NATIONAL CRUISE TOURISM...Confidential Page 3 2/3/09 • Achieve understanding of the challenges facing the industry; • Achieve agreement of the need to pursue Cruise Tourism as

Confidential Page 1 2/3/09

NATIONAL CRUISE TOURISM

INITIAL OPPORTUNITY EXAMINATION

REPORTBACK TO D.E.A.T

PRESENTED TO: SINDISWA NHLUMAYO, D.D.G. DEAT

DATE: FEBRUARY 03, 2009

AUTHORED BY: ANITA MENDIRATTA

CLASSIFIED: CONFIDENTIAL


BACKGROUND

On January 27, 2009 the Deputy Director-General, Ms Sindiswa Nhlumayo, hosted

a local government Indaba on Tourism with leaders critical to growth and

development of the nation’s Travel & Tourism sector.

Immediately following the Indaba DEAT leveraged the opportunity of having a

rich number and diversity of government and private sector representatives from

South Africa’s coastal provinces to host a mini workshop with all coastal provinces

where we will discuss an integrated approach to both Cruise Tourism as well as

Blue Flag Status for

South Africa, namely:

o Western Cape

o KZN,

o Northern Cape and

o Eastern Cape.

This report reflects only the outputs and proposed Strategy going forward as

regards CRUISE TOURISM

WORKSHOP OBJECTIVES

From a Cruise Tourism perspective the national Coastal Province workshop

focusing on Cruise Tourism sought to achieve alignment and momentum of

Tourism leadership of coastal provinces. Specifically the Workshop sought to:

• Set the context of the importance of Cruise Tourism and DEAT’s focus on same;

• Gain consensus on the best way of taking Cruise Liner tourism forward;

• Share findings of an initial feasibility study completed by the City of CT on the

potential of the cruise liner industry around the Southern African coastline;


• Achieve understanding of the challenges facing the industry;

• Achieve agreement of the need to pursue Cruise Tourism as a national Tourism

priority, supported by coastal province Tourism authorities

• Agree next steps, roles and accountabilities of examination and mobilisation

of the potential of Cruise Tourism.

Critical to the success of the Workshop, and exploration of CRUISE TOURISM per se,

is momentum. For this reason it was agreed that, in addition to facilitating the

Workshop, CACHET Consulting will deliver to DEAT within 10 days of the Workshop

a clear Framework for both Cruise Tourism and Blue Flag Beach Status based on

workshop outputs, including:

1. Short term strategy (towards 2010);

2. Long term plan reviving the sector;

3. Roles of the three spheres of government and industry stakeholders.

This report is, therefore, a comprehensive reportback of:

PART 1) WORKSHOP OUTCOMES – specific agreement and resolutions reached

in the Workshop by all participating, and endorsed by DEAT (distributed on

January 29, 2009 to DEAT: SN / NN / LN / BS)

PART 2) A clear, concise FRAMEWORK for Cruise Tourism incorporating an

overview:

o SHORT-TERM STRATEGY (leading up to 2010)

o LONG-TERM PLAN for reviving the sector

o Outline of ROLES OF THE THREE SPHERES OF GOVERNMENT and INDUSTRY

STAKEHOLDERS, namely Municipal, Provincial and National


PART 1: WORKSHOP OUTCOMES

In line with Workshop objectives, the below outcomes emerged from the group of

over 70 representatives from, inter alia:

o Coastal Provinces (Local and Provincial Government),

o DEAT National Government,

o the Private Sector (individuals and associations) and

o the media.

KEY OUTCOMES OF JANUARY 27TH 2009 CRUISE TOURISM WORKSHOP:

1. Agreement by all present to PROCEED with Cruise Tourism as a priority

development sub-sector for Tourism’s growth and development in S Africa

(and Southern Africa).

2. Agreement that DEAT should be the national Champion of the initiative,

supported by a STEERING COMMITTEE of selected, numbers-controlled

representatives from Coastal Provinces and Port Cities as well as private

sector / parastatal partners (ie ACSA, TRANSNET, DBSA)

3. Agreement by all present that Coastal Provinces / Port Cities are to

propose 1 (+ 1 back-up) Steering Committee representative to

DEAT/Sindiswa by Monday, February 02/09 for DEAT’s selection of Steering

Committee members. Chairman also to be appointed from same.

4. Agreement by all present to share with DEAT/Sindiswa all existing Cruise

Tourism knowledge (studies, research, etc) for the development of a

singular, centralised DEAT Cruise Tourism DATABASE

5. Agreement by all present for DEAT to PROCEED with Cruise Tourism

ECONOMIC IMPACT STUDY which will be conducted by Mitchell DuPlessis

(incorporating Market Segmentation / Competitiveness), recognising the

window of opportunity held by the study team for commencement end

Q1/09. Expected study duration: 3 months.


Based on the above, the following actions are being undertaken:

o Coastal Provinces / Port Cities are to propose 1 (+ 1 back-up) Steering

Committee representative to DEAT/Sindiswa

o Development of a singular, centralised DEAT Cruise Tourism DATABASE is

being explored by DEAT

o Bev Mitchell of Mitchell DuPlessis is in contact with the international study

team leading the National Cruise Tourism ECONOMIC IMPACT STUDY for

commencement end Q1/09. Updating study costs being established

nb: City of CT (Mansoor Mohamed) has, in theory, offered to cover 50% of

the Study cost as they are acting as study custodians and had commissioned

the previous Study which has lead us to this point of confident, aligned

agreement for sub-sector development)

Progress of the above outcomes is now in the trustworthy hands of NALEDI NKULA

and LORAINE NCUBE at DEAt as per instruction of Ms NHLUMAYO, DDG.


PART 2: FRAMEWORK

The above outputs from the workshop set the short-term agenda for actioning the

Cruise Tourism project for South Africa. These actions are critical to ensure

momentum of focus and progression on this important segment of the Tourism

sector.

DEAT recognises, however, that while short-term action is critical, so too is having a

longer-term vision and strategy for the sector.

This is required to ensure sector development which truly delivers long-term,

balanced growth for the nation.

This requires that the following principles of development be taken into account:

At a STRATEGIC level, Cruise Tourism sector development must ensure an

approach is adopted which:

o Responds to the greater Tourism mandate

o Increases competitiveness of the destination

o Is grounded on evolving, equitable market needs and opportunities

o Focuses on opportunities which deliver a strong, meaningful R.O.I.

o Targets key source markets which complement existing marketing and

promotional efforts of the nation’s tourism entities

o Establishes a South African Cruise Tourism positioning which aligns to the

greater national positioning of the destination, resonates with market needs

and destination offering

o Secures and leverages all available resources – people, time, funds to

sustain sector growth and impact


o Ensures inclusion and buy-in of all coastal provinces (at both tourism sector

and general community levels) and sectors which can benefit from Cruise

Tourism stimulation

o Is sustainable as a long-term pillar of tourism growth and development for

the nation.

o Increases the year-round awareness, appeal and attraction of South Africa

o Builds the regional, Southern African Cruise Tourism sector for the benefit of

SADC.

o Measures growth based on the UNWTO’s Quadruple Bottom Line

framework: Economic, Social, Environmental and Climate Control

While at a PRACTICAL level it is important to ensure that sector development:

o Elicits and provides on-going, confident and visionary leadership behind

sector design and development

o Prioritises and resources Cruise Tourism as a powerful fuel for realisation of

the nation’s greater Tourism development objectives

o Invests in critical, market-focused requirements of truly world-class Cruise

Tourism experience creation for successful, sustainable sector delivery

o Maximises opportunities for offering land and sea travel

o Maximises opportunities for Cruise Tourism to be applied in both Leisure and

Business Tourism contexts

o Stimulates both the international and domestic markets

o Identifies and applies global best practice at all levels of design and

delivery of the Cruise Tourism offering

o Engages key front-line partners involved in ‘engineering’ the needs of the

sector at an operational level, both nationally and internationally


o Builds on the specific, stated needs of the international cruise line industry

to ensure development of infrastructure and supporting services in line with

key industry players’ expectations and wishes

o Continuously takes a carefully segmented, market-orientated approach to

sector activation

o Actively participates in international Cruise Tourism trade events to establish

and embed South Africa as a major player on the international Cruise

Tourism map

o Consistently engages leading tourism organisations (ie UNWTO) as a partner

in effective sector development and promotion

o Leverages 2010 as a stimulus for engaging with target cruise line companies

The above strategic and practical considerations representing, in effect, key

Enablers of establishment and mobilisation of a globally competitive, locally

celebrated Cruise Tourism offering in South Africa.

With these in mind the following Short-Term (2009 – 2010) and Long-Term (2010-

2020) Frameworks have been designed for DEAT as guidelines for proceeding with

Cruise Tourism sector development and activation.

Importantly, these Frameworks are to be treated as directional compasses

outlining Key Actions required, and are not Strategies within themselves as not

enough examination and analysis has been done on the sector to enable delivery

of a fully informed, credible South African Cruise Tourism Strategy.

As is seen below, the development of a comprehensive, long-term South African

Cruise Tourism Strategy is, however, a key requirement going forward.


NOTE:

The Frameworks have been created based on two dimensions:

1. SUPPLY: creation of the essential Hardware (ie infrastructure) and

Software (ie supporting services, skills development) to meet

technical delivery requirements and wishes of the international and

regional Cruise Tourism industry

2. DEMAND: creation of critical drivers of destination awareness and

preference (ie marketing, promotion, strategic partnerships) for on-

gong, impactful attraction of interest and utilisation of South Africa

as a major global Cruise Tourism destination.

Importantly:

The SHORT-TERM FRAMEWORK outlines, from a more practical perspective, what

needs to happen now to turn conceptual buy-in of a Cruise Tourism sector in

South Africa into a working reality.

The LONG-TERM FRAMEWORK needs to address, from a more strategic

perspective, the greater direction and development path of the Cruise Tourism

sector in the nation and region.


FRAMEWORK: SHORT-TERM (2009-2010)

For South Africa to be able to effectively and efficiently mobilise development of

the Cruise Tourism sector between now and 2010 a number of short-term actions

are required.

These actions all work together to set in place the initial engineering of a

collective, connected Cruise Tourism sector for the nation. Together they quickly,

carefully and cohesively establish:

1. Leadership of new sector development from select, limited, key

Stakeholders instrumental in sector ‘engineering’ at both

Government, Private sector levels.

2. Opportunity identification of the new sector, based on:

o global best practice,

o key cruise liner customer needs identification, and

o careful examination of the holistic impact of the sector to the

greater Tourism and Economic Development goals of coastal

provinces and the nation as a whole

3. Knowledge Collection and Centralisation of existing intelligence

which is held by National Government, Coastal Provinces and

private sector key Stakeholders around Cruise Tourism

4. Interim Cruise Tourism facilities offering for cruise liner activity 2010 in

order to leverage exposure of the sector, and destination as a

whole, during the highly publicised, high profile and high visitation

period of the FIFA WORLD CUP.


SUPPLY

ACTION DESCRIPTION TIMING

1. NATIONAL CRUISE

TOURISM FORUM

ACTIVATION

o Creation of a National Cruise Tourism TASK

TEAM based on representatives from:

o Coastal province and city governments

(maximum 8)

o National Key Stakeholders related to

Cruise Tourism infrastructure and

accessibility: ACSA, TRANSNET, Dept of

Transport, SAT (maximum 6),

o Key Stakeholders from the Private sector,

ie: MSC (maximum 3)

o 1 appointed Chairman

o Activation of a monthly TASK TEAM Forum to,

inter alia, address critical issues, create the

groundswell for cross-coastal province buy-in,

monitor progress of sector development as a

whole, and provide regular reportbacks to

DEAT for national sharing of progress.

February/09

From

March/09

2. NATIONAL CRUISE

TOURISM KNOWLEDGE

CENTRE DEVELOPMENT

o Creation of a centralised DEAT Cruise Tourism

database for internal and external viewing of

collective knowledge (research, reports,

studies, publications, etc) on Cruise Tourism

held by Coastal Provinces, Private sector,

National government and others

o Establishment of on-going dialogue with TASK

TEAM to continuously update DEAT database


3. NATIONAL CRUISE

TERMINAL STRATEGY

DEVELOPMENT

o Appointment of Strategic services for the

development of a long-term Cruise Tourism

Strategy 2010 – 2020 for South Africa (and

Southern Africa)

o Development of a long-term Strategy for SA

Cruise Tourism taking into account key

components of, inter alia,:

o Market opportunity: international and

domestic

o Competitive landscape

o Key needs and expectations of Cruise

Liners

o Investment: initial and on-going

o Policy development requirements

o Incentivisation

o Economic impact

o Environmental impact

o Social impact

o Considerations regarding Climate

Change

o Skills development

o Marketing: B2B and B2C

o Promotion: B2B and B2C

February/09

March – May

/09

4. TEMPORARY CRUISE

TERMINAL

o Examination of existing port facilities vis a vis

cruise liner requirements for 2010

March /09


DEVELOPMENT FOR

2010 o Identification of interim operational needs for

2010

o Securing of requisite approvals and funding

o Activation of interim 2010 Terminal project

plan with key Stakeholders (nb: TRANSNET)

o Establishment of interim Marketing

Programme in lead-up to 2010 for inclusion in

WTM 2009 efforts

May/09 July/09 September/09 – April/10 November/09

DEMAND

ELEMENT DESCRIPTION TIMING

1. ECONOMIC IMPACT

STUDY

o Appointment of City of CT as custodian of

Economic Impact Study on behalf of DEAT

(nb: effectively Stage 2 of Cruise Tourism study

already executed by the City of CT)

o City of CT / Mitchell duPlessis securing of

services of global Cruise Tourism expert for

Study activation by end Q1/2009

o Securing by DEAT of required funding for

Study commencement

o Study complete by end Q2/2009

January/09

February/09

February/09

June/09

2. INDUSTRY NEEDS

DEFINITION

o Invitation (possibly during 2010) to the leading

cruise liner conglomerates, namely:

o MSC


o NCL/Star Cruises

o Royal Caribbean

o Carnival Corporation

to individually come and visit South Africa to

share their respective perspectives on the

opportunity for SA as one of their destinations.

o Specifically seeking identification of their

needs as regards:

o Infrastructure (ie terminals + supporting

infrastructure)

o Services and servicing

o Value-add offerings

o Incentives

o Marketing and promotional support


FRAMEWORK: LONG-TERM (2010-2020)

From a long-term perspective, as indicated earlier it is vitally important for DEAT to

invest the necessary resources – people, intelligence, time and funding – into the

creation of a holistic, visionary, challenging, competitive and differentiating Cruise

Tourism Strategy for South Africa (and SADC per se).

To achieve this goal a specific project is recommended around creation of same.

DEMAND & SUPPLY

ELEMENT DESCRIPTION TIMING

1. NATIONAL CRUISE

TERMINAL STRATEGY

DEVELOPMENT

o Appointment of qualified, respected strategic

consulting services for the development of a

long-term Cruise Tourism Strategy 2010 – 2020

for South Africa (and Southern Africa)

o Development of a long-term Strategy for SA

Cruise Tourism taking into account key

components of, inter alia,:

o Market opportunity: international and

domestic

o Competitive landscape

o Key needs and expectations of Cruise

Liners

o Investment: initial and on-going

o Policy development requirements

o Incentivisation

February/09

March –

June /09


o Economic impact

o Environmental impact

o Social impact

o Considerations regarding Climate Change

o Skills development

o Marketing: B2B and B2C

o Promotion: B2B and B2C

o Critical roleplayers

o Goals

o Measures

o Milestones


ROLE OF LEVELS OF GOVERNMENT AND INDUSTRY STAKEHOLDERS

Finally, in the development of a national Cruise Tourism sector it is recommended

at this stage that the following roles and responsibilities be assigned to the

different levels of Government:

LEVEL OF

GOVERNMENT

ROLE & RESPONSIBILITY

NATIONAL (ie

DEAT)

o Championing the development of a national Cruise

Tourism sector

o Overseeing of TASK TEAM

o Acting as guardian of execution of both the Short-Term

and Long-Term Frameworks

o Ensuring alignment of Coastal Provinces

o Centralisation of sector intelligence

o Regular updating of key parties in the national Tourism

Community on progress of Cruise Tourism exploration

o Funding of critical deliverables identified for immediate

activation of Cruise Tourism, with priority on:

o Economic Impact Study (50%)

o National Cruise Tourism Strategy development

(2010-2020)

o Cruise Line Conglomerate FAM trip

o Centralised Database development


PROVINCIAL o Support of DEAT’s efforts to develop Cruise Tourism as a

driver of national tourism growth and development

o Involvement in TASK TEAM

o Incorporation of Cruise Tourism into provincial Tourism

Strategies and Action Plans, mirroring efforts of DEAT

o Support of key programmes behind Cruise Tourism

development, namely:

o Economic Impact Study

o FAM trips

o Long-term strategy development process

o Communication to local tourism community of updates on

national Cruise Tourism initiative (as and when deemed

appropriate by DEAT)

o Knowledge sharing with DEAT

LOCAL o Support of DEAT’s efforts to develop Cruise Tourism as a






o FAM trips


o Communication to local tourism community of updates on

national Cruise Tourism initiative (as and when deemed

appropriate by DEAT)



INDUSTRY

STAKEHOLDERS

o Support of DEAT’s efforts to develop Cruise Tourism as a






o FAM trips



- ENDS -

Documents

NATIONAL CRUISE TOURISM...Confidential Page 3 2/3/09 • Achieve understanding of the challenges facing the industry; • Achieve agreement of the need to pursue Cruise Tourism as