L EBOGANG M ASHILE , M ARIA M OLOKOMME AND C HARLES N HEMACHENA
3.5. Results
3.5.2. Analysis of empirical results
The findings from the study present useful insights for tourism policy direction in the Limpopo Province. The study looked at the contribution of tourism to the economy of the Limpopo Province, focusing on the following key areas:
Composition of the Tourism Industry in Limpopo: Over 50% of respondents from all three categories (i.e. accommodation establishments, attractions and key informants) had knowledge about the composition of the tourism industry in Limpopo. The largest component of the accommodation category is Bed and Breakfast (B&B) representing 28% of the sample, followed by guest houses at 25%, lodges at 18% and hotels at 14%, with the rest below 5%. In terms of attraction composition, the largest category is represented by nature reserves at 32%, followed by art galleries and wildlife & adventures both at 14%, with the other categories accounting for less than 10% of tourism attractions in Limpopo.
Contribution of Tourism to Economic Growth: Empirical findings from the survey support the secondary data that the tourism industry contributes to the national as well as the provincial economies. The industry’s contribution to the national economy is 3% in real terms, showing the
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industry’s potential in general; and the Limpopo Province could take advantage of its tourism potential to promote the industry for local and international attraction and investment. This contribution is measured in terms of spending by tourists, job creation, skills development, tourist arrivals and departure, capacity of establishments, etc. All these indicators show that there is great potential for the tourism industry in Limpopo to develop and improve its current contribution to the local economy. The tourism industry accounts for more than 5% to the Limpopo provincial economy, measured in terms of tourism spending as a percentage of GDP (in current prices). Similar trends are shown for the national economy, where the tourism industry’s contribution to GDP recorded an average of around 6% for the period 2004 and 2012 (Global Insight, 2014). In terms of growth in tourism measured in bed-nights by origin, the Limpopo Province experienced increases in growth of domestic tourism between 2007 and 2012, while growth in international tourism declined over the same period, which could be attributed to the global economic meltdown.
Nevertheless, the growth in international tourism outweighed that of domestic tourism on average over the same period (Global Insight, 2014).
Spending: Tourism spending is measured in terms of monetary expenditure by tourists who visit the Province over a certain period of time. With regards to accommodation establishments, 65.6% of the tourists that visit the Province spend less than R2,000 at these establishments, followed by 25.5% of the tourists who spend in the range of R2,001-R5 000, while only 3.1% of visitors spend over R10,000 during their visits at particular establishments. With regards to attraction establishments, 81% of the tourists visiting tourist attractions in the province spend less than R2,000, and 9.5% spend between R2,001 and R5,000, while 4.8%spend over R10,000 during their visit. About 52% of accommodation owners/managers indicated that average spending by tourists had increased, while 45% of attractions indicated that spending has increased over time. Table 3.1 presents responses to the reasons that led to increases in spending by tourists. About 31.5% of respondents cited increased marketing approaches at business level, 17.8% believed improved global conditions were behind tourism increases, while 15.1%
indicated that increased marketing strategies promoted spending by tourists at their establishments. Other reasons for increase in spending were attributed to the provision of additional services like internet.
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Table 3.1 – Given reasons for increased spending by tourists
Reason for increased spending Per cent Increased marketing approaches at business level 31.5%
Increased marketing strategies at business level 15.1%
Increased provision of incentives from government to businesses in Limpopo
13.7%
Improved marketing platforms (e.g. online booking, etc.) 6.9%
Improved global economic conditions 17.8%
Others 15.1%
Job Creation: On average, 2 people are involved in the running and managing of each accommodation establishment in the Limpopo Province.
About 54% of the accommodation establishments employ between 0 and 3 people, 23% employ between 4 and 6 employees and 9.2% employ 7-10 employees on average. Of the total employees, 54% are females, while 56% of family members who work at establishments qualify as employees.
Tourist Arrival and Purpose of Visit: Among the accommodation establishments, 41.4% received between 100 and 500 tourists and 17.2%
received between 501 and 1,000 guests per annum. In terms of main purpose of visit, most tourists visit the Province for meetings and conferences, ranked as number one on the list, followed by tourist attractions, adventure retail (i.e. Festivals), and sports activities. Other reasons for visiting the Limpopo Province are for hunting, school exhibitions and wildlife. Analyses of purpose of visit supports other findings that the Limpopo Province is used as a transit by tourist whose destination is the other provinces, given the limited number of days they spend for conferences and meetings as the main activity for their visits.
Impact of Provincial Tourism Policies and Strategies: Despite the provincial government’s effort to introduce policies and strategies on tourism, the majority of respondents felt that such policies, strategies and incentives are not effective. One of the key findings is that despite the provincial government’s effort to introduce policies and strategies on tourism, the majority of respondents feel that such policies are not effective. In some cases, incentives provided to boost tourism are also not known by the majority of tourism business owners and managers from accommodations and attractions. As expected, most of the key informants are familiar with the tourism strategies, and they are also aware of
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strategies at the district levels. The results reveal more knowledge about strategies among key informants, while tourism stakeholders (accommodation and attractions) have limited knowledge. This shows the level of concentration of such information among the policymakers. The most important implication of the findings related to knowledge and effectiveness of policies and incentives, in that there is a need for government to improve information flow to the relevant stakeholders in the Province. Both accommodation establishments and attractions need to take advantage of such strategies and incentives to maximise their returns and contribute positively to the provincial economy. The lack of proper infrastructure and access to information was attributed as one reason why these policies are ineffective; furthermore, the respondents expressed that strategies have not contributed to enhancing the opportunities for the rural poor and emerging contractors/service providers.
Skills: Analyses of skills looked at the type of skills required by the tourism industry, and their availability or shortage in the Limpopo tourism industry. About 52% of accommodation establishments and 70% of tourism attractions indicated that there is a shortage of relevant skills to the tourism industry in their respective districts. Some of the skills that were considered scarce included administrative training in tourism, communication skills, interpreting skills, people who understand the game industry, cultural sensitivity, customer service, advertising and marketing - among others. This provides an opportunity for policymakers and other stakeholders in the province to enhance skills capacity by providing and facilitating the provision of the necessary training to boost tourism.
Compliance of Tourism Industry with Government Regulations: About 89% of accommodation and 57% of attraction establishments are registered for tax purposes. A total of 55% of accommodations and 62% of attractions indicated that they don’t belong to any industry associations.
When it comes to grading, 48% of accommodation establishments are graded, while most of the attractions (67%) are not graded, although they see grading as important to their business. The highest star grading for most accommodation establishments is the 3-Star grade (55%), followed by the 4-Star grade (30%). Some of the main challenges they face in getting graded are the excessive requirements, especially for the small establishments, client’s expectations of certain standards to be met by establishments, and the high costs associated with keeping the standard, which make it unprofitable to operate the business. Over 50% of both accommodation and attractions respondents indicated that they comply
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with the national transformation policies of government by showing certificates of compliance. Responses by tourism owners and managers were in line with those from key informants (policy experts, etc.), where 56% of them stated that the provincial tourism industry was compliant with South Africa’s national Codes of Good Practice around Broad-Based Black Economic Empowerment and Employment Equity (BBBEE-EE).
Value Chain among Clusters: Value chain clusters are considered to be an efficient way of managing - and a marketing tool - for tourist destinations and local economies. Strengthening the relationships amongst these clusters can contribute to achieving competitive advantages through local development and setting sustainable development basis (Melisidou et al., 2014). Results show that 36% of the key informants felt that there was a strong value chain among the different tourism clusters, while 18% said more needed to be done to enhance benefits from value chain among clusters.