INTRODUCTION

KWAZULU-NATAL TOURISM AUTHORITY

FINAL DRAFT SUMMARY REPORT

OF THE

KWAZULU-NATAL TOURISM PRODUCT DEVELOPMENT STRATEGY

Prepared by:

The Deloitte & Touche Consortium

March 2002

CONTENTS

1. INTRODUCTION AND BACKGROUND

2. MARKETING

2.1 Situational Analysis

Developing the Marketing Model

Towards a Marketing Strategy

2.4 Conclusion

3. TOURISM PRODUCT DEVELOPMENT STRATEGY

3.1 Introduction

Spatial Framework

Tourism Node Identification and Product & Infrastructure Prioritisation

3.4 Strategy to Develop Tourism in Rural Areas

3.5 Identification of Key Tourism Destinations, Nodes & Sites for Public Sector Funding

3.6 Identification of Key Infrastructure required for Tourism Product Development

3.7 Identification of Key Tourism Sites for Private Sector Investment

3.8 Identification of Key Tourism Development Projects

4. INVESTMENT AND FUNDING STRATEGY

4.1 Introduction

4.2 Pre-requisites to creating a ‘climate’ conducive to investment

4.3 Project Funding in perspective

4.4 Strategy Formulation

4.5 Process of allocating appropriate capital sources to projects

4.6 Strategy Implementation

4.7 Sources of Funding

5. INSTITUTIONAL, FUNCTIONAL, LEGAL AND POLICY ISSUES

5.1 Introduction

5.2 Implications for the KZN Tourism Product Development Strategy

6. SUMMARY

ANNEXURE 1: SUMMARY TABLE OF RECOMMENDATIONS FOR TOURISM PRODUCT & INFRASTRUCTURE DEVELOPMENT

ANNEXURE 2: Recommended Key Development Projects:

Preliminary Proposals, Budgets and Timeframes for Implementation

APPENDIX A: MARKETING ISSUES – DETAILED REPORT

APPENDIX B: TOURISM PRODUCT DEVELOPMENT STRATEGY – DETAILED REPORT

APPENDIX C: INVESTMENT AND FUNDING STRATEGY – DETAILED REPORT

APPENDIX D: INSTITUTIONAL, FUNCTIONAL, LEGAL AND POLICY ISSUES – DETAILED REPORT

1. INTRODUCTION AND BACKGROUND

The KZNTA has identified the following as one of its key focus areas and functions:

"Facilitate the development of a strategic tourism product that broadens ownership in synergy with the overall theme and branding of the province."

It has set itself the following goals and targets to be achieved by 2003 from a baseline of 1998:

Growth in domestic urban tourist arrivals:

From at least 8mn urban adult tourists in 1998 to 8.16mn in 2003

Growth in foreign tourism arrivals:

From 459,000 in 1998 to 557,000 in 2003

Growth in direct tourism spending:

From R6.8bn to R9.6bn in 2003

Total impact on GDP:

From R9.7bn in 1999 to R13.6bn in 2003

Total impact on employment:

From 122,482 in 1999 to 132,450 in 2003

Growth in average length of stay:

To increase the typical length (mode) of stay from 3 nights in 1998 to 4 nights in 2003 and the stay of domestic tourists from 5 nights in 1998 to 6 in 2003.

Increase in the percentage of tourists indicating that their decision to visit KZN was influenced by marketing media:

Domestic tourists from 7% in 1998 to 11% in 2003.

Foreign tourists from 35%in 1998 to 40% in 2003.

In addition to its primary key focus and function of Marketing, the KZNTA acknowledges it has a strategic role in facilitating new and appropriate tourism products, as a means of stimulating new in-bound investment into the tourism economy, thereby unlocking additional tourism revenue opportunities. Its objectives in this regard have been identified as follows:

Broadening ownership in the industry, particularly amongst the previously disenfranchised sectors;

Complementing and improving the existing tourism product mix;

Giving support to the strategic marketing framework and brands;

Facilitating new investment / funding in areas of low economic activity; and

The facilitation of new tourism infrastructure.

The challenge can therefore best be summarised as producing a strategic tourism product development plan that will substantially contribute to attaining the above goals and targets.

In July 2001, the Deloitte & Touche Consortium was appointed by the KwaZulu-Natal Tourism Authority (KZNTA) and the Development Bank of South Africa (DBSA), to facilitate the development of a plan and strategy for tourism product development in KwaZulu-Natal to ensure its global competitiveness.

The Consortium comprises the following members:

Deloitte & Touche

Marriott Merchant Bank

Haley Sharpe Southern Africa

Madi Herdbuoys Public Relations

The KZNTA identified that the principles for strategic tourism product development as contained in their Tourism Strategy 2000 need to be translated into a more direct / practical / implementable action plan which should include:

A spatial framework;
A strategy to develop tourism in rural areas;
An identification of key tourism nodes and sites for public sector funding;
An identification of key infrastructure required for tourism development;
An identification of key tourism sites for private sector investment;
An identification of key tourism development projects;
A funding and investment strategy.

The KZNTA indicated that the strategy should take cognisance of the following:

Both demand and supply factors should be taken into account (local and international), including a proper assessment of the quality of existing supply of tourist infrastructure and experience;

Build on the work that has already been done, i.e. by eThekwini Uni-City; District Municipalities; and Local Municipalities;

Link with structures that are already in place;

Encourage a climate which is conducive to tourism;

Address the issue of perceptions of crime, health and security;

Offer a solution to certain infrastructural impediments such as signage;

Indicate how local communities could benefit from tourism; and

Assist in creating a climate that will encourage investment.

The whole initiative was divided into six phases of which only the first five formed part of this specific project:

The first phase, which involved a workshop, finalised the scope of the project and established work teams to take the process forward, was completed on the 30 January 2001.

2. In the second phase the work teams and the Consortium developed proposals and a report covering:

Points of departure

Legal and policy framework

Spatial framework

Strategy to develop tourism in rural areas

Identification of key tourism nodes and sites / projects for public and/or private sector funding

Training, marketing, entrepreneurial support and institutional frameworks

Environmental and image constraints, particularly issues such as legislation, funding and perceptions of crime and grime

This phase also included a regional workshop and concluded with a presentation of the preliminary results to the KZNTA Tourism Working Group. An interim report on the infrastructure development framework for the Province was also prepared.

3. The third phase included

The identification of key infrastructure required for tourism development that will enable KZN to compete on a global scale and a priority rating to such infrastructure

An identification of key tourism development projects - taking demand and current supply issues into account and those that support the tourism branding strategy of KZN

Budget estimates

Preliminary proposals on management arrangements

4. The fourth phase included the finalisation of an investment and public sector funding strategy.

The fifth and final phase of the project consists of tabling the final report to the KZNTA Board and to the Provincial MEC for Economic Development and Tourism.

This document provides a Summary Report of the findings and recommendations as contained within the more detailed and comprehensive appendices attached.

The detailed reports attached as appendices to this summary report cover the following areas:

Appendix A: Marketing Issues

Appendix B: Tourism Product Development Strategy

Appendix C: Investment and Funding Strategy

Appendix D: Institutional, Functional, Legal and Policy Issues.

2. MARKETING

The success of an effective Tourism Product Development Strategy lies in a unique marketing strategy. Unlike classic product marketing criteria, when the product is developed first followed by the marketing strategy, this report has instead been determined as a consequence of marketing imperatives.

The recommendations of the Tourism Product Development Strategy have been ‘packaged’ into distinct tourism destinations. Each destination is a distinct product, exhibiting a clear and unambiguous differentiation from the others.

The destinations therefore have not only the subjective attributes like image and sense of place, but also destination marketing, which in effect ‘lands’ the would-be tourist. Therefore the marketing thrust can achieve the twin objectives of ‘selling the place’ (image marketing) and ‘landing’ the tourist (destination marketing). Image marketing is promoting the ‘sense of place’ and destination marketing is selling the product.

2.1 Situational Analysis

Globalisation has made it imperative for states – especially those in the developing world – to market their countries and regions.

A winning strategy must be driven by public relations rather than the more costly above-the-line advertising campaigns. Media management is crucial. eEssentially it comes down to managing the county’s reputation.

Reputation management is an emerging discipline whose central tenet is that strong reputations result from initiatives and messages that are in tune with the distinctive values and personalities of a country. In today’s world, where ideas are increasingly displacing the physical in the production of economic value, competition for reputation becomes a significant driving force, propelling our economy forward.

KwaZulu-Natal, while naturally having a unique ‘Kingdom of the Zulu’ brand, should recognise these factors as discussed in the national context and apply them where possible into a marketing strategy.

KwaZulu-Natal, as a domestic tourism holiday destination, dominates the rest of the country, and as such, the existing product offering reflects the needs of domestic holiday tourists, namely that for coastal tourism. However, the total value of tourism revenue has declined, for example by more than 50% during the October – January period since 1997. Of this market, the majority of domestic tourists stay with friends and relatives, with only 2% staying in 3-5 star hotels. This has less to do with the success or failure of the branding strategy, but more to do with KwaZulu-Natal’s reputation. The negative impacts of crime are likely to be disproportionally exacerbated by intense media coverage.

Internationally, it is Southern Africa’s negative profile that has a cascading effect on KwaZulu-Natal, because KwaZulu-Natal has virtually no international profile. Without proactive reputation management, KwaZulu-Natal’s reputation is likely to be uncontrollable (in the hands of other forces).

The ‘Kingdom of the Zulu’ brand has been adopted for both the domestic and international markets. Historically, it is the needs of the domestic market that have created the existing tourism product, which by and large is devoid of direct ‘Kingdom of the Zulu’ attributes.

The international tourist is not likely to be attracted to the same facilities as those created for the domestic tourist - predominantly the VFR market.

In the absence of associated product and infrastructural offerings, the Kingdom of the Zulu brand lacks substance. The existing infrastructure and rather tired product, is in response to the needs of domestic holiday tourists and not those of the international market.

2.2 Developing the Marketing Model

2.2.1 SENSE OF PLACE + PRODUCT = IMAGE

An image is created as a consequence of marketing sense of place and associated product. A picture of the Drakensberg Mountains evokes a certain response but coupled with hiking trails, bushman paintings and cosy hotels nestling in the foothills, a ‘sense of place’ is created. The sense of place is bound in with the product thus creating the image. The product must build on the sense of place in a tangible, easily assimilated way.

2.2.2 BRANDING + POSITIONING = STRATEGY

Branding in its purest sense denotes ownership and identity of a product. Differentiation helps us to ‘position’ a product away from direct competition. Ultimately we brand products that are positioned for best differentiation. Branding, therefore, is something that is done to a product to denote ownership, identity and recall, and to drive equity, but it is not the product.

Therefore the ultimate success of a brand depends upon the reputation that the brand has. Reputation goes beyond sense of place, image, positioning, differentiation, branding or product. Any successful brand leverages on a good reputation.

2.2.3 STRATEGY + IMAGE = REPUTATION

Marketing should concentrate increasingly on developing strong brand reputations to build equity and ownership. The region of KwaZulu-Natal has a reputation onto which the brand is attached. In the past there has not been the luxury of developing a brand/product from scratch, and therefore The Kingdom of the Zulu brand has had to adopt the existing product package, which is mostly at variance with, and sometimes contradicts the brand.

KwaZulu-Natal has a reputation which has suffered at the hands of a variety of largely uncontrollable internal and external factors, like crime, grime, violence, HIV/Aids, and tardy infrastructure. This reputation needs to be clarified and changed positively wherever possible.

2.2.4 REPUTATION MANAGEMENT

The following are the five basic principles of reputation management.

Distinctiveness: a strong reputation will result when KZN owns a distinctive position/image in the minds of its public.

Focus: a strong reputation will result when Tourism KZN and partners focus their attention and communication around a single core theme.

Consistency: a strong reputation will result when Tourism KZN and partners are consistent in their marketing activities and communications to all their public.

Identity: a strong reputation will result when Tourism KZN and all partners act in ways that are consistent with espoused principles of identity.

Transparency: strong reputations are built when organisations are transparent in the way they conduct their affairs.

2.3 Towards a Marketing Strategy

2.3.1 THE POWER OF WORD OF MOUTH

Some 76% of international tourism to KwaZulu-Natal is the VFR market - influenced by word of mouth and personal recommendation. Yet upon arrival, a significant percentage (60%) feels disappointed because they feel unsafe. Attracting tourists, either as VFR’s or conference delegates, is only sound if they return with positive feelings and are able to give strong recommendations. However, if they return with negative experiences or perceptions, their word-of-mouth comments will severely affect KZN’s reputation. More than half the visitors to KZN return with negative impressions. This recipe will create a shrinking market.

2.3.2 COUNTERING NEGATIVE PERCEPTIONS

It is assumed, and this cannot be proved due to absence of research, that KZN is negatively perceived internationally due to the extent of negative Southern Africa publicity. While this is true, it can be argued that KZN has no separate or unique reputation internationally. Without scientific media analysis this will remain conjecture. However, communication campaigns directed at the international market to overcome negative perceptions of crime and violence will not work, and indeed could be counter-productive by alerting audiences to potential dangers that they did not know about previously.

2.3.3 VISIBILITY VS REPUTATION

The term ‘any publicity is good publicity’ can only be attributed to pop stars or politicians. What audiences read in the media will not only shape their perceptions, but will influence the reputation of KZN through the image that is created.

As an example, the Aids and Racism conferences may have elevated Durban’s visibility as a conference destination internationally, but it cannot be proved that these events enhanced Durban or KZN’s reputation as a premier tourism destination. The media coverage emanating from large conferences elevates visibility, but if the visibility is negative, or merely neutral, it could be counter productive.

2.3.4 UNIQUE SITUATION REQUIRES UNIQUE PLAN

A marketing strategy for KZN must be unique. There is no case study to follow and the marketing proposition does not conform to the more widely known tenets of product and/or corporate marketing. It must build good reputation and positive image by promoting sense of place and product, in this case destination.

Each destination must market its unique sense of place within the Kingdom of Zulu brand. Because the various destinations offer different attractions and product, most being directly or indirectly associated with coastal tourism, a wider cross section of tourists will be attracted.

The ‘wilderness’ destination of St Lucia and Maputaland has its own sense of place – as evidenced by its having been granted World Heritage Site status. This, coupled with product on the ground as suggested in the tourism product development strategic analysis, will ensure that the resultant marketing of sense of place and product will produce a positive image.

Each of the destinations can be subjected to close analysis to see that they deliver against the criteria needed to demonstrate sense of place and project / product / destination facilities.

2.3.5 MARKETING DELIVERY STRUCTURE

Each destination must have its own marketing plan, which is implemented through the creation of an intra-destination marketing committee. Internal and investment marketing will be the responsibility of each destination – but external marketing (regional, national and international) will become a joint effort under the umbrella of the intra-destination marketing committee.

This structure should be funded and chaired by the KZNTA, and ensure cost effective delivery without expensive activity overlaps, confusion of messages and duplication of efforts. It should also be the custodian of the Kingdom brand.

2.3.6 NEW AND TRADITIONAL MARKETING TECHNIQUES

Traditional marketing techniques need to be re-appraised. Staying with the tried (tired) and tested is neither strategic nor cost effective in comparison to ‘21^st century’ solutions.

The method of getting the message to market is reliant on using three specific strategies.

Adopting 21^st century communications techniques.

Ensuring physical presence at trade shows, exhibitions etc.

Facilitating direct interventions with tour operators and travel agents.

2.3.7 PUSH vs. PULL MARKETING

The power of the internet is its ability to communicate to a mass global audience while adopting one-to-one communication principles. Pushing information via advertising to an international audience is too costly, wasteful, uncontrollable and relatively ineffective when compared to the attributes of one-on-one, or word-of-mouth communications.

As noted earlier, the majority of tourists to KZN have been ‘landed’ by word-of-mouth communication through the VFR market. Almost like word-of-mouth, the internet provides the power of one-on-one communication, but through a mass medium. Internet communication is more credible as it is deeply personal, in that the internet user ‘pulls’ information at his/her own discretion.

2.3.8 INTERNET USERS ARE ALSO TOURISTS

Ever increasingly, the high-income tourists KZN wished to attract will have internet capability. In North America and Western Europe, both core tourist-source markets, there are enough internet users to qualify as its own market segment.

2.3.9 DIGITAL DISTRIBUTION OF PICTURES AND WORDS

The term ‘a picture is worth a thousand words’ has become a cliché because it is so true, especially in this instantaneous communications age, which relies on strong imagery to cut through the media clutter.

Sense of place and product are best communicated by using pictures and few words. Greater use must be made of available digital satellite and internet technology to distribute quality images into the computers of picture editors, input editors and news editors in travel/tourism related publications and online newsrooms throughout the word.

This, coupled with the placement of expertly written editorials by well-respected individuals, will supply hungry tourism-oriented publications with material that will communicate the destination’s unique sense of place and associated product to a global audience.

2.4 Conclusion

The identified destinations each possess the correct attributes for sense of place and product marketing.

Each destination displays clear marketing differentiation, each offering unique tourism experiences resulting in less overlap and confused messages.

Reputation management is foundational.

A strong reputation results from good strategy and a positive image. The focus of the marketing strategy will be to embrace the five principles of reputation management.

Marketing sense of place in conjunction with product directly to target audiences is the emphasis of all communications. This will result in a positive image of each destination and the Kingdom of the Zulu.

The marketing delivery system at destination and intra-destination level will engage three layers namely: tourism marketing, internal marketing and investment marketing.

Media analysis must be undertaken to direct strategy, measure and benchmark reputation index and demonstrate return on investment. Each destination will form part of an intra-destination marketing committee with clear and unambiguous lines of communication and areas of responsibility.

Marketing techniques should use a combination of traditional activities and 21^st century technologies.

3. TOURISM PRODUCT DEVELOPMENT STRATEGY

3.1 Introduction

Research for the preparation of the Tourism Product Development Strategy has included the consortium tourism-working group reviewing an extensive array of reports on earlier relevant tourism research, as well as marketing surveys produced at local, provincial and national levels. In summary, it was found that the provincial tourism industry has declined, particularly in terms of tourism revenue, over the last 4 years.

It was also found that, whilst there was generally a high-level of support for tourism development and growth, this was mainly occurring in an ad-hoc and independent manner. It also appeared to be more ‘product driven’ aimed at existing tourist-source markets, as opposed to the ‘market driven’ nature of the Tourism Industry, which could deliver an increase in tourist numbers. The absence of a cohesive tourism strategy or masterplan for the province was believed to be the main cause in this respect. As a result, a strategic framework (Chart 1) was developed, which identified the various components requiring investigation as part of arriving at the recommendations for inclusion in the overall Tourism Product Development Strategy.

Chart 1: Strategic Framework for the KZN Tourism Product Development Strategy

One of the key areas for the preparation of the overall strategy has been the contextualisation of the above framework within which the tourism industry is dependant for its sustainability. This area has been addressed at length within the full report, and Chart 2 on the following page is an attempt to ‘paint the picture’ and its particular relevance to KwaZulu-Natal. This chart links both the Domestic and Foreign Tourist-source Markets with each of their own Marketing needs; their two Supply-chains; Accessibility – both international and local; and the need for understanding the levels and roles of Primary and Secondary Tourist Attractions as well as Tourist Facilities:

In conclusion, it has been found that the Tourism Product Development Strategy must primarily focus on infrastructure and product that will enable the growth of tourist numbers. In turn, it was determined that the largest sectors of both domestic and foreign tourist-source markets are seeking a coastal destination for their leisure holidays. Furthermore, it was found from market research that the two main disappointments for departing foreign tourists was their lack of ability to interact with traditional culture and heritage, as well as wildlife.

The Tourism Product Development Strategy has therefore focused on strategic interventions that will hopefully re-address the above shortcomings, as well as addressing the needs identified by the KZNTA within the Terms of Reference.

This has led to the Tourism Working Group recommending that a focus be given to the following strategies for crafting of the Tourism Product Development Strategy.

A Primary Tourism Product Development Strategy for KZN to build a reputation for its ‘Coastal Destinations’, which will include the need for a more focused ‘Destination Marketing’ strategy on KwaZulu-Natal’s potential for growth as a domestic, as well as an international, coastal destination, with the objective of maximising tourist numbers and associated tourism revenue.

The potential increase in tourist numbers will then provide the necessary justification, through the improved opportunity of sustainability for;

A parallel Tourism Product Development Strategy for the establishment of a Zulu Heritage and Cultural Trail, which will provide the enabling environment for broadening of ownership within the tourism sector, particularly within the rural and previously disenfranchised sectors. It is also considered that this will compliment and improve the existing product mix within the context of the ‘Kingdom of the Zulu’ branding.

As well as;

Policies for Strategic Intervention for inclusion of a "Zuluness" within other tourism product development initiatives, particularly within the destinations of;

Durban / Pietermaritzburg / Midlands Tourism Corridor and linkage to the Southern Drakensberg

The Thukela Gateway – linkage to the Ukhahlamba-Drakensberg World Heritage Site; Wildlife; Heritage and Culture; and the Battlefields

3.2 Spatial Framework

From an overall review of KZN, in terms attaining the KZNTA goals and targets for tourism growth, it is recommended that the focus for both tourism product development and associated marketing should be aimed at the following ‘Destinations’:

The planning and implementation of a ‘Zulu Heritage and Cultural Trail’, focusing initially on a spatial corridor from just north of Durban through to Northern Zululand, but eventually ‘meandering’ throughout the whole province, thereby linking together the diversity and variety of heritage and cultural tourism sites of interest. This proposal, we believe, will truly underpin the branding of the Kingdom of the Zulu.

Four spatial ‘Coastal Destinations’, each with its own differentiation in terms of product attraction, targeted tourist-source markets, and ability to create its own image / branding within the overall context of the Kingdom of the Zulu. The four Coastal destinations are:

Maputaland / St Lucia (Coastal linked to Wildlife)

Dolphin Coast (Coastal linked to Zulu Heritage and Culture)

Durban (Cosmopolitan Beachfront and Culture)

South Coast (Coastal linked to Wild Coast)

Two spatial ‘Interior Destinations’, the Durban / Pietermaritzburg / Midlands Corridor and the Thukela Gateway / Ukahlamba-Drakensberg.

The proposed Spatial Coastal and Interior Destinations Framework are contained in Map 1 below:

3.3 Tourism Node Identification and Product and Infrastructure Prioritisation

The process for identification of the Nodes as well as the prioritisation of the Sites / Projects / Infrastructure has been informed and analysed by using the following criteria:

How the Node/Site/Project relates to being, or facilitating, a Provincial / Local Primary Attraction, in that it will significantly increase the potential of attracting more domestic and/or foreign tourists in accordance with the product/visitor characteristics as defined for the destination.

How the Node/Site/Project relates to being, or facilitating, a Provincial / Local Secondary Attraction, in that it will significantly increase the potential of attracting more domestic and/or foreign tourists, together with lengthening their stay, in accordance with the product/visitor characteristics as defined for the destination.

How the Node/Site/Project relates to being, or facilitating, a Provincial / Local Visitor Facility, in that it will significantly increase the potential of lengthening the stay of domestic and/or foreign tourists, in accordance with the product/visitor characteristics as defined for the destination.

Does the Node/Site/Project offer the potential of including rural and/or previously disadvantaged people in order to gain significant benefit by their involvement in the proposed tourism products?

Does the Node/Site/Project meet the needs of untapped tourist-source markets, in being a significant coastal / wildlife / heritage / cultural tourism asset, thereby encouraging tourism revenue growth, as opposed to only tapping into existing tourists already visiting KZN?

The Nodes / Sites / Projects / Infrastructure were identified from a variety of sources, particularly District and Local Government structures. Close to 500 projects were captured onto a database with as much relevant information as could be ascertained. Each project was then given individual scores against the above criteria, with the highest scoring projects then being put forward for prioritisation. The full Tourism Product Development Strategy Report contains a full listing of each project, together with its score per Destination and per Node.

Map 1. Spatial Framework Destinations

More comprehensive details on the proposed spatial framework recommendations are contained in the attached Tourism Product Development Strategy.

3.4 Strategy to Develop Tourism in Rural Areas

The key attraction to draw tourists into rural areas has been identified as primarily being associated with Zulu Heritage and Culture. The creation of the Zulu Heritage and Cultural Trail is therefore considered as the principal development initiative in order to create a focus on strategic rural tourism product development. The development of this tourism route, which has the potential eventually to meander throughout KwaZulu-Natal, is considered as the ‘glue’ that will join together the wide diversity of rural cultural tourism attractions and sites of historical importance. More importantly it is anticipated that it will act as a catalyst for the opening up of previously disadvantaged areas for further tourism product development.

As stated above, it has been recommended that the initial Zulu Heritage and Cultural Trail commences just north of Durban and runs through to Northern Zululand. An initial scan of potential sites of interest and attractions include the following:

Bambatha Rebellion

Border Cave

eMakhosini Valley

Hlobane

Inanda Tourism Route

Isandlawana

Isibayi - Nongoma

Kambule

King Shaka Tourism Route around KwaDukuza

KwaBulawayo

Lilani and Shu Shu Hot Springs

Ndondakasuka

Nkandla

Ondini

Ongoye Forest

Ophathe Game Reserve

Shakaland

Thukela Frontier

Zulu Heritage and Cultural Interpretive Centre

The above list is not intended to be fully inclusive, but rather provide an example of the variety of product that can be initially included within the Zulu Heritage and Cultural Trail. The location of such attractions within the proposed Zulu Heritage and Cultural Trail will lead to a number of these projects, together with associated infrastructure, needing to become prioritised for development as a result of the key issue of accessibility having been addressed.

The proposed spatial location and extent of the initial Zulu Heritage and Cultural Trail is as set out on the following Map 2:

Map 2. Spatial Location of the Initial Zulu Heritage & Cultural Trail

More specific details on the implementation of the proposed Zulu Heritage and Cultural Trail are contained in the attached full Tourism Product Development Strategy.

Key to the sustainability of the proposed strategy for the development of tourism within rural areas is the need to ensure growth of tourist numbers, together with tourism revenue yield, into KwaZulu-Natal, which will then be attracted to explore the Zulu Heritage and Cultural Trail.

The Tourism Product Development Strategy has identified, amongst other issues, the need to focus on coastal destination product development and marketing, in order to widen access into relatively untapped foreign tourist-source markets. These markets’ primary choice for leisure holidays are coastal destinations, but they also need to be offered unique additional activities associated with wildlife, heritage and culture, when viewed within the African context. Similarly, the largest sector of domestic tourists also seeks coastal destinations. It is for this reason of sustainability that the Tourism Product Development Strategy identified the need for a parallel and inter-related coastal tourism product development strategy. The following flowchart presents the logic applied to this issue of sustainability:

Chart 3: Tourism Sustainability Flowchart

3.5 Identification of Key Tourism Destinations, Nodes and Sites for Public Sector Funding

Each of the spatial destinations referred to above have been analysed with a view to identifying the key nodes and sites for inclusion with the Tourism Product Development Strategy. The following provides a summary of the findings and recommendations for each of the proposed destinations:

Maputaland / St Lucia (Umlalazi River Mouth to Kosi Bay) – linkage to Wildlife

Product Description:

Approximately 250 kilometres of mostly pristine beaches, including the Greater St. Lucia Wetland Park World Heritage Site, and stretching up to Kosi Bay. Wildlife areas of Mkhuze, Phinda, Tembe, Ndumu, Pongola, Itala and Hluhluwe-Umfolozi are included within this destination. These all contribute to the potential of creating a world-class unique coastal and wildlife destination and tourism cluster within the Kingdom of the Zulu.

Potential Market:

Due to the potential uniqueness and product clustering of this destination, it is proposed that the focus of tourism product should be on high quality / mid to high income / low-density tourism, offering exclusive individual beach and wildlife destinations with sensitive environmental management. This should be targeted at ‘A’ income domestic and foreign tourists arriving by scheduled flights and connecting local charters to airstrips in close proximity to the destinations. Spinal corridor routes need to be able to provide close road vehicle accessibility without spoiling the perception of the exclusiveness of the destination.

Proposed Key Nodes:

The key Nodes of this destination are recommended as follows:

Primary Node:

The Greater St Lucia Wetland Park (World Heritage Site), stretching from Cape St Lucia in the South to Kosi Bay in the North and inland, generally using the N2 as the Western Boundary.

Secondary Nodes:

Hluhluwe-Umfolzi Park

Itala / Pongola

Richards Bay Waterfront & Marina

Linkage to the Zulu Heritage & Cultural Trail

Proposed Key Sites:

Coastal: Kosi Bay

Mabibi and Lake Sabayi

Sodwana Bay

Greater St. Lucia Wetland Park

St. Lucia

Mapelane

Richards Bay Waterfront and Marina

Wildlife: Tembe Elephant Park

Ndumu Game Reserve

Jozini / Ghost Mountain / Pongola Reserve

Mkuze and Phinda Reserves

Itala Nature Reserve

Hluhluwe-Umfolozi Park

Royal Zulu Reserve & Biosphere

Cultural / Rural: Border Cave

Grave of King Dingane

Maqonqgo

Ongoye Forest

Recommendation for Public Sector Funding:
Due to the advanced stage of the Lubombo Spatial Development Initiative, and the knowledge that KZNTA have been involved in the processes to date, research into the individual projects and infrastructural needs of this destination has not been undertaken. However, it is recommended that this destination should continue to be considered as a key priority for tourism product development in the province by KZNTA.

Dolphin Coast (Westbrook to Umlalazi River Mouth)– The "King Shaka" Region & Gateway to Zulu Heritage & Culture

Product Description:

Approximately 50 to 70 kilometres of superb beaches and coastline, which has already been identified as probably having the best prospects for re-attracting higher-income domestic and international tourism, given careful environmental management. With this stretch of coastline acting as the Primary Attraction, it is proposed that the development of Secondary Attractions and Visitor Facilities that will complement the destination as a major domestic and international coastal resort be investigated. This is closely identified as being linked to the Kingdom of the Zulu through providing direct linkage and accessibility to the proposed Zulu Heritage and Cultural Trail.

Potential Market:

It is proposed that the focus of tourism product should be on medium to higher quality / lower middle to higher middle income / medium to high-density tourism, offering a range of beach resort style individual destinations. These should be targeted at ‘A’ and ‘B’ income domestic and foreign tourists arriving either direct by road or air via Durban, with international scheduled and/or charter flights for the foreign market.

Proposed Key Nodes:

The key Nodes of this destination are recommended as follows:

Primary Node:

The coastal stretch of beach from the Tongati River in the South to Tinley Manor in the North. (King Shaka Coast)

Secondary Nodes:

Linkage to Zulu Heritage & Cultural Trail

Linkage to The Valley of 1000 Hills

Proposed Key Sites:

Coastal: Zimbali

Ballito

Shaka’s Rock

Salt Rock

uMhlali Beach

Tinley Manor

Blythedale Beach

Zinkwazi Beach

Thukela Mouth

Amatikulu

Mtunzini / Umlalazi

Recommendation for Public Sector Funding:
Not including recommendations for the Zulu Heritage & Cultural Trail, which have been included elsewhere in this report, the key recommendation is for the establishment of a major coastal resort development, but within the context of an overall coastal development masterplan. The project, which has been identified in conjunction with the Ilembe District Municipality, is located on the northern banks of the Tongati River at the river mouth. A comprehensive report has been prepared for this development, which sets out the extent of Public Sector support & finance.

Durban (Scottburgh to Westbrook) – A Zulu / Cosmopolitan Buzz and Vibrancy and Gateway to the North, West and South of KwaZulu-Natal

Product Description:

At present Durban can probably best be described as a confusing tourism destination as it does not appear to have a single focused image or reputation as to what its Primary Attraction is to both the domestic and foreign tourist markets. This can probably be attributed to the transitionary phase that it finds itself emerging from and is therefore not suggested as being the fault of any institution, but rather as a result of its circumstances. At present it appears to be marketing itself as offering everything to everyone, which is resulting in other more focused competitive destinations gaining market share of the available tourist-source markets.

Due to the strategic importance of Durban within the context of tourism growth within KwaZulu-Natal, it would be arrogant to be able to suggest the complete solutions solely within this document. Therefore the focus has been on providing an indication as to the direction that could be taken. The key stakeholders should then be tasked with more fully developing an agreed vision, image and strategic agenda for its implementation.

Some fundamentals that are recommended to be addressed are as follows:

What is the image, ethos and ambience (reputation) that Durban wishes to project into the tourist-source markets? As the principal gateway into the Kingdom of the Zulu, surely it needs to conform more to this branding. It is suggested that Durban has the potential of being the most significant African City as a coastal tourism destination. Its key access points, such as the airport, harbour and main roads, need to project more of an image in keeping with the branding of the Kingdom of the Zulu.

What is Durban’s Primary Attraction, and what are its Secondary Attractions and Visitor Facilities that could differentiate it from its competition? Again, coastal tourism is the dominant tourist-source market; therefore it is recommended that focus be given on developing its beach product to be more in keeping with the needs of its primary tourist-source markets.

What should the focus be in identifying the tourist-source markets? Having identified what and where its target markets are, Durban will then need to identify what it must offer to meet the needs of those tourists.

If Rio de Janeiro is used as a comparative example, its beaches have names such as Copacabana; Ipanema; and Flamenco, which have all created international brand images in their own right. Durban offers North, South and Battery as some of its names, none of which conjure up an exotic image in keeping with the Kingdom of the Zulu. Umhlanga is perhaps the one exception and has certainly been able to develop its own image.

Hotels along the beachfront should be able to provide a degree of exclusiveness for use of certain areas of the beach. The hotels could then start to build on an image linked to their particular beach areas. The proposed beach areas could be operated under a concessionary arrangement to local qualified and trained SMME’s, who then contract with the ‘linked’ hotels, in order to provide beach, refreshment and entertainment facilities for exclusive use of the hotel residents and other paying guests. The tourist and visitor want to use the beach to its fullest extent, Durban needs to provide facilities in keeping with these needs and not create barriers between what the customer wants and what is available, otherwise the customer will certainly go where his / her needs are being met.

The development of the Point Waterfront will go along way to providing a significant Secondary Attraction and range of Visitor Facilities, which will boost the Primary Attraction of the beach. Hopefully attention will be paid to its ‘Zuluness’ being in keeping with the Kingdom of the Zulu.

Yachting, boating and cruise tourism, together with related water sports and other activities, are significant opportunities that appear to be underestimated within Durban. Significant similar facilities are being developed to the north and into Mozambique which, if not linked to Durban, could pose serious competitive threats to the Durban tourism market within the next 10-years. Durban has the potential to act as the ‘southern anchor’ marina for the East African Seaboard. Such a development needs to be encouraged and supported, if not driven, by the appropriate Durban authorities.

All of the above are fundamentals that can contribute towards Durban maximising its tourist numbers, as well as their length of stay. However, in addition to the above, attention needs to be given to adding significant Secondary Attraction and Visitor Facilities within the Heritage and Culture and Wildlife sectors. Next to the beach, these two sectors are identified as being the next highest on the visitors’ list of things they want to do. The nature of the majority of Durban’s tourists, usually for reasons of time and/or cost, means that they cannot travel northwards to enjoy the Game Reserves and Zululand areas. The opportunity therefore exists to provide such facilities within closer proximity to the Durban Beachfront. In this regard, support is recommended to the following product development:

Cato Manor

Inanda ‘Freedom Valley’ Community Tourism

Inanda Tourism Route

Isithumba

KwaMashu

Mkhambathini Game Reserve

Shongweni Community Tourism

The Valley of 1000 Hills

Township Tourism

Zulu Heritage and Cultural Interpretive Centre

Potential Market:

Durban offers a range of medium to high-density beach tourism facilities in the high, medium and lower income range for both domestic and foreign tourists. It is proposed that it has the spatial capacity to maintain such a range, provided this is done within a controlled masterplanning environment. It is recommended that Durban needs to consider spatial sub-groupings of mini-destinations that link certain hotel groupings with exclusive beach areas, which can then develop their own market image, which can then be marketed to targeted tourist-source markets. An example in this regard is as follows:

Cluster the hotels along the Marine Parade between the Edward Hotel on the corner of Sea View and the corner with Old Fort Road. Allocate the beach, or a part of, between Dairy Beach and North Beach Piers for the use of the hotel guests and other visitors willing to pay for the use of the facilities. Create the opportunity for one or more SMME concessionaire operated facilities, which would contract with the hotels for providing the services that would include seating areas with umbrellas; water and beach sport activities; serving of refreshments; restaurant eating facilities; music and other forms of entertainment. Such a clustering could, for example, use the name of ‘Embizeni’, which would start to create an image and branding for marketing purposes that would work within the Kingdom of the Zulu, but also stand alone when selling it to the targeted tourist-source markets.

Proposed Key Nodes:

The key Nodes of this destination are recommended as follows:

Primary Node:

The Beachfront, stretching from the Point in the South to Blue Lagoon in the North.

Secondary Nodes:

Eco-tourism linkage to The Valley of 1000 Hills

Zulu Heritage & Culture and Township Tourism

Durban Marina

Recommendation for Public Sector Funding:
The recommendation focuses on the 3 core attractions of Coastal; Heritage & Culture; and Wildlife. Certain Coastal recommendations are contained within the infrastructure section of this report. The following relates to the Destinations, Nodes and Sites for Public Sector Funding:

Point Waterfront Development (Coastal & Cultural)

Valley of 1000 Hills / Mkhambathini Game Reserve (Cultural & Wildlife)

Inanda Tourism Route (Heritage & Cultural)

Cato Manor Tourism Route (Heritage & Cultural)

The South Coast (Scottburgh to the Wild Coast) – The existing reputation of the South Coast as a Domestic Beach Destination linked to the emergence of the Wild Coast

Product Description:

The South Coast, as it has been known historically, comprises approximately 100 kilometres of sandy beaches, bays and lagoons stretching from Scottburgh to the Wild Coast. A variety of activities exist and have potential for further development. These include amongst others, golfing; scuba diving; whale and dolphin watching; and the annual sardine run. This area has been the preferred playground of the South African domestic holiday tourist for many years and has developed according to those needs. Inland are vast areas of relatively poor rural communities that have received little or no benefit from the coastal tourism corridor. It is proposed that the South Coast be maintained primarily as a domestic tourism destination, due primarily to the affordability of the existing products. The Primary Attraction remains its wide variety of beaches, however, attention needs to be given to the standard and type of visitor facilities in keeping with the need and demands of the targeted domestic tourists, particularly the newly emerging Gauteng tourist market.

Inland, the potential exists to develop adventure, eco and cultural tourism products that would add value to the coastal destinations and again provide a differentiation with other destinations in KwaZulu-Natal and elsewhere.

Potential Market:

It is proposed that the focus of tourism product should be on lower to medium quality / lower to higher middle income / medium to high-density tourism, offering a range of beach resort style destinations. These should be targeted at ‘B’ and ‘C’ income domestic and foreign tourists arriving either direct by road or air via Durban, with international scheduled and/or charter flights for the foreign market.

Proposed Key Nodes:

The key Nodes of this destination are recommended as follows:

Primary Node:

The coastal stretch of beach from Port Edward in the south to Port Shepstone in the north and creating a triangular node by going inland to include Oribi Gorge/uMzimkhulu Game Reserve.

Secondary Nodes:

Future Linkages to the Zulu Heritage and Cultural Trail

Recommendation for Public Sector Funding:
Two marina / resort developments are in the planning stages for Port Shepstone and Hibberdene, which are considered as having the potential to significantly contribute to re-generating the South Coast as a tourist destination for the domestic market, and in particular the higher-spend tourists from Gauteng. The re-development of the Mpenjati Resort has also been identified, for a number of reasons, including its proximity to the Wild Coast, as a product that could act as a catalyst for the southern part of the South Coast destination.

In addition an initiative to investigate ways of linking the Oribi Gorge with the proposed Umzimkulu Reserve would significantly contribute to opening up tourism within the rural areas of this Destination.

Durban / Pietermaritzburg / Midlands Tourism Corridor – with its linkage to the Southern Drakensberg and the proposed Lesotho Loop

Product Description:

The principal tourism products are sites of scenic, heritage and cultural interest, as well as tourism retail and short-stay accommodation. In addition, a number of dams / nature reserves are frequented by tourists.

At present, the area benefits predominantly from domestic tourism, with a limited support from the foreign tourist sector. Pietermaritzburg, the Midlands Meander and Howick were the most popular places visited.

Apart from a component of the domestic tourist sector, most visitors appear to use this area as a secondary attraction during their visit to KwaZulu-Natal.

It is also proposed that the Southern Drakensberg be linked to this destination cluster, which would include the potential of a ‘Lesotho Loop’ using Sani Pass, Ramatselisao’s Gate and Qachas Nek.

Potential Market:

Due to the strategic location of this corridor straddling the N3 with its large number of vehicle-travelling tourists, and even more so, its close proximity to the main tourism destination of Durban, it is proposed that the focus of tourism product should continue to remain on the Secondary Attraction products that will primarily benefit from the ‘flow-through’ effect of domestic and foreign tourists visiting the provinces’ Primary Attractions.

New product should focus on medium to higher quality / lower middle to upper middle income / low to medium density tourism, offering a range of scenic sites; wildlife; and culture and heritage destinations. These should be targeted at the ‘A’ and ‘B’ income domestic and foreign tourists travelling along the N3, or staying in Durban; the north-coast; or the south-coast, who would be looking for day-trips or short-stay added components to their holiday.

Whilst this area is not considered as a Primary Attraction within the Province, it is very much this type of product that will contribute towards lengthening the stay of the tourist during their visit to KwaZulu-Natal.

Proposed Key Nodes:

The key Nodes of this destination are recommended as follows:

Primary Node:

The Valley of 1000 Hills.

Secondary Nodes:

Southern Drakensberg

Linkages to the Zulu Heritage and Cultural Trail

Recommendation for Public Sector Funding:
The continued support of development of the Mkhambathini Game Reserve, with its linkage to the Valley of 1000 Hills, is considered as being the single most significant tourism development within this destination. The ability of providing an appropriate wildlife attraction in such close proximity to Durban would not only provide a strong differentiation for KZN’s primary destination of Durban, it would also significantly enhance further tourism development opportunities within these rural areas between Durban and Pietermaritzburg.

Thukela Gateway – linkage to the Ukhahlamba-Drakensberg World Heritage Site; Wildlife; Heritage and Culture; and the Battlefields

Product Description:

Most of this area falls within the region of the province currently being marketed as the "Berg, Bush & Battlefields", an initiative jointly being undertaken by the Uthukela and Umzinyathi District Municipalities together with Tourism KwaZulu-Natal.

The Northern and Central Drakensberg – the Ukhahlamba-Drakensberg World Heritage Site – appears to represent the Primary Attraction within the area, supported by a variety of Secondary Attractions and Visitor Facilities, such as the Heritage, Culture, Battlefields and Wildlife products available throughout the area, which in turn are supported by a variety of places to stay.

At present the main reason for domestic tourists visiting the area appears to be linked to the Drakensberg Mountains, for a variety of outdoor pursuits and activities. However, the total percentage of these visitors appears to be less than 10% of the domestic tourists visiting KwaZulu-Natal. The associated wildlife, heritage, cultural and battlefields attract even less visitors at present, according to available research.

With the foreign tourists, again the Drakensberg Mountains proves to be the most popular destination, primarily for the scenery, hiking, mountain climbing and other outdoor activities. The Battlefields were perhaps one of the least supported of the attractions in the area and limited in their contribution to tourism revenue. Demand for wildlife, heritage and culture attractions from foreign tourists is high and it can be assumed that the lack of product within these categories is inhibiting further growth of foreign tourists into the area at present.

One of the key tourism assets of this area is the fact that the N3, as well as the N11, pass through the northwestern region. As stated previously, these are some of the busiest tourism transit routes in the country. The ability, therefore, to tap into the ‘flow-through’ effect of these tourists is vitally important in order to grow market share. The proximity to the major KZN tourist-source markets of Gauteng and KZN is also a critical factor in this regard.

Potential Market:

It is understood that the area already has an initiative underway for the creation of a "tourism triangle" that will link the Drakensberg Mountains to the province’s coastal and wildlife attractions. It is considered that this concept is sound and warrants further consideration. However, it is suggested that a re-alignment of the "tourism triangle" be undertaken taking the following issues into account:

It has already been established that the Primary Attraction for the Province is its coastline – this is the area that has the potential to attract the greatest number of tourists, both foreign and domestic.

It has been identified, through market research, that the Primary Attraction within the "Thukela Gateway" destination is the Drakensberg Mountains.

It has also been identified through market research, that the next most popular visitor attractions relate to wildlife and Zulu heritage and culture.

It is suggested that the main tourist-source markets for the "Thukela Gateway" for the future, will be foreign and domestic tourists that are already visiting the province’s coastline, as well as a direct source from the Gauteng and KZN markets.

The "Thukela Gateway" area needs to develop more Secondary Attractions and Visitor Facilities in order to strengthen its ‘Tourism Clustering’ within the area. In terms of market demand, such attractions and facilities need to be focused on improving the Primary Attraction of the Drakensberg, as well as Wildlife and Zulu Heritage and Culture Secondary Attractions and Visitor Facilities.

It is also suggested that the "Battlefields", whilst they may appeal to certain niche-market tourism, on their own they are not considered as a high-ranking secondary attraction in terms of visitor numbers, nor with the low tourism revenue they generate. However, through the linkage of some of the sites to Zulu heritage and culture, and particularly the story they have to tell being told from a Zulu perspective, it is believed these products can be re-generated into more significant visitor attractions.

Particular attention is recommended to the development of wildlife attractions due to the distinct advantage for the foreign tourists of the area being malaria free.

Based upon the above, it is recommended that the focus of tourism product within the "Thukela Gateway" should be on medium to higher quality / lower middle to higher income / low to medium density tourism, offering a range of experiential tourism in the Drakensberg Mountains, as well as key secondary attractions in the Wwldlife and Zulu heritage and cultural sectors, initially in close proximity to the N3.

Proposed Key Nodes:

The key Nodes of this destination are recommended as follows:

Primary Node:

The Ukhahlamba-Drakensberg World Heritage Site.

Secondary Nodes:

The Thukela Gateway (Ladysmith/Colenso/Weenen/Estcourt corridor between the N3 in the West and the Thukela River in the East).

Linkage of the ‘Battlefields’ to the Zulu Heritage and Cultural Trail.

Recommendation for Public Sector Funding:
Continued support for community-based tourism product development within the Mnweni Valley, and in particular, the proposed Drakensberg Cableway. As well as the proposed Zulu Cultural Theme Park and associated Game Reserve.

3.6 Identification of Key Infrastructure required for Tourism Product Development

Infrastructure has been identified as falling into two categories: Soft and Hard, which have been defined as follows:

Soft Infrastructure

This relates mainly to intellectual, managerial, administrative and technical support that KZNTA is recommended to provide on a variety of tourism initiatives that have been identified; as well as market research and other marketing related issues. The focused objective is on maximising tourist numbers into KZN and the resultant tourism revenue yield, in accordance with the goals and targets contained within the Tourism Strategy 2000. It is considered that the ‘soft infrastructure’ issues recommended below are a pre-requisite in bringing about sustainability for the recommended core product development issues. In certain cases they will be followed by hard infrastructure implementation.

Hard Infrastructure

Hard Infrastructure relates more to the physical built requirements that are necessary to facilitate ‘ease-of-access’ for tourists once they are in the province, as well as making it easier and simpler for the tourists to remain in the province for longer periods, due to the expanded range of tourism product in keeping with the tourists’ needs. Hard Infrastructure also relates to physical built requirements that are necessary to be facilitated in order to make areas more attractive to potential investors looking at specific tourism product development.

Recommendations for Soft Infrastructure Required for Tourism Development:

Management of Perceptions of Personal Safety (Crime, Grime & Health)

Market Research of Tourist-source Markets & their ‘Needs’

Management of the ‘Supply Chain’

Accessibility – Destination Marketing

Accessibility – Ease of Access

Accessibility – Tourism Route / Access Development within each Destination

Product Development Monitoring Database & Prioritisation Model

Recommendations for Hard Infrastructure Required for Tourism Development:

Richards Bay Cruise Ship Passenger Terminal

Local Airstrip Upgrades at Dukuduku; Hluhluwe; & Manzangwenya

Coastal Marina Developments (Durban; Port Shepstone; Hibberdene)

Ukhahlamba-Drakensberg Access Road Upgrades

Continued Implementation of Infrastructure within the Lubombo SDI

Margate Airport Upgrade

South Coast Marinas

A summary table of the recommendations for tourism product and infrastructure is included in Annexure 1 of this document.

3.7 Identification of Key Tourism Sites for Private Sector Investment

The following projects have been identified for prioritisation for Private Sector Investment within the context of the Tourism Product Development Strategy. In most cases these projects are seen as joint Public / Private sector initiatives due to their recommended strategic importance in achieving the goals and targets set with the Tourism Strategy 2000:

Coastal Marina/Resort Developments (Durban; Port Shepstone; Hibberdene)

Dolphin Coast – Coastal Resort Development

King Shaka International Airport

Lubombo SDI / Greater St. Lucia Wetlands Park – various product developments

Margate Airport Upgrade

Point Waterfront

Richards Bay Cruise Ship Passenger Terminal

South Coast - Mpenjati Resort

A summary table of the recommendations for tourism product and infrastructure is included in Annexure 1 of this document.

3.8 Identification of Key Tourism Development Projects

The following have been identified and are recommended as the most significant development projects in terms of attaining the various goals and objectives as contained within the KZNTA Tourism Strategy 2000, as well as having been formulated within this Tourism Product Development Strategy. Detailed project sheets, containing preliminary proposals, budgets and timeframes for implementation, for each project are included as Annexure 2 of this document:

3.8.1 ZULU HERITAGE & CULTURAL TRAIL

Project 1. On the basis that a single project will not provide the strategic intervention necessary to act as the catalyst for the formation of the Zulu Heritage and Cultural Trail, it is recommended that the minimum implementation should focus on 2 strategic components, namely –

To enable ‘ease-of-access’ onto the trail from the major tourist-source markets – Durban and north and south coast in close proximity to Durban.

To provide world-class attractions, which will draw the tourists ‘through’ the Zulu Heritage and Cultural Trail once they have been initially attracted to it.

Based upon the above, the following three initial projects are recommended for implementation:

Project 2. The King Shaka Tourism Route focused around KwaDukuza, and in particular the re-generation of the King Shaka Interpretive Centre.

Project 3. The combining and development of the eMakhosini Valley and Opathe Game Reserve (eMakhosini Heritage Park – Valley of the Kings)

Project 4. The development of a reduced / phased Isibaya (The Royal Zulu House at Nongoma)

3.8.2 LSDI / Maputaland / St. Lucia

Project 5. With the objective of focusing on ‘accessibility’ and increasing the number of tourists and tourism revenue, the development of the proposed Cruise Ship Passenger Terminal at Richards Bay is recommended as the key infrastructure project. Redirection of world tourism, post 11 September, as well as demand for new destinations in the Cruise Ship industry, support this initiative as a key strategic intervention for increasing tourists into the Greater St. Lucia Wetlands Park, Wildlife and Cultural attractions of this destination, as well as providing a ‘word-of-mouth marketing tool for future tourism visits.

3.8.3 DOLPHIN COAST

Project 6. With the objective of focusing on the need to develop world-class coastal resort developments along the KZN Coastline, the recommendation is for support for the development of the proposed Coastal Resort Complex on the Tongati River, as identified by the Ilembe District Municipality. The underlying logic for this selection revolves around the fact that this stretch of coastline has already been identified as being probably the most suitable for such a development. The recent favourable news regarding the development of the King Shaka International Airport also provides the motivation for resort development in close proximity to this key transportation hub.

The development of such a resort is also considered as having the potential to act as a catalyst for further resort and similar development along this stretch of coastline.

3.8.4 DURBAN BEACHFRONT

Project 7. The preparation of a Strategic Tourism Development Plan for Durban Beachfront, including the Point Development and Marina’s to the south and up to and including Blue Lagoon / Umgeni River Mouth to the north, in terms of the recommendations previously contained within this report.

3.8.5 VALLEY OF 1000 HILLS

Project 8 This spatial tourism attraction has the ability to provide accessibility for tourists into rural areas associated with eThekweni Unicity; uGungundlovu and King Skaka District Municipalities. It can provide a range of scenic, wildlife and cultural attractions in close proximity to the major tourist-source market of Durban, thereby adding to the value of Durban as tourism destination, with the potential of growing tourist numbers and their length of stay, but perhaps most importantly providing a strategic intervention for developing tourism into the previously disadvantaged areas around the periphery of Durban. The key projects are the continued development of Community / Cultural Tourism in Inanda with a linkage to, and including, the Valley of 1000 Hills Tourism Routes, plus the establishment of the Mkhambathini Game Reserve.

3.8.6 UkHahlamba-Drakensberg

Project 9. This is considered as the primary inland tourism attraction within KZN and, with

Project 10. its recent granting of World Heritage Status, it is recommended that issues around accessibility need to be attended to. A number of Access Road Projects have been identified, which are proposed as being grouped together as a single project for implementation. The development of the Mnweni Valley is considered as the key development initiative that will act as a catalyst for further tourism related development within the area. In particular the development of the proposed Drakensberg Cableway is considered as being the most significant tourism draw-card and major attraction that could be developed within the area.

3.8.7 SOUTH COAST

Two principal aspects inform the recommendations for key development projects for the South Coast.

Project 11. The first is motivated as a strategic intervention to improve upon attracting (or rather re-attracting) the higher-spend category of domestic tourists, as well as foreign tourists. The concept of one or more coastal resort complexes, incorporating waterfront and/or marina facilities, are considered as being the type of primary attraction that could help rejuvenate the South Coast tourism industry. Such developments could act as the necessary catalyst to increase tourist numbers, which in turn could leverage new investment for upgrading of existing private sector tourism assets, as well as new developments.

It is understood that the Ugu District Municipality are presently engaged with two such development initiatives at Port Shepstone and Hibberdene. It is recommended that it may be necessary to initially step back from these ‘project driven’ initiatives and first re-evaluate two key components:

What would the market demand be for such developments?

What would be the best locations along the stretch of coastline between Port Edward and Scottburgh for such developments?

In this regard, it is recommended that investigations should include historical research as to why yacht owners previously relocated mooring of their boats to Cape Town from Durban. With the recent opening of new marinas at Richards Bay and Maputo, as well as the ability to sail / cruise further north along the East African coastline, plus the additional proposed marina facilities in Durban, whether, with additional mooring capacity along the South Coast, these boat owners would consider relocating back to KwaZulu-Natal.

Project 12. The second is motivated by the recognised need to open up ‘inland-tourism’ into the rural areas of the South Coast hinterland. Whilst a number of individual projects within these areas have been identified during this assignment, it appears that ‘individual’ is just what they are. The recommendation is to develop some form collective framework whereby the variety of individual projects focusing on culture, heritage, wildlife and the scenic beauty of the area, is brought together with the objective of creating a single inland destination image. The recommendation in this regard is to focus initially around the existing Oribi Gorge tourism asset and both north and south of the line of the Umzimkulu River. This would include such projects as the Uzumbe Game Reserve, proposed Umzimkulu Game Reserve, Gilbert Eyles, Muzimumbe, Mbumbasi, Nyamazane, Mfangisale and Ndwebu, with a key component of accessibility being provided by the proposed Steam Train from Port Shepstone to Harding, as well as the development of a tourism route linking all the sites together. This would obviously require a re-focusing of previous individual efforts into the creation of a collective spatial inland destination, which would need to be agreed with the District and Local Municipalities and other stakeholders in the first instance.

4. Investment and Funding Strategy

4.1 Introduction

The establishment of an Investment and Funding strategy for tourism product development pre-supposes the acceptance of two principal issues:

1. There is a united private and public sector acceptance that there exists, within KZN, a R7 billion opportunity that can only be realised if a properly structured and co-ordinated investment and funding strategy is in place, and,

2. The organisation responsible for implementing the strategy is adequately capitalised to carry out its task.

Crucial to the development and subsequent success of the overall strategy is a pervasive ‘climate of investment’ in the region. It is therefore important to set out the issues that have a direct bearing on an investment and funding strategy in the tourism sector in South Africa.

A ‘climate’ conducive to investment implies one that is relatively free of the impediments of bureaucracy and crime.

4.2 Pre-requisites to creating a ‘climate’ conducive to investment

The creation of a single body/agency whose mandate is to facilitate and streamline the public rules and procedures with the express objective of creating a climate conducive to investment.

Streamline investor access to information and the subsequent processing of that information is done through a single delivery channel.

Guarantee that investors have security of tenure.

A reduction in both the perceived and real crime levels.

An acute understanding as to who the ‘competition’ is regarding such opportunities to invest.

The situation is currently that the commercial banks have no appetite to finance tourism developments. The primary reason being that tourism, as an industry, is extremely susceptible to negative influences that are effectively beyond the control of the business itself. As examples, the endemic dangers of crime and malaria put a greater funding risk premium on the industry.

The gauge to measure whether the climate is right for investment is when the commercial banks revise their stance on tourism.

4.3 Project Funding in perspective

In devising a strategy one must take into consideration the importance of matching funding sources to appropriate projects. There are, in broad terms, three categories of funding sources; private enterprise, aid organisations, and, public enterprises. The key to correctly matching funding sources to projects lies in understanding the funding motive underpinning each organisation.

Private enterprise is motivated primarily by the relationship between risk and reward. Inevitably, therefore, commercial viability is paramount. In the broadest sense these entities will make in-depth assessments of past experience and track record in related projects and take significant comfort from the debt to equity ratio.

By contrast, Aid organisations and public enterprise are motivated primarily by poverty alleviation and job creation. Public enterprise does, however, have the additional motivation of development - social and infrastructural. Social development, in essence, refers to malaria eradication, crime, and education whilst infrastructural development refers to physical access such as, roads, bridges, and airports.

4.4 Strategy formulation

Prior to formulating any strategy it is important to understand the competition for capital resources: From a global standpoint there is an abundance of capital available for investment emanating from a variety of sources. Therefore, in order to successfully compete for a portion of the available capital only those projects that look most attractive from a risk and viability perspective will attract interest. It follows therefore that those projects that rank further down the scale in terms of risk and viability will either be unsuccessful in attracting the requisite capital or the capital will be priced to reflect this profile.

This, in part, answers why the tourism industry in South Africa has historically struggled to attract project funding. The risks are too high.

The key, then, to an ultimately successful investment and funding strategy, is to be able demonstrably to reduce the inherent investment risks.

The question is how does one formulate a strategy to achieve this given that the reality is that the current ‘investment climate’ is not exactly ideal?

In answering this question further assumptions need to be made. A core assumption in formulating an appropriate strategy is that central and local governments are supportive of tourism initiatives (these stakeholders are critical in every respect to a successful investment and funding strategy). It is the type and nature of this support that are key ingredients to attracting capital.

The strategy revolves around identifying the development regions/nodes and ranking the various projects within each region. Certain projects that demonstrate an ability to generate cash flow and are relatively impervious to market shocks will stand out and not require any financial support package. On the other hand there will be those projects that will have question marks over their ability to become commercially viable or sustainable in either the short or long term.

Therefore the funding strategies for each of the project categories mentioned above will be substantially different. The obviously viable projects will be funded by commercial banks or a consortia of commercial banks depending on the size of the project whilst the latter category of project will rely on packaged financial incentives granted at local and central government level.

Typically the nature of these financial incentives would occur at the entry and mezzanine levels of finance and, broadly speaking are grant funding and tax based schemes. There may, in certain instances, be an element of equity participation although this is dependent upon the regional / national importance of the project.

An important distinction to be made is that the commercial bank would consider the ‘less viable’ projects more palatable if a substantial portion of the risk is removed, firstly by the financial aid and, secondly if the commercial banks’ claims ranked preferentially ahead of the financial commitment made by government. The rationale is that the greater the ‘vested’ interest public enterprise has in a project(s) the more pro-active these structures will be in protecting their interest. This philosophy fulfils a virtuous cycle of a stable investment ‘climate’ and capital inflows.

The next steps in the strategy formulation process are to review the currently available financial incentives available and assess whether they are sufficient to compensate for project and ‘climate’ risk.

Each individual project’s commercial viability must then be evaluated. The outcome of this process will determine whether financial assistance is required and if so, the extent and nature of financial assistance.

4.5 Process of allocating appropriate capital sources to projects

In defining a successful strategy there is the need to develop a ‘Maslow’s Hierarchy’ type-package pertaining to each identified sector and then specific to each project.

This ‘Hierarchy’ is an attempt to narrow the focus in determining the appropriate funding strategy (only because there is a perception that, in the past, the provision of funding for these projects has failed because there has been a mismatch between project and source of funding):

Hierarchy descriptions:

Access: Implies the physical access to the Project location. Access also relates to any other impediments that may hinder or prevent access to the project location eg. Malaria eradication.

Project concept: Infrastructure vs. Cultural vs. Destination.

Viability: Initial financial assessment. Preceding any detailed EIA’s, market analysis, etc.

Nature of cash flows: Annuity (Predictable and extrapolated e.g. Toll road), or Visitor tariff (Unpredictable).

Interest expression: Local or Foreign source? What is their track record?

This ‘Hierarchy’ together with the existing project ranking exercise may result in changes having to be made not so much in the ranking of projects per se but in the creation of the climate to invest. For example, if crime is identified as a particular problem in a sector then the eradication of crime should be viewed as a project, given a ranking to reflect its priority, which will, in turn, trigger the implementation of a funding strategy.

Projects that reflect commercial viability will be presented to commercial banks and private enterprise as their motive is congruent with the project status. Whilst projects deemed to be of national importance/interest that do not show commercial viability require funding that is ultimately supported by the provincial, and possibly national, structures.

4.6 Strategy implementation

To implement the strategy the recommended structures need to be put in place and tasked with the responsibility to rank, assess, negotiate, and implement. As mentioned earlier a key success factor in the implementation of the strategy will be a strong political will, within both Central and Local Government structures, in support. This support will go a long way to creating the desired ‘climate’ for investment.

It remains then to list the various sources of funding.

4.7 Sources of Funding

Foreign aid:

For example;

Infrastructural development.

Eradication of malaria.

Crime prevention (Training, processes, etc.)

Public enterprise:

Industrial Development Corporation

Development Bank of South Africa

Khula Enterprise Finance

Issue of government bonds:

The possibility of raising of capital through the primary markets. This is relatively untested as yet but at the right price and with the appropriate credit rating does present strong potential.

Private enterprise

Commercial banks

Entrepreneurs

National and local government:

Grants (SMEDP Tourism – cash backed tax incentive to a max. project value of R100m)

Subsidies

Tax relief.

5. INSTITUTIONAL, FUNCTIONAL, LEGAL AND POLICY ISSUES

5.1 Introduction

Over the last few years many research studies have identified a myriad of institutional, functional, legal and policy issues, which have hampered tourism development in KwaZulu-Natal. Various agencies, authorities and government departments have acted on these studies and significant advances have been made to eliminate these impediments.

There are, however, still a number of issues that continue to have a negative impact on tourism product development in the Province. Some of these are realities over which the Province has no control and around which tourism product development must be managed. Other issues are currently inhibitors to tourism product development, but could be reduced or eliminated by further timeous action. The issues may be institutional, functional, legal or policy-related, and most of the issues could be classified in more than one of these categories.

The following issues are discussed in this report:

Synergy between tourism product development institutions

Basic Infrastructure versus Tourism Product Development

The involvement of local communities in tourism product development

National tourism product development plans versus provincial goals

Masterplanning

Coordination of planning processing

Tourism product development capacity in local and regional authorities

Traditional land tenure and ownership

Government-owned land

Land restitution claims procedures

Conservation versus tourism product development policies

The cost of Development Facilitation Act procedures

The detailed analysis and discussion of these issues are set out in the Annexures to this summary report. This summary sets out below the implications of these issues for the KZN Tourism Product Development Strategy.

5.2 Implications for the KZN Tourism Product Development Strategy

The above issues must be taken into account in selecting projects for the Tourism Product Development Strategy together with the following:

5.2.1 Guidelines for the selection process are as follows:

The proposed location of projects must be compared to the spatial plans in the Provincial Growth and Development Strategy, as well as local Integrated Development Plans, to ensure that such locations are compatible with the masterplan.

The ownership of the proposed land for each project should be ascertained at an early stage to determine whether it is likely to cause problems or special requirements. For example, Ingonyama Trust land, land subject to land claims, land owned by the State and land occupied by KZN Wildlife, all require special consideration and processes.

5.2.2 Guidelines for project implementation are as follows:

Clear responsibility for the implementation of the projects must be devolved to the most appropriate government agency, depending upon the roles assigned to the different agencies.

Project infrastructure needs must be determined and submitted to the appropriate local municipalities for inclusion in their Integrated Development Plans.

Where projects require community involvement, the appropriate processes must be understood and followed closely.

The Department of Traditional and Local Government Affairs should be approached to assist with the coordination of processing and to ensure that the correct process is followed with regard to the Development Facilitation Act.

6. SUMMARY

This completes the final draft summary report of the KwaZulu-Natal Tourism product Development Strategy. It is clear from the report that, since the KwaZulu-Natal tourism industry competes with so many other attractive tourist destinations throughout Southern Africa and the rest of the world, the Province faces a major challenge to provide world-class, high quality tourism products which will assist the industry to retain domestic tourists and attract more foreign tourists to its shores.

This challenge has been taken up and the catalytic projects recommended in this report are but a small start to what needs to become a flood of tourism product development in the Province.

The next step is for the KZNTA to work hand-in-glove with the other tourism related agencies and the private sector to bring these products to fruition.

The Deloitte & Touche Consortium wishes to thank the Management and Staff of the KZNTA and of all the other public and private sector organisations which have contributed so enthusiastically to the content of this report.

ANNEXURE 1:

SUMMARY TABLE OF RECOMMENDATIONS FOR TOURISM PRODUCT & INFRASTRUCTURE DEVELOPMENT

ANNEXURE 1: SUMMARY TABLE OF RECOMMENDATIONS FOR TOURISM PRODUCT & INFRASTRUCTURE DEVELOPMENT

PROJECT TYPE

DESTINATION / NODE

PROJECT NAME

BUDGET

POTENTIAL / SUGGESTED FUNDING SOURCE

RESPONSIBLE INSTITUTION

Soft Infrastructure

Province wide but particularly within key Destinations / Nodes

Management of Perceptions of Personal Safety

Annual on-going budget to be reviewed with KZNTA

Public Sector

KZNTA Internal

KZNTA

Soft Infrastructure

Province wide but particularly relative to key Destinations / Nodes

Market Research of Tourist-source Markets & their Needs

Annual on-going budget to be reviewed with KZNTA

Public Sector

KZNTA Internal

KZNTA

Soft Infrastructure

Province wide but particularly relative to key Destinations / Nodes

Management of the Supply-Chain

Annual on-going budget to be reviewed with KZNTA

Public Sector

KZNTA Internal

KZNTA

Soft Infrastructure

Province wide but particularly relative to key Destinations / Nodes

Accessibility – Destination Marketing

Annual on-going budget to be reviewed with KZNTA

Public Sector

KZNTA Internal

KZNTA with relevant District Municipalities & Tourism Associations

Soft Infrastructure

Province wide but particularly relative to key Destinations / Nodes

Accessibility – Ease of Access

Annual on-going budget to be reviewed with KZNTA

Public Sector

KZNTA Internal

KZNTA with relevant District Municipalities & Tourism Associations

Soft Infrastructure

Province wide but particularly relative to key Destinations / Nodes

Accessibility – Tourism Route / Access Development

Annual on-going budget to be reviewed with KZNTA

Public Sector

KZNTA Internal

KZNTA with relevant District Municipalities & Tourism Associations

Soft Infrastructure

Province wide but particularly relative to key Destinations / Nodes

Product Development Database & Prioritisation

Annual on-going budget to be reviewed with KZNTA

Public Sector

KZNTA Internal

KZNTA with relevant District Municipalities & Tourism Associations

Soft Infrastructure

Province wide but particularly relative to key Destinations / Nodes

Business Planning for Implementation & Co-ordination of the Zulu Heritage & Cultural Trail

R500,000

Public Sector

KZNTA; Ilembe; Uthungulu; & Zululand Municipalities

PROJECT TYPE

DESTINATION / NODE

PROJECT NAME

BUDGET

POTENTIAL / SUGGESTED FUNDING SOURCE

RESPONSIBLE INSTITUTION

Hard Infrastructure

EThekweni Unicity but impact Province wide

Motivation for King Shaka International Airport for Tourism Growth

Unknown

Private/Public Sector

KZN Dept. Economic Development & Tourism; eThekweni Unicity

Hard Infrastructure

Maputaland / St.Lucia / Richards Bay

Richards Bay Cruise Ship Passenger Terminal

R120 million

Public Sector

Portnet Properties/ Uthungulu District Municipality

Hard Infrastructure

Maputaland / St.Lucia

Local Airstrip Upgrades at Dukuduku; Hluhluwe; & Manzangweya

Part of LSDI

Public Sector

Lubombo SDI; Uthungulu & Umkhanyakude DM’s

Hard Infrastructure

South Coast

Margate Airport upgrade

R5 million

Private/Public Sector

Ugu District Municipality

Hard Infrastructure

Coastal Destinations

Coastal Marina Developments

Unknown

Private/Public Sector

LSDI; eThekweni Unicity; Ilembe & Ugu DM’s

Hard Infrastructure

Ukhahlamba-Drakensberg

Access Road Upgrades

R196 million

Public Sector

District Municipalities & KZN Dept. Transport

Soft / Hard Infrastructure

Ukhahlamba-Drakensberg

Tourism Route Planning & Implementation

R17.25 million

Public Sector

Uthukela District Municipality

Soft / Hard Infrastructure

Maputaland / St.Lucia

Tourism Route Planning & Implementation

Part of LSDI

Public Sector

Lebombo SDI; Uthungulu & Umkhanyakude DM’s

Soft / Hard Infrastructure

Dolphin Coast

Tourism Route Planning & Implementation

R5 million

Public Sector

Ilembe District Municipality

Soft / Hard Infrastructure

Durban

Tourism Route Planning & Implementation

Unknown

Public Sector

eThekweni Unicity

Soft / Hard Infrastructure

South Coast

Tourism Route Planning & Implementation

R32 million

Public Sector

Ugu District Municipality

PROJECT TYPE

DESTINATION / NODE

PROJECT NAME

BUDGET

POTENTIAL / SUGGESTED FUNDING SOURCE

RESPONSIBLE INSTITUTION

Nodes / Sites / Projects

Maputaland / St.Lucia

LSDI – Kosi Bay; Lake Sabayi; & GSLWP existing Resort & Wildlife

PROJECT TYPE	DESTINATION / NODE	PROJECT NAME	BUDGET	POTENTIAL / SUGGESTED FUNDING SOURCE	RESPONSIBLE INSTITUTION
Soft Infrastructure	Province wide but particularly within key Destinations / Nodes	Management of Perceptions of Personal Safety	Annual on-going budget to be reviewed with KZNTA	Public Sector KZNTA Internal	KZNTA
Soft Infrastructure	Province wide but particularly relative to key Destinations / Nodes	Market Research of Tourist-source Markets & their Needs	Annual on-going budget to be reviewed with KZNTA	Public Sector KZNTA Internal	KZNTA
Soft Infrastructure	Province wide but particularly relative to key Destinations / Nodes	Management of the Supply-Chain	Annual on-going budget to be reviewed with KZNTA	Public Sector KZNTA Internal	KZNTA
Soft Infrastructure	Province wide but particularly relative to key Destinations / Nodes	Accessibility – Destination Marketing	Annual on-going budget to be reviewed with KZNTA	Public Sector KZNTA Internal	KZNTA with relevant District Municipalities & Tourism Associations
Soft Infrastructure	Province wide but particularly relative to key Destinations / Nodes	Accessibility – Ease of Access	Annual on-going budget to be reviewed with KZNTA	Public Sector KZNTA Internal	KZNTA with relevant District Municipalities & Tourism Associations
Soft Infrastructure	Province wide but particularly relative to key Destinations / Nodes	Accessibility – Tourism Route / Access Development	Annual on-going budget to be reviewed with KZNTA	Public Sector KZNTA Internal	KZNTA with relevant District Municipalities & Tourism Associations
Soft Infrastructure	Province wide but particularly relative to key Destinations / Nodes	Product Development Database & Prioritisation	Annual on-going budget to be reviewed with KZNTA	Public Sector KZNTA Internal	KZNTA with relevant District Municipalities & Tourism Associations
Soft Infrastructure	Province wide but particularly relative to key Destinations / Nodes	Business Planning for Implementation & Co-ordination of the Zulu Heritage & Cultural Trail	R500,000	Public Sector	KZNTA; Ilembe; Uthungulu; & Zululand Municipalities