Will South Africa's 2025 budget speech fulfil tourism's potential?

Zawya

19-02-2025

As South Africa looks ahead to the 2025 Budget Speech, there is optimism that this year's fiscal plan will mirror the positivity seen in the President's recent State of the Nation address. Alan Campbell, Sales and Marketing Director at ANEW Hotels & Resorts is hopeful that the Budget will tackle critical structural challenges hindering growth in the tourism and hospitality sectors.
Despite contributing approximately 8.2% to the country's GDP in 2023, the tourism and hospitality industry faces significant barriers, according to Campbell.
"Tourism is not just a sector - it is a driver of social upliftment, a creator of jobs and foreign exchange earnings, yet heading towards the budget speech, we hope that the positive focus areas highlighted at SONA will materialise in the Minister of Finance's address," says Campbell.
"On the one hand, President Cyril Ramaphosa has emphasised the importance of tourism to South Africa's economic recovery, citing its role in employing approximately 1.5 million people. But this has yet to play out in terms of engagement with the private sector or a significant shift in the support of the industry, in past budget speeches."
Campbell says the disconnect between the sector's recognised potential and the strategic use of resources highlights an urgent need for a more focused, actionable approach. "If tourism is truly a foundation for South Africa's economic recovery, it requires not just verbal support but also concrete investment, strategic planning and a clear mandate for entities like SA Tourism."
'The government must empower these organisations with the budget, infrastructure and political will to execute ambitious growth plans. Equally, there is a need for greater accountability and efficiency to ensure that allocated funds are utilised effectively."
Job creation through tourism
He says with South Africa recently achieving its highest-ever matric pass rate, there is an urgent need to create job opportunities for young people entering the workforce.
"Tourism presents a unique opportunity for large-scale employment across various skill levels. However, without strategic investment, this potential will remain untapped. Other African nations are already outpacing South Africa in seizing these opportunities, making it imperative for the country to become more competitive in this space."
Campbell says they welcome the President's commitment to allocating R940 billion to infrastructure investment but questions whether the focus will be on the areas that require significant tourism support.
'Unreliable transport systems, poorly maintained roads and limited connectivity in rural areas continue to frustrate both tourists and operators, disproportionately impacting small businesses and community-based tourism initiatives in underdeveloped regions like Mpumalanga, Limpopo and the Northern Cape.
"These regions with their rich cultural and natural attractions hold significant tourism potential and a portion of the budget should prioritise improving critical infrastructure such as roads, airports and public transport systems,' Campbell emphasises.
Public-private collaboration needs strengthening
Collaboration between the public and private sectors also requires significant attention. "While smaller-scale partnerships have shown promise, there has been limited progress on large-scale initiatives," Campbell says.
"Rejuvenation plans for the Durban CBD fuelled by private sector involvement hint at what could be achieved with a more strategic approach. SA Tourism and government entities must actively engage private stakeholders to co-develop a robust tourism strategy, leveraging shared resources and expertise to create jobs and drive economic growth."
Globally, tourism marketing budgets are increasing, yet South Africa's spend on destination marketing remains relatively stagnant.
"In 2024, competitors like Kenya and Morocco outpaced us with digital marketing campaigns targeting high-value travellers. The government must increase funding for South African Tourism to execute dynamic global campaigns, particularly in emerging markets such as China, India, and the Middle East while also focusing on regional travel from neighbouring countries."
Campbell says the tourism and hospitality sectors have proven their resilience time and again but that resilience alone is not enough to drive growth.
"The 2025 Budget must demonstrate bold action, with allocations that address systemic challenges and catalyse new opportunities. The right budgetary support in 2025 could be the turning point that ensures tourism and hospitality flourish."
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