Industry stakeholders are optimistic that the 2025 Budget Speech will align with the promising themes in President Cyril Ramaphosa's State of the Nation Address (SONA), as South Africa awaits the fiscal measures to be introduced.
Alan Campbell, sales and marketing director at ANEW Hotels & Resorts, draws attention to the paradox facing the industry.
Although the Tourism and Hospitality Industry is credited with contributing approximately 8.2% to the nation's GDP in 2023, it grapples with formidable challenges that threaten its potential.
“Tourism is not just a sector; it is a driver of social upliftment, a creator of jobs, and a source of foreign exchange earnings,” Campbell remarked.
“As we approach the budget speech, our hope is that the positive areas highlighted at SONA will come to fruition in the Minister of Finance’s address.”
Campbell underscores that while Ramaphosa has acknowledged tourism’s indispensable role in South Africa’s economic recovery, especially in generating employment for about 1.5 million people, words have yet to translate into substantial engagement or investment in the sector.
“Despite the recognition, there has been little evidence of a significant shift in support for tourism in previous budget speeches,” he lamented.
He advocates for a more focused, actionable approach to harness the sector's acknowledged potential.
“If tourism is indeed a foundation for South Africa’s economic resurgence, it necessitates not only verbal endorsements but also tangible investments, strategic planning, and a definitive mandate for organisations like SA Tourism,” Campbell added, stressing the importance of sufficient funding, infrastructure, and robust political will to carry out ambitious growth strategies.
With South Africa recently achieving its highest-ever matric pass rate, Campbell flagged the pressing need for job opportunities, particularly for the youth entering the workforce.
“Tourism offers a unique avenue for large-scale employment across all skill levels.
“However, this opportunity remains largely untapped without strategic investment. Other African nations are swiftly outpacing us in this regard, underscoring our need to boost competitiveness,” he cautioned.
While the commitment of R940 billion towards infrastructure investment by the President has been welcomed, Campbell raises concerns about the allocation focus.
“Critical areas that need tourism support have often been overlooked. Inefficient transport systems, subpar road conditions, and limited connectivity in rural regions continue to hamper the experience for tourists and operators alike, greatly affecting small businesses and community-based tourism initiatives, especially in underdeveloped areas like Mpumalanga, Limpopo, and the Northern Cape.”
He pointed out that a portion of the budget must prioritise pivotal improvements to infrastructure, such as roads, airports, and public transport systems, to unlock the inherent tourism potential in these areas rich in culture and natural beauty.
Additionally, Campbell highlights the necessity of fostering collaboration between the public and private sectors.
“While smaller-scale partnerships have demonstrated promise, progress on larger initiatives has been limited,” he noted.
The rejuvenation plans for Durban's CBD, driven by private sector involvement, exemplify the potential awaiting a more strategic approach.
“SA Tourism and government entities must actively seek collaboration with private stakeholders to create a robust tourism strategy, tapping into shared resources and expertise,” he urged.
On a global scale, tourism marketing budgets are on the rise, yet South Africa's outlay on destination marketing remains stagnant, Campbell observed.
“In 2024, competitor nations such as Kenya and Morocco surpassed us with dynamic digital marketing campaigns targeted at high-value travellers.
“It is vital that the government amplifies funding for South African Tourism to launch robust global campaigns, especially in emerging markets like China, India, and the Middle East, as well as catering to regional travel from neighbouring countries.”
Although the tourism and hospitality sectors have shown resilience through adversity, Campbell contends that resilience alone is insufficient to spice economic growth.
“The upcoming 2025 Budget must demonstrate audacious action, with financial allocations that effectively tackle systemic challenges while catalysing new opportunities.
“The right budgetary framework in 2025 could pivot South Africa’s tourism and hospitality industries toward a flourishing future,” he added.