by Katherine Graham

Boost for business tourism

International attention on SA's conferencing sector

SA is a preferred destination for business tourism

With business tourism expected to inject R1.6 billion in the South African economy over the next five years, it is little wonder that this is the sector to watch as far as tourism-related growth is concerned. 

“South Africa has the proven capacity and infrastructure to successfully host major international business events and meetings,” says Amanda Kotze-Nhlapo, executive manager of the newly created National Convention Bureau (NCB). 

“What differentiates us from other global business events destinations is our rich cultural heritage, warm and welcoming people, and the many authentic experiences to be had which leave an indelible impression on business and leisure travellers that visit here.”

Her optimism is backed up by hard figures, too. Over the next five years, the country has secured over 200 international conferences, which is estimated to attract 300 000 delegates – representing an economic boost of more than R1.6 billion.

Impressively, South Africa boasts a 40% return of delegates as leisure visitors, compared to the city of Melbourne, which has a 23% return. In addition, 43% of all delegates bring an accompanying person, with leisure tourists typically spending R1 000 per day.

Presenting a united front

At the Meetings Africa 2012 conference, Tourism Minister Marthinus van Schalkwyk said his department’s aim, with the help of the NCB, was to make South Africa more aggressively competitive in the business tourism market. 

“We want to grow our global market share, which will require government and the private sector to work closely together as partners to shape the future of business tourism, to grow business tourist arrivals and to fulfil the rich potential of destination South Africa as a business tourism destination,” he said.

The rationale behind the bureau, which started operating in April last year, is to act as a one-stop shop for independent information and assistance, giving advice on hosting any business tourism-related event in the country. The NCB will co-ordinate national bidding and research, as well as collaborating with national convention centres and the business tourism industry to present a united front for Destination South Africa.

Forecast for 2013

Although conditions in the local tourism industry remain difficult, business tourism seems to be staging a recovery. “The tough economic climate has hit business in the travel and tourism sector hard,” says Kagiso Mosue, spokesperson for the Tourism Business Council of South Africa (TBCSA).

“However, through our quarterly TBCSA First National Bank Tourism Business Index, during the course of 2012 we saw business performance edge closer and closer toward normal levels and even in some cases surpassing normal performance slightly.”

Her prediction is for the recovery to continue this year. “The overall outlook for 2013 is positive, although some businesses in the accommodation industry have a more subdued outlook,” Mosue says.

Lorin Bowen, general manager for the Southern African Association for the Conference Industry (SAACI), is similarly upbeat. “I believe the business events industry in South Africa is beginning to stabilise after the recent slump and, in some instances, is even on the increase again, which bodes well for the future,” she says.

Investment and job opportunities

In terms of investment opportunities, Bowen believes these can be found in the development of SMME (small, medium and micro enterprise) business operators. “There is a call for the growth and support of these businesses and we are finding that some of the bigger operators in our sector are supporting the small guys to get their feet on the ground, whether it be financial support or sharing their experience,” she says.

Mosue says travel and tourism is one of the few sectors in the economy where entry barriers for new market entrants are low. “The entire travel and tourism value chain provides opportunities for investment,” she says, “particularly with new niche markets such as marine, medical and sports tourism developing.”

Business tourism’s capacity to create jobs is well-known, so an uptick is expected to mean more employment opportunities for this sector. “Our business is very labour-intensive, so the busier we are, the more people we are likely to employ,” comments Bowen. She adds that the SAACI is in talks with several training institutes about enhancing the curricula of their hospitality courses.

Equally well-documented is the role of enterprise development in the growth of business tourism. Mosue mentions the example of the Tourism Enterprise Programme, which “works closely with industry to not only support new market entrants, but also in respect of mentorship, for instance, Southern Sun’s adopt-a-guesthouse programme”. She says the industry also has competitions such as Emerging Tourism Entrepreneur of the Year Award  run by South African Tourism, which showcases new emerging tourism products.

Although South Africa continues to be a popular destination for hosting events, meetings, conferences and exhibitions, there are signs of increasing frugality among business travellers. In a recent Business Day article, TBCSA chief executive Mmatsatsi Marobe said business tourism remains under pressure, with cost-cutting measures now making companies more reluctant to send employees on long and expensive trips. She added that conferences are becoming smaller and travellers often no longer stay overnight.

Once economic conditions improve in some of South Africa’s traditional markets, such as the United Kingdom and Germany, business tourism will be quick to follow suit, most experts agree. 

Until then, local operators will be looking to remain profitable and, where possible, increase their number of visitors. Van Schalkwyk believes there is still significant room for improvement when it comes to the number of meetings the country attracts, the spend per visitor and the length of stay.

Perhaps most encouragingly of all, employment figures within the industry remain stable. “Although many businesses have been negatively affected by the recession,” says Mosue, “there’s been a strong focus on retaining staff.”


Katherine Graham


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