28 September 2005

Capetown Tourism Annual General Meeting


It’s a somewhat daunting pleasure to be invited to talk about tourism to people who are at the heart of one of the world’s great tourism icons. I began to wonder what could I tell you that you don’t already know.... which is rather like being Zaa Zaa Gabor’s eighth husband on their wedding night.

The challenge is compounded by the fact that I am approaching that stage of life where the things that I might usefully impart are in that dark area of the brain that only recalls when the moment has passed.

What i do recall however – and indeed am obsessed with - is the fantastic opportunity that Africa has to capitalise on our sector of the economy. And to use it as a tool in the War on Poverty. . And I want to share with you an emerging initiative to help focus the attention of policymakers on that opportunity. And seek your support to help capitalise on it

Before I do let me just put on my WTO hat and give you a quick overview of the state of the sector as we see it.

The first half of this year we are predicting global 8% growth on top of last years 10% bounce back from the post 9/11, SARS and Tsunami doldrums. Arrivals and receipts are equally strong. The best performing markets are in Asia driven by the powerful China and India performance. Africa is holding up strongly in the 10% range, with South Africa back on track after the slower performance of the previous year. The new branding and competitive strategy as well as rationalization of visa processes are all seen as positive factors.

Even the high oil prices have not yet caused problems in tourism growth – recent research suggesting that tourism companies’ pass through to consumers is not depressing demand and that in constant dollar terms oil prices at 70$ a barrel are no more burdensome than in the shocks of the past decades..

As we look to the longer term we remain bullish.. But we are keeping a wary eye on the results of the recent hurricanes in the US and events in the Middle East on refining capacity. The air transport cost impact being particularly sensitive with security, insurance and taxation escalating almost everywhere

Finally in this tour d’horizon let me just identify a few of the dominant change agents we envisage in the years ahead.

• The dominant impact of the emerging markets - inbound and outbound - of China and India as well as the former Eastern European States
  
• The shifting demographics – with the over 50’s showing strong potential and ecotourism the sweetheart sector.
  
• The market impacts of new security costs and the low fare airline model
  
• The dominance of the internet on distribution
  
• And the importance of quality.

I mention these items, not to go into any depth, but simply to draw attention to issues that will provide both challenge and opportunity to this audience. Competition will intensify around destination brand and satisfaction linkages.

Let me now turn to my general remarks entitled “Globalization, Tourism and Ubuntu”

I have only recently grasped the concept of Ubuntu – pushed by a young man from Capetown, Johan du Toit, to consider values like community, patience and conscience – which seem the antithesis of the roller coaster, survival of the fittest world of globalization. And to realize that these Ubuntu values reflect the moderation needed to the globalization model for a tourism framework that could be a serious factor in achievement of the continent’s Millennium Development Goals.

A model, which blends the dynamism and innovation of the market with pro - poor innovation, development support and safety nets to protect the weakest. Where the pace of change may be more modest, but the results are more just and more lasting.

At the macro level we have seen this moderation build since the start of the new millennium. The poverty summits of Doha – on fairer trade, of Johannesburg on sustainability: of Monterrey on debt and of New York on the Millennium Development Goals. We have seen it with the Commission for Africa: with the G8:and live 8: with the UN Assembly and the World Bank this very month and hopefully at the Hong Kong Trade Summit later this year.

A meaningful attack on debt elimination: doubling of aid and most importantly pro development fair trade with asymmetrical results favoring the poorest. The poorest globally but most specifically here in sub-Saharan Africa - where the need is greatest. I say that Ubuntu has come to geopolitics. .And it’s a two way street because the governance agenda – which is a valid global priority has now become part of the AU/NEPAD requirements.

The challenge is how to bring it to Tourism.

So that our industry that is already the largest foreign exchange earner in 46 of the 49 poorest countries in the world can truly provide a lift to Africa’s development agenda, creating jobs, empowering women and lifting living standards. So that the International and Regional Financing mechanism’s can truly give it the same status as other priority sectors. So that the framework for air services, the lifeblood of tourism, can be open and non-restrictive making it possible to fly easily around the continent rather than via Europe. And modern visa programmes to encourage not discourage travel

So that governments treat it as an export with all of the incentives and facilitation that implies, rather than simply a cash cow to raise taxes. So that it’s automatically installed in school curricula and vocational training to encourage young people to seek careers in the industry to provide the quality service needed to be globally competitive.

Much has already been done in this respect in certain States. None moreso than here in South Africa, where pro poor tourism and responsible, community based tourism had its origins and where tourism has been integrated into the wider business priorities. In Zambia – where President Mwanesa has made it a key component of his Business Advisory Council. In Ethiopia – where Prime Minister Meles has introduced an Ethiopian Tourism Paradigm specifically designed to place this sector at the heart of his development agenda. And in Nigeria where President Obasanju now does promotional slots on CNN.

And there has been real progress at the multilateral level, where SADEC and other regional bodies have in place a slate of Tourism projects and cross border spatial initiatives. In the AU/NEPAD where Heads of government have endorsed a work program developed in collaboration with WTO and an air transport initiative to move the famous Yamoussoukro freedoms from theory into practice.

I am proud to say that WTO has been very active in this respect. With a special sub Saharan African priority work program. With our ST-EP initiative linking directly Sustainable Tourism with Eliminating Poverty - bringing new funds and focus to both areas. With an innovative initiative to support new air services to tourism destinations now part of the International aviation practices. The fact that WTO has become the newest UN Agency is also an important factor in linking Tourism to the Millennium Development Goals. A few days ago in New York WTO gathered several Heads of UN, Private Sector and Civil Society Organizations as well as a number of African Tourism Ministers to provide input to the General Assembly’s Millennium Development Review.

All of this – which is only a small portion of the work in progress across the industry and government spectrum, is good news. BUT it does not go far enough fast enough. It is piecemeal not holistic. And if the truth be known in most African Governments and Institutions the true potential of Tourism as a development tool is neither understood nor prioritized. (Any more than it is in developed markets)

And of course there are so many priorities for Africa – most of them so significant – like maternal health, HIV/Aids, Food Security and the whole Governance Agenda.- for example, getting people to see that Tourism (which just seems like the flippant leisure stuff) is a potential silver bullet is virtually impossible.

And we don’t really help ourselves, complicating our messages with all the minutiae, which is vital to us but immaterial to the bigger picture players. Let me be clear, the issues are complex but the messages have to be simple to get through and reverberated over and over again. Fortunately the Internet let’s you do both.

I recall when I was setting up the WTTC we came up with rwo simple ideas following our basic research. The World’s largest industry and “10% of the economy” It used to drive people mad when we kept repeating it – and many frankly disputed it with all the venom that only academics and bureaucrats can muster. But 10 years later the message was out there.

And that leads me to the big idea I want to share with you today – as President of the International Council of Tourism Partners – or to use our ‘wired” name tourismpartners.org a nonprofit web based community for social conscience in the sector. Whose primary role is to support the UN Millennium Development Goals and the WTO Global Code for Ethical Tourism. The former being the underlying global imperative - with eradicating extreme poverty at the core. The latter, the framework for the kind of positively contributing tourism that responsible people aspire to. Sustainable, non exploitive, community linked and sharing equitably benefits between suppliers and destinations.

The idea “To Help Africa sustainably triple its tourism exports by 2015 “

The idea is simple. Let me dissect it for you

First it says “To Help Africa”. Clearly the owner of such an objective is Africa itself - our role is to create the proposition, the understanding and the support around the world. I have sounded it out informally with a number of African Tourism Leaders and I am more than encouraged by their reactions.

Then it puts sustainably up front – and obviously that means triple bottom line – social, environmental and economic. Equally important is the fact that it is up front as a precondition for the proposed growth not an afterthought. And it means that issues such as infrastructure, technology and capacity are key components.

Next it talks about tripling tourism export income.

• The goal is to promote tourism – business and leisure travel - as an export. In the heart of the Services Sector - where economic growth is forecast. And one with special value for Africa, because all countries are producers: all have comparative advantage with nature, heritage and tradition to the fore. And it’s the very kind of tourism product that savvy travelers are seeking.
  
• The point of focusing on export income is important, because that’s a measurable economic indicator and one which bankers and economist well recognize. At a base level, simple numbers of visitors and receipts give a good starting indicator and that material is readily available from WTO. But there are many other indicators that could be applied.
  
• Then comes the nub idea of tripling. At the moment the arrival and expenditure forecasts show a doubling. But simply achieving the forecast does not set any great expectation. It condemns Africa to the same small share of the total tourism cake as it currently holds. By tripling it means more direct tourism revenue, but it also amplifies all of the ancillary value chain benefits and increases the contribution to the MDGs. Moreover because Africa’s base is so low it’s a more feasible target. And the international focus on the continent at a geopolitical level as well as the increasing activity of institutions and of the media should heighten the interest in visiting.
  
• Finally in this context is the 2015 date - locking in to the Millennium targets and all of the intensifying focus that will develop over the next decade. Tourism must be a visible component.
  

As I said earlier, our role as Tourismpartners.org, is to frame, float and follow. We will maintain an interactive website with a focused knowledge centre which annually reports on the progress. And which links to others who share the goal and its promotion.

I hope that will include Capetown Tourism and its stakeholders.

In concluding can I remind you of what President Mbeki said a few days ago in New York at the General Assembly. The world’s approach to commit and deploy the necessary resources for realization of the MDG’s has been halfhearted, timid and tepid. And he challenged the Assembly to ”drape ourselves in the clothes of heroes and heroines ...and act to ensure the faithful implementation of the Millennium Declaration.”

I would like you to leave you with that challenge and the belief that the tools to help achieve it for this continent are in the vibrant tourism sector.

Together we can make them deliver. And I think that is the spirit of Ubuntu applied to the globalizing, liberalizing realities around us.