Destea is ecstatic by the launch of the Tourism Equity Fund by President Cyril Ramaphosa last week, saying it will go a long in promoting a transformed tourism economy that contributes to sustainable and inclusive development and competitiveness of the Free State as a destination of choice.
The fund, estimated at just over R1.2 billion, is aimed at creating an inclusive and growing tourism sector by supporting entrepreneurship and investment on the supply side of the tourism sector.
Speaking at the virtual launch of the Tourism Equity Fund (TEF), President Ramaphosa said many jobs in the tourism and associated sectors in the value chain have been shed.
He indicated the fund was created to finance commercially viable and sustainable majority Black-owned tourism enterprises with a minimum of 51% black ownership including enterprises in rural areas and townships, to help create jobs, alleviation of poverty, fight inequality and promote the growth of black-controlled tourism enterprises.
In her opening remarks, tourism minister Mmamoloko Kubayi-Ngubane said the TEF is a dedicated fund that will provide a combination of debt finance and grant funding to facilitate equity acquisition as well as new project development in the tourism sector by black entrepreneurs.
Destea (Department of Economic, Small Business Development, Tourism and Environmental Affairs) director of tourism support in the Free State, Motsehoa Mahlatsi, said they were geared to diligently play their role to promote the fund in the province to achieve its objectives.
“More importantly for us as Destea, we seek to promote a transformed tourism economy that contributes to sustainable and inclusive development and competitiveness of the Free State Province tourism destination,” noted Mahlatsi.
She told the Free State Weekly that Destea has already contacted the department of tourism to arrange for training of officials so that the department is capacitated to assist with the application process.
The officials will also be expected to provide critical information and guidance regarding the criteria and requirements of the TEF.
Mahlatsi said the department of tourism will only implement training in the new financial year (2021-2022) for Destea officials.
This would enable Destea to assist tourism enterprises in the province with TEF information and applications. Benefits will accrue to approved tourism sector players.
Mahlatsi said the Free State province as a destination is moving in the desired direction in terms of growth.
“In recent years our efforts to position the FS as a preferred destination have been slowly but surely realised. There is growth from 224.5 million domestic trips undertaken in the Free State in 2015 to 236.5 million in 2019. There has been growth in both domestic day and overnight trips,” she explained.
In terms of domestic competitiveness, the province had 10.7% share of the domestic market and has moved from the third least visited province to the five-most visited province by domestic tourists.
“We are preceded by Gauteng, KwaZulu-Natal, Western Cape and Limpopo,” indicated Mahlatsi.
She added, “In terms of our international competitiveness, the Free State destination is still the fifth most visited province by international tourists, preceded by Gauteng, Limpopo, Western Cape and Mpumalanga provinces.”
More efforts towards tourism growth and development as well as marketing were needed for the Free State to improve both its domestic and international competitiveness.
To improve the province’s competitiveness as a tourism destination, Destea is currently finalising its five-year Provincial Tourism Sector Strategy, which will among other goals, increase tourism’s contribution to the economy.
Mahlatsi noted the Free State has been devastated by the Covid-19 pandemic like the rest of the country and world.
By late March 2020, hotel occupancy which was down 50% year-on-year with the rest of the sector, declined further to effectively under five percent, mainly serving as quarantine and isolation sites such as Destea resorts, from level 5 of the Risk-Adjusted Approach and other levels.
Local hoteliers – large and small – have closed establishments, airlines ceased operations, and attractions remain shut during lockdowns.
“As such, many businesses in the Free State did not survive the pandemic. Free State enterprises like the rest of South Africa had to apply for Tourism Relief Fund and of those which applied, 134 facilities received funding of R50 000 each from the national department of tourism.
“Destea is committed to the recovery of the tourism sector and other key sectors in the province,” added Mahlatsi.
Tourism directly accounts for 2.9% of South Africa’s GDP and 8.6% indirectly, Ramaphosa said during the TEF launch. It supports about one-and-a-half million direct and indirect jobs.