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How globe-trotting students grow SA’s economy
5/1/2015

​Globally, tourism is regarded as a modern-day engine of growth. In South Africa, it is a “sector of hope”, contributing 10% to the country’s gross domestic product. Adding academic tourism to the mix can play a significant part in future growth, experts say.​

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Each day, a significant number of passenger flights can be seen and heard in the airspace above the University of Stellenbosch Business School (USB), making their way to the tarmac at the nearby Cape Town International Airport.

These aircraft ferry millions of local and international travellers to what is South Africa's second largest airport, and a prime tourism gateway to everything the Mother City offers. Often among the visitors are foreign MBA students travelling to Cape Town to spend time at USB as part of their exchange programme. Others come here for a week or two as a group of international executives from USB's partner business schools all over the world.

In 2012, Cape Town International was named Africa's leading airport in the World Airport Awards. It is also Africa's third busiest airport after OR Tambo in Johannesburg and Cairo International Airport in Egypt. A decade ago, the number of passengers trafficking through the airport amounted to almost seven million. This year, double that amount is expected to pass through the airport's terminals.

The international visitors are mainly from the United Kingdom, which accounts for South Africa's largest overseas market, followed by countries such as Germany, France and Italy. Out of the rest of Africa, Nigerians make up the majority of air market visitors to South Africa. Continued growth is also recorded in visitor numbers from North America, Asia and Central and South America.

They come to South Africa for holiday, business, medical procedures, study purposes or so-called MICE tourism, which is the collective name for travel encouraged by having to attend meetings, (workplace) incentives, conferences and exhibitions.

 

Growing a 'sector of hope'
The money that these tourists spend on their visits to Cape Town and other parts of South Africa add enormously to the city's and the country's economic growth. On a national level, tourism contributes about 10% to South Africa's gross domestic product (GDP), says international tourism expert Prof Shaun Vorster, a USB MBA alumnus and associate professor extraordinaire.

Referring to tourism as "a sector of hope, opportunity and a better life for all", he adds: "Not only does it employ more people than banking, mining, communications or automotive manufacturing, the World Tourism and Travel Council also tells us that for every job created in tourism, more jobs are created in the rest of the economy – and at a lower cost than is the case for most other economic sectors."

According to figures released in 2013 by Statistics South Africa, tourism contributed to approximately 617 287 direct jobs in 2012, amounting to about 4,6% of direct employment in the country. In 2011 the figure was 591 785.

Prof Vorster also points to the fact that tourism generates 70% of the country's services export revenues and 9,4% of total exports. "This means that tourism is bringing in plane loads of foreign currency, and foreign currency helps to fuel the economy. It pays, for example, for the imported machinery on which sectors such as manufacturing and mining depend, and for imported textbooks on which tertiary education depends."

Earlier this year, Tourism Minister Derek Hanekom said the performance of the tourism sector underscored the fact that the fundamentals of the industry were sound. "This bodes well for future growth. Tourism continues to be one of the stars in our economy."

And as such, says Prof Vorster, there may potentially be a place for tourism in business schools' MBA modules. "In future, especially as the commitment to inclusive and green growth gains global traction, business schools may focus on sustainable executive tourism in their offering."

Prof André Roux, outgoing director of Stellenbosch University's Institute for Futures Research and USB professor in Economics, speaks about the past first: "Obviously, before the 1990s tourism was not a big thing because the country was isolated in so many ways. Not many people came to the country, but it was still a very attractive place."

That all changed now, says Prof Roux.

"We receive millions of tourists each year. Together they probably constitute 10% of the country's GDP. By comparison our primary sector (mining and agriculture), account for about 10% of the economy. So we can say our tourism economy is more or less the same size as our mining-and-agriculture economy to give it some perspective."

Interviewed while he is seated outside in the sun with a passenger flight flying overhead, he turns the spotlight on the future: "We're probably underutilising our tourism sector."

Medical tourism is one area where Prof Roux sees great potential for growth. This phenomenon allows foreigners to come to South Africa to have a medical procedure, such as plastic surgery, performed.

Prof Roux says: "While here, they get good medical service, for fairly cheap. Then they spend a few weeks recuperating while enjoying our country's natural beauty. And the whole trip turns out cheaper than the same operation back home."

 

The growth of academic tourism
Another future scenario raised by Prof Roux is the potential growth in academic tourism, whereby students spend a part of their academic programme in South Africa.

The country's unique mix of challenges – poverty, inequality and unemployment – is often unknown to these students and scholars. "In our current almost mental psychosis of negativism, it's interesting how they see something different. They see a country with a lot of spirit, of vitality, a lot of excitement. And they go back, revitalised about the world and its problems. So I think academic tourism is something that we can really start expanding on in this country."

South Africa has got good universities and good facilities, says Prof Roux. Already, "more than just a handful of business schools from all over the world" annually visit USB to learn about the South African experience and diversity, he emphasises.

It is an experience that starts as their flights descend over the USB's campus in the Tyger Valley business district, a short distance from the Cape Town International Airport.


The world at USB
In 2014 USB hosted international groups and exchange students from the following countries:

  • United Kingdom
  • United States of America
  • Germany
  • France
  • Mauritius
  • Nigeria
  • The Netherlands
  • Latvia
  • Belgium
  • Canada
  • Italy
  • Turkey
  • Russia
  • China
  • Brazilia


The list for 2015 includes: The Netherlands, USA, Belgium, Mauritius, Ukraine, UK, France, Germany and Sweden.

Watch full interview with Prof André Roux HERE

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