Grant Thorton says the tourism industry suffered more damage than they had expected.
JOHANNESBURG – The consultancy that first warned the tourism industry would suffer massive losses when new travel regulations were introduced, says the damage they did was worse than they had expected.
On Friday cabinet reversed an earlier decision by the Department of Home Affairs to introduce regulations requiring biometric visas for tourists and unabridged birth certificates for children travelling to South Africa.
Grant Thornton advisory services’ Lee-Anne Bac says the tourism industry suffered more damage than they had expected while these regulations were in force.
“Looking at what has happened to our tourism industry, we are estimating that, due to immigration regulation, [we could have lost around 500,000 tourists this year].”
While political analyst professor Sipho Seepe says there are lessons here for government about making policy.
“The arrogance of ministers working in isolation and not wanting to be interfered with should be a thing of the past.”
Tourism minister Derek Hanekom has said he’s grateful that these changes are now being made.
At the same time, the tourism industry says it’s going to take time and money to rebuild the markets it lost during these time controversial travel regulations were in force.
Bac says there’s hard work ahead for the tourism industry.
“It’s going to take a lot on time, energy and money to restore our reputation; to get the communication out there out there about the changed regulations.”
Seepe says this episode may not actually damage Home Affairs Minister Malusi Gigaba.
“He is young so he is going and in government you learn and make mistakes. But what is good for him si to climb down.”
Gigaba had strongly defended the regulations saying they were required to stop terrorism and child trafficking.
Sunday marked World Tourism Day, and the U.N.’s theme this year was “One Billion Tourists, One Billion Opportunities.” According to the U.N. World Tourism Organization,tourism contributes 10% of global GDP and 6% of the world’s total exports. Many factors come into play when explaining tourist flows to a particular country, but the ease of getting a tourist visa is surely a big one. The diverging paths of Zambia and South Africa demonstrate this clearly.
Zambia’s Tourism Minister Jean Kapata said on Sunday that tourism is among the alternative sectors that can save Zambia’s economy in light of the current decline in copper prices. Zambia’s annual increase in arrivals has been over 12% for several years (apart from a slowdown to 3.5% in 2014). In the case of MICE (meetings, incentives, conferencing, exhibitions) tourism, arrivals have grown 400% annually for the past two years. The country predicts that its steady growth in tourist arrivals will create 300,000 jobs by next year.
“Zambia has instituted substantial visa reforms to make it easier for tourists to come to our destination. These include the implementation of the KaZa Univisa system between Zambia and Zimbabwe, similar to the EU Schengen visa for all countries who are on our ‘visa on arrival’ list for both countries which are 41 in total. This has already increased arrivals to the two countries,”Kapata stated in mid-September. She highlighted that more countries are being added to the list, and noted, “Before the end of this year, Zambia will also launch the electronic visa processing system. This is expected to give tourist arrivals a further boost.”
On the other hand, South Africa has seen a decline in tourists over the past year after enacting tough visa regulations aimed at stemming illegal immigration. The measures require that prospective travelers visit a South African consulate to capture biometric data before departure, and require that children entering the country must be accompanied by an adult in possession of a birth certificate that names both parents.
According to the South African Reserve Bank, preliminary estimates suggest that travel receipts declined by 9% in the second quarter of 2015. And a study done on behalf of the Tourism Business Council of South Africa estimated that in 2015 the regulations would result in a total net loss to South Africa’s GDP of around $295 million.
However, South Africa’s Home Affairs Minister Malusi Gigaba criticized the local tourism sector for not doing enough to sell South Africa as a destination for visitors, adding that other factors, including a constrained global economy, had also contributed to the decline of tourism numbers. “That the number of travelers dropped because of the new visa regulations is always an opinion. And the Reserve Bank is entitled to its opinion and also entitled to be wrong,” he said.
Still, the government is now rethinking the visa regulations to mitigate further losses. Constructive proposals to mitigate the potential unintended consequences of the new regulations were “at an advanced stage,” Gigaba noted. “The department is in the process of developing an e-permit system with an intention to roll it out in all South African missions abroad and also extend the visa facilitation services centers in countries where we receive mostly skilled persons for our economy,”stated the Home Minister’s parliamentary reply, published last week.
Tourism can bring in a lot of revenue and create local jobs, but it needs to be enabled by visa rules that reduce hassle. Otherwise travelers will just go elsewhere.