Chapter 2: The South African Tourism Industry - Key Characteristics

Chapter 2: The South African Tourism Industry - Key Characteristics

2.1.1 World

The position of the tourism industry in the world economy continues to be an exceptionally important and strong one, and is perhaps underestimated in terms of its contribution to the world GDP. International tourism arrivals are growing rapidly at 8% to 9% per year and reached 689 million in 2001 with the growth rate at just over 7% (World Tourism Organisation [WTO], 2001). Tourism accounted for total market receipts of some $444 billion in 1999 and $476 billion in 2000, an increase of 4.5% over the previous year. The WTO reports that in 2000 and 2001 tourism enjoyed exceptional years and that in 2000 international tourism grew by 45 million arrivals, reaching previously unheard of levels. In 2001, international arrivals declined by 0.6% though, the first year of negative growth for international tourism since 1982. However, the results for 2001 would have been in line with the trend observed over the past decrease had it not been for the magnitude of the increase in tourist arrivals in 2000 which was much larger than those of previous years. Initial reports regarding 2002, however, indicate substantial recovery in the tourism industry. The largest market share of the worldwide industry goes once again to Europe (57.7%), followed by the Americas (17,4%). In terms of tourism arrivals, Europe and the Americas account for 75.1% of the global industry (WTO, 2002). As an employer, the industry supported some 198 million jobs in 2001 - one in every nine jobs worldwide. Africa as a tourism region conforms to the world average as a tourism employer with one in nine employees engaged in tourism, approximately 13.9 million employees ( WTO 2001). According to the WTO (1999), the major world source markets are Germany, the USA, the UK, and the Netherlands, while the countries showing the greatest number of tourism arrivals are France, the USA, Spain, Italy and China, the UK having moved to 6th place in 1999 and remains there. South Africa was ranked in 54th position but by 2000 had moved up to 35th. France, the world’s leading destination, received 75.5 million arrivals, compared to South Africa’s 5,8 million in 2001. The WTO predicts that the international tourism market will grow at an average rate of 4.1% per annum during the first two decades of the new millenium (WTO, 2001). The most recent information available from the WTO confirms that tourism recovery is underway and recovery is most visible in the regions of the Pacific, Europe and Africa (WTO website, May 2003).

2.1.2 Africa

Africa as a whole is not an exceptional performer in the tourism industry in world terms, although parts of the continent do exhibit growth above the world average. In general terms, tourism in Africa is projected to grow at around the 4-5% level, but the WTO predicts a growth rate in excess of 5% per annum into the new century. This exceeds the predicted world average growth rate of approximately 4.1% per annum during the first decade of the new century (WTO, 2001). The WTO in fact reports that the Africa region showed a growth rate of 6.6% in arrivals – nearly twice the world average (WTO, 2001). In volume, the African continent attracted some 23,2 million visitors in 1997, an increase of 1,7 million from the previous year, and this figure was up to 24,9 million by 1998. This increased further to 26,9 million in 1999, to 27.6 million by 2000 and to 28.4 million by 2001. Southern Africa’s share of total arrivals in Africa increased from 13,5% in 1990 to 29,4% by 1995, up to 30,4% in 1999, 36% in 2000 and to 37.3% in 2001. There are a number of factors which will influence, either positively or negatively, the continent’s tourism activity in the foreseeable future. On the positive side, the global economic recovery has contributed to growth in the tourism industry in a number of African countries. This factor is also closely connected to the scale and variety of tourism development in major tourist destinations in the region. “Western” visitors continue to have a growing interest in the peoples and cultures of developing countries, thus increasing tourism to many parts of Africa. This sector consists largely of those with the greatest ability in terms of personal discretional/disposable income and leisure time to engage in such travel. The number of visitors with the financial ability and interest to travel is also increasing. Ethnic ties between people of the region and between Africa and Europe are increasing in importance, further promoting tourism growth. Expansion in airline services to important source markets and a continuation of the impact of computer technology and communications also have positive benefits for the tourism industry. On the negative side, fears for personal safety, health and security continue to play a strong role in reducing travel to Africa. However, the events of 11 September 2001 in the Northern Hemisphere have led to a noticeable change in travel patterns. A significant number of tourists who would usually have travelled east-west, have instead chosen to travel north-south, perceiving South Africa to be a safe tourist destination. It remains to be seen to what extent this factor continues to influence travel patterns and tourist behaviour, but in the meantime, South and southern Africa are benefitting. The Middle East war has also had a negative on tourism worldwide but conversely has had a positive effect on tourism for South and southern Africa. South Africa, unlike other northern hemisphere destination, is seen as a safe destination by comparison. The effects of severe acute respiratory syndrome (SARS) almost brought the tourism and certainly the air travel industry to a halt for the eastern countries. Starting in China this highly contagious and deadly disease led to the severe decline of the airline travel industry of the orient but by mid 2003 travel was again on the increase albeit tentatively. Insufficient funding for all the infrastructure and tourist facilities required for the full development of the industry has been the cause of stunted development in most parts of Africa. Education, training and skills development programmes have not been implemented to their fullest extent. High tourist price inflation relative to other destinations, and conflicts between tourism developers and local communities in respect of projects which are not subject to sustainable environmental planning principles, have also negatively affected the industry in the Africa region. There remains fairly strong polarization of international tourism in the region, towards destinations in the north and south of the continent.

2.1.3 South Africa

Many of the factors noted above apply to the South African situation as much as to the wider African or global situation. Southern Africa is the fastest growing sub- region in Africa, and the South African tourism industry experienced an average annual growth rate of 8,8% between 1980 to 1992, and a growth rate of 10,2% between 1996 and 1997. During 1994 the country received 5,4 million international visitors with the rest of Africa generating of the bulk of those visitors (72%). Europe accounted for about 16%. South Africa’s major source market countries, after Africa, are the UK, Germany, USA, Netherlands, France, Australia, and Switzerland. In 1997 the country received over 5,7 million foreign visitors, and the total value of the market was R53,2 billion. By 1999 this had increased to 6,3 million. The growth in overseas visitor (i.e. visitors from outside the African continent) numbers was 17,7%. There were some slow years but 2002 saw the arrival of 6,43 million foreign visitors to the country, and 11,1% increase over the previous year. This included a 20/1% increase in oveseas arrivals. Many countries experienced a time of ‘stagnation’ in the industry and South Africa’s tourism growth only resumed with the easing of political sanctions at the end of the 1990s. However, it is estimated that by 2010, Africa will be hosting some 46 million arrivals with Southern Africa receiving almost one third of that total (WTO, 1997). Bearing in mind the fact that three quarters of these arrivals are concentrated in South Africa, the possibilities for the development of this industry are enormous. Further, South Africa has immense potential for increasing its African visitor sector due to the potential for increasing visitor numbers from neighbouring countries. There is also potential for increasing its domestic market although due to the smaller size of this potential market, the opportunity is obviously more restricted by nature. With increases in both leisure time and disposable income, growing numbers of new domestic tourists are entering the tourism arena.

2.1.4 International Market

Visitors to South Africa spent an average of 16,2 nights in the country in 1999, compared with 16,7 nights in 1997. By 2001 the length of stay had increased to 17,2 nights. In SATOUR’s survey of 1999, holiday and visiting friends and relatives (VFR) was stated as the purpose of visit by 65% of visitors to South Africa. Business travel accounted for a further 28%. Almost two thirds (61%) of foreign tourists stayed at least one night in a hotel during their stay, while 37% also stayed for some time with friends and relatives. In the KZNTA survey of 2001, holidaying accounted for the main reason 38% of foreign arrivals which VFR travel accounted for 21% and business 29%. The average spend per day by foreign visitors was R752 in the 1998 summer survey, whereas the comparable figure in 1996 was R537 per day. This had increased to R947 by 1999. The average total expenditure of foreign visitors was R20 072, of which 41% was paid in South Africa. The 1996 summer figures were R16 100 and 34%. By 2001 daily spend was in the region of R756 and by 2002 it was over R1000. In so far as the motivation for travel and tourism to, and within, the region are concerned, the main reasons for international arrivals to South Africa are wildlife and nature, beaches, safaris, visits to historic sites and museums and African culture. Adventure activities are becoming more popular. The WTO (1994) reports that there remains considerable growth potential in the European- derived beach resort tourist market segment and there are considerable opportunities for Africa, especially South Africa, to realise more of its potential in this market. Nevertheless, evidence exists that tourist demand is moving towards holidays which increasingly involve active pursuits and exposure to local society and manifestations of its culture. These trends must be kept in the forefront when tourism development possibilities for KwaZulu-Natal are envisioned. The South African tourism market in 1993 consisted of 90% domestic movement and 10% international tourism. By 2000 the picture had changed substantially with foreign tourism accounting for over a third of all tourism in the country. Furthermore, with a population growth rate in the country of 2,2% annually (SSA, 2001), increasing pressure on tourism facilities has created a growing demand for further facilities in the tourism industry for both these sectors. Estimates from both SATOUR and other sources are that during 1996, tourism’s contribution to the GDP was in the region of 4-5% - a fairly low figure when compared to the world figure of 10,9%. It is also estimated that an increase of 500 000 jobs are directly and indirectly created by tourism and that tourism is the fourth largest earner of foreign exchange in the country. The implications of these findings are that South Africa’s tourism industry has a very real potential to grow, to increase its contribution to the national income threefold, and double its foreign exchange earnings by the turn of the century (SATOUR targets). This fact was borne out by the fact that in 1998 tourism's contribution to the South African GDP had increased to 7,7%, and the industry was responsible for the employment of some 735 000 people. However, by 2000, tourism was contributing only about 5% to the national GDP and employment in the industry had decreased to about 574 000. If tourism could contribute 10% to the GDP of the country, as is the case in world tourism, and in the USA, but substantially less than in the UK or other European countries (e.g. Spain 29%), it would generate some R40 billion per year and create over 2 million jobs. The contribution to GDP by 2000 had almost reached 8% for South Africa as a whole.

2.1.5 KwaZulu-Natal

KwaZulu-Natal played host to over one third of the overseas and African air arrival visitors in 2002. This amounted to approximately 1 000 000 visitors. KwaZulu- Natal’s source markets for foreign tourists do not differ from those of the country as a whole. The UK, Germany, and the USA all feature highly, followed by France and the Netherlands. The foreign tourists who travelled to KwaZulu-Natal spent an average of almost 12 nights in the province but the mode, or most frequent length of stay was 3 nights (KwaZulu- Natal Tourism Authority, 2000). The value of this sector of the market is estimated to be in order of R9 billion. In terms of purpose of visit, the foreign tourist market in KwaZulu-Natal displays a similar profile to that detailed for South Africa in the preceding section with the exception that holiday assumes a greater importance – 64%, with the inclusion of VFR visitors - and business a lesser importance – 17%.

2.2 Domestic Travel

2.2.1 KwaZulu-Natal

The amount spent by domestic tourists had increased to tie in closely with that of their international counterparts for the same period, but the number of domestic tourists, and thus the gross receipts, are approximately ten times those of international tourists (KZNTA, 2002). KwaZulu-Natal’s domestic holiday market (2002) is based on more than one third of the 24 million leisure trips taken annually by South Africans and 26% of all “pure” holiday trips. The value of the domestic tourism market for the Province is estimated (DSI) to be in the region of R9 billion for 2002. The domestic business market in KwaZulu- Natal accounts for 17% of all trips in KwaZulu-Natal (KZNTA, 2002). The Durban domestic tourism market accounts for almost sixty percent of all trips to KwaZulu-Natal, with an estimated value in excess of R1,9 billion (KZNTA, 2000). The most important source market for domestic tourists to KwaZulu-Natal is Gauteng, followed by the province itself. Domestic tourists enjoy shorter stays than do international tourists, largely due to the travel distance, and thus the cost, involved in international movements, with the result that overseas travellers then often spend two weeks or more at their destination. Whereas foreign visitors spend around 17 nights in the country, local tourists’ holidays show a tendency to be restricted to periods of approximately one week. In KwaZulu-Natal, the holiday patterns indicate that of people holidaying in the Drakensberg areas, 59% stay for between 4 and 7 nights and a further 31% stay for 3 nights or less. Visitors holidaying in the Natal Midlands stay for even shorter periods, with 34% staying for up to 2 nights and 25% staying for 4 to 7 nights. On average, domestic visitors spent 6,7 nights in the Midlands, 5 nights in the Drakensberg or 6 nights in Zululand. In KwaZulu-Natal, 47% of holiday trips were for the purpose of visiting friends and relatives and a further 30% were for holiday. Also, 57% of domestic holidaymakers in the province stayed with friends or family, 5% stayed in hotels and less than 1% stayed in game or country lodges. Travel to destinations was mainly by private cars (49%) and minibus taxis (9%). Domestic holiday makers travelled in an average group size of 5 adults, however, this was strongly influenced by several very large groups although the most frequent group size for KwaZulu-Natal was 2 adults. The average number of children in the holiday group was 1,2 although just over 70% of all holiday groups contained no children.

2.3 National Tourism Policy
Based on the government white paper (1996), the national government has several roles to play in the development and promotion of the tourism industry. These are: „h Facilitation and implementation „h Co-ordination „h Planning and policy making „h Regulation and monitoring, and „h Development promotion Any investor in the South African tourism industry would be advised to take note of these points. At a provincial level, provincial government will take on similar functions to those at the national level although there are three major thrusts which will be concentrated under the control of the provincial authorities. First, the focus is much more on the implementation and application of national principles, objectives and policy guidelines appropriate to local conditions. Second, the provinces will play an important role in facilitating and developing the local tourism product at the provincial level. Third, the responsibility for marketing and promoting tourism destinations will fall to each provincial authority. The domestic/international emphasis is not as yet determined. At a local level, similar functions exist but there is a greater emphasis on specific aspects of the local tourism product.

2.3.1 South African National Tourism Organisation

The South African Tourism Organisation, SATOUR has undergone major transformation and is now referred to as SA Tourism. SA Tourism is a statutory parastatal body responsible for the marketing and promotion of tourism in the country. It also has offices outside the country. SA Tourism functions are: „h International marketing and promotion „h Research, market intelligence and information management „h Industry standards setting „h Product development, and „h Human resource development Provincially, SA Tourism is being replaced by a number of different provincial organisations, or interim tourism bodies, or such organizations are taking on a number of responsibilities which previously fell under SATOUR, eg the registration of tour guides.

2.4 KwaZulu-Natal Tourism Authority
The provincial government has a critically important role to play in the development and promotion of the tourism industry in the province. Both provincial and private tourism bodies are currently undergoing transformation. Provincial tourism organisations are specifically provided for in the Constitution. The KwaZulu-Natal Tourism Authority has been responsible for producing the tourism development strategy for the province under the auspices of the KwaZulu-Natal provincial Ministry of Economic Development and Tourism. The public sector has a critical role to play in the development of tourism, but the private sector also provides significant impetus to the industry. The private sector bears both the risks of investment as well as a large part of the responsibility for successful development and marketing. Specific functions of the private sector include: „h Industry investment; „h Efficient and profitable operation of tourism plant; „h Advertising and promotion of individual tourism services; „h Capacity building; „h Development and promotion of socially and environmentally responsible tourism; and „h Community participation in tourism development. Other bodies involved in the development of the industry in KwaZulu-Natal include, for example, Durban Africa which has as its specific task the marketing and promotion of the Durban Metropolitan Area (DMA), now known as the Ethekwini Municipality. There is a loose agreement between the two bodies and the KZNTA undertakes some tourism research projects for as well as together with Durban Africa.

2.5 Tourism Industry Sectors
2.5.1 Accommodation

The accommodation sector is perhaps the most important sector of the tourism industry, and one which contributes significantly to the GDP. The average South African hotel occupancy rate for 2002 was 58,8% and brought in a total revenue of R6,64 bn, an increase of 3,99% over the corresponding period of 2001. Average hotel occupancies in the Durban and Umhlanga area for 2002 were significantly higher than the national average, 74%, and also for the province as a whole, 60,8%. In March 2002, KwaZulu-Natal supplied some 211 hotels, 185 guest houses, 586 bed and breakfast establishments and 149 caravan and camping sites to the accommodation sector of the country.

2.5.2 Transport

The transport sector is the principal infrastructural backbone of the tourism industry. South Africa has its own national carrier - South African Airways - which carried 8,8 million passengers during the 1998 financial year, producing 11,1 million revenue passenger kilometres and R363 million in operating profit. The service is complemented by over 80 other international airlines flying into the country. Durban’s international airport is currently situated 15 kilometres south of the city, but is planned to relocate to a new site at La Mercy, 20 km north of Durban, early this century. Internally, the country has 375 licensed airfields, including 74 private aerodromes and 180 approved heliports. Surface transportation is provided by car hire companies, bus and coach lines, minibus taxis, and passenger train services. There are 60 car hire companies throughout the country, 25 coach charter firms and 460 tour operators. The Association of South African Travel Agents (ASATA) has 440 retail travel agent members and the International Airline Transport Association (IATA) has 820 registered travel agent members. Some 27% of foreign tourists to SA (over 300 000 pa) participate in organised tours. Spoornet is the South African national train service company and operates an extensive mainline service throughout the country. However, the service provided is slow, particularly in comparison with air travel, and trips are usually substantially longer than coach travel, too. Mainline passenger numbers have decreased from some 4 million in 1980 to about 2 million in 1993 due mainly to competition from inter-city coaches and reduced airfares. There has, however, been an increase in train passengers since 1993 with present users numbering in the region of 6 million, most of whom are black urban commuters. Most of the passengers are holidaymakers or people visiting friends and relatives. Few overseas tourists use the local train services but many use special luxury theme trains such as the Blue Train which runs between Cape Town and Pretoria. The train is presently running at 70-75% occupancy despite the expensive fares which range from R2 500-R8 500 per person, one way. Rovos Rail is the other specialist train operator running luxury train services on four main routes. It has an average occupancy of 60-70% with 80% of its passengers from overseas. The trains are a combination of steam, electric and diesel. In KwaZulu-Natal, the steam railway trips, such as those run by the Umgeni Steam Railways, are proving increasing popular with South Africa being one of the few countries in the world still operating steam trains. A number of other short train tours exist, and new overnight or long distance tours from Durban through Zululand are being planned as well as a number in the East Griqualand area of southern KZN. In terms of the domestic market, the transport sector earned R4 545 million during 1995. The business market used mainly cars (63%) and planes (23%) as their major means of transport. However, on the whole, the major means of transport for the domestic travel and holiday market is still the car or minibus taxi. Air or train travel remain peripheral in the domestic market. Nevertheless, Durban International Airport presently contends with some 1,3 million passengers annually (Acsa, 2000).

2.6 Hotel and Non-Hotel Accommodation

As mentioned earlier, visitors tend to stay with friends and family wherever possible (54%), in hotels (13%) and in a variety of other accommodation types. However, there is an indication that even fewer foreign tourists are staying with friends or relatives (20,8% in 2001, as compared with 28% in 2000), probably due to the increasing proportion of holidaymakers and business persons (KZNTA, 2001). Stays in game lodges account for a larger percentage of the accommodation used by foreign visitors in 2001 – 21,7% (18% in 2000) (KZNTA, 2001). The relatively new hostel/backpacking sector of the accommodation market is presently undergoing significant growth and already accounts for some 5% of the accommodation market. There are 8 495 tourist accommodation establishments throughout South Africa with some 108 027 beds. In KwaZulu-Natal bed and breakfast facilities are in the majority accounting for 30% of the total, followed by self catering establishments (27%), hotels (11%), lodges and bush camps (10%), guest houses (9,5%), caravan and camp sites (7,6%) and the newly emerging backpacker hostel accommodation (3%). These provided a total of 1 952 accommodation establishments in the province (KZNTA, 2002).

2.6.1 Hotel Accommodation

Hotel accommodation falls into two broad categories - graded and ungraded. Hotels used to be graded into five divisions based on the SATOUR star grading system, from one to five stars, with five stars being the most luxurious. That system became largely non-functional in about 1993. However, a new star grading system will be introduced during 2001. In Durban the occupancy rates for hotels for 2002 were 74%, as compared with the average occupancy for the whole of KwaZulu-Natal for 2002 which was 59% (SSA, 2003). Achieved room rates in the Durban area for 1997 were R214. The accommodation market can be broken down into its individual sectors as follows:
- Resorts 22%
- Holiday Flats 23%
- Hotels 26%
- Guest Houses 9%
- Other 20%

Accommodation was the main expense of international tourists to the province, accounting for almost 23% of local expenses (KZNTA 2001). Business visitors, who pre-pay less of their expenditure, pay more for accommodation which accounts for approximately 40% of their total expenditure. Tourists who stay with friends and relatives (28% of the international market and 40% of the domestic market) constitute the second largest group of visitors after those coming to the country purely on holiday, and spend the least on accommodation. An average international visitor spent R947 per day on a visit to South Africa in 1998 (KZNTA, 2000). During 2000 foreign visitors to KwaZulu-Natal spent an average of R5 940 per trip. These visitors spent an average of R1 916 each on accommodation alone. By 2001, foreign visitors were spending some R 5879 on their trip in KZN, with R1856 of that on accommodation. Business visitors spent R7991 while on the province, R2346 of that on accommodation. KwaZulu-Natal captures approximately one third of the air arrivals tourism market, or some 616 290 people (2002), who stayed for an average of 8 nights. If all foreign visitors are included, KZN received some 1.9 million visitors in 2002 with an average daily per person spend or R1300. . The value of this market is estimated to be over R7,5 billion (KZNTA, 2002). Domestic tourists in South Africa spend an average of R400 on accommodation per trip (KZNTA, 2002) out of an average of R1492 for total trip spend.

2.6.2 Non-Standard Hotal Accommodation

Non-standard hotel accommodation includes luxury country house hotels, a relative newcomer to the accommodation scene in South Africa. The luxury country house hotel market has gained significantly in popularity and there has been an increase from between 80-100 establishments in 1993- 94 to around 131 by 2001 (Portfolio Exclusive Getaways, 2001/2002). Some 76% of their trade is with holiday visitors and the remaining 24% with business travellers. Over half of their clientele are from the international market. Average room occupancies for luxury country house hotels were in the region of 52% for 1995, an increase of 4% on the previous year. Accommodation provides for 66% of their revenue with food and liquor making up a further 31%. The average room rate is R274, with the average achieved room rate of R252 for 1995. By 2000 the room rates had increased to an average of R1 350 for these exclusive luxury venues although prices varies considerably between venues, by season and according to numbers of people.

2.6.3 Timeshare

In South Africa there are approximately 170 timeshare resorts and some 5% of the world’s 3,3 million timeshare owners. Between 6 000 and 7 000 weeks remain unsold, a small proportion in relation to the 200 000 weeks sold to date. The number of exchanges has increased by 20% in 1995 to reach 110 000 & 160 000 in 1997, a 9% increase over 1996. This sector is currently in an expansion phase.

2.6.4 Guest Lodges

Guest lodges are also a popular sector of the accommodation market hosting an average of 31% of the foreign market. KwaZulu-Natal now offers 185 guest houses. A guest house, by definition, offers facilities similar to those of a bed and breakfast but has more than four rooms available.

2.6.5 Bed and Breakfast

The bed and breakfast sector is a relative newcomer to the South African accommodation market, having only come into serious existence in the mid 1980s. This sector has experienced unprecedented growth and consists presently of over 8 000 establishments with more than 4 000 rooms. Some 5860 of these were in KwaZulu-Natal by 2002.

2.6.6 Conference, Convention and Exhibition Sector

The conference, convention and exhibition sector is currently undergoing rapid growth. Durban’s International Convention Centre, the largest in the southern hemisphere, began operating during 1997. This is presently being enlarged. Most hotels and many non-hotel accommodation venues offer conference facilities of some sort. By the end of 2002, KwaZulu-Natal alone offered 234 conference venues.

2.6.7 Parks Boards

The two most important conservation agencies in South Africa are the South African National Parks Board and Ezemvelo KZN Wildlife. Occupancy rates at National Parks Board facilities were in the region of 62% for 1995 with a total of 1,2 million visitors. There are a further 300 private game lodges throughout South Africa. Negotiations are presently taking place for the development of three cross-border parks: one including parts of South Africa, Zimbabwe and Botswana; and a second between Lesotho and South Africa, the Maloti-Drakensberg Transfrontier Park, which is likely to have a positive impact on related tourism opportunities in KwaZulu-Natal and the third one is being negotiated between Mozambique and Swaziland, the Greater Limpopo Transfrontier Park. The Ukhahlamba Drakensberg Park was awarded World Heritage Site status in 2000, having been accepted on the basis of all four categories of criteria. World Heritage Site status was also conferred on the Greater St Lucia Wetland Park in 1999, giving the province of KZN two World Heritage Sites.

2.7 Food and Beverage Sector

After accommodation, the food and beverage sector provides a substantial contribution to the income of the tourism industry as a whole. Worldwide, the catering industry will be worth $1,2 trillion by the year 2000. In 1994 the total revenue from catering in South Africa was R936 million with over 14 700 people employed. South Africa has some 6 600 restaurants and fast food outlets although the growth in the numbers of outlets is currently exceeding the growth in demand.

2.8 Casinos, Gambling and Gaming

The gaming sector is a relative new-comer to the industry in South Africa, due to previously conservative legislation restricting the operation of casinos to former ‘homeland’ areas. However, with substantial changes in legislation regarding gaming since 1994, the operation of legal casinos has become an accepted part of the tourism industry. Licenses of different levels have been, and are being, granted within each province. The KwaZulu-Natal Gaming Board has been established to orchestrate the granting of casino licenses for KwaZulu-Natal, and casino license submissions were called for early in 1998. National legislation presently allows for 5 licenses in the ‘A’ or major category for the province of KwaZulu- Natal. Licenses were granted for casinos at Midmar Dam, Richards Bay and Newcastle. However, there were some problems in the implementations of the regulations, and negotiations have only recently been completed for the casino proposals for the Pietermaritzburg area. The R204 million Golden Horse Casino opened in 2001. In the Durban area the temporary Sugarmill Casino has been completed and is in operation at Mt Edgecombe. The Suncoast Casino on the Village Green site near the centre of Durban, opened in late 2002. Meanwhile, the permanent Sibaya Casino is under construction near Umdloti, north of the prestigious Zimbali resort and plans to open within 18 months to replace the temporary Sugarmill Casino.

2.9 Sports Tourism

Since the re-entry into the world of international sports, South Africa has hosted a variety of major sporting events, as well as taken part in such events at a wide range of international destinations. The Kingsmead Cricket Grounds in Durban and the Kings Park Rugby Stadium, recently renamed the Absa Stadium, are well known and well used venues for provincial, national and international events. The Durban Beachfront also hosts the Ocean Action Festival during Easter and the Gunston 500 International surfing competition later in the year. These two events also underwent name changes during 2000, the first to Beach Africa and the second to the Mr Price Surfing Classic. The province is also host to five of the country’s premier endurance events, the Pietermaritzburg-Durban “Dusi” canoe marathon, the Comrades ultramarathon road race, the Mont- aux-Sources 50km Mountain Challenge, the Giants Challenge 80km mountain bike race and the Midmar Mile (swimming). Pietermaritzburg is home to the Scottsville Race Course. Durban offers two horse racing tracks, Clairwood Park and Greyville, home of the July Handicap - South Africa’s premier horse race.

2.10 Ecotourism

The term ecotourism is defined in the government White Paper on The Development and Promotion of Tourism in South Africa as “environmentally and socially responsible travel to natural or near natural areas that promotes conservation, has low visitor impact and provides for beneficially active socio-economic involvement of local people” (1996). A popular and rapidly growing sector of the tourism market, ecotourism is of enormous significance throughout South Africa and holds a prominent position in KwaZulu-Natal. According to a SATOUR report, some entrepreneurs and conservationists believe that ecotourism “creates economic growth without smokestacks... it can turn grave robbers into tours guides, guerrillas into game rangers”. While this view may well be somewhat of an exaggeration, ecotourism is a form of sustainable economic growth compatible with the aims of the Reconstruction and Development Project. Its importance is indicated in that between 70-90% of foreign travellers say they came to South Africa to experience its combination of landscape, climate and wildlife. More recently, the Industrial Development Corporation (IDC) produced a brochure and web site material outlining their ecotourism scheme through which they provide financing "for the development of new projects, as well as the expansion and improvement of existing facilities both in conservation areas under the control of the conservation authorities, and in private game parks or reserves of substantial size and significance" (IDC 2000). Further information on funding from this source is to be found in Chapter 3 and also on the IDC website ( The KZN Wildlife provides a broad spectrum of accommodation facilities catering for most income groups. Such facilities include camping, hutted accommodation, luxury lodges and bush camps. These facilities are scattered throughout the KZN Wildlife reserves with two dominant spatial concentrations, namely the Drakensberg and the northeast Zululand/St Lucia area. The annual occupancy rates vary between different accommodation facilities and different reserves. Seasonal fluctuations, marketing, popularity of locality and visitor preferences also influence occupancy rates. Therefore, an across the board annual occupancy rate does not provide a true reflection of the use of KZN Wildlife accommodation. When the accommodation is divided according to type, the picture becomes clearer and occupancy rates for 2002/2003 are: „h Camping and caravanning (R30 – R60 per person per day): 45% „h Hutted accommodation (R65 – R250 per person per day): 60% „h Luxury hutted accommodation (R300 – R600 per person per day): 85%

The tourism boom is expected to continue, generating higher occupancy rates throughout the spectrum of possible accommodation. Of interest is the high occupancy rate for luxury hutted accommodation, illustrating a high demand for that standard of accommodation which, for KZN Wildlife, helps in sustaining rustic accommodation facilities and so providing a wide range of accommodation facilities. This was also part of the reason for the proposals by the KZN Wildlife to develop at least two new camps in their areas during the 1999/2000 period. In this regard, the Giants Castle Camp was enlarged, upgraded to include a restaurant, and refurbished. It is now known as the ‘Flower of the Drakensberg’, with each of the thatched huts decorated according to a particular plant or flower, including original paintings of these and, where possible, live plants outside relevant huts. The new 213-bed camp at Cathedral was completed by 2003 and includes a San Art and history interpretive centre.

Such occupancy rates are also indicative of a real opportunity for further growth in this sector of the market. Given the tourism boom and an influx of overseas visitors, the demand for luxury accommodation is likely to remain. It is also interesting to note the increase in the numbers of visitors overall to the Drakensberg during 2002 and initial parts of 2003.

2.11 Cultural Tourism

Cultural tourism is defined in the government White Paper on The Development and Promotion of Tourism in South Africa as “cultural aspects which are of interest to the visitor and can be marketed as such, including the customs and traditions of people, their heritage, history and way of life” (1996).

Cultural tourism is a relative newcomer to the tourism field and is undergoing significant growth throughout South Africa and within KwaZulu-Natal. KwaZulu-Natal is in a unique position in the country with regards to cultural tourism and offers a wealth of possibilities in this regard. As home to the Zulu nation and its king, as well as the location of the Battlegrounds of the Zulu and Boer Wars, the variety of cultural attractions within the province is enormous. The value of the concept of Zululand as a unique resource is being developed and related support industries are increasing.

As well as being home to the Zulu nation, KwaZulu-Natal provides enormous diversity in terms of culture with its unique African/Asian/European mix. The Province is home to the largest number of Indian people outside of India and Durban has the highest Indian population of any city in South Africa - almost one million people. The city was, for a time, the home of Mahatma Gandhi who influenced history in the area and the Gandhi Settlement in Phoenix outside Durban is becoming increasingly well known. Durban also has the largest mosque in the southern hemisphere, the Grey Street Mosque, whose golden domes can be seen from most parts of the city and whose muezzin can be heard calling the faithful to prayer five times a day. Attractions such as the Indian Market in Victoria Street with its spices, curries and saries provide further flavour to the city.

The city exhibits further non-African influence with its Edwardian industrial architecture along Point Road, a row of English Terrace houses in the area dating back to the early days of the century, and a host of art deco-styled homes and buildings throughout the city.

Durban offers a range of Art Galleries, Museums and Music Centres with a variety of themes - Maritime and Local History Museums; Modern, Traditional and African art galleries; traditional jazz, African jazz, symphony concerts, Indian music events and popular music concerts hosting international and local musicians.

Durban acts as gateway city to the hinterland of the KwaZulu-Natal province which offers a further range of attractions in terms of cultural tourism from the Battlefields of Blood River and the Tugela, to craft centres at Rorkes Drift and the Midlands Meander.

Over 600 kilometres of KwaZulu-Natal coast north and south of Durban offer even more in terms of culture and history. From Portuguese explorers to Indian Ocean pirates, ivory traders, shipwrecks and battlegrounds, the possibilities for cultural tourism development are endless.