Transcript Tourism SBU INFORMATION AND AWARENESS WORKSHOP

Tourism SBU
INFORMATION AND AWARENESS WORKSHOP
Johannesburg
Tebatso Matlala
18 March 2014
Introduction
Sectors covered by SBU:
Accommodation:
Niche Tourism:
Exclusions:
hotels, guest houses, game lodges (efficiency of room size currently under
review)
adventure & sports tourism, business tourism, attractions (including theme parks
and natural attractions), health tourism.
stand alone restaurants (unless linked to an attraction), casinos and gambling
facilities, property development, timeshare/fractional developments.
SBU Approach to development of these sectors
• Aligning activities with industry goals as indicated in National Tourism Sector Strategy and
IPAP2/NGP
• Proactive development of projects in subsectors through identifying potential projects, project
scoping, pre-feasibility and feasibility studies.
• Assessment and funding of applications as received
• Support for the dti programs in some subsectors (Arts and Crafts, backpackers, avitourism)
• Active participation and sponsorship of industry events (HICA, Sports Exhibitions, Imvelo)
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Financing Products
IDC offers a wide array of financial instruments, including:
Equity
Quasi-equity
Commercial debt
Guarantees
These may be provided as a single facility or in combination
• R3 m minimum loan amount and financial contribution of between 40%50% from the shareholders
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HIGH DEVELOPMENT RING FENCED FUNDS
R10bn
R2bn
R 100 m
€47m
R 1 bn
IDC Business
Support Unit
Development Funds Department
GRO – E - SCHEME
Unemployment Insurance Fund (UIF)
Isivande Women’s Fund (IWF)
Risk Capital Facility (RCF)
Transformation and Entrepreneurial Scheme (TES)
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Financing Criteria
• Consider funding of start-ups, expansions and refurbishments
• Project must demonstrate significant development impact
• Security is tailored to the transaction and may include personal
suretyship, corporate guarantees, bonds over fixed and
movable assets, pledge and cession of shares
• Comprehensive business plan must be submitted.
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Financing Criteria
• Focused management team with ability to adapt to market forces
• Product specifications to be in line with intended grading with upfront
input from management and marketing company
• Approved buildings plans and building cost estimates prepared by a
QS
• Clearly defined marketing strategy in terms of product offering, target
market, key success factors
• Financial contribution of at least 40% from the shareholders
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Review of IDC’s progress in the industry to date
• The Tourism SBU played and active role in the industry over the past 10 years
• Current exposure of ca R2.56 billion (of which R800 million is still to be drawn) to 88 clients.
• Geographical spread (value and number)
Number of clients per province
(%)
5%
13%
23%
4%
10%
10%
8%
Eastern Cape
1%
Free State
25%
0%
4%
Exposure per province
(%)
23%
Gauteng
KwaZulu Natal
Limpopo
Mpumalanga
12%
Free State
10%
3%
2%
Gauteng
45%
0%
2%
Eastern Cape
KwaZulu Natal
Limpopo
2%
Mpumalanga
• A total of 53% in value and 47% in number of transactions are to BEE:
- Black owned (10% in value, 11% in number), Empowered (43% in value, 32% in number), 4 companies are owned by Black Women.
• Most of the exposure is to the accommodation sector with:
- 4 in Other recreational facilities (Sandown Bay Fishing, Knysna Elephant Park, Tourvest Guma)
- 3 Restaurants (Wandies, Eagle’s Fare)
- 1 Sporting activity (Cape Epic)
- 1 Travel Agency (Basfour)
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Industry Environment
Change in environment
Implications for Industry and SBU Sector Strategies
Successful hosting of 2010 SWC
Country image enhanced which is expected to result in
increased visitor numbers and improved industry
performance. SA is seen as an investment destination
with potential investment opportunities in the long
term.
New and upgraded tourism
infrastructure
Improved capacity to handle projected growth in visitor
numbers will lead to improved industry performance
and should mitigate market risk for tourism
investments.
Current overcapacity in
accommodation sector in certain
nodes
Hotel performance to remain strained for some time,
cautious investment in accommodation sub-sector in
over developed nodes. Strategic focus on improved
geographic spread and development of nonaccommodation sub-sectors.
Continued depressed economic
climate
Tighter credit markets thus difficulty in raising finance,
new developments stalled, trading conditions strained,
lower travel volumes due to strong Rand.
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Constraints to Industry Development
Constraint
Demand
Implications if constraint not
addressed
Responsible
party
Possible solutions
Development
Other
Air access
Limited growth in inbound arrivals
Dept of
Tourism and
Transport
Deregulation of airline industry to improve
inbound and regional air access
Safety and Security
concerns
Limited visitor numbers due to negative
country image
Government
Effective policing, pro-active country
marketing and effective responses to bad
news
Legal requirements
Long lead times and difficulty to obtain
EIA’s and rezoning approvals
dti, DWA
Effective implementation of legislation with
minimal bureaucracy
Unresolved Land
Claims
Community disillusionment, ineffective
use of resources, limited industry
growth
Department of Rural
Development and
Land Reform
Fiscal support for land settlements
Inadequate Skills
Service levels compromised, tourism not
seen as long term career
Government,
private sector
Apprenticeship programs, offer tourism
studies at tertiary level
Regulation
Health Tourism opportunities limited until
regulation issues resolved
Dept of
Health and
Tourism
Regulatory issues relating to medical visas,
post hospital care, transportation of bodies
and capacity issues to be resolved.
Support from
provincial
government
Limited development in underdeveloped
provinces
Provincial
government
Provincial government to be better
organised with regards to tourism
opportunities.
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Industry Goals
1.
2.
3.
4.
5.
6.
Grow tourism sector’s absolute contribution to GDP by more than average GDP growth
Achieve transformation within tourism sector
Provide excellent people development and decent work within the tourism sector
Entrench culture of travel amongst South Africans
Deliver a world class visitor experience
Address geographic, seasonal and rural spread.
IDC Goals
High-Level Sector Development Strategies
1.
2.
3.
4.
Prioritise development outside established tourist nodes
Active development of subsectors outside of accommodation
Entrench a culture of travel amongst South Africans
Transformation of sector through support to BEE to own start-ups.
Rest of Africa
Development
Adventure & Sports
Tourism
Key
Strategies/Initiatives
• KZN Beach Tourism
• Mpumalanga
and
Limpopo
attraction
projects
• SADC opportunities
• East & West Africa –
Business Hotels
• 500
• 0 in SA
• Suitable Land (location, price, zoning)
• Equity partners
• Community buy-in
Focus
Areas
SA
Jobs
(5
years)
Subsector Development
Potential
Constraints
Improved Geographic Spread
Travel culture
Niche Tourism
Domestic travel facilities
• Western Cape kite surfing
facility
• Northern Cape Extreme
Sports facility
• Eastern
cape
opportunities
• Theme Park development
• Backpackers
• Develop or refurbish
facilities suitable and
affordable for domestic
market
• 100
• 300
•
•
•
•
Onerous EIA requirements
Bulk infrastructure (water, electricity)
Air Access
Provincial and local government support
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Thank you
Industrial Development Corporation
19 Fredman Drive, Sandown
PO Box 784055, Sandton, 2146
South Africa
Telephone (011) 269 3000
Facsimile (011) 269 3116
E-mail [email protected]