Rand 12.8 billion, or 11.5% of 10.3% in 1995 growing to 12.3% in 2000. This compares to total national investment. For South Africa, this expectation a world share that is relatively stable at 11.4%. includes Rand 12.6 billion of investment from the private The base case scenario suggests significant opportunity for sector and Rand 0.2 billion of investment from the public growth to 13.5% of total capital investment by 2010. The sector. Worldwide, Travel & Tourism capital investment is pessimistic scenario expects 9.1% of investment. The opti- expected to total S779 billion, or 11.8% of the total in 1998. mistic scenario results in a massive 21.0% of total capital Over the next twelve years (1998-2010), the average contri- investment in 2010. bution of Travel & Tourism to the national capital invest- ment accounts is expected to grow from 11.5% to 13.5%. For the most part, Travel & Tourism capital investment has strong links to the business cycle, major events such as nat- SOUTH AFRICA ural disasters, and significant sociopolitical changes. In r Travel & Tourism Capital Investment - 2010 South Africa, major investment was made in 1991, followed (Rand Billions and Percent of Total) 2 Pessimistic Case Base Case Optimistic Case by several years of uncertainty and then a major vote of 32.3 47.8 74.3 confidence in 1995/1996 totalling 44% real growth. 9.1% 13.5% 21.0% SOUTH AFRICA SOUTH AFRICA SOUTH AFRICA Travel & Tourism Capital Investment Travel & Tourism Capital Investment Travel & Tourism Capital Investment (1998 Constant Rand Billions) (Percent of Total) (Cumulative Real Growth, Percent) Is 12 5% 14 120% tee 13 115% 120 12 11 120% 80 10 105% 40 9 $ I00% 0 19% 1996 1992 1998 1999 10:0 1995 1996 1997 1918 1999 2000 1948 1993 1998 2003 2010 WORLD WORLD WORLD Travel & Tourism Capital Investment Travel & Tourism Capital Investment Travel & Tourism Capital Investment (1998 Constant USS Billions) (Percent of Total) (Cumulative Real Growth, Percent) 900 100 850 so 800 60 no 40 700 20 650 600 0 1995 1996 1997 1998 1999 2800 1995 1996 1997 1998 1999 2030 1989 1993 1999 2003 2010 17 EFTA00578092 Personal & Business Travel al In 1998, South Africa is expected to generate Rand 23.2 bil- accounts, ensuring an accurate assessment of Travel & lion of personal Travel & Tourism consumption by residents Tourism "produced" in South Africa and Travel & Tourism — 5.8% of total personal consumption. Corporate travel of "produced" abroad. Rand 7.1 billion and government employee travel of Rand In 1998, South Africa residents will spend just under 6% of 1.8 billion add a further Rand 8.9 billion of visitor activity. their personal expenditures on Travel & Tourism. This is Unlike South African visitor exports that depend on the lower than the world average of 10.5%. This is however international market for consumers, the business generated consistent with other developing countries. And, in those in these two categories depends on the South Africa econo- emerging economies, personal consumption tends to my itself. As the South Africa economy grows, South Africa increase in direct relation to the standard of living and per consumer and business travel follow suit. Over the next capita income. twelve years to 2010, personal Travel & Tourism in South By 2010, South Africa expects to see Travel & Tourism per- Africa is expected to grow at an annual rate of 3.5%, while sonal consumption increase to 6.4% of total consumption. business/govemment travel is expected to grow at an annual The optimistic scenario calls for an increase to 9.6% of total rate of 3.3%. consumption, while the pessimistic case would result in Although most of this Travel & Tourism takes place within 4.5% of the total. South Africa, part takes place abroad. The Satellite Account SOUTH AFRICA is required to capture all Travel & Tourism demand attribut- Travel & Tourism Personal Consumption - 2010 able to South Africa residents, visitors and travel companies. (Rand Billions and Percent of Total) When the spending does take place abroad, the Account Pessimistic Case Base Case Optimistk Case generates a corresponding - import credit" in the supply side 55.3 79.3 119.1 4.5% 6.4% 9.6% SOUTH AFRICA SOUTH Africa SOUTH Africa Personal & Business Travel & Tourism Travel & Tourism Personal Consumption Travel & Tourism Personal Consumption (1998 Constant Rand Billions) (Percent of Total) (Cumulative Real Growth, Percent) 5.9% 00 36 MB:away Irclaby ID 60 5.8% 23 40 5.7% 15 20 10 5.6% 0 5 5.5% .20 0 1995 1996 1997 1998 1999 2000 1905 1993 1990 2003 2010 WORLD WORLD WORLD Personal & Business Travel & Tourism Travel & Tourism Personal Consumption Travel & Tourism Personal Consumption (1998 Constant USS Billions) (Percent of Total) (Cumulative Real Growth, Percent) MEconany BO% 80 MOO 9gi6bY tisco 102% 60 2,000 106% 40 MOO 10.8% 1.000 20 10.2% SOO 100% 0 0 1995 1996 1997 1998 1559 2000 1955 1993 1998 2003 2010 18 EFTA00578093 Exports Travel & Tourism exports are an important and growing Tourism exports will reach 11.1% of total exports. The base- item of South Africa's Economy. In 1998, Travel & Tourism line figure is 17.5% of all exports. The optimistic case sce- services exports — visitor spending — are expected to amount nario forecasts Travel & Tourism at 29.1% of total exports. to Rand 18.5 billion; merchandise exports should account for a further Rand 5.8 billion. Together they represent more than one-third (34.7%) of total Travel & Tourism demand for the nation. Between 1995 and 2000, Travel & Tourism is expected to increase its share of total South African exports from 10.0% to 14.9% — a gain of almost five percentage points. Through to 2010, South Africa visitor exports arc forecast to increase annually in constant Rand — at an average annual rate of 7.2%. During the same period, merchandise exports are expected to grow at an annual average of 5.4%. For the period 1998 — 2010, the overall Travel & Tourism export growth for South Africa of 6.8% per annum is sub- SOUTH AFRICA stantially ahead of the expected worldwide figure of 5.4%. Travel & Tourism Exports - 2010 And the reduced level of the Rand against major currencies (Rand Billions and Percent of Total) could increase the South African export growth rates. Pessimistic Case Base Case Optimistic Case 69.2 109.2 181.7 The pessimistic case scenario suggests that 2010 Travel & 11.1 17.5% 29.1% SOUTH AFRICA SOUTH AFRICA SOUTH AFRICA Travel & Tourism Exports Travel & Tourism Exports Travel & Tourism Exports (1998 Constant Rand Billions) (Percent of Total) (Cumulative Real Growth, Percent) 09 141% 250 200 14% 150 20 12% 100 15 10% 50 10 8% 1995 1998 1997 1996 1999 2000 1895 1996 1997 1998 1099 2000 WORLD WORLD WORLD Travel & Tourism Exports Travel & Tourism Exports Travel & Tourism Exports (1998 Constant USS Billions) (Percent of Total) (Cumulative Real Growth, Percent) 1,100 16% 160 14% 1.000 120 12% 900 80 10% BOO 40 8% 700 6% 0 1995 1996 1997 1998 1999 2000 1996 1996 1997 1998 1999 2000 1988 1993 1998 2003 2010 19 EFTA00578094 Government Spending Government expenditures include: individual expenditures — There should, in principle, be a direct link between the size Rand 147 million in 1998 — which can be linked to and impact of an industry like Travel & Tourism on the individual visitors like museum subsidies or immigration economy (in terms of GDP) and the amount of funding services; and collective expenditures — Rand 619 million in allocated by government toward that sector. In South Africa, 1998 — which are undertaken for the community-at-large the ratio of Travel & Tourism GDP to government like airport administration, tourism promotion, security or expenditure is 15 to 1, compared to a worldwide ratio of. sanitation. 1.7 to I — meaning that South Africa's contribution is National and local government agencies in South Africa are dramatically lower than the global norm. This could mean expected to spend Rand 766 million to provide individual underfunding of tourism infrastructure and services and and collective government Travel & Tourism services to requires further detailed analysis of South Africa's govern- visitors, travel companies and the community-at-large. This ment expenditures beyond the framework of this report. figure represents only 0.6% of total government The pessimistic scenario sees scarcely any growth in this expenditure. area. The optimistic scenario more than triples the contri- By 2010 this figure is expected to increase to 1.1% of total bution to 2.0% of total government expenditure, an annual government expenditures. This represents an annual constant Rand gain of 15% per year. constant Rand gain of 9.0% per year. Although this component is the fastest growing element of SOUTH AFRICA South Africa Travel & Tourism demand, it is a very low Travel & Tourism Gov't Expenditures - 2010 percentage contribution by world standards. In 1998, the (Rand Billions and Percent of Total) average country is expected to contribute 6.8% of its overall Pessimistic Case Base Case Optimistic Case government expenditures to Travel & Tourism related 2.9 4.9 8.7 0.6% 1.1% 2.0% functions, more than 10 times the South African level. SOUTH AFRICA SOUTH AFRICA SOUTH AFRICA Travel & Tourism Gov't Expenditures Travel & Tourism Gov't Expenditures Travel & Tourism Gov't Expenditures (1998 Constant Rand Billions) (Percent of Total) (Cumulative Real Growth, Percent) 0.90 040% 200 020 0.70 0.60 0.$0 1995 ■ 19% WORLD 1997 1996 Travel & Tourism Gov't Expenditures (1998 Constant USS Billions) 21/3 1999 2000 055% 0.50% 0.45% 040% 7.4% 1995 10% WORLD 1997 19% Travel & Tourism Gov't Expenditures (Percent of Total) 1999 2000 160 120 so so 0 1981 Travel & Tourism Gov't Expenditures (Cumulative Real Growth, Percent) 60 1993 1990 WORLD 1 2003 2010 265 7.2% 45 255 7.0% 245 8.8% 15 235 6.6% ZIS 4% 0 1995 1996 1997 1996 1999 2000 1995 1996 1997 1998 1999 2808 19103 1993 1990 2003 201( 20 EFTA00578095 South Africa's Travel & Tourism economy is expected in and spending increases, so do the indirect transaction taxes 1998 to generate Rand 15.0 billion in tax revenue. collected by Travel & Tourism companies. As Travel & Tourism businesses expand, so do the income taxes The largest portion of this total is Rand 6.6 billion personal associated with those businesses. income taxes paid by the 737,617 direct and indirect employees in South Africa. These are truisms but it is worth noting that in 1998 total travel related taxes amounted to some Rand 15.0 billion in Next are the indirect transaction taxes such as sales, VAT sharp contrast to the Rand 0.8 billion travel related govern- and accommodation taxes which total Rand 5.9 billion ment expenditure during the same period. generated from sales of Travel & Tourism goods and services. Third is Rand 2.6 billion generated from income taxes on Travel & Tourism companies. All totalled, South Africa's Travel & Tourism economy is responsible for 8.4% of total national and local taxes paid in South Africa. Through to 2010, South Africa's Travel & Tourism tax contribution is expected to increase 74% in constant Rand. By then, the T&T Economy will account for 10.6% of South Africa's tax revenue. As Travel & Tourism employment increases, personal and real property tax revenues will also grow. As visitor counts SOUTH AFRICA SOUTH AFRICA SOUTH AFRICA Travel & Tourism Taxes Travel & Tourism Taxes Travel & Tourism Taxes (1998 Constant Rand Billions) (Percent of Total) (Cumulative Real Growth, Percent) 16 125 14 100 75 12 50 10 25 8 0 6 1995 1996 1997 1998 1999 2000 WORLD WORLD WORLD Travel & Tourism Taxes Travel & Tourism Taxes Travel & Tourism Taxes (1998 Constant USS Billions) (Percent of Total) (Cumulative Real Growth, Percent) 900 13% 80 SSO 12% 60 800 11% 750 40 10% 700 20 9% 650 600 8% 0 1995 1996 1997 1998 1999 2000 1995 1996 1997 1998 1999 2000 1988 1993 1998 2003 2010 21 EFTA00578096 Satellite Account Tables I 1995 1996 1997 1998E 1999E 2000E 2O10P South Africa Travel & Tourism - Rand (Millions) - Nominal Rand Travel & Tourism Demand Side Aggregates Consumer Expenditures 16,853 18,674 20,836 23,177 25,695 28,779 79,319 Durables 9,038 9,984 11,168 12,498 13,868 15,573 44,278 Non-Durables 6,044 6,706 7,436 8,201 9,047 10,069 25,990 Services 1,771 1,985 2,232 2,477 2,781 3,137 9,051 Business & Government Travel 6,374 7,309 8,108 8,850 9,864 10,958 29,065 Corporate 5,181 5,939 6,524 7,0% 7,929 8,835 23,117 Government 1,193 1,370 1,585 1,753 1,935 2,123 5,947 Government Expenditures - Individual 79 91 129 147 171 198 937 Visitor Exports 8,977 12,085 14,685 18,449 21,893 25,891 87,104 Travel & Tourism Consumption 32,283 38,159 43,758 50,623 57,625 65,827 196,425 Government Expenditures - Collective 333 383 540 619 720 833 3,936 Capital Investment 8,427 9,927 11,080 12,753 14,833 16,708 47,782 Public 153 168 160 173 183 202 5% Private 8,274 9,760 10,919 12,580 14,650 16,506 47,186 Exports (Non-Visitor) 3,195 4,501 5,075 5,762 6,264 7,085 22,091 Travel & Tourism Demand 44,237 52,970 60,454 69,758 79,442 90,453 270,235 T&T Industry Supply Side Aggregates Direct and Indirect Effects Employment 401,702 452,343 487,039 535,290 562,030 596,990 911,290 Gross Domestic Product 23,525 28,731 33,1% 38,571 44,377 50,941 153,327 Compensation 13,144 15,912 18,405 21,620 24,905 28,632 91,407 Depreciation 2,918 3,462 3,970 4,595 5,153 5,778 12,272 Operating Surplus 4,934 6,370 7,328 8,642 10,313 12,100 36,779 Subsidies 385 481 500 562 650 746 1,943 Indirect Taxes 2,915 3,469 3,994 4,276 4,656 5,178 14,813 Personal Taxes 2,658 3,300 3,975 4,778 5,187 5,999 17,944 Corporate Taxes 729 1,167 1,368 1,862 2,279 2,510 7,278 Total Taxes 6,302 7,935 9,337 10,916 12,122 13,686 40,034 Imports 8,757 9,428 10,562 12,052 13,248 14,886 43,098 Direct Effects Employment 181,309 208,744 224,026 248,141 261,345 278,165 422,182 Gross Domestic Product 10,251 12,645 14,595 16,982 19,585 22,524 68,131 Compensation 6,286 7,625 8,811 10,345 11,950 13,760 43,926 Indirect Taxes 1,170 1,416 1,618 1,729 1,889 2,104 6,001 Indirect Effects Employment 220,392 243,600 263,013 287,150 300,685 318,825 489,108 Gross Domestic Product 13,274 16,086 18,602 21,589 24,791 28,417 85,1% Compensation 6,858 8,287 9,594 11,275 12,954 14,871 47,480 Indirect Taxes 1,744 2,053 2,376 2,547 2,767 3,073 8,812 T&T Economy Supply Side Aggregates Direct and Indirect Effects Employment 550,451 627,912 672,860 737,617 774,824 820,325 1,253,722 Gross Domestic Product 32,237 39,883 45,862 53,150 61,178 69,998 210,942 Compensation 18,011 22,088 25,427 29,792 34,334 39,343 125,754 Depreciation 3,999 4,806 5,485 6,331 7,103 7,940 16,883 Operating Surplus 6,760 8,842 10,123 11,909 14,218 16,626 50,600 Subsidies 527 668 691 775 896 1,025 2,673 Indirect Taxes 3,994 4,815 5,518 5,892 6,419 7,115 20,379 Personal Taxes 3,643 4,581 5,491 6,584 7,150 8,243 24,686 Corporate Taxes 1,000 1,620 1,890 2,566 3,142 3,448 10,013 Total Taxes 8,636 11,015 12,899 15,042 16,712 18,806 55,078 Imports 12,000 13,087 14,592 16,608 18,264 20,455 59,293 Direct Effects Employment 248,448 289,763 309,499 341,932 360,294 382,227 580,824 Gross Domestic Product 14,047 17,553 20,163 23,401 27,001 30,951 93,732 Compensation 8,614 10,585 12,173 14,255 16,475 18,908 60,432 Indirect Taxes 1$04 1,965 2,236 2,383 2,605 2,892 8,256 Indirect Effects Employment 302,004 338,149 363,360 395,685 414,530 438,098 672,899 Gross Domestic Product 18,189 22,330 25,699 29,749 34,177 39,048 117,210 Compensation 9,397 11,504 13,254 15,537 17,859 20,435 65,322 Indirect Taxes 2,390 2,850 3,282 3,510 3,814 4,223 12,123 22 EFTA00578097 Satellite Account Tables II 1995 19% 1997 1998E 1999E 2000E 2010P T&T Accounts as % of State Accounts based on Nominal Dollar results Consumer Expenditures 5.71 5.64 5.68 5.78 5.79 5.83 6.40 Durables 11.38 11.13 11.15 11.32 11.27 11.29 11.85 Non-Durables 3.21 3.19 3.20 3.25 3.25 3.27 3.53 Services 6.49 6.44 6.49 6.53 6.58 6.63 7.07 Government Expenditures 0.43 0.43 0.53 0.55 0.58 0.61 1.09 Individual 0.16 0.16 0.20 0.21 0.22 0.24 0.44 Collective 0.70 0.71 0.86 0.90 0.94 1.00 1.68 Capital Investment 10.29 10.61 10.72 11.45 12.14 12.30 13.49 Public 1.86 1.77 1.48 1.50 1.52 1.54 1.83 Private 11.23 11.60 11.80 12.60 13.31 13.44 14.73 Exports 9.99 11.10 11.96 13.18 14.20 14.87 17.50 Merchandise 3.03 3.45 3.52 3.59 3.62 3.66 4.06 Services 54.16 63.75 70.05 79.12 87.03 92.01 110.00 T&T Industry Supply Side Aggregates (Direct and Indirect) Employment 3.96 4.44 4.73 5.10 5.28 5.48 6.75 Gross Domestic Product 4.85 5.29 5.58 5.98 6.16 6.36 7.48 Compensation 5.11 5.61 5.92 6.39 6.64 6.89 8.14 Depreciation 4.42 4.80 5.03 5.38 5.57 5.77 6.71 Operating Surplus 4.63 5.02 5.29 5.68 5.88 6.10 7.22 Subsidies 6.33 7.06 7.44 7.98 8.22 8.49 9.84 Indirect Taxes 4.87 5.30 5.55 5.93 6.14 6.36 7.42 T&T Economy Supply Side Aggregates (Direct and Indirect) Employment 5.42 6.16 6.54 7.02 7.28 7.52 9.28 Gross Domestic Product 6.65 7.35 7.71 8.24 8.50 8.75 10.29 Compensation 7.01 7.79 8.18 8.80 9.16 9.47 11.20 Depreciation 6.06 6.66 6.95 7.42 7.68 7.93 9.23 Operating Surplus 6.34 6.97 7.31 7.82 8.10 8.38 9.93 Subsidies 8.67 9.79 10.28 11.00 11.34 11.66 13.53 Indirect Taxes 6.68 7.35 7.66 8.18 8.46 8.73 10.21 Personal Taxes 7.01 7.79 8.18 8.80 9.16 9.47 11.20 Corporate Taxes 6.34 6.97 7.31 7.82 8.10 8.38 9.93 Total Taxes 6.77 7.47 7.82 8.37 8.67 8.97 10.57 'Ravel & Tourism Real Growth (Per Annum) based on 1990 Constant Rand Consumer Expenditures 3.6 2.7 2.6 3.7 2.6 3.0 3.9 Business & Government Travel 5.8 5.9 3.0 2.1 3.5 3.2 3.4 Government Expenditures (0.5) 7.0 31.4 7.2 8.3 8.2 9.1 Exports 31.6 23.4 13.4 14.3 9.5 9.7 6.3 Capital Investment 32.5 11.4 4.8 10.8 9.5 5.9 4.4 Travel & Tourism Consumption 9.4 9.4 7.4 8.6 6.5 6.4 5.2 Travel & Tourism Demand 16.7 11.3 7.0 8.8 6.8 6.3 5.1 T&T Industry Supply Side Aggregates (Direct and Indirect) Gross Domestic Product 19.4 14.1 8.4 10.1 7.6 7.1 5.3 Employment 12.2 12.6 7.7 9.9 5.0 6.2 4.5 T&T Economy Supply Side Aggregates (Direct and Indirect) Gross Domestic Product 26.5 15.6 7.9 9.8 7.7 6.8 5.3 Employment 18.9 14.1 7.2 9.6 5.0 5.9 4.5 navel & Tourism - USS (Billions) -1990 Constant Rand Consumer Expenditures 9,668 9,929 10,189 10,570 10,845 11,173 15,884 Business & Government Travel 3,787 4,009 4,129 4,215 4363 4502 6,288 Government Expenditures - Individual 47 51 67 71 77 84 204 Visitor Exports 6,245 7,616 8,808 10,325 11,541 12,788 23,851 Travel & Tourism Consumption 19,748 21,604 23,193 25,182 26,826 28,547 46,226 Government Expenditures - Collective 199 213 279 300 324 351 857 Capital Investment 5,720 6,375 6,682 7,402 8,107 8,585 13,422 Exports (Non-Visitor) 2,223 2,836 3,044 3,225 3,302 3,499 6,049 Travel & Tourism Demand 27,889 31,028 33,198 36,108 38,560 40,983 66,555 T&T Industry Supply Side Aggregates (Direct and Indirect) Gross Domestic Product 14,226 16,228 17,585 19,357 20,828 22,315 36,668 Total Taxes 3,811 4,482 4,946 5,478 5,689 5,995 9,574 T&T Economy Supply Side Aggregates (Direct and Indirect) Gross Domestic Product 19,494 22,526 24,294 26,674 28,713 30,663 50,447 Total Taxes 5,222 6,221 6,833 7,549 7,843 8,238 13,172 23 EFTA00578098 The South African Satellite Account for Travel & Tourism 1998 1998 Estimates (Rand Millions, Except Employment) Consumer Business & Government Visitor Government Capital Exports Expenditures Gov't Travel Expenditures Exports Expenditures Investment (Non-Visitor) (Individual) (Collective) 23,177 8,850 147 18,449 619 12,753 5,762 Travel & Tourism Consumption 50,623 Travel & Tourism Demand 69,758 Travel & Tourism Supplier Supply 19,135 T&T Industry Supply T&T Economy Supply 50,623 69,758 T&T Industry Production T&T Economy Production South Africa Gross Domestic Product (GDP) South Africa GDP (Direct & Indirect) (Direct & Indirect) 38,571 53,150 Wages & Operating Imports Wages & Imports Salaries Surplus, Depr. Salaries and Subsidies 21,620 12,675 12,052 29,792 Employment Empl. (Dir. & (Dir.8and.) 535,290 737,617 Personal Indirect Corp. Income Personal Indirect Corp. Income Taxes Taxes Taxes Income Taxes Taxes Taxes 4,778 4,276 1,862 6,584 5,892 2,566 Total Taxes Total Taxes 10,916 15,042 24 EFTA00578099 The WTTC/WEFA Travel & Tourism Satellite Accounting Travel & Tourism Demand, in addition, incorporates research for 1998 reflects: significant realignment of con- products and services for industry demand including: cepts with the latest work of the public/private sector ■ Government Expenditures (Collective) — Services by Experts Committee under the auspices of the World Tourism agencies and departments associated with Travel & Organization, analytical and data enhancements and Tourism, but made on behalf of the community-at-large, application of WEFA's latest world and national such as tourism promotion, aviation administration, macroeconomic forecasts. security services and sanitation services. This new research provides greater detail on the inter- ■ Capital Investment — by Travel & Tourism providers linkages of the T&T Industry and the broader T&T (the private sector) and government agencies (the public Economy. The former captures the production-side sector) to provide facilities, equipment and "industry" equivalent for comparison with other industries; infrastructure to visitors. the latter reflects the flow through effect of Travel & ■ Exports (Non-Visitor) — which include consumer Tourism across the economy-at-large. goods sent abroad for ultimate sale to visitors such as clothing, electronics or gasoline; and capital goods sent The Satellite Account is based on a "demand-side" concept abroad for use by industry service providers (such as of economic activity — the activities of visitors and travel aircraft or cruise ships). companies, because Travel & Tourism does not produce a By applying input/output modelling to these two aggregates, homogeneous product or service like traditional industries the Satellite Account is able to differentiate between: (agriculture, electronics, steel, etc.). Instead, Travel & ■ T&T Industry Production and T&T Economy Tourism is a collection of services such as transportation, Production; accommodations, restaurant meals, immigration and park ■ Imports; services, and entertainment; and products (durables and nondurables, consumer and capital) such as souvenirs, ■ Direct and Indirect impacts; and recreational vehicles, automobiles, aircraft manufacturing ■ Gross Domestic Product (GDP) elements — Wages & and resort development. Salaries. Indirect Taxes, Operating Surplus, Depreciation, and Subsidies. The Satellite Account uses two major demand concepts; Travel & Tourism Consumption and Travel & Tourism In the same way. Employment can also be quantified in Demand, which help differentiate between the T&T terms of the "T&T Industry" and the broader —T&T Industry and the T&T Economy. Economy." Travel & Tourism Consumption focuses on visitor T&T Industry Employment (Direct) generally demand including: includes those jobs with face-to-face contact with ■ Consumer Expenditures — Incorporating traditional visitors — airlines, hotels, car rental, restaurant, retail. personal spending by South African residents on entertainment etc. services that are normally associated with Travel & ■ T&T Industry Employment (Indirect) includes those Tourism — lodging, transportation, entertainment, meals, faceless jobs associated with industry suppliers — financial services etc; as well as durable and nondurable caterers, laundry services, food suppliers, wholesalers, goods which are purchased by residents and used for accounting firms etc. Travel & Tourism activities. ■ T&T Supplier Employment (Direct) generally ■ Business and Government Travel — Corporate and includes those faceless jobs associated with government travel expenditures that mirror those of government agencies, manufacturing and construction personal consumption (transportation, accommodation, of capital goods and exported goods used in Travel & meals, entertainment etc.). but are undertaken in the Tourism. course of business or government work. ■ T&T Supplier Employment (Indirect) generally ■ Government Expenditures (Individual) — Services by includes those faceless jobs associated with supplied agencies and departments such as cultural institutions commodities — steel producers, lumber, oil production (art museums) or national parks, customs and etc. immigration on behalf of individual visitors. The first two categories cover T&T Industry Employ- ■ Visitor Exports — Expenditures by international visitors ment while all four cover T&T Economy Employment. on goods and services. 25 EFTA00578100 South African Travel & Tourism Realising the Potential - The Policy Framework Travel & Tourism is already an important contributor to employment and wealth creation in South Africa, with a huge "flow through effect" across the entire economy. It has enormous inherent potential to increase its impact if the underlying policy framework is conducive to dynamic growth. This will require the full determination of government to create a policy framework which induces invest- ment, stimulates demand and encourages quality. It will also require the commitment and application of the private sector to operationalise globally competitive products and service standards. In this respect there is a very strong correlation between concepts contained in WTTC's Millennium Vision for Africa, the World Economic Forum's recent Namibia summit conclusions and the government's Tourism in Gear Strategy. WTTC AFRICA TOURISM IN GEAR WEF NAMIBIA MILLENNIUM VISION Highlight Travel & Tourism Recognize the full value of Tourism across Develop Tourism as as a strategic economic/ the economy and measure it through a National priority employment priority,based on Satellite Accounts its full economic impact Advance Sustainable growth, regional Establish an internationally recognizable Implement a new International marketing public & private sector marketing, brand, leverage natural wildlife strategy, freshen branding and particularly majoring on Afrikatourism to promote and culture of Southern Africa into develop eco and cultural tourism cultural and natural heritage national strategies Improve quality and quantity of skilled Invest in education and training to Put education and training at manpower in tourism,and upgrade raise operational quality,standards the forefront of national and hospitality front line service and competitiveness regional tourism development. Investigate Infrastructure needs Engage international/regional financial Attract support from international and resources, leverage government institutions in tourism growth, advance financing institutions for programs towards tourism and obtain public/private sector initiatives, develop Travel & Tourism infrastruture special funding allocations. infrastructure for sustainable growth. WTTC congratulates the South African Government for its encouraging investment. streamlining regulation and forward looking GEAR strategy and also strongly recom- building infrastructure. mends that the key related aspects of the Africa Millennium In this context. recent substantial growth has generated sig- Vision and the WEF Namibia Tourism declaration be nificant investment in tourist accommodation - short-term reflected in its implementation. efforts must be focussed on encouraging sustained demand A consensus is building within the public and private sectors and providing expansion in related infrastructure. as to the pivotal role played by Travel & Tourism in sus- tainable growth. job creation and social development across Above all consumer interest must be maintained in a climate the entire national economy and the economy of the Southern where safety and security of travellers is secured. In today's African region. world of discerning customers and competing destinations reputations have to be carefully and creatively built: but While the private sector can and must play an increasingly with instant global communications they can be quickly lost. important role in developing quality products and services This is a high priority challenge if South Africa's tourism geared to international and regional demand. government potential is to be realised — and the broadscale economic must create the underlying conditions for market confidence. wealth and job creation which will accompany it. dynamism and sustainability. This will mean leadership in 26 EFTA00578101 RECOMMENDATIONS intensivity of its interaction with other areas of the economy, through the suppliers of goods and services to travellers and Make Travel & Tourism A Strategic travel companies — such as telecommunications for mes- Economic And Employment Priority sages, agriculture for meals and financial services for cash or credit. Recognise The Economic Contribution Travel & Tourism has only recently emerged as a discrete Wilt urges all public and private sector stakeholders to economic sector as borders have opened, nations democra- recognise Travel & Tourism's full impact across the tised, living standards risen and whole sectors of society economy, and its untapped potential and to collaborate in a gained the freedom move across international borders. This strategic initiative to grow the sector sustainably. has been coupled with cheaper transport and accommoda- tion. In this context, the governments"Tourism Growth Fund" is a vital catalyst for achieving government-led, private sector Vine magazine says we are on the verge of "the golden age driven and community based progress. of travel", with more and more of the world's population able to visit more and more of the world's nations. Travel & Tourism is expected to contribute significantly to 21st century service sector-driven growth. Bill Gates (Microsoft) identifies it with healthcare and education as the key target market sectors, and John Naisbitt (Megatrends) forecasts it will rank with information technology and telecommunications as lead sectors of the new millennium global economy. In South Africa, Travel & Tourism has grown dramatically since the beginning of the 1990s — well above the world average. Major factors have included: ■ A stable and open democratic regime ■ World renowned natural & cultural resources, which offer real comparative advantage and are in the main- stream of evolving global demand. Recognise The Industry ■ Attraction of private investment Employment Creation Potential ■ Growth of small and medium sized enterprises (SMEs) Because it is a service, tourism is a "people delivered" activ- ■ Historically good basic infrastructure. ity and thus an intensive creator of jobs. Figures in this report show that Travel & Tourism is one of the largest creators of Wilt believes that it has substantial further potential to: direct and indirect employment worldwide. ■ Improve the balance of payments This same impact is apparent today from the South African ■ Stimulate entrepreneurship — particularly in small satellite account — with almost 250,000 jobs in the Travel & businesses Tourism Industry and nearly 740,000 in the broader econo- ■ Catalyse investment my, whose livelihoods depend on a buoyant Travel & ■ Create large number of sustainable jobs — particularly Tourism sector. for women and young people This impact will intensify over the next decade with the ■ Help social development in local communities potential for adding 175,000 new jobs in the industry and more than 500,000 across the economy with the baseline Tourism is a complex of products and services, provided to forecast. The optimistic scenario gives a potential of more meet consumer, business and government demand for travel than 800,000 new travel related jobs in the economy at large. in domestic and international markets. It is decentralised and These include jobs in upstream suppliers like aircraft or woven into the economy because tourists are mobile and cruiseship constructors, hotel fitters or airport engineers, and consumption occurs before (eg. tickets), during (eg. food) or in downstream servicers like retail, petrol stations, clothing occasionally, after the trip (eg. photos). manufacturers and food suppliers. The former depend on The major components — transport, accommodation, cater- travel company purchases, the latter are driven by travellers ing, entertainment and travel organisers — are dominated by expenditures. There are also jobs created in the public sector SMEs of under 50 employees. But in practice, Tourism that cater to visitors — like border inspectors, air traffic con- impacts far beyond these immediate sectors because of the trollers and museums. 27 EFTA00578102 Contrary to conventional wisdom, Travel & Tourism created jobs — inside and outside the industry — range across the T&T ECONOMY: THE FLOW-THROUGH mil entire employment spectrum and in many cases have charac- EMPLOYMENT IMPACT - 1998 teristics which fit model employment patterns: ■ They can be created at low cost, with few barriers to Wholesale and retail trade 164,73S l entry, and faster than most industries. Catering and accommodation services 66,323 ■ They are service and export related. Transport and storage 66,002 Government 42,985 ■ They provide an impetus to regeneration and social General labour and domestics 35,127 cohesion by counter-balancing the flow of people to Agriculture, forestry and fishing 34,911 the cities from disadvantaged rural areas. Motor vehicles and parts 34,174 ■ They are often created in small and medium sized Business services 30,667 enterprises, encouraging traditional arts / crafts Building construction 26,577 activities and family-run businesses. Non-electrical machinery 25,482 ■ They provide significant opportunities for women. Electrical machinery 21,342 ■ They are ideal for young or for first time employees. Metal products 13,477 Finance and insurance 13,105 ■ They have good capacity for education, training and Other 13,043 skill development. Other community and personal services 12,821 ■ Wages are equal to or above the industrial norm. Textiles 11,761 Communication 11,623 WTTC encourages the South African Government to recog- Diamond and other mining 10,973 nise the scale, scope and characteristics of jobs created. Other industries 9,633 directly and indirectly by Travel & Tourism, and to factor this Other transport equipment 8,393 into mainstream employment, trade, investment and educa- Clothing 8,380 tion policies. Food 8,097 We underline the importance of the catalytic "flow through Wood and wood products 6,050 effect" across many industrial sectors, and of public/private Petroleum refineries 5,362 sector partnerships to support infrastructure and education — Printing and publishing 4,387 the key areas to facilitate Travel & Tourism growth. Beverages 4,128 Electricity, gas and steam 4,037 We urge consideration of flexible working practices to Coal mining 4,009 increase industry responsiveness, productivity and innova- Paper and paper products 3,991 tion. At the same time to avoid regulatory rigidities and pro- Other non-metallic minerals 3,980 tectionism which will have he reverse effect. Other chemical products 3,874 We suggest particular consideration be given to tourism in Leather products 3,254 policy mechanisms that enhance rural employment, and in Basic iron and steel 2,932 areas where manufacturing is declining. Plastic products 2,906 Civil engineering and other construction 2,814 Industrial chemicals 2,706 Establish Effective "Satellite Accounting" Furniture 2,645 Travel & Tourism's economic and employment impacts can- not be separated from the need for effective measurement of Rubber products 2,456 Basic non-ferrous metals 2,287 the sector and its "flow through effect" Medical & health services 1,439 Travel & Tourism as a new industry is not discretely identi- Gold mining 1,270 fied in charts of national account — rather its component parts Pottery, china and earthenware 1,116 are scattered throughout the accounts. Glass and glass products 1,114 Public sector analysis and related policies tend to overlook or Footwear 632 understate the impact of the industry, or deal with its smaller Water supply 517 components. Tobacco products 79 The technique of satellite accounting is designed to measure Total T&T Employment 737,617 the new service sectors, and this report has simulated a Travel 28 EFTA00578103 & Tourism Satellite Account for South Africa. It uses the lat- In Africa as a whole, air traffic has increased by 120% over est definitions, and evolving accounting concepts developed the past 5 years, with Southern Africa as the magnet. And within the World Tourism Organization's public/ private sec- while it is the case that South Africa has gone far in libera- tor study group. It incorporates WTTC/WEFA modelling lising its domestic and international aviation regimes, more experience from some 20 national and regional studies can be done to increase services, expand price/product around the world and WEFA's global macroeconomic data- options and encourage competing carriers. bases. In the latter context the privatisation of airlines and airports is WTTC encourages the South African Government to develop a constructive step forward which should be brought to early a Travel & Tourism Satellite Account, and offers to collab- conclusion. In this process clear, equitable, transparent pro- orate in this endeavour. Pending completion of such an curement and investment provisions should be established. approach WTTC stands ready to update and adapt this simu- Similarly WTTC has identified measures in its report Air lated Account as a low cost option to ensure that adequate Transport and Freer World Trade for progressively and deci- data is available to factor Travel & Tourism into economic sively liberalising air transport agreements at a bilateral. and employment strategies regionalateral and multilateral levels. This includes the open- ing of entry and pricing regimes — essential to the growth of ACTION long-haul and regional tourism. Studies undertaken for the World Tourism Organization suggest that for every job saved ■ Recognise Travel & Tourism's full impact through protection of airline interests, up to four can be lost across the economy and use private/public in the economy as a result of lost tourism spend. sector partnerships to exploit its untapped potential. We urge that the employment impact of expanding tourism be made a primary and continuous input to the development ■ Reflect Travel & Tourism in mainstream of South African Aviation policies. policies for employment, trade, investment and education with a focus on encouraging Furthermore, liberal aviation accords should be aggressively flexible working practices and enhancing sought with South Africa's principle bilateral and regional rural tourism employment. air transport partners — particularly in major tourist generat- ■ Ensure that Travel & Tourism's flow through ing markets. effect across the economy is appreciated by A related issue is the need to ensure that international tele- all sections of Government and establish a communications markets are also liberalised. An increasing National Satellite Account to consolidate this recognition. amount of Travel & Tourism operations — and virtually all distribution and sales transactions — flow through telecom- munications circuits. Move Towards Open Where telecommunications are monopoly-controlled, there are often restrictions on access, high costs and unreasonable and Competitive Markets operating conditions. This in turn limits the potential for mar- Liberalise Markets ket-oriented expansion of Travel & Tourism, with negative A liberal international and regional trading regime with free national and international economic impacts in terms of cost, flowing markets for goods and services will help Travel & operational efficiency and customer service. Tourism grow, and in turn enhance wealth and jobs creation. Opening telecommunications markets will lower costs and Increased trade encourages business trips, and growing enhance service for travellers and travel companies. disposable income expands leisure travel. The ongoing programmes of the World Trade Organization Enhance Promotion and of SADEC provide a framework for progressive liberali- Spending by foreign travellers constitutes export earnings for sation and should be vigorously pursued. Sustained efforts South Africa's economy in the same way as manufacturing or should be made to incorporate Travel & Tourism as a key agricultural exports. element in these mechanisms. Travel & Tourism should enjoy the same incentive regimes as other export sectors. In growing Travel & Tourism, the biggest single challenge is to achieve competitive air transport opportunities. The major- It is particularly significant for South Africa given the drama- ity of international business travellers, as well as a significant tic current growth and long range forecasts of almost 7% per and growing number of leisure travellers, arrive by air — par- annum through to 2010. ticularly from the major tourism origin markets. Worldwide there is increasing awareness of the importance of 29 EFTA00578104 Travel & Tourism and the competitive need for improved There is real need for a strong national leadership branding promotion. WTTC shares the view expressed in Tourism in which optimises resources, focuses the myriad of interests - Gear that: public and private sector, national and local - and gets the attention of travellers in an increasingly competitive global ■ the absence of a clear product branding and fresh mar- marketplace. keting strategy is a main weakness; ■ it is important to broaden and diversify the product This will require particular attention to a coordinated offer, to highlight the real African character of the desti- approach to internet marketing and distribution to optimise nation; South Africa's visibility. ■ any Travel & Tourism development action plan should A powerful brand, such as Afrikatourism, is also important in include a fresh promotional drive to grow tourism attracting and maintaining media interest, and in high profile arrivals in South and Southern Africa. positioning in the vitally important but increasingly complex electronic distribution channels. While the focus of this drive should be the growing, high- yield international markets, the emerging domestic and The rationale behind Afrikatourism is that conservation can regional markets should also be targeted - particularly special and must benefit people in a tangible way by creating jobs high growth segments like nature, educational & youth and local community development in this way Tourism can tourism. turn African resources into a very valuable product, while simultaneously protecting and restoring them. WTTC suggests that the government of South Africa particu- larly take note of the existing highly successful Travel & There will nevertheless be a concomitant need to upgrade Tourism promotional models developed by the Canadian and South Africa's nature tourism foundations to match inter- the Australian governments. national and regional competition. This applies particularly to National Parks where this is a huge potential to cater to a Their common features are: growing market segment with quality accommodation, • Top level active political support and engagement. infrastructure and service. • Declared Strategy - with clear targets and detailed WTTC believes that organisations like the Open Africa implementation gameplan. Initiative, the University of Pretoria's Centre for Africa- • Involvement of major stakeholders in the development Tourism, the Conservation Corporation and others give South process. Africa an excellent base for development of such branding • Strong public and private sector cooperation with out- approach, and will continue to work closely with these reach to partners across the T&T Economy. bodies. • Substantially increased public sector funding and I exceptional inducements for private sector matching. • Private sector leadership in marketing strategies. IMMir ACTION • An integrated approach across government departments and particularly in co-ordinating national, state and • Progressively liberalise trade, transport and telecommunications under the auspices of local promotional efforts. the World Trade Organization and SADEC. • Formal Launch to raise the profile of the campaign and • Continue to open up air transport markets, the media interest. attract more long haul services, expand the range of price and product options and I encourage competition. • Upgrade promotion to match prevailing competitive approaches, restructure SATOUR with adequate funds, build in public / private cooperation and examine the coordination of provincial, national and regional marketing. • Build on the Afrikatourism brand which focuses on South Africa's unique natural, cultural and wildlife traditions. I 30 EFTA00578105 Pursue Sustainable Development energy and resource conservation, water management, com- munity involvement, customer awareness and staff training. Since the Rio Earth Summit it is widely recognised that It also suggests locally driven processes for continuous stake- sustainability has to be at the core of all policy making and holder consultation and involvement. development planning. WTTC is undertaking with its partners a five year implemen- Travel and Tourism is no exception. With twice the number tation of this sectoml Agenda 21 program, to create aware- of travellers predicted over the next decade or so, there are ness and local implementation - including an African Think evident implications for consumption, waste and resource Tank in Zimbabwe in late 1998. utilisation. At the operational level, WTTC"s GREEN GLOBE pro- At the same time, we are neither extractive nor resource gramme - backed by a growing number of Travel & Tourism focussed, and because of the intensive involvement of people industry associations - is a key component of this Agenda 21 as consumers and service providers, and the pervasive spread initiative. GREEN GLOBE aims to build an environmental across the economy there is a real possibility to be a catalyst ethic into all aspects of Travel & Tourism, on a corporate and for positive action. destination basis. The environment - ecological, economic and social - is South The program draws on a worldwide database of best practice Africa's main heritage and Travel & Tourism's core asset. and offers destination management programs and industry guidance - including leading edge ISO type certification. It is imperative to ensure that the economic and social bene- fits which the industry brings, and the investment which In the context of Sustainable Development, a relevant place underpins it, are sustainable in the longer term. must be assigned to social issues linked to local communities development and empowerment. Within the African continent, South Africa has been gifted with such a wealth and variety of resources, that it has a As an underlying principle, any sustainable Travel & leading edge position of comparative tourism advantage. Tourism strategy should involve local entrepreneurship, community shareholding. partnership and participation in The South African Government and the private sector has tourism by the widest spectrum of citizens. long been involved in the sustainable management of Travel & Tourism has the potential to stimulate and regener- resources, and TOURISM IN GEAR highlights the need to ate rural and peripheral areas, by building capacity at grass- establish clear procedures and guidelines for planned and roots level and providing the instruments for economic self- sustainable tourism expansion. sufficiency. WTTC supports the effort undertaken by the Government in Travel & Tourism is often the only viable alternative to agri- this area and stresses the importance of: culture, can thus become a source of income and benefits for ■ a clear leadership strategy tied into mainstream Agenda emerging areas with high tourism potential, also by generat- 21 developments. ing a host of tourism-related activities and services - electric- ity, water, local shops, banks, post office etc.- which benefit ■ Involvement, encouragement and incentivisation of the local populations and tourists alike. private sector. ■ Close interrelationship of infrastructure, fiscal and education/training policies and programs. In this context we urge the government to take account of the principles of Agenda 21 for the Travel & Tourism Industry developed by WTTC, the World Tourism Organization and the Earth Council. Its central messages are that: ■ sustainability will need a balance of private initiative, economic instrument and regulation. ■ global principles must be reflected in local action ■ market-based delivery mechanisms should be At community level many jobs can be provided which do not encouraged. require great capital outlay - for example local guides, local It proposes specific actions for governments and the industry music and dance shows, craft workshops. The local tourism to achieve these goals, in areas such as waste utilisation, industry can help promote and market these activities, which 31 EFTA00578106 in general maintain or even increase the quality of the Eliminate Barriers to Growth tourism product. Ensure Safety of Tourists In this context, WTTC supports the concept of pilot pro- The safety and security of visitors is a fundamental condition grammes to evaluate and demonstrate the potential of for all tourism destinations. It is however particularly impor- tourism which involve and sustain local communities. We tant for South Africa, where the otherwise exceptional repu- also encourage financing institutions to promote microloans tation is being shadowed by the actual and perceived level of for local tourism entrepreneurship initiatives. crime. WTTC is ready to work with the government of South Africa "Tourism in Gear" highlights the importance of co-operative and the private sector to advance these concepts of sustain- efforts to address and contain criminality. WTTC strongly able development within the framework of its Millennium supports this view, and suggests that security and safety Vision. Growth and the jobs it will create depend on building issues must be built into the national tourism strategy as well a sound environmental framework for tomorrow's develop- as taken into specific consideration at local/destination level. ment. Travel & Tourism should also be reflected as a priority in policing strategies. WTTC agrees with the launch of a communication campaign to improve perceptions of security in the marketplace — with positive effect on potential tourists as well as investors and the establishment of a database on security trends to support it. Yet, even more fundamental is the need for a strong effective law enforcement regime that deals with the substantive issues. In addition, WTTC suggests that existing global models of visitor security are reviewed which could usefully be imple- mental in South Africa. ACTION While conscious that there is clear recognition of this aspect ■ Establish clear procedures and guidelines of tourism development at the highest public and private for planned and sustainable Travel & sector levels, we want to underline its pivotal importance. It Tourism expansion as proposed in 'Tourism could over time be the major difference between the opti- in GEAR'; pay particular attention to eco- tourism and ensure that park facilities are mistic and pessimistic scenarios — and that means a differ- expanded sustainably. ence of half a million jobs across the economy. ■ Adopt and apply the principles of Agenda 21 for the Travel & Tourism Industry deve- Invest in Human Resources loped by the WTTC, the World Tourism Organization and the Earth Council and encourage transnational and sub-regional projects. ■ Make South Africa a GREEN GLOBE destina- tion, targeting the corporate sector with I Education and training presents major opportunities and challenges for a rapidly expanding Travel & Tourism sector in South Africa. Human Resource Development (HRD) must adapt to increasing globalisation, diversifying products and changing customer expectations. Strategies must therefore be developed which enhance the employment capacity of Travel certified standards, and new tourism areas & Tourism and increase the quality of service to internation- such as the LUBOMBO SDI with tailored al levels. GREEN GLOBE environmental programmes.. WTTC shares the - Tourism in Gear" view that South Africa's ■ Ensure that sustainable Travel & Tourism HRD should mainly focus on: strategies take into account the need for ■ Improving the quality and quantity of skilled manpower local community development, engagement in the sector, by establishing a Sectoral Training and empowerment. Work with the business Organisation for tourism training and a Southern Africa community to implement these strategies.. Training Tourism Academy ■ Expand microloans to provide incentives for ■ Upgrading front-line service and training local community based sustainable tourism enterprises and use pilot projects to evalu- ■ Expanding Travel & Tourism in schools, by finalising ate and demonstrate local sustainability. curricula and introducing training programmes for teachers 32 EFTA00578107 For best results, mechanisms should be developed for close and speedy procedures to manage border clearances will co-ordination between the public and private sectors to escalate dramatically in future years if serious congestion is ensure that education, training and skill levels can keep pace to be avoided. Existing initiatives for facilitating cross border with industry growth and competitive demands. flows of business travellers need to be supplemented by examination of more far reaching measures to welcome Travel & Tourism should have access to Government-funded visitors — including those arriving from outside the region training and education programs on at least an equitable basis and leisure travellers generally. with other industries. WTTC is working with the Multilateral Investment The private sector should be playing an active role in ensur- Guarantee group of the World Bank and other international ing the maintenance of the highest international standards of bodies to advance the concept of investment in sustainable management and service, both through access to internation- Travel & Tourism Infrastructure. al skills and experience to ensure competitiveness, and through the implementation of training and career structures WTTC urges the South African government to interest and capable of supporting the development of skills. involve the international financing community in supporting As part of its new Millennium Vision initiative in emerging the provision of travel related infrastructure as a matter of states, WTTC will work closely with Reach and Teach to strategic priority. The World Bank family. the African Deve- advance these concepts in South Africa, the Southern African lopment Bank and regional institutions need to dramatically Region and the continent at large. change their vision of tourism, and to recognise its vital development and job creation capacity. Expand Infrastructure Infrastructure remains a critical component in Travel & Tourism development in South Africa, if the full potential of employment generation, export earnings and regional devel- opment effects are to be realised. In most cases public infrastructure which supports Travel & Tourism expansion will also serve other urban and regional development purposes. Infrastructure development programmes are also important to ensure sustainability by ensuring that the fruits of good environmental management are not lost through inadequacy in capacity. Quality infrastructure is also essential in order to diversify the product base, remove bottlenecks, ensure good service and distribute benefits of tourism flows around the economy. It is not only a question of coping with increasing numbers of visitors, but to make sure that the patterns of flow don't affect the natural or built heritage. nor run counter to local interests. WTTC believes that there is a need to conduct in-depth Tax Intelligently investigation of infrastructure needs/ resources, and attaches Travel & Tourism should pay its fair share of taxes — and it particular importance to air transport infrastructure. does. In particular. airport expansion and air traffic control system This Report indicates that the South African T&T Economy modernisation are priorities for Travel & Tourism growth. will generate Rand 15 billion in tax revenues in 1998 — some An increased private sector role should be pursued in this 8.4% of overall taxes. This could rise to 10.6% of tax revenue development. by 2010 simply under the baseline scenario. Current land-based ATC systems should be switched to The growth and prosperity of the industry, including the satellite navigation as soon as possible to contain operating investment necessary to generate those future revenue flows, costs, improve safety and reduce congestion. will depend in no small part on the competitiveness of Travel & Tourism, including whether it receives equitable treatment With pressures on budget and space resources likely to come relative to other industries and to competing destinations. under increasing stress, the problem of finding more efficient 33 EFTA00578108 There is an increasing tendency worldwide for governments to target Travel & Tourism as a revenue generator, to meet short term budget objectives with little thought to the longer term consequences on demand and job creation. Often this ACTION involves unco-ordinated actions of national, state and ■ Review models of visitor safety and municipal authorities. For example, according to WTFC's security and build provisions into the Tax Barometer, in the city of Johannesburg a total basket of national tourism strategy. Ensure these are Travel & Tourism related taxes has increased by some 13% reflected in provincial and local tourism in the last year alone. plans. Encourage law enforcement agencies to recognise and integrate specific Travel & Also, taxes are often levied on travellers at different points of Tourism issues into local policing strategies. the journey, so that what may at first appear a small amount has a much greater impact on the final product as a whole. ■ Place education and training at the forefront of tourism development, expand WTTC believes that travellers and travel companies should the range of school and college curricula and highlight industry career prospects and not be taxed in a discriminatory way. role in the economy. Introduce measures to International visitor spending is an export and should be raise skills and standards -- particularly taxed like other exports. front-line service. Develop mechanisms for public/business-private sector buy-in and An increasing number of "user fees" are being applied to involvement. Travel & Tourism — for air tickets, security, airport construc- tion, highways and the like. WTTC firmly believes that the ■ Review and expand infrastructure, particu- principle of "User Pays — User Benefits" should be applied larly for airports, air traffic control and in such cases, with the funds earmarked for the related Travel streamline border clearance, eliminating & Tourism infrastructure, transparently dispersed and with visas where possible. collection time limited to the specified project completion. ■ Encourage the international financial institutions, including the World Bank and the African Development bank, to support sustainable tourism infrastructure in lending priorities and programmes. ■ Apply WTTC principles of fair taxation to s_ Travel & Tourism - fair revenue generation, efficiency, equity, simplicity - and give Travel & Tourism equitable access to industry export incentives and exemptions. Apply the 'User pays - User benefits' principle. a This report unequivocally demonstrates the enormous potential for Travel & Tourism in South Africa. WTTC will be pleased to work with the South African government and other stake- holders in further developing this recommendations into a cohesive policy framework. Travel & Tourism can lead South Africa and the Southern African region into a new economic era creating half a million new jobs across the economy in the first decade of the new Millennium. 34 EFTA00578109 I= a GREEN GLOBE' al What is GREEN GLOBE? How does it work? GREEN GLOBE is a worldwide environmental manage- GREEN GLOBE helps a company to develop an environ- ment and awareness program mental program suited to its specific requirements, and for the Travel & Tourism brings numerous business benefits. GREEN GLOBE mem- industry based on bers have access to: Agenda 21. ■ Advice in tailoring practices to changing environmental needs Its prime objective is to provide a low-cost, ■ Tools to help evaluation and to improve performance practical means for all • Information on environmental good practice and cost Travel & Tourism com- saving techniques panies and destinations to undertake improvements in • Recognition of your environmental commitment environmental practice leading towards ISO style certification. What are the benefits? • Continuous practical help to build environmental considerations into daily business decisions Why GREEN GLOBE? A clean healthy environment is the core of the Travel & ■ A service which is tailored to the size, business focus Tourism product, and is essential to future development. and level of environmental activity of your company Good environmental practice is not only morally right; it ■ Cost-saving and commercial opportunities makes sound business sense and can lead to significant cost savings. What is the cost? Membership fees are structured to ensure that the program What are its origins? is accessible to companies of any size; they range from USS GREEN GLOBE was developed by the World Travel & 200 per annum for companies with turnover of less than Tourism Council (WTTC), a global coalition of industry US$ I million, to US$ 5,000 for companies with turnover Chief Executive Officers, with the involvement of the Earth of more than US$ 30 million. Council and its Chairman, Dr. Maurice Strong, former If your company is not already a GREEN GLOBE Member, Secretary General of the 1992 Rio Earth Summit. The and you would like further information about the program. concept has the broad support of the United Nations please contact WITC. Environment Program (UNEP). Major regional and sectoral Travel & Tourism organizations have joined GREEN GLOBE as Industry Associates and are working to encourage their members' participation. Who can join? Membership is open to Travel & Tourism companies of any size, type and location which commit to improvement in en- vironmental practice and to countries with similar goals. 35 EFTA00578110 pi The World Travel & Tourism Council (WTTC) is the Global Business Leaders Forum for Travel & Tourism. Its Members are Chief Executives from all sectors of industry, including accommoda- tions, catering, entertainment, recreation, transportation and other travel-related services. Its central goal is to work with governments to realise the full economic impact of the world's Wor ld largest generator of wealth and jobs - Travel & Tourism. Tr•vel World Travel & Tourism Council World Travel & Tourism Council —6— P.O. Box 6237 20 Grosvenor Place, London Toorism SW1X 7TT, U.K. New York, New York Council Tel: 44-171-838.9400 10128 U.S.A. Fax: 44.171.838-9050 Tel/Fax: 1-212-534.0300 Email Creatingiobs@compuserve.com Email 73132.3165@compuserve.com www.wttc.org The WEFA Group is one of the world's leading economic consulting and forecasting firms with nearly 300 economists worldwide. It distributes data on 152 countries and forecasts 94 country economies in depth. APRINAARKCompany Founded in 1963 by Lawrence R. Klein, 1980 Nobel Laureate in Economics, Wharton Econo- metric Forecasting Associates (WEFA) was the original economic forecasting firm started at the request of business leaders who wanted objective, independent forecasts for business planning and analysis. Over the years, WEFA built its reputation on academic standards, quality research and forecast accuracy. In 1987, WEFA merged with Chase Econometrics, an independent subsidiary of Chase Manhattan Bank that provided unequaled planning support to financial institutions, corporations, and government agencies for over 15 years to form the WEFA Group. The WEFA Group and its predecessors have always been at the forefront of economic consulting, forecasting and analysis. TECHNICAL Dr. M. Fabricius Department of Environmental Affairs and Tourism & Chairperson REVIEW TEAM Dr. S. Bah Central Statistical Services Prof. E. Heath University of Pretoria Mr. H. Kleynhans Department of State Expenditure Mr. M. Nkosi SATOUR Ms. A. Myburgh Central Statistical Services Ms. R. Pietersen Central Statistical Services Mr J. du Ness's Department of Finance Mr. J. Prinsloo South African Reserve Bank Dr. M. Saayman SATOUR (Board Member), Potchefstroom University Ms. G. Saunders Grant Thornton and Kessel Feinstein Mr. C. Walker Tourism Business Council of South Africa WTTC would like to thank Dr. Mike Fabricius and all the technical review team for their advice and assistance during the production of this report. The financial support of American Express is also gratefully acknowledged. 0 World Travel & Tourism Council, 1998 Use of data and information from this Report is authorized provided source is acknowledged. 36 EFTA00578111 EFTA00578112 IVor ld Travel —&— Tourism Council World Travel & Tourism Council 20 Grovesnor Place London, UK SW1X 7TT Tel: 44-171-838-9400 Fax: 44-171-838-9050 Email: CreatingJobs@compuserve.com www.wttc.org EFTA00578113