South Africa’s 2025 Budget: What’s on the MICE Industry’s Wish List?
Finance Minister Enoch Godongwana presented the 2025 Budget Speech in the National Assembly on Wednesday, February 19th.
This crucial speech outlined the government’s financial priorities, echoing President Cyril Ramaphosa’s State of the Nation Address from February 6th.
It detailed the financial, economic, and social commitments the government plans to prioritize in its upcoming expenditures.
To get a sense of the industry’s hopes, we spoke with several leaders in the tourism and hospitality sectors about their budget wish lists.
Tshifhiwa Tshivhengwa, CEO of the Tourism Business Council of South Africa (TBCSA), expressed optimism following the President’s acknowledgement of tourism as a vital economic driver.
He hopes the budget will allocate funds to projects benefiting the sector and contributing to broader economic recovery.
A key priority for the TBCSA is modernizing the visa system, using technology to streamline processes and boost South Africa’s global competitiveness.
Furthermore, they’re advocating for improvements in public infrastructure, like roads and public spaces, to enhance the visitor experience, especially with the upcoming G20 summit.
Tshivhengwa believes strategic investment in these areas will strengthen the tourism sector’s job creation and economic development capabilities.
Alan Campbell, Sales and Marketing Director for ANEW Hotels & Resorts, welcomed the government’s commitment to R940 billion (€48.9 billion) in infrastructure investment.
However, he voiced concern that this might not adequately address areas crucial to tourism.
He highlighted unreliable transport, poorly maintained roads, and limited connectivity in rural areas as major obstacles for tourists and operators.
These issues disproportionately affect small businesses and community-based tourism initiatives in regions like Mpumalanga, Limpopo, and the Northern Cape.
Campbell emphasized the rich tourism potential of these areas, urging the budget to prioritize infrastructure improvements, including roads, airports, and public transport.
He also strongly advocated for increased funding for destination marketing.
He noted that while global tourism marketing budgets are expanding, South Africa’s remains relatively stagnant.
In 2024, competitors like Kenya and Morocco surpassed South Africa with effective digital marketing campaigns targeting high-value travelers.
Campbell believes the government needs to boost South African Tourism’s budget to create dynamic global campaigns, focusing on emerging markets like China, India, and the Middle East, and regional travel from neighboring countries.
He acknowledged the resilience of the tourism and hospitality sectors but stressed that resilience alone isn’t enough to drive growth.
He hopes the 2025 Budget will take bold action, addressing systemic challenges and creating new opportunities.
He believes the right budgetary support could be a turning point for the industry’s growth.
Rosemary Anderson, National Chairperson of FEDHASA, emphasized the need for bold fiscal policies to encourage investment and job creation in the sector.
She cited successful examples from other countries, like Singapore’s productivity and innovation credit scheme, which allowed businesses to deduct up to 400% of qualifying expenditures for tourism-related projects.
Anderson believes a similar incentive could stimulate reinvestment in South Africa’s tourism infrastructure.
She also pointed to Brazil’s fiscal incentives program from 2002, which resulted in a 34% increase in tourism-related employment in the Northeast region.
Anderson believes a similar program in South Africa could significantly boost economic activity in rural areas.
She highlighted the enormous potential of South Africa’s smaller towns and villages as rich tourism destinations.
Anderson concluded that with proper support, tourism can be a powerful driver of job creation and economic growth.
She hopes the budget will introduce smart fiscal incentives to unlock investment and create jobs where they are needed most.
Otto de Vries, CEO of ASATA, emphasized the importance of supporting growth in the travel and tourism sector through strategic budget allocations across various ministries.
While advocating for increased funding for the Department of Tourism, he also stressed the need for recognizing domestic travel’s significant economic contribution.
De Vries pointed out that domestic tourism, especially corporate travel, contributes R123 billion (€6.4 billion) to the GDP, exceeding the R95 billion (€4.9 billion) contributed by inbound tourism.
He believes increased investment in domestic travel marketing could yield quick economic wins.
He also emphasized the importance of outbound travel for tourism growth, stating that inbound success relies on profitable airline routes, requiring full planes in both directions.
De Vries suggested increasing budgets for International Relations and Cooperation and Home Affairs to improve visa policies and reduce costs for South African passport holders.
He stressed the importance of a stable aviation environment, including clear airline licensing policies and investment in critical infrastructure like reliable flight systems, fuel stability, efficient airport operations, and digitized border processes.
He believes these elements are essential to expanding air connectivity and driving down prices.
Echoing De Vries’ call, Ken Hill, CEO of Drifters, suggested decreasing airport taxes to make flights to South Africa more affordable, allowing visitors to spend more money elsewhere in the country.
Sabine Blehle, CEO of GoVacation Africa, advocated for increased funding for destination marketing to improve the skills and awareness of South Africa in overseas markets.
She also suggested bringing more agents on familiarization trips to educate them about South Africa’s offerings.