The economic contribution of tourism to selected provinces of South Africa

Abstract

The main purpose of this study was to determine the economic contribution of tourism to selected provinces of South Africa. One of the reasons why this research is important is the fact that tourism is not reported as an industry in the national accounts, and this makes it very difficult to determine the economic impact of tourism. Most other sectors contain tourism related activities in their estimates and therefore tourism's economic contribution is greater than it seems at first. The underestimation of the complex nature of the tourism industry means that the contribution of tourism is not always seen as an important area of potential economic growth and development. To determine the above goal, the study is made up of two research articles. Article one is titled: 'Estimating the economic contribution of tourist spending to the nine provinces of South Africa.' The main purpose of this article was to estimate the direct and indirect contribution of tourist spending to the regional economies of the nine provinces. This was done in order to determine whether tourist spending is similar in each of the nine provinces or does the indirect effects of tourist spending lead to some provinces benefiting more from tourism than other provinces. The tourist expenditure data used in this article was taken from two reports, namely the Domestic Tourism Survey (completed during May 2000 to April 2001) and the Foreign Winter Executive Summary (completed during August and September 2001). The research for these reports was conducted on behalf of South African Tourism (SAT) and the Department of Environmental Affairs and Tourism (DEAT). Data on tourist arrivals and the economic activity of the provinces were obtained from Statistics South Africa (Stats SA). An input-output model was also used as an instrument in order to achieve the mentioned goals. Article 2 is titled: 'A Demand and Supply Analysis of the tourism industry in the North West Province'. The purpose of this article was to perform a demand and supply analysis of the tourism plant in the North West Province in order to identify possible gaps between demand and supply. This information could be used to increase tourists' contribution to the provincial and therefore national economy. In South Africa there is very little information available on the supply side of tourism in the nine provinces. Absence of information such as the number of tourism products, the number of people working within the tourism industry, the availability of beds and the variety of products, makes it especially difficult to plan tourism developments in order to stimulate growth and improve economic impact. Policy implications were also formulated that the North West Province can use as guidelines. A database of all tourism products in North West Province was compiled. A total of 646 questionnaires were personally handed out by a research team and were completed by 401 owners and/or managers of facilities. The results clearly indicated that provinces do not benefit equally from tourism and that the contribution of tourism to the GDP of South Africa is increasing steadily. Another finding was that provinces with the most developed tourism infrastructure benefit most from tourism. The final finding was that developing provinces such as North West need to place more emphasis on their tourism supply side in order to attract more tourists. The development of tourism attractions and the supply of good quality services are essential for improving the economic contribution that tourists make towards a province.