Education and Tourism Correspondent

THE tourism industry is growing faster than mining, agriculture and construction sectors, more than doubling its contribution to SA's gross domestic product (GDP) from 4% in 1995 to 8,2% in 1999, according to a new report by the Human Sciences Research Council.

The report quotes the World Travel and Tourism Council's (WTTC) forecast, which shows the sector's GDP contribution is expected to rise to 11% within the next five years and more than 27000 jobs a year will be created.

This is good news for the economy as tourism is seen as a major source of growth and as a foreign exchange earner in SA.

It also gives hope to an industry, whose profit margins have been recently hit hard by the strong rand, a global slump in travel, seasonality problems, airline availability and the relatively high prices of accommodation and tourism products.

The report, to be released next week, rates tourism as the secondfastest growing sector in the economy, trailing behind manufacturing which contributes 19,9% to the country's GDP.

The mining and quarry sector contributed 6,4% to GDP in 1999 while agriculture was 4,5% and construction 3%.

However, on a broader note, the report noted that tourism's direct and indirect contribution towards GDP only amounted to 7,08%.

But the report still identified tourism as the biggest job creator over the five year period from 1997 to 2002, when other key sectors in the economy shed jobs, and the economy as a whole showed negative growth in employment.

The WTTC figures showed that 1,14-million jobs were supported by the tourism sector in 1998.

The figures back assertions by Cheryl Carolus, head of SA Tourism, that tourism, a relatively young growth industry, was positioned to become the largest employer and GDP contributor to the economy over the next 10 years.

Gillian Saunders, head of tourism and hospitality at Grant Thornton consulting, said tourism growth had dropped to "more normal levels of growth" from 2002. But, she predicts good growth prospects for the coming years.

"We should pull off about 8% growth for this year."

She said although key industry players had complained of decreased forward bookings, mainly because "SA is more expensive now and air capacity is a problem", SA's business and economic climate was conducive for tourism growth.

"We're doing more intelligent marketing now, which is paying off. We already have a strong domestic tourism base, but in terms of the global tourism market share, SA has a very small percentage less than 1%," she said.

Pundy Pillay, an independent economist, said tourism was booming in SA both in national economic output and employment but the sector was employing mainly casual, informal labour to fill its skills requirements.

"In tourism, there is evidence that employment is growing, but the magnitude of the growth is uncertain, given the nature of work in this sector (part-time and casual, as well as full-time)," he explained.

Feb 04 2004 07:20:25:000AM Sharda Naidoo Business Day 1st Edition