1. 1 Measuring the economic contribution of Tourism to the economy of South Africa Pali Lehohla Statistician-General Tourism Summit: Parliament 28 February 2010

2. 2 Content Outline of Presentation What is tourism Sources of information for tourism Patterns of domestic tourism Contribution of Tourism to Employment and GDP Status of non-vat registered businesses

3. 3 Content Tourism and the TSA TSA results Tourism Statistics at Statistics South Africa

4. 4 Intro to tourism Visitors Same day visitor Some might be in transit Don’t spend a night Tourist Some might be in transit Do spend a night (see next slide) Tourism: their activity Other travellers Tourism: their activity WORKERS paid in the country visited REFUGEES Others within USUAL ENVIRONMENT DIPLOMATS MIGRANTS Travellers

5. 5 What is a TSA Tourism is Difficult to Measure Hotels Restaurants 85% 45% Tourist Not a Tourist!

6. 6 Concepts and definitions Tourism Tourism includes all trips away from one’s usual environment, not just holiday/leisure trips. It also includes business, visiting friends and/or relatives, medical/health trips, and religious journeys amongst others. Trip A journey taken outside of the usual environment of the household. Usual environment The usual environment is defined as all places within a 40 kilometer radius of the place of usual residence of the respondent, AND all places that the respondent visits at least once a week (e.g., going to work), irrespective of the distance from their place of usual residence. Day trip A trip outside of the respondent’s usual environment, where they leave and return within the same day. Overnight trip A trip outside of the respondent’s usual environment where one night or more is spent away from the household.

7. 7 TSA What does the TSA do? It is a statistical instrument used to measure the size of the tourism industry’s contribution to the economy of a country according to international standards of concepts, classifications and definitions; Allow for valid comparisons with other industries and eventually from country to country and between groups of countries; Fundamental structure of a TSA is based on the general relationship existing within an economy between the demand of goods and services generated by tourism on the one hand and their supply on the other hand – it therefore brings together the demand- and supply side of the tourism industry;

8. 8 TSA Why a TSA? A TSA provides a framework for policy analysis of issues related to tourism economics, as well as for model-building, tourism growth analysis and productivity measurements; A TSA is constructed using official data and not modeling techniques; The main purposes of the TSAs are to: analyse in detail all the aspects of demand for goods and services which might be associated with tourism within the economy; observe the operational interface with the supply of such goods and services within the same economy of reference; and describe how this supply interacts with other economic activities.

9. 9 TSA Tables The 10 tables of the TSA

10. 10 Foreign and Domestic Tourists

11. 11 Tourism and Migration Travellers versus Tourists (2009) (Tourism 2009, Report 03-51-02 (2009)) Foreign travellers 18 778 556 Arrivals 10 098 306 Departures 8 680 250 Visitors 9 531 615 Non Visitors 566 691 Tourists 7 011 865 Same day visitors 2 519 750

12. 12 Patterns of Domestic Tourists

13. 13 Number of most recent person trips. Type of trip Number of person trips N (1 000) Day trips Overnight trips 5 361 9 770

14. 14 Number of overnight trips by length of stay Number of nights Number of recent overnight person trips N (1 000)Percentage (%) 1 Night 1 078 11,3 2-4 Nights 3 20233,4 5 or more Nights 5 29755,3 Subtotal 9 577100,0 Unspecified nights 192- Total 9 770-

15. 15 Province of destination Gauteng was the most visited province on day trips (24,2%) KwaZulu-Natal had the highest proportion of overnight trips (22,7%).

16. 16 Province of destination Percentage of day and overnight trips by province of destination

17. 17 Purpose of visit The main reasons for taking trips was visiting friends and family/relatives and leisure: Day trips - VFR: 29,7% and Leisure: 20,6% Overnight trips – VFR: 54,0% and Leisure: 25,0%

18. 18 Purpose of visit by kind of trip

19. 19 Main destination by purpose of visit

20. 20 Mode of transport

21. 21 Mode of of transport Main mode of transport Day tripsOvernight trips Thousand% % Bus3316,21 17912,1 Car2 67850,03 88739,8 Taxi2 05438,33 97740,7 Total5 3611009 770100 Totals include other modes of transport e.g. aircraft, trains, motorcycles and bicycles

22. 22 Destination by mode of transport

23. 23 Destination by mode of transport When trips made to Western Cape people used cars (76,3%), taxi (7,5%), aircraft (6,8%) and bus (6,8%). Travellers to Gauteng used taxis (43,4%), cars (30,8%), buses (15,7%) and trains (7,7%). Fifty five (55,1%) used taxis, cars (30,8%) and buses (12,5%) to reach the Limpopo province. The mode of transport of most of the travellers to Kwazulu-Natal was taxi (48,7%), cars (38,1%) and buses (10,1%). Forty per cent (40,1%) of trips to Eastern Cape were made by taxis, 33,5% by cars and 19,4% by buses.

24. 24 Activities undertaken whilst on trip

25. 25 Age distributions by day and overnight The age group 30 – 34 most likely to travel. 1,018 million overnight trips 606 000 day trips

26. 26 Age distributions by day and overnight trip

27. 27 TSA role players Roles and responsibilities of key role-players Working team Collect and provide data Users Construct the TSA Stats SASATSARBDHAdti Other industry players NDT SARS

28. 28 Contribution of tourism to employment and size of the economy

29. 29 Key concepts Key concepts used in the TSA

30. 30 Key Results 2005 (final) 2006 (provisional 2007 (provisional) 2008 (provisional) Inbound tourism expenditure (R million) 51 09057 98366 65569 964 Domestic tourism expenditure (R million) 52 84261 22867 60976 914 Internal tourism expenditure (R million) 103 932119 211134 264146 878 Tourism direct gross domestic product (TDGDP) (R million)44 90852 42359 78367 141 Tourism direct gross domestic product (TDGDP) (%)2,93,0 2,9 Persons directly engaged in producing goods and services purchased by tourists (nr)507 384553 712569 677599 410 Persons directly engaged in producing goods and services purchased by tourists (%)4,04,14,24,4

31. 31 Key Results: Employment 2005200620072008 Employment in the tourism industries2 137 6392 365 0842 449 1322 459 674 Persons directly engaged in producing goods and services purchased by tourists 507 384553 712569 677599 410 Total employment in SA 12 768 85913 418 80713 467 26113 712 823 % contribution of tourism4,04,14,24,4 Tourism employment, 2005 to 2008

32. 32 Concepts &Definitions Forms of Tourism Outbound Domestic Inbound Internal International National

33. 33 TSA results Tourism products2005200620072008 Accommodation for visitors16,916,416,616,9 Restaurants and similar services7,57,27,57,6 Railway passenger transport services0,2 Road passenger transport services23,223,122,122,9 Water passenger transport services0,0 Air passenger transport services9,89,59,910,2 Transport equipment rental1,81,71,61,8 Travel agencies and other reservation services3,53,43,33,0 Cultural services0,1 Sports and recreational services3,94,0 3,8 Tourism-connected products11,111,211,1 Non-specific products22,023,323,522,3 Total100,0 Internal tourism consumption expenditure by types of products, 2005 to 2008

34. 34 TSA results Comparison – Tourism vs traditional industries (Value Added)

35. 35 TSA results Comparison – Tourism vs traditional industries (Employment)

36. 36 Business in the non-vat registered environment

37. 37 Businesses which are not registered are generally excluded from the Business Frame which is used by Stats SA in the business surveys to assess the formal economy. However, non-registered businesses also contribute to the economy of the country It is for this reason that Stats SA introduces a survey of employers and the self employed (SESE) in 2001 SESE is a household based survey that measures the contribution of non registered businesses to the economy. The survey also provides information on the characteristics of individuals operating these businesses This survey is done once every 4 years Background to non registered businesses

38. 38 Number of persons running at least one business by industry Most of the non-VAT registered businesses were operating within the Trade industry -1,6 m in 2001 and 1.1 m in 2009 (Although the number had declined by 614 000 in 2009, Trade was still the highest contributor)

39. 39 200120052009 Per cent Total100,0 Inherited/family tradition4,23,54,7 Unemployed/have no alternative income source60,668,268,6 Retrenched4,74,33,8 Inadequate income from the other source12,43,84,1 I like the activity4,88,25,0 I have the skills of this business5,14,17,8 I have the equipment for this business1,20,30,1 Activity brings high income2,82,61,6 Small investment needed1,81,00,7 Unhappy with previous work1,1 1,9 Other1,32,91,7 Unemployment or not having alternative income source (more than 60% in all the three time periods under review) was indicated as the main reason why people decided to start a business The main reason for starting a business

40. 40 Proportion of those who did not need money to start a business by industry The highest proportion of business owners who did not need money to start their businesses were in Trade.

41. 41 Proportion of those who needed money to start a business by source of money Among those who needed money over 70% used their own money to start their own businesses

42. 42 Proportion of those who borrowed money to start a business by source of money The majority of persons who borrowed money to start a business, borrowed it from friends or relatives. The proportion of persons who borrowed from commercial banks increased from 4,0% in 2001 to 8,4% in 2009

43. 43 Thank You