Slide no. 1 © South African Tourism 2010
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SA Tourism’s 2009/10 Annual Report and Financial & Performance Information for the 6 months that
ended on 30 September 2010
Presentation to the Portfolio Committee10h00 – 13h4519 October 2010
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Index
1. SA Tourism Vision, mission, values and structure (slides 2 – 5)2. Portfolio Review methodology (slides 6 - 9)3. Outcomes of SA Tourism’s fourth Portfolio Review conducted
during July/August 2009 by SA Tourism Strategic Research Unit in consultation with Exco, Manco and TOMSA levy collectors (slide 10)
4. Government’s priorities and SA Tourism high-level mandate, business objectives and strategies 2007-2010 (slides 11 - 15)
5. SA Tourism’s progress against the 4 high-level objectives to date (slides 16 - 40)
6. Grading Council statistics (slides 41 - 43)7. SA Tourism’s Financial performance during 2009/10 (slides 44 –
49)8. SA Tourism’s engagement with other stakeholders (slides 50 -
51)9. SA Tourism’s Business planning process (slide 52)10. Measuring the 2010 World Cup & way forward (slides 53 – 73)11. Challenges for SA Tourism going forward ( slides 74 - 76)12. Extracts from SA Tourism’s 2011/12 Strategic Plan (slides 77 -
87)13. SA Tourism’s finances as at 31/8/2010 (slide 88)14. Conclusion (slides 89 – 95)
Slide no. 3 © South African Tourism 2010Slide no. 3 © South African Tourism 2010
OUR MANDATE
Slide no. 4 © South African Tourism 2010Slide no. 4 © South African Tourism 2010
A quick recap of SA Tourism’s vision, mission and values
For South Africa to be the preferred tourist destination in the world, in order to maximise the economic potential of
tourism for our country and its peopleMission of SA Tourism
To develop and implement a world-class international tourism marketing strategy for SA. In pursuance of this SAT will:
• Facilitate the strategic alignment of the provinces and industry in support of the global marketing of tourism to SA
• Remove all obstacles to tourism growth• Build a tourist-friendly nation• Ensure that tourism benefits all South Africans
Slide no. 5 © South African Tourism 2010Slide no. 5 © South African Tourism 2010
Values of SA Tourism
Pushing the boundaries of excellence in all we do
Teamwork
Feel responsible and be accountable
Care for South Africa and each other
Integrity
Respect for the
purpose, people
and assets of the
organisation
We unconditionally respect our organisation’s people, its purpose and its assets.
Living this respect with integrity translates into an authentic caring for South Africa and each other, a feeling of responsibility, and the acceptance of accountability for the outcomes of our actions.
Our team pushes the boundaries of excellence in everything we do.
Slide no. 6 © South African Tourism 2010Slide no. 6 © South African Tourism 2010
South African Tourism has 10 overseas offices in 4 regions
• Africa
This regional office operates from SA Tourism’s Sandton Head Office and coordinates all marketing activities in East Africa, West Africa, SADC countries and domestic marketing inside South Africa.
SA Tourism plans to open an office in Angola following the completion of detailed research (approximately April 2011)
• Asia and Australasia
Australia, Japan, India and China
• UK and Americas
United States of America and the United Kingdom
• Europe
Germany, France, Netherlands and Italy
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South African Tourism has 15 business units
• Office of the CEO/COO (including Legal, Internal Audit & Admin)• Human Resources• Africa Portfolio (including Domestic Marketing)• Americas Asia & Australasia Portfolio• Europe & UK Portfolio• Events• Business Tourism• Central Marketing (including Global Brand, Channel & Agency
Management)• E-Business• Research• PR & Communications• Product & Itinerary • Finance• TGCSA• Business Systems (previously known as IT)
Slide no. 8 © South African Tourism 2010
SA Tourism’s Portfolio review methodology (done every 3 years)In essence, it adopts a “fresh eyes” approach by considering all the countries in the world, and filtering them based on a set of objective attractiveness criteria
Consideration Set
Attractive Markets
COST-BENEFIT EVALUATION &
UNDERSTANDING OF MARKETING ISSUES
CORE, TACTICAL, INVESTMENT &
WATCHLIST MARKETS
Salient Set
1s
t F
ilter
Attra
ctiv
ene
ss
C
riteri
a
Qualitative process involving a panel
discussion
2n
d
Filter
4th
F
ilter
Approach to Portfolio Review
Slide no. 9 © South African Tourism 2010
How attractive are these markets in the short term
and the long term?
Core, tactical, investment and watch-list markets
2nd filter
Key steps of the Portfolio Review Process
Application of cost-benefit evaluation
1st filter
4th filter
Exclude markets with less than 20,000 arrivals p.a. or
no airlift
3rd filter
Markets with less than 20,000 arrivals p.a. in 2008
but with airlift (strategic hubs)
Final portfolio
Top sub-Saharan Africa markets PLUS Africa land
markets
Exclude sub-Saharan Africa
Exclude markets with less than 4 million people
living in urban areas and less than 20,000 arrivals
p.a. or no airlift
Include all Africa land markets*
Exclude markets of less than 3 million people or
GDP per capita is less than US$2,000
Top 50 markets in terms of outbound volume and
value
Salient set
*Africa land markets are markets where more than 60% of arrivals to SA arrive by land.
Slide no. 10 © South African Tourism 2010
The results of the evaluation will illustrate the suggested core, tactical, investment and watch-list markets within each region
Results of Portfolio Review
Less Attractive But Easier
Tactical Markets Markets where there are particular
opportunities, i.e. “low hanging fruit”
15% of organisation’s effort deployed against these markets
Attractive And Easier
Core Markets Markets that deliver the “bread &
butter” 60% of organisation’s effort
deployed against these markets Best capabilities allocated to these
markets
Less Attractive And Difficult
Watch-list Markets
Markets that are on the radar Activity in these markets will only
occur if there is spare capacity in the organisation
5% of organisation’s effort deployed against these markets
Attractive But Difficult
Investment Markets Invest in these markets ahead of
return, i.e. invest for the future
20% of organisation’s effort deployed against these markets
Core markets are those which present the
greatest opportunity
Tactical markets are those which should be considered
for specific, tactical opportunities
Watch-list markets need to be watched for value segments
Attractiveness of Market
Ea
sie
r to
Ta
rge
t
Investment markets are those where some
investment is made for returns in future
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The 4th Portfolio Review process that took place during July/ August 2009 and the outcomes will be implemented in full effective 1 April 2011
Africa & Middle East UK & Americas Asia & Australasia Europe
Core Markets
Angola
Botswana
Kenya
Nigeria
South Africa*
USA*Australia*
India
France*
Germany
Netherlands
UK*
Investment Markets
DRC
Mozambique
Brazil
Canada
China (incl. Hong Kong)
Japan
Belgium
Italy
Sweden
Tactical MarketsLesotho
SwazilandNew Zealand Ireland
Watch-list Markets
Malawi
Namibia
Zambia
Zimbabwe
Argentina Republic of Korea
Austria
Denmark
Portugal
Spain
Switzerland
Strategic Importance
Bahrain, Oman, Qatar, Saudi Arabia
Strategic Air Links/Hubs
Egypt, Ethiopia,
Ghana, Mauritius, Tanzania,
Senegal, UAE
Malaysia
Singapore
4th Portfolio2011-20142008 – 20102005 – 20072002 – 2004
Regional Director
Stakeholder Manager
Global
Channel Manager
Resp
on
sib
ility
Country Manager
*Indicates Business Tourism Hubs
Slide no. 12 © South African Tourism 2010Slide no. 12 © South African Tourism 2010
Linking Government priorities to SA Tourism priorities:STRATEGIC PLAN
1. Government has set five key priorities for the next five years including the creation of decent work and sustainable livelihoods, education, health, rural development including food security and land reform and the fight against crime and corruption.
2. These five priorities has been converted into Government’s Medium-Term Strategic Framework which highlights 10 priorities and 12 outcomes over the MTEF period. Tourism falls under the Economic Sectors and Employment Cluster, one of the 5 Government clusters and its actions appear under Outcome 4: “Decent employment through inclusive economic growth”.
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Increase the direct contribution to GDP from R52,38 billion in 2009 (estimate) to R65,72 billion in 2015 calendar year
Increase the indirect contribution to GDP from R210 billion* in 2009 (estimate) to R258 billion in 2015 calendar year
Increase in the number of jobs supported directly by the sector from 527 630 in 2005** to 640 000 in 2015 calendar year
Increase the number of indirect jobs from 557 134 * in 2009 (estimate) 746 000 in 2015 calendar year
Increase number of international arrivals from 9 591 828 in 2008 to 12 068 030 by 2015 calendar year
Increase domestic tourists from 13 483 000 in 2008 to 16 000 000 by 2015 calendar year
Employ-
ment
Income
Level
Economic Growth
Equality
The tourism sector is essential contributor to the creation of decent work and job opportunities
Sample Activities
Domestic and international tourism Marketing
Tourism investment promotion
Tourism product diversification
Tourism enterprise development
Action
Activity
Indicators
Decent Employmen
t1
Incl. & Diversified
Econ. Growth
2
* Based on the tourism satellite account for 2008of the World Tourism & Travel Council for SA ** based on the first Tourism Satellite Account by StatsSA
SAT’s alignment with NDT’s targets for Tourism development/1
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SAT’s alignment with NDT’s targets for Tourism development/2
Assisting GDP growth by increasing total tourism direct spend from R100,1 billion in 2008* calendar year to R169 billion in 2015 calendar year (assuming 6% CPIX to reflect a real growth of 1,5% pa)
Increase per tourist spend from R8, 100 in 2008 to R11,600 in 2015
Employ-
ment
Income
Level
Economic Growth
Equality
The tourism sector is essential contributor to the creation of decent work and job opportunities
Sample Activities
Domestic and international tourism Marketing
Tourism investment promotion
Tourism product diversification
Tourism enterprise development
Action
Activity
Indicators
Decent Employmen
t1
Incl. & Diversified
Econ. Growth
2
* last available statistics are for 2008, ** based on the first Tourism Satellite Account by StatsSA
Slide no. 15 © South African Tourism 2010
Share our vision with stakeholders
Use the trade to grow our business
Grow & nurture our staff
Improve brand traction in markets
Increase value-extraction in SA from
all tourists
Fine-tune internal systems and
communication
SA Tourism mandate, key business objectives and strategies at present (until 31/3/2010)
Sustainable GDP Growth
Sustainable job creation
Redistribution and
transformation
The mandate to SA Tourism
is ...
. . . through four key
targets/objectives . . .
. . . by focusing on doing only
the following “Big 6
things” very well!
Achieve targeted total arrivals to SA in 2007 - 2010
Achieve total average tourist spend inside SA in 2007 -
2010
SA to be the most preferred tourist brand by 2014
SA Tourism to be the Best Tourism Organization by 2010
Slide no. 16 © South African Tourism 2010
Convince consumers that SA can be trusted to deliver
memorable experiences
Engage Stakeholders to deliver quality visitor
experience that re-affirm the brand promise
Work the distribution channel to promote SA
Energise and empower the organisation to innovate and achieve excellence
Invest only in selected markets to deliver volume
and value
SA Tourism mandate, key business objectives and strategies at present (effective 1/4/2010)
Create a thriving tourism sector by making South Africa a destination of choice
Possible Tourism sector outcome which SAT will need
to deliver against
SAT outcome
Strategies to deliver
outcome
Make the SA brand a Global Player in portfolio markets which will grow tourism’s trended revenue to the economy by 1.5%
p.a
Slide no. 17 © South African Tourism 2010Slide no. 17 © South African Tourism 2010
The organization’s financial and marketing performance during
the 2009/10 financial year
Slide no. 18 © South African Tourism 2010Slide no. 18 © South African Tourism 2010
Key Messages
Global arrivals declined by 4% in 2009 whilst South Africa’s arrivals grew by 3.6%. South Africa’s growth has outstripped global growth ever year since 2004. India grew by 17.5%, China grew by 12.4% & Africa grew by 5.7%
The domestic market was affected by the financial crisis as domestic tourism decreased by 8% in 2009 with 30 million trips being undertaken compared to the 33 million in 2008. Domestic tourists also tightened their spending in 2009 as total revenue declined by 14% to R22 billion, from R26 billion in 2008. But the domestic market does provide real potential for growth especially in the younger, upcoming segments.
The 2010/11 fiscal is strategically focused at protecting our leadership in wildlife and adventure and build welcoming people. A key asset we leverage off of is the diversity and vibrancy of South Africa’s people.
While our core markets still deliver our bread and butter , we will focus on expanding in China, India, Brazil and African air markets where there is better potential for growth.
The success of the World Cup has created immense goodwill and positive brand reputation for SA, leading to a more receptive world.
The big job after the World Cup is to convert WC awareness into arrivals to continue to upward trend in overall arrivals to South Africa. Message content will be built on rich experiences for travellers that are a combination of people, place and culture. ‘Welcome!’ will continue to be a chief component of the message content to entrench South Africa’s reputation as a friendly, welcoming destination.
Visitor arrivals for the first 7 months of 2010 grew by 13.3% over the same period in 2009 to reach 6,329,643. This was driven by a growth in all markets.
Slide no. 19 © South African Tourism 2010Slide no. 19 © South African Tourism 2010
Goal Key Performance Indicator Target Performance Results Reasons for variance
Arrivals Achieve 9 824 858 arrivals (+3.6%) Total arrivals for J an-Dec 2009 is at 9,933,966 Growth driven by arrivals from Africa. Global travel has declined by 4% according to UNWTO
J oint Marketing Agreements with key trade
Sign 101 J MAs with trade partners as per country trade strategy
J MAs signed in 2009/ 10 = 122 Exceeded target
Trade contacts of key operators and travel agents that sell South African in all countries
Obtain 13,000 trade contacts on trade database
Trade Contacts 2009/ 10 = 31 367 Exceeded target
Closure Ratio Obtain an average 1 in 2.9 closure ratio Average 1 in 2.88 Target met5% more PR value from 08/ 09 (2008/ 09: 46 100 334)
Total 2009/ 10 = R60 455 440.80 Source: FD Beachhead analysis, Dow J ones/ Ornico analysis
Exceeded target
Obtain 80% neutral coverage of South Africa as a tourism destination
J an 2010: 70% neutral and positive; 20% negative 10% very negative Feb 2010: 95 % neutral and positive; 5% negative Mar 2010: 90% neutral and positive; 10% negative Source: Dow J ones Media Monitoring
Exceeded target
Increase in number of media hosted over 08/ 09
5% increase in number of media hosted over 08/ 09 (2008/ 09: 58)
219 media hosted Exceeded target
Use Indaba to showcase our diversity on offer in SA
Increase total visitors at Indaba by 3% Total registered attendees declined by 2%The impact of the global economic recession had a negative effect on international visitors to Indaba and businesses have closed down in core markets
Create a conducive business environment at Indaba
Maintain current exhibitor numbers at Indaba
Exhibitor numbers dropped by 8.5%We reconfigured space allocations to accommodate bigger space requests from existing Indaba exhibitors
Host 120 International Buyers at Meetings Africa
115 international buyers were hosted at Meetings Africa 2010
119 international buyers registered of which only 115 were confirmed
Grow no. of exhibitors by 10% over the previous year.(2008/ 09: 163)
272 exhibitors Exceeded target
Network with relevant trade and refine marketing tools to equip trade to secure more meetings and incentives to SA
Ensure at least 20 business tourism leads per annum from all countries are escalated to relevant bodies
247 active leads and 93 escalated to relevant bodies Exceeded target
Support 3 international events aimed at attracting visitors to SA
Host 5 foreign journalists for each of the 3 international events
55 foreign journalists held for the year Exceeded target
CONSOLIDATED
Increase positive / neutral coverage value over 08/ 09 fiscal
Create awareness about SA as a global meetings destination by using Meetings Africa to showcase SA to international trade
Achieve Total Arrival target
Slide no. 20 © South African Tourism 2010Slide no. 20 © South African Tourism 2010
Goal Key Performance Indicator Target Performance Results Reasons for variance
Spend per person per day in SA Spend broken down per country office: Spend broken down per country office:
France R 10 800 France R 10,204Germany R 14 000 Germany R 12,522Italy R 11 800 Italy R 11,431Netherlands R 16 400 Netherlands R 13,897United States R 17 200 United States R 13,428United Kingdom R 13 100 United Kingdom R 11,518India R 17 400 India R 14,860Australia R 13 700 Australia R 11,961J apan R 12 400 J apan R 13,788China R 17 900 China R 20,836Kenya R 11 400 Kenya R 8,755Nigeria R 16 400 Nigeria R 14,869
Number of travel agents and tour operators trained to better sell SA
Train at least 10 000 trade across all markets per annum
19 474 trade trained Exceeded target
90 products to be trained per annum 500 products trained Exceeded target2 provincial hosting conferences per annum 2 provincial hosting conferences held Target met
Website visits to southafrica.net and campaign sites
Achieve 10% more visits over 08/ 09 (1,468,474)
3 227 480 website visits for the year (+119,78%) Exceeded target
Improve Global awareness Achieve 77% global awareness by Dec 2010 Brand awareness at 79% (2009 Actual, Source:SRU) Exceeded targetImprove Global positivity scores Achieve 40% global positivity by Dec 2010 Global positivity at 38% (2009 Actual, Source:SRU) On trackImprove Global Reach on television, cinema and online global marketing
1 Billion consumers to b reached on TV and online on global platforms by Mar31, 2010
1,272 billion consumers with 6,194 brand spots, 3,743 vignettes/ programmes and 88 million online impressions
Exceeded target
Local product incentives for the development of new products (ETEYA)
ETEYA 2009/ 2010: 159 entries (5% increase) ETEYA 2009/ 2010: 206 entries (increase of 36 %) Exceeded target
Service levels incentives (Welcome Awards)
Welcome Awards 2009/ 2010: 1 094 entries (5 % increase)
Welcome Awards 2009/ 2010: 1 406 entries (increase of 41 %)
Exceeded target
Secure 1 major international sport/ lifestyle event post 2010 e.g. rugby world cup; cricket world cups
Secure event by March 2010Bidding strategy 50% completed. Requested extension from Exco until May 2010
Bidding for events dependent on completion of bidding strategy. Service provider appointed in Dec 09
Support 5 domestic events to leverage awareness of SA
Host 10 foreign journalists for all 5 events by Mar 2010
136 journalists hosted Exceeded target
Achieve Total Arrival target (CONT)
The results portrays the different impacts of the financial crisis. While 2 countries have exceeded targets, 10 have not due to financial crisis and people travelling with reduced budget which was exacerbated by the volatile Rand exchange rate.
Educate and equip the trade to sell us better and address perceptions
CONSOLIDATED (cont.)
South Africa to be a most preferred Tourism Brand by 2014
Slide no. 21 © South African Tourism 2010Slide no. 21 © South African Tourism 2010
Goal Key Performance Indicator Target Performance Results Reasons for variance
Drive an increase on online traffic to the key websites southafrica.net and / 2010
10% growth in online traffic quarterlyQ4 = 860,335; Q3 = 748 997; Q2 = 59 544; Q1 = 27 374; Total 2009/ 10 = 1 696 250
Exceeded target
PR value from published media work
5% more PR value from 08/ 09 ( 2008/ 09: 46 100 334)
Q4 2008/ 9 = R5 848 328.97m; Q4 2009/ 10 = R13 911 400.14 Total 2009/ 10 = R60 455 440.80 Source: FD Beachhead analysis, Dow J ones/ Ornico analysis
Exceeded target
Increase positive/ neutral coverage of SA as tourism destination
5% increase in positive/ neutral coverage over 08/ 09
J an 2010: 70% neutral and positive; 20% negative 10% very negative Feb 2010: 95 % neutral and positive; 5% negative Mar 2010: 90% neutral and positive; 10% negative Source: Dow J ones Media Monitoring
Exceeded target
Execute projects within approved budgets or do timely budget reallocation requests
100% of budget spent as per business plan by 31/ 03/ 2010
As at 31 March 2010 SAT has spent 93% of their annual budget**
Target met
Tourism competitiveness benchmark
Complete research study by 31/ 01/ 2010 Project in progressDelays in the commencement of the project due to approval process internally. Project only commenced in Dec 2009 and will be completed in April 2010
SAT Climate survey Report on results by 31/ 08/ 2009 Achieved Target met
Asset countsConducted bi annually i.e. 31/ 08/ 2009 and 31/ 03/ 2010
Asset count was concluded 20 March 2010 Target met
Monitoring service level agreements with third parties
100% compliance as per contract terms and conditions
Monitoring compliance- Ongoing Target met
Integration of TECSA and TGCSA into SAT’s systems
To be completed by 31/ 03/ 2010TGCSA has been integrated on SAT IT infrastructure , email , SAT branding , Telephony etc. **
Target met
Unqualified Audit Reports Audit reports received from the Auditor General by 31/ 07/ 2010
Final results to be received by 31 J uly 20102008/ 09 audit results unqualified with no emphasis of matter. 2009/ 10 results will only be available after 31 March 2010 audit
Oracle Upgrade to version 12Oracle upgrade to be completed by 31/ 03/ 2010
Deliverables for period ending 31 March 2010 implemented as per plan. System is currently in use.
Target met
Monthly business unit meetings Two per month i.e. 24 per annum 100 business unit meetings held On track
Reduced staff turnover By 5% compared to 2008/ 95 resignations in Q4. Total 2009 = 14 resignations. Turnover in 2009 was 7,8% excluding unavoidable exits, compared to 13,5% in the previous period
Target met
Participation in Delloite’s BCTWF Reach a 70% participation rate Reached 72.18% participation Exceeded targetCreation of a competency database
J ob analysis and verifications done 100% Compiled all competency profiles On hold until the succession plan is in place
Ensure the roll-out of the induction program
100% of all staff inducted on the induction program by 31/ 03/ 2010
All head-office staff inducted, covered 6 international offices (i.e. 60% ) in Q4
4 offices (J apan, Germany, Australia, USA) could not be done in Q4 due to operational reasons. e.g. unavailability of countries due to business planning and other commitments). The 4 offices will be covered in the 1st quarter of 2010/ 11
South Africa to be a most preferred Tourism Brand by 2014
(CONT)
SA Tourism to be the Best Tourism Organization by 2010
CONSOLIDATED (cont.)
Slide no. 22 © South African Tourism 2010Slide no. 22 © South African Tourism 2010
Goal Key Performance Indicator Target Performance Results Reasons for variance
Optimise and improve Call Centre response and information handling capabilities
Decrease dropped call rates by 10% (2008/ 09: 6 757)
Q4 = 2,050; Q3 = 1 769; Q2 = 1 732; Q1 = 1 303 Total 2009/ 10 = 6,914 ;
833 abandoned calls outside of the target amount (6,081) due to increased call volumes and software upgrade for 2010 and the Rooms4U calls
Increase the National Tourism Product Database entries and engage in a new CRM strategy to communicate to Trade and Product Owners and grow these CRM segments
Increase CRM activity with Trade and Product Owners by 15% (2008/ 09: 52 082)
Q4 = +173 Q3 = +8,009; Q2 = +52,698 Q1 = +0; Total 2009/ 10 = 60,880
Exceeded target
Number of new properties graded and number of renewals
1635 new properties and 6007 renewals
530 new properties and 1 708 renewal properties graded in Q4, 556 new properties and 1 776 renewal properties graded in Q3 ,448 new properties and 1 326 renewal properties graded in Q2, 610 new properties and 1242 renewal properties graded in Q1. Total 2009/ 10 total properties graded = 8 196
Exceeded target
Assist Provinces/ Municipalities in executing their Tourism Growth Plans by ensuring that the properties identified by them are graded through a signed MoU
4 MOUs to be signed and executed
Q4 = Northern Cape Tourism, DACT-KZN; Q3 = Department of Economic Development and Tourism in KZN, Northern Cape Tourism; Q2 = Gauteng Tourism Authority; Q1 = 0 Total 2009/ 10 = 5
Eastern Cape Tourism (ECT) have gone ahead and implemented the project on their own and hence the MOU will not be signed.
10% response from the industry Call put on hold
Accreditation of Verification Agencies by SANAS outstanding. BEE Advisory Council reporting to the presidency has been appointed and the DTI will be presenting the reporting framework in Feb 2010 for sector charters
Host 12 workshops 8 workshops held
Due to the transitional period of incorporation into the Department and limited human resources, workshops were postponed to the 2010/ 11 financial year.
Renew 10 MOUs with AssociatesTBCSA MOU signed. Association MOUs extended. Draft Open Africa MOU in place
With incorporation into NDT some of the area of the NGO MOU fall under the SRP programme and thus the draft MOU is under revision to incorporate the SRP requirements.
SA Tourism to be the Best Tourism Organization by 2010
(CONT)
Transformation of the Tourism Sector*
Increase in the number of private sector stakeholders that comply
with the Tourism BEE Charter and Scorecard by holding workshops
and renewing MOUs with Associates
CONSOLIDATED (cont.)
Slide no. 23 © South African Tourism 2010Slide no. 23 © South African Tourism 2010
What were SAT’s 4 high-level objectives?
Objective 1
Achieve total arrivals to SA
2008 calendar year target: 9 699 365 (6.2% increase over 2007)
2008 actual close: 9 591 828(5.5% increase over 2007)
2009 calendar year target: 9 824 858 (3.6% increase over 2008)
2009 actual close: 9 933 966 (3,6% increase over 2008 actual)
2010 calendar year target: 10 193 585 (2,6% increase over 2009 actual)
2011 calendar year target: 10 295 520 (4,2% increase over 2010)
2012 calendar year target: 10 398 475 (1% increase over 2011)
2013 calendar year projection: 11 234 911 (8% increase over 2012)
Slide no. 24 © South African Tourism 2010
Domestic Tourism Indicators: there has been a decline in both volume and value of domestic tourism in 2009 as the market responded to the financial crisis
Note: 1Varies greatly due to seasonalitySource: SAT Domestic Tourism Surveys for 2007 – 2009
Key Metrics 2007 2008 2009
Domestic Travel
Incidence
Annual 43.5% 46.5% 47.6%
Monthly1 9.9% 9.0% 8.2%
Number of Trips
Annual 35.9 Million 32.9 Million 30.3 Million
By PurposeVFR: 68%, Holiday: 16%,
Business: 7%, Religious: 7%, Medical: 1%
VFR: 71%, Holiday: 16%, Business: 5%, Religious: 5%,
Medical: 2%
VFR: 76%, Holiday: 12%, Business: 5%, Religious: 5%,
Medical: 1%
Spend
Total Annual Spend R20.0 Billion R25.8 Billion R22.4 Billion
By PurposeVFR: 45%, Holiday: 37%,
Business: 14%, Religious: 3%, Medical: 0%
VFR: 45%, Holiday: 39%, Business: 12%, Religious: 3%,
Medical: 2%
VFR: 59%, Holiday: 22%, Business: 17%, Religious: 2%,
Medical: 1%
Average Spend per Trip / per Day
R550 / Trip; R120 / Day R780 / Trip; R170 / Day R730 / Trip; R170 / Day
Total Annual Bed Nights
157.8 Million 149.0 Million 128.4 Million
Average Nights per Trip
4.4 4.5 4.2
Slide no. 25 © South African Tourism 2010Slide no. 25 © South African Tourism 2010
What were SAT’s 4 high-level objectives? (figures below per person includes domestic tourist spend figures; total figure agrees to Annexure F)
Objective 2
Achieve average spend per tourist inside SA
2008 calendar year target: R 7 300 per person (Total R 70,8 billion)
2008 actual: R 8 100 per person (Total R 83,4 billion)
2009 calendar year target: R 8 300 per person (Total R109,2 billion)
2009 actual: R 8 400 per person (Total R 79,4 billion)
2010 calendar year target: R8 700 per person (Total R117,2 billion)
2011 calendar year target: R9 222 per person (Total R126,1 billion)
2012 calendar year target: R9 775 per person (Total R 135,7 billion)
2013 calendar year target: R10,360 per person(Total R 146 billion)
Slide no. 26 © South African Tourism 2010
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Foreign arrivals increased by 3.6% in the 2009 compared to 2008
Arr
ivals
Arrivals to South Africa by Region, January to October
Source: Table A October 2009
2009 Growth target (revised) 3.6% 5.8% 4.3% 0.3% 1.2% 1.0% 2.0%
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
2008 9,591,828 306,961 7,087,452 407,408 322,586 1,406,350 61,071
2009 9,933,966 317,122 7,490,425 379,907 322,290 1,348,502 75,720
Difference (08 vs 09) 342,138 10,161 402,973 -27,501 -296 -57,848 14,649
% change (08 vs 09) 3.6% 3.3% 5.7% -6.8% -0.1% -4.1% 24.0%
Grand Total Africa - Air Africa - Land AmericasAsia &
AustralasiaEurope Unspecified
Slide no. 27 © South African Tourism 2010
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• Fourth level• Fifth level
Average spend increased by 3.7% driven by increased spend by land tourists but behind our growth targets for 2009
Avera
ge s
pend p
er
touri
st p
er
trip
TFDS (excluding capital expenditure) by region, Jan to Dec
2009 Growth target (revised) R9,900 R6,900 R14,600
Slide no. 28 © South African Tourism 2010
Average for Welcoming People
Maintain Lead on Adventurous and Nature and Wildlife
77% aware of SA
40% positive about SA
26% sought info on SA
14% plan to visit in short-term
Closure ratio of at least 1 in 2.9 in all markets
What were SAT’s 4 high-level objectives?
Objective 3: South Africa to be a most preferred Tourism Brand by 2014:
Global Performance
Globally, each market should aim to achieve a minimum level of performance along 1. Brand Knowledge, 2. Brand Journey and 3. Conversion . Markets that exceed this level must try to maintain their higher performance
Brand Knowledge
Brand Journey Conversion
Slide no. 29 © South African Tourism 2010
Note: Core Markets weighted according to relative investment spend – Australia = 6%, France = 17%, Germany = 18%, India = 6%, Netherlands = 18%, UK = 18% & USA = 17%; Investment Markets weighted according to – China = 32%, Italy = 43% and Japan = 25%; Global Average, weighted according to investment spend – Core = 91%, Investment = 9%; All rating questions have been analyzed using top 2 box approachSource: SAT BrandTracker Feb-07 through Nov-09 (merged for each year)
Awareness Positivity Sought Info in the Past
Likely to Visit in Next 18 Months
2007 Baseline 75% 38% 23% 12%
2008 Actual 76% 37% 22% 11%
2009 Actual 79% 38% 21% 11%
Global Target 2010 77% 40% 26% 14%
Global Target 2013 79% 42% 28% 16%
Global Targets
Objective 3: South Africa to be a most preferred Tourism Brand by 2014:
2. The Brand Journey – Global Target
We have improved in both awareness and positivity but declines on sought info and likely to visit on the next 18 months due to the slowdown in global travel
Slide no. 30 © South African Tourism 2010
Progress on our 2007-2010 4 high-level objectives?
Objective 3: South Africa to be a most preferred Tourism Brand by 2014:
South Africa to be a most preferred Tourism Brand by 2014
Improve Global awareness
Achieve 77% global awareness by Dec. 2010
Brand awareness at 79% (2009 Actual, Source:
SRU) Improve Global positivity
scores
Achieve 40% global positivity by Dec 2010
Global positivity at 38% (2009 Actual, Source:
SRU) Improve global reach on
TV, cinema and online global marketing
1 Billion consumers to be reached on TV, online, cinema and global platforms.
We reached 1,208 Billion consumers with 3,381
brand spots,753 billboards, 285
vignettes/programmes and 36.8 Million online
impressions.
Slide no. 31 © South African Tourism 2010
1. Knowledge of the Brand – Global Target
Memorable(Average)
Nature & Wildlife(Leadership)
Welcoming People(Average )
Adventurous(Leadership)
Value for Money
Table Stakes (Require Improvement)
Variety
Breathtaking
Enriching
Safety & Security
Imm
ed
iate
Focu
s2
00
8 t
o 2
01
0
Lon
g T
erm
Bu
ild
Reinforces Memorable
In 2009, the global average for most of the Brand Knowledge metrics improved, however, it continued to drop for Welcoming People and Safety and Security
5.69 (2009)
5.65 (2008)5.68
(2007)6.12
(2009)6.07
(2008)6.10
(2007)
Note: Core Markets weighted according to relative investment spend – Australia = 6%, France = 17%, Germany = 18%, India = 6%, Netherlands = 18%, UK = 18% & USA = 17%; Investment Markets weighted according to – China = 32%, Italy = 43% and Japan = 25%; Global Average, weighted according to investment spend – Core = 91%, Investment = 9%Source: SAT BrandTracker Feb-07 through Nov-09(merged for each year)
4.70 (2009)
4.73 (2008)4.75
(2007)
5.74 (2009)
5.69 (2008)5.70
(2007)5.66
(2009)5.62
(2008)5.67
(2007)5.55 (2009)
5.51 (2008)5.51
(2007)5.51 (2009)
5.49 (2008)5.51
(2007)4.52 (2009)
4.56 (2008)4.58
(2007)
3.41 (2009)
3.54 (2008)3.53
(2007)
Slide no. 32 © South African Tourism 2010
Metric Netherlands Germany UK France USA India Australia Italy China Japan
Memorable 1 2 4 3 4 4 2 2 2 2
Adventurous 2 2 3 3 3 2 2 3 2 2
Natural Wildlife Experience 1 3 2 2 2 2 2 3 3 3
Welcoming People You Can Interact With 4 5 5 5 4 3 5 3 4 5
A Wide Variety of Experiences 1 2 2 2 2 2 1 2 3 4
Breathtaking 1 2 4 3 3 3 2 3 2 2
Enriching 1 2 4 4 4 4 4 2 4 2
Unique 1 2 5 3 2 4 3 2 2 2
An Authentic Travel Experience 2 3 4 3 2 4 5 2 3 2
Value for Money 3 4 4 4 4 4 4 4 4 5
Safety & Security 5 5 5 4 3 4 5 2 5 5
Ranking (out of 5) of The SA Brand Relative to Direct Competitors Along Key Brand Attributes – 2009
Note: Competitor set includes Australia, Thailand, Kenya, Brazil to produce ranking out of 5. If any of the above are not included in survey, India or China is used as destinations. For India market, Egypt is used as an additional destination for ranking purposesSource: SAT BrandTracker Feb-09 and Nov-09
Knowledge of the Brand – SA Rank Versus Direct Competitors (2009)
In 2009, South Africa’s perception improved on key Personality Attributes in the Netherlands and Germany, compared to its direct competitors, however, it declined substantially in Italy
When SA is ranked highest amongst competitors
When SA is ranked lowest amongst competitors
Significantly Above Average for 10 destinations (at 95% confidence level)
Significantly Below Average for 10 destinations (at 95% confidence level)
Slide no. 33 © South African Tourism 2010
Brand Journey Metrics – SA Rank Versus All Destinations (2009)
Ranking (out of 10) of The SA Brand Relative to Competitors Brand Journey Attributes – 2009
South Africa’s rating on Stature has improved marginally in 2009; the ratings on other metrics continue to be below average in most of the markets, except for the Netherlands and Germany
Note: For ranking purposes, if there are more than 10 destinations in survey, the following destinations are removed from rankings: USA followed by Italy and FranceSource: SAT BrandTracker Feb-09 and Nov-09
Metric Netherlands Germany UK France USA India Australia Italy China Japan
Total Awareness 5 5 6 7 7 7 8 8 8 9
Unaided Awareness 3 5 4 8 7 7 6 5 7 9
Positivity 3 5 6 7 7 6 8 6 7 9
Likely to Visit in Future 2 4 5 6 7 7 8 6 7 9
Likely to Seek Info 1 4 5 7 7 6 8 6 7 9
Uniqueness 1 2 4 4 3 6 2 3 5 8
Stature 4 4 5 5 5 6 6 5 7 9
Sought Info 2 4 5 6 7 6 7 6 7 9
Familiarity 4 5 5 10 8 7 7 8 8 9
Suitability 4 2 5 5 5 6 6 5 6 9
Likely to Visit in Next 18 Months 2 4 5 9 7 7 6 7 7 9
Closure Ratio 6 7 7 8 10 8 6 8 6 9
Blu
e-S
ky
Con
sid
ere
rsIn
form
ati
on
S
eekers
When SA is ranked highest amongst competitors
When SA is ranked lowest amongst competitors
Significantly Above Average for 10 destinations (at 95% confidence level)
Significantly Below Average for 10 destinations (at 95% confidence level)
Slide no. 34 © South African Tourism 2010
South Africa has seen a positive CAGR for most of the Brand Journey metrics between 2006-2009; however, Visitation and Closure Ratio have declined slightly in 2009, compared to 2008
Brand Journey Trends – Core Markets
Note: Core Markets weighted according to relative investment spend – Australia = 6%, France = 17%, Germany = 18%, India = 6%, Netherlands = 18%, UK = 18% & USA = 17%; Closure Ratio = Visited in Past 18 Months / Sought Info in the Past; All rating questions have been analyzed using top 2 box approachSource: SAT BrandTracker Nov-06 through Nov-09 (merged for each year)
2006 2007 2008 2009 CAGR (2006-09)
Total Awareness 74% 77% 78% 81% 3%
Unaided Awareness 18% 19% 20% 19% 2%
Positivity 37% 39% 38% 39% 2%
Likely to Visit in Future 31% 35% 32% 33% 2%
Likely to Seek Info 17% 19% 18% 18% 1%
Uniqueness 28% 28% 27% 28% 0%
Stature 19% 20% 18% 18% -1%
Sought Info 21% 23% 22% 21% 0%
Familiarity 20% 22% 22% 22% 3%
Suitability 19% 19% 19% 18% 0%
Likely to Visit in Next 18 Months 10% 12% 11% 11% 2%
Visited in Past 18 Months 6% 8% 8% 7% 6%
Closure Ratio 1 in 3.35 1 in 2.90 1 in 2.75 1 in 2.85 6%
Slide no. 35 © South African Tourism 2010
2006 2007 2008 2009 CAGR (2006-09)
Total Awareness 54% 57% 55% 58% 3%
Unaided Awareness 11% 13% 11% 14% 7%
Positivity 27% 29% 29% 32% 5%
Likely to Visit in Future 27% 27% 27% 28% 2%
Likely to Seek Info 18% 20% 20% 21% 5%
Uniqueness 24% 26% 26% 26% 3%
Stature 17% 18% 18% 19% 3%
Sought Info 22% 23% 22% 23% 1%
Familiarity 7% 8% 9% 9% 13%
Suitability 17% 19% 18% 20% 5%
Likely to Visit in Next 18 Months 10% 10% 11% 11% 3%
Visited in Past 18 Months 7% 8% 8% 7% -1%
Closure Ratio 1 in 2.98 1 in 2.96 1 in 2.78 1 in 3.12 -2%
Brand Journey Trends – Investment Markets
Note: Investment Markets weighted according to relative arrivals – China = 32%, Italy = 43% and Japan = 25%; Closure Ratio = Visited in Past 18 Months / Sought Info in the Past; All rating questions have been analyzed using top 2 box approachSource: SAT BrandTracker Nov-06 through Nov-09 (merged for each year)
In Investment Markets, South Africa’s performance has improved on most of the Brand Journey metrics in 2009, compared to 2008; however, a slight drop in Visitation has led to a drop in Closure Ratio
Slide no. 36 © South African Tourism 2010Slide no. 36 © South African Tourism 2010
Objective 4 : SA Tourism to be the Best Tourism Organization by 2010(will be replaced, effective 1/4/2011, by SA Tourism to be a Top 20 Best-Company-to-Work-for by 2012*)
As decided by the Annual Tourism Awards Committee of the World Tourism Organization, and as attested to by the most credible award committees in our chosen core markets
*As measured in the annual Deloitte Best-Company-to-Work-for survey that will take place during June/July 2012
Slide no. 37 © South African Tourism 2010
37
International Olympic Committee will host the International Olympic Committee’s 123rd Congress in in 2011Society of Incentive & Travel Executives (SITE)
The Society of Incentive Travel Executives (SITE) has selected to host its International Conference in December 2010. The event will bring the leaders of the design and delivery of motivational experiences and travel rewards, a multi-billion dollar global industry, to the City
Two South African companies also walked away with a SITE Crystal award in 2009:- Terra Nova won a SITE Crystal Award for “Most Outstanding Motivational programme 2009”- Dragonfly Africa won a SITE Crystal Award for the “Most Outstanding Sustainable Motivational Experience
2009”Great Wine Capitals Global Network Rust en Vrede Restaurant in Stellenbosch was announced Global Winner in the 2010 Best of Wine Tourism award in
the Wine Tourism Restaurants category.S. Pellegrino 100 World’s Best Restaurant Awards
S. Pellegrino 100 World’s Best Restaurant put two South African restaurants in the 2010 top 50 world’s best restaurants
La Colombe in Constantia (12th place up from 38 last year); Le Quartier Francais in Franschoek (31st place, up from 37th place in 2009)South African restaurants in the top 100 in 2009: Le Quartier Francais in Franschoek La Colombe in Constantia Jardine’s Aubergine Rust en Vrede in Stellenbosch
Chinese Tourists Welcoming Award 2009 The won the bronze award in the internet/new media category of the 2009 Chinese Tourists Welcoming Award which were announced in April during China Outbound Tourist and Trade Market in .
Luxury Tourism Awards 2009 has been awarded in the Best Entertainment Category of the Luxury Tourism Awards 2009 held at the International Luxury Travel Exhibition held in
Travel & Leisure World’s Best Awards readers’ survey
Cape Town has been voted second in the world’s top City in the 2009 Travel and Leisure online pollThe following SA hotels have been voted the world's top 100 hotels for 2009 in an online poll by Travel & Leisure
magazine: Bushmans Kloof, Western Cape, Cedarberg Mountains (1st place) Sabi Sabi Private Game Reserve (Earth Lodge), Sabi Sand Wildtuin, Kruger National Park (3rd place) Singita Sabi Sand, Sabi Sand Wildtuin, Kruger National Park (6th place) Twelve Apostles Hotel & Spa in Western Cape, Cape Town (15th place) , Sabi Sand Wildtuin, Kruger National Park (24th place) , Kruger National Park (25th place) , Eastern Cape (27th place) Hotel, Gauteng, Johannesburg (29th place) (29th place) , Sabi Sand Wildtuin, Kruger National Park (34th place) , Western Cape, Franschhoek Valley (60th place) , Sabi Sand Wildtuin, Kruger National Park (77th place)
16th World Travel Awards. Saxon Boutique Hotel & Spa – World’s Leading Boutique Hotel Thanda Private Game Reserve - World's Leading Luxury Lodge The Blue Train - World's Leading Luxury Train Shamwari Game Reserve – World’s Leading Conservation Company
Accolades for 2009/10
Slide no. 38 © South African Tourism 2010
38
2009 TripAdvisor Travellers’ Choice awards
(5th place)– Top World 100 Best bargains An African Villa, , , (24th place)– Top World 100 Best bargains 54 , , (54th place)– Top World 100 Best bargains (4th place)– Top World 10 Hidden Gems (2nd place)– Best World Service (8th place)– Top 100 Best Luxury Shamwari Game Reserve, (82nd place)– Top 100 Best Luxury
Condé Nast Traveler World Savers Awards
has been named Global Winner of Wildlife Conservations Programs (2009) in the third annual Condé Nast Traveler World Savers Awards
International Wine and Spirits Competition
South African brandy, KWV Founders Reserve Brandy, won gold at the International Wine and Spirits Competition hosted July 2009 in
US Incentive Industry Award South African Tourism’s operation has been named a 2009 winner of Incentive magazine’s prestigious Platinum Partner Award. More than 65,000 of ’s most qualified travel industry decision-makers selected the people, products and services that helped them most in motivating their employees and customers over the past year.
Sustainability is named as one of the 2020 Global Sustainability Centers by The New York Ethisphere Institute
Conference and Incentive Travel Magazine’s Hot List 2009
was voted Best Incentive Destination in the inaugural Conference and Incentive Travel magazine’s 2009 Hot List.
2009 Condé Nast Readers’ Travel Awards
is voted eighth (8) in the top 20 overseas cities category. ranked eight (8) has reader’s favourite country as a result of it diverse range of
attractions and activities. Pride of Africa, Rovos Rail was voted third (3) as the reader’s favourite train experience
due to its child friendly facilities. Blue Train ranked tenth (10) in the favourite train experience (10).
ABTA Travel Trends Report ABTA has named South Africa as a top destination for 2010.The annual report cites ‘x-factor destinations’ - those with something new and unique to offer.
Accolades for 2009/2010 (Continuation)
Slide no. 39 © South African Tourism 2010Slide no. 39 © South African Tourism 2010
The organization’s financial and marketing performance during the 2009/10 financial year
Slide no. 40 © South African Tourism 2010Slide no. 40 © South African Tourism 2010
On the financial side…
South African Tourism achieved its 9th consecutive
unqualified (no emphasis of matter) audit report from the
Auditor General and holds the record in Government
(including all Departments, Public entities and Local
Authorities) with the most consecutive unqualified no-
-emphasis audit reports!
But we realize it’s even
tougher to stay Nr. 1!
Slide no. 41 © South African Tourism 2010Slide no. 41 © South African Tourism 2010
Overview of SAT’s financial position and financial performance for the 2009/10 financial year
• SA Tourism’s total expenditure increased by 17% from R 724,27 million in 2008/9 to R 849,15 in 2009/10, leaving a net surplus of R 13,35 million (2008/9: R 6.94 million). The surplus related entirely to the acquisition of capital items as well as the capatilisation of intangible assets (including ongoing website improvement).
• A total increase of 19% over the previous year of SA Tourism’s funding, representing 80.7% (2008/9: 79%) of R 699.49 million (2008/9: R 586.09 million) of total revenue, came from Government.
• Other revenue of R 167.26 million (2008/9: R 154.86 million), an increase of 8% over 2008/9, was earned from voluntary Tourism levies, interest received, exhibitions, grading activities, sale of marketing items, sale of advertisement space in publications and raising sponsorships.
Slide no. 42 © South African Tourism 2010Slide no. 42 © South African Tourism 2010
• Total non current assets comprising of PPE, staff loans and intangible assets decreased by 14% (2009/10 R 74.31 million , 2008/9: R 86.9 million).
• Approximately 40% (R 3.71 million ) of total costs on PPE for the year (R9.20) was spent on acquisition of furniture and fittings.
• Approximately 99% (R 1.73 million ) of total costs on intangible assets for the year (R 1.74 million) was spent on website costs.
• Cash and cash equivalents increased by 38% (2009/10 R 224.66 million , 2008/9: R 162.61 million).
• Total current assets increased by 151% (2009/10 R 300.39 million, 2008/9: R 199.41 million) largely due to prepayments classified under trade and other receivables while overall total assets increased by 31% (2009/10 R 374.69 million ,2008/9: R 286.32 million)
Overview of SAT’s financial position and financial performance for the 2009/10 financial year (cont.)
Slide no. 43 © South African Tourism 2010Slide no. 43 © South African Tourism 2010
• Trade and other payables (2009/10 R 209.77 million, 2008/9: R 180.55 million) representing approximately 76% (2008/9: 89%) of total current liabilities (2008/09 R 275.92 million, 2008/9: R 203.09 million) increased by 16% over the previous financial year.
• Total non current liabilities comprising of provisions and finance lease liabilities decreased by 8% (2009/10 R 13.09 million, 2008/9: R 14.19 million) whilst total liabilities increased by 33% (2009/10 R 289.02 million, 2008/9: 217.28 million) over 2008/9 financial year.
• Accumulated surplus increased by 25% (2009/10 R 68.17 million, 2008/9: R 54.57 million) over the previous year. It largely represents tangible and non-tangible assets on SA Tourism’s Statement of Financial position.
Overview of SAT’s financial position and financial performance for the 2009/10 financial year (cont.)
Slide no. 44 © South African Tourism 2010Slide no. 44 © South African Tourism 2010
Executive Summary – 2009/10 scorecard
2008 2009 Growt
h
Arrivals 9,591,82
8
9,933,96
6
+3.6%
Awarenes
s
76% 79% 3 pp
Positivity 37% 38% 1 pp
Overall, we reached 1,262 Billion consumers with 5900 brand spots, 3800 vignettes, 2992 billboards and 84 Million online impressions in the 2009/10 fiscal.
Tourist arrivals for the first 4 months of 2010 grew by 16.3% over the same period in 2009 to reach 1,886,523. This was driven by a growth in all markets
Slide no. 45 © South African Tourism 2010
45
Areas of co-operation with stakeholdersStakeholder Details of co-operation
• TBCSA & TOMSA 1.1 SAT is co-funded from voluntary tourism levies collected and SAT therefore offers some specific benefits for establishments that collects TOMSA levies
1.2 SAT and TBCSA, which represents all tourism business associations, jointly addresses the industry once a year in all provinces and have bilateral meeting quarterly
2. Provincial Tourism Authorities CEO’s Forum (now called the Marketing Working Group) meeting quarterly where SAT CEO meets Provincial CEO’s to share Business Plans & Budgets and discuss specific marketing issues including joint marketing projects. SANParks, SANBI and TEP also attend. The CMO convenes the quarterly marketing forum with provincial marketing managers.
3. Fedhasa, ASATA and SATSA Sharing of information
4. DEAT public entities & programmes:
4.1 SANPARKS
4.2 SA Weather service
4.3 SANBI
4.4 TEP
Lobby SANPARKS to also start collecting TOMSA levies. Provide exhibition space at exhibitions at beneficial rates
Share information
Share information
Joint funding of ETEYA project
5. IMC, GCIS and the Department of Trade & Investment
Sharing of information and joint marketing activities
6. SAPS Quarterly meetings with Provincial SAPS leadership
7. Match & LOC Ongoing liaison on Confederations Cup and 2010 Soccer World Cup8. Miptech and Minmec Sharing of information on obtaining inputs on high-level marketing issues. SAT’s
CEO attends both meetings.9. Departments of International Relations & Cooperation and South African embassies overseas
Provide marketing collateral
Slide no. 46 © South African Tourism 2010Slide no. 46 © South African Tourism 2010
The Grading Council Performance 2009/10
financial year
Slide no. 47 © South African Tourism 2010Slide no. 47 © South African Tourism 2010
TGCSA (historical performance of the TGCSA until 31/3/2010
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 Budget
Total Renewals 986 1222 2017 3784 4742 5132 6007 7007
Total New Gradings 986 236 795 1767 958 658 1808 1635 1281
Grand Total Est 986 1222 2017 3784 4742 5400 6940 8196 8288
Annual Increase 124% 165% 188% 125% 114% 129% 110% 108%
Monthly Awards Meetings 82 102 168 315 395 450 578 637 691
Current = 8000+
Slide no. 48 © South African Tourism 2010Slide no. 48 © South African Tourism 2010
Establishments SummaryAs at end July 2010
Non-Hotel Accommodation EC FS GP KZN LP MP NW NC WC Grand Total
Backpacker & Hostelling 13 1 12 12 3 4 4 2 28 79
Bed & Breakfast 322 76 328 325 20 44 36 52 377 1580
Caravan & Camping 10 3 7 23 16 26 7 17 9 118
Country House 15 8 19 32 7 21 3 0 75 180
Guest House 314 141 643 212 86 169 138 127 855 2685
Lodge 72 26 67 82 84 76 53 19 40 519
Self Catering 196 53 225 379 120 135 50 47 1103 2308
Non-Hotel Accommodation Total 942 308 1301 1065 336 475 291 264 2487 7469
Hotel Total 70 27 165 73 33 32 16 23 191 630
Accommodation Grand Total 1012 335 1466 1138 369 507 307 287 2678 8099
MESE Total (Business Tourism) 5 3 112 17 18 21 28 2 18 224
Grand Total Graded Properties 1017 338 1578 1155 387 528 335 289 2696 8323
Slide no. 49 © South African Tourism 2010Slide no. 49 © South African Tourism 2010
Rooms SummaryAs at end July 2010
Non-Hotel Accommodation EC FS GP KZN LP MP NW NC WC Grand Total
Backpacker & Hostelling 486 19 1530 981 73 198 154 483 1136 5060
Bed & Breakfast 1818 374 1662 1842 143 286 236 329 1651 8341
Caravan & Camping 413 154 383 1731 1125 1503 824 786 561 7480
Country House 107 79 271 381 108 273 37 0 771 2027
Guest House 2637 1111 5290 1787 962 1609 1499 1108 5796 21799
Lodge 668 474 1369 1156 1079 1443 838 217 424 7668
Self Catering 1377 356 1427 2184 2130 2001 998 430 4420 15323
Non-Hotel Accommodation Total 7506 2567 11932 10062 5620 7313 4586 3353 14759 67698
Hotel Total 3654 1518 15337 4710 1787 1683 1744 944 12141 43518
Accommodation Grand Total 11160 4085 27269 14772 7407 8996 6330 4297 26900 111216
MESE Total (Business Tourism) 20 6 625 58 72 71 76 4 72 1004
Grand Total Graded Properties 11180 4091 27894 14830 7479 9067 6406 4301 26972 112220
Slide no. 50 © South African Tourism 2010
Introduce Grading Criteria
which are globally
recognised and credible to visitors &
stakeholders
Simplify Billing process and implement a
more equitable fee structure
Improve the integrity of the
grading process using
IT Infrastructure
Improve the competence and integrity of Assessors
Stop illegal use of stars and protect the
TGCSA brand
The road ahead for TGCSA from 2011 - 2014
TGCSA Outcome/Vision
Strategies to deliver
outcome
Establish a recognisable and credible, globally bench-marked system of
quality assurance for accommodation and MESE experiences which can be relied upon by visitors when making
their choice of establishment
Get industry to see value in participating in the grading system -
Slide no. 51 © South African Tourism 2010
The road ahead for TGCSA from 2011 - 2014
TGCSA Outcome/Vision
Strategies to deliver
outcome
Establish a recognisable and credible, globally bench-marked system of
quality assurance for accommodation and MESE experiences which can be relied upon by visitors when making
their choice of establishment
All progressing well, system going live on 14 October 2010 and commencement date.
Update:
Improve the integrity of the
grading process using
IT Infrastructure
Slide no. 52 © South African Tourism 2010Slide no. 52 © South African Tourism 2010
DELL – Tablets – New QiT System
Slide no. 53 © South African Tourism 2010
Click to edit the outline text format Second
Outline Level Third
Outline Level
Fourth Outline Level Fifth Outline Level
Sixth Outline Level
Seventh Outline Level
Eighth Outline Level
• Ninth Outline LevelClick to edit Master text styles
• Second level• Third level
• Fourth level• Fifth level
New Grading Fee Structure
• 6 room Guesthouse• 5-Star• Franschhoek• R3 000.00 pp-pn• Last year = R2 082.00• New Fee = R 3 030.00• Grading Plaque
• 6-room Guesthouse• 2-Star• Soweto• R500.00 pp-pn• Last year = R 2 082.00• New Fee = R 2 350.00• Grading Plaque
Slide no. 54 © South African Tourism 2010Slide no. 54 © South African Tourism 2010
Performance in April to September 2010
Slide no. 55 © South African Tourism 2010Slide no. 55 © South African Tourism 2010
Objectives Target - 2010 Measurement to date1
Challenges Plans for next quarter
Foreign visitor arrivals to SA2
Total - 10,193,585 Air – 2,365,096 Land – 7,834,324
Total – 6,329,643 Air – 1,682,209 Land –4,647,434
Foreign visitor arrivals increased by 13.3% in the first 7 months of 2010. There has been good growth across all regions in the first 7 months of 2010 with the Americas recording the highest growth of 41.2% in this period. Both Europe and Asia & Australasia also recorded growth of 8.9% and 29% respectively. This strong growth has been as a result of the 2010 FIFA World Cup which saw a 12.8% in the first six months of 2010 and 39.3% in J une 2010 compared to J une 2009. Africa also recorded good growth with stronger performance from the air markets (15.4%) and 9.6% growth from the land markets.
Spend in SA Total – R8,700 Air – R14,200 Land – R7,100
Total – R9,400 Air – R12,500 Land – R8,400
Average spend per trip increased by 2% overall driven by an increase in spend per trip by arrivals from Africa land markets (up 15%). Tourists from land markets tend to spend the most on shopping for business use and this to drives up their spend per trip. Tourists from the air markets spent -20% less per trip in the first 6 months of 2010 compared to 2009. This decrease in spend could in part be explained by the depreciation of major currencies of the US dollar (-21%), Euro (-22%) and Pound (-19%) against the Rand between the first 6 months of 2009 and 2010. Tourists from air markets are still suffering the effects of the global financial crisis which has left high levels of unemployment in certain markets.
1 Arrivals data is for the period J an to J uly 2010; all other data is for the period J an to J une 2010 2 Data is showing visitor arrivals as the targets have been set on all visitor arrivals to SA. There is insufficient data on tourist arrivals to SA to set targets for tourist arrivals – we need a minimum of 5 years of tourist arrivals data to set targets.
Slide no. 56 © South African Tourism 2010Slide no. 56 © South African Tourism 2010
Objectives Target - 2010 Measurement to date1
Challenges Plans for next quarter
Seasonality Air – 2.05% Land –1.77%
Measured annually
Length of stay Air – 10% modal shift Land - +1 night
Total: 7.8 nights Air –16.2 nights Land – 5.2 nights
Leisure tourists remain the most attractive and largely come from air markets as the tourists from land markets visit frequently and stay between 1 and 2 nights which impact the overall length of stay. The global trend is towards shorter holidays and this has intensified as consumers try to manage their tight budgets following the global financial crisis. The importance of direct flights is highlighted by the fact the tourists lose time in transit and are therefore left with fewer nights to spend in SA. The land markets primarily visit for shopping and therefore it is difficult to increase length of stay.
Transformation As per tourism scorecard
We are on target in terms of both employment equity and procurement
We will be employing Empowerdex to do a rating of SAT
1 Arrivals data is for the period J an to J uly 2010; all other data is for the period J an to J une 2010
Slide no. 57 © South African Tourism 2010
Visitor arrivals for the first 7 months of 2010 grew by 13.3% over the same period in 2009 to reach 6,329,643
AFRICA
4,808,453 arrivals 9.7% up from 2009
Central & South America
91,447 arrivals 152.8% up from 2009
North America
216,069 arrivals 19.0% up from 2009
Europe
790,202 arrivals 8.9% up from 2009
Asia
156,274 arrivals 33.9% up from 2009
Australasia
75,139 arrivals 19.8% up from 2009
Middle East
31,444 arrivals 24.0% up from 2009
Indian Ocean Islands
13,059 arrivals 22.4% up from 2009
Source: Table A Visitors Arrivals July 2010
Slide no. 58 © South African Tourism 2010
SA continues to outperform global growth, which grew by 6.9% in the first 6 months of 2010
Note: UNWTO estimates incorporate provisional data for some regions
Source: Statssa Tourism & Migration release June 2010, SAT analysis; UNWTO World Tourism Barometer, September 2010
12.8%7.4%
14.1%
2.0%
20.4%
7.3% 6.9%
0%5%
10%15%20%25%30%35%40%
South Africa Africa Asia and the Pacific Europe Middle East Americas World
Growth in visitor arrivals for Jan to Jun: 2009 vs 2010
% C
hange
Slide no. 59 © South African Tourism 2010
%
TFDS (excl. Capex) by Region, 2009 and 2010
Source: SAT Departure Survey 2009 - 2010
Africa Land Africa Air Americas Asia&Australasia Europe Total
Q1 & Q2 2009 R 25.5 R 2.0 R 2.3 R 2.4 R 8.9 R 41.1
Q1 & Q2 2010 R 32.5 R 1.8 R 3.2 R 2.6 R 7.0 R 47.2
% Change 28% -6% 38% 6% -21% 15%
0
5
10
15
20
25
30
35
40
45
50
Total revenue generated by tourism increased by 15% driven off a 28% increase from the Africa land markets
Slide no. 60 © South African Tourism 2010
%
Average TFDS (excl. Capex) by Region, 2009 and 2010
Source: SAT Departure Survey 2009 - 2010
Africa Land Africa Air Americas Asia&Australasia Europe Total
Q1 & Q2 2009 R 7,300 R 15,900 R 14,600 R 16,900 R 15,800 R 9,200
Q1 & Q2 2010 R 8,400 R 12,700 R 13,600 R 14,400 R 11,400 R 9,400
% Change 15% -20% -7% -15% -28% 2%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
The increases in revenue are due to increases in average spend per trip of tourists from the Africa land markets
Slide no. 61 © South African Tourism 2010
Click to edit the outline text format Second
Outline Level Third
Outline Level
Fourth Outline Level Fifth Outline Level
Sixth Outline Level
Seventh Outline Level
Eighth Outline Level
• Ninth Outline LevelClick to edit Master text styles
• Second level• Third level
• Fourth level• Fifth level
Click to edit the outline text format Second
Outline Level Third
Outline Level
Fourth Outline Level Fifth Outline Level
Sixth Outline Level
Seventh Outline Level
Eighth Outline Level
• Ninth Outline LevelClick to edit Master text styles
• Second level• Third level
• Fourth level• Fifth level
There was growth in all regions as a result of the 2010 FIFA World Cup that was hosted in June and July
Arr
ivals
Visitor arrivals to South Africa by Region, January to July
Source: Table A Visitor Arrivals July 2010
Slide no. 62 © South African Tourism 2010
%
Most Common Length of Stay by Region, 2009 and 2010
Source: SAT Departure Survey 2009 - 2010
1
6 6
5
13
1
2
6
9
5
13
2
0
2
4
6
8
10
12
14
Africa Land Africa Air Americas Asia&Australasia Europe Total
Q1 & Q2 2009 Q1 & Q2 2010
Length of stay increased by 1 night in the period compared to 2009
Slide no. 63 © South African Tourism 2010
%
Most Common Length of Stay by Region, 2009 and 2010
Source: SAT Departure Survey 2009 - 2010
2
7
6
5
13
22
3
7
5
13
2
0
2
4
6
8
10
12
14
Africa Land Africa Air Americas Asia&Australasia Europe Total
Q1 2009 Q1 2010 % Change
Length of stay remained flat in the period compared to 2009 ( till April 2010)
Slide no. 64 © South African Tourism 2010Slide no. 64 © South African Tourism 2010
We are still in process of studying the impact of the 2010 FIFA World cup
• Impact of 2010 FIFATM World Cup on ‘Brand South Africa’ - analyze Brand Tracker (Regular + Lite) survey data to track the changes in perception about South Africa as a leisure destination across the globe. SAT commissioned a shorter version of the existing Brand Tracker study to understand the movement in key brand indicators post the World Cup
• Impact of 2010 FIFATM World Cup on International Tourism –analyse Departure survey data to evaluate in detail the impact of World Cup on International tourism. SAT extended the scope of the Departure Survey in the months of June and July to ensure that a larger sample of “World Cup” respondents are sampled
• Impact of 2010 FIFATM World Cup on Domestic Tourism – evaluate the impact of World Cup on South Africa’s Domestic tourism, by analysing data from Domestic survey
Slide no. 65 © South African Tourism 2010Slide no. 65 © South African Tourism 2010
Positive global reputation – our people did it
Slide no. 66 © South African Tourism 2010Slide no. 66 © South African Tourism 2010
World Cup Legacy - What's in Store for Country?
by JP van der Merwe
All Africa
Aug 31, 2010 (Trade Invest Africa/All Africa Global Media viaCOMTEX) -- With the end of the FIFA 2010 World Cup just over a month ago, South Africa can be proud of pulling off an amazing event, which in many ways showed off the best that the country has to offer. The question, which everyone is now concerned about is what happens now? Will the South African economy be able to capitalise on the momentum or will we be stuck with a World Cup hangover that never seems to go away?
We know the question is: “What now?”
Slide no. 67 © South African Tourism 2010Slide no. 67 © South African Tourism 2010
But it won’t last forever
Britons priced out of South Africa
Visitor numbers have slumped in South Africa since the World Cup, says Oliver Smith. By Oliver Smith Published: 8:00AM BST 04 Sep 2010
http://www.telegraph.co.uk/travel/travelnews/7979689/Britons-priced-out-of-South-Africa.html
Sounds of labour strife replace vuvuzela in South Africa
The Economist
31 August 2010
THE warm, fuzzy feeling of national pride and unity engendered by South Africa's hosting of the football (or soccer) World Cup did not last long.
Slide no. 68 © South African Tourism 2010Slide no. 68 © South African Tourism 2010
Challenges
• No doubt impact of world cup on global perceptions has resulted in a more receptive world
• Back home national pride
• We are feeling pressure to sustain momentum• Global recession still affecting global travel but UNWTO has
indicated upward trend of +7% in global travel though based on decline last year.
Our mission is to meet arrival and revenue targets at a time when our key markets are in decline
Choices have to be made on how to manage the falloff
Next few slides show the extent of the problem that we face if we continue to lose revenue out of the UK and Europe
Slide no. 69 © South African Tourism 2010Slide no. 69 © South African Tourism 2010
Post 2010 WC Campaign - 20 Experiences,10 days
To inspire people to visit South Africa & get a glimpse of what we have to offer, we have developed this campaign. This campaign allows us to showcase South Africa as a breakthrough destination & reinforces reasons to believe in a real & authentic way.
In May/June 2010 4 couples from the UK, USA, India & Nigeria got to experience an incredible adventure in South Africa. Filmed in South Africa – the group started together but went on four different journeys around the country, enjoying 20 amazing experiences in 10 days. While they were here, their experiences, adventures, responses & emotions were all captured on camera. They journeys were developed into 4 brand TVC’s that will flight on global platforms (CNN EMEA, CNN USA, BBC, Fox & cinema).
The campaign will also be driven online through various social media with 360 integrated portal on the SAT’s homepage.
Slide no. 70 © South African Tourism 2010Egyptian Tourist Authority spent 64% of total adspend on TV.SA Tourism spent 38% of total adspend on the Internet.
64% TV
41%Mag
39% TV
39% TV
38% Int
82% TV
51% OOH
36%Mag 66%
Nws52%Nws
52%Int
•Source: Nielsen adex Jan-June 2010
SA Tourism & its Key Competitors / Adspend Split by Medium
Slide no. 71 © South African Tourism 2010Slide no. 71 © South African Tourism 2010
Global Ad spend Summary
Tourism Boards had a higher SOV than Airlines by 18% . SA Tourism ranked 22nd in the overall category set of Tourism
Boards. India, Morocco & Egypt Tourist boards are amongst the top 10
advertisers. Television is the key medium used by Tourism boards, whereas,
Newspapers are the key medium used by Airlines.
SAT & ITS KEY COMPETITORS SA Tourism ranked 5th amongst its key competitors with
Egyptian Tourist Authorityranking 1st.
Television was key medium used followed by magazines. Egyptian Tourism Authority had the 46% SOV on Television and highest SOV in Outdoor by 47%.
SA Tourism had the highest SOV on the Internet by 44%, Radio by 46% and Cinemaby 41%.
India Tourist Board had the highest SOV in Magazines by 34% & Newspapers by 29%.
Slide no. 72 © South African Tourism 2010
April 2010 to September 2010
Timing Estimated Admissions
Target Market Format
Canada ( Toronto)
Estimated no of
screens
2 x 60 vign
3rd Sept to 30th Sept
2 x 60 vign
13th Sept to 30th Sept
Netherlands ( National)
France (Paris) 2 x 60 vign
1 Sept – 30th Sept
Germany (Hamburg, Munich, Dusseldorf, Cologne, Frankfurt, Berlin & Stuttgart)
2 x 60 vign
W/c 30 Sept
144
303
768
353
1,000,000
569,000
2,626,400
265,600
Total reach: 7,431,386
Global Cinema / Activity Overview
• Netherlands, France & Germany to continue running into the 3rd quarter.
• UK, USA , Australia and India to commence in 3rd & 4th quarters.• Final Total Reach: 22,899,852
USA (NY, Boston, LA, San Francisco & Chicago)
2 x 60 vign
1 Sept – 30th Sept
406 1,391,361
UK (National) 2 x 60 vign
1 Sept – 30th Sept
585 1,579,025
Slide no. 73 © South African Tourism 2010
Global Brand / southafrica.net
southafrica.net
EngagementTotal
Numbers
Visits 1,134,875
Page views 4,342,372
Pages/visits 3.83
Average time spent on site 149.57
% New visits 83.81%
% Bounce rate 17.44%
Slide no. 74 © South African Tourism 2010
Global Brand / southafrica.net
April May June July August Total/Average
Visits 177,246 230,871 307,383 234,048 185,327 1,134,875
Pageviews 751,406 990,418 1,188,896 777,964 633,688 4,342,372
Pages/Visit 4.24 4.29 3.87 3.32 3.42 3.83
Bounce Rate 16.67% 17.34% 17.18% 17.88% 18.12% 17.44%
Avg. Time on Site 191.43 179.42 150.03 112.85 114.13 149.57
% New Visits 79.79% 81.78% 85.73% 85.97% 85.78% 83.81%
Slide no. 75 © South African Tourism 2010Agency Generated / All
April
May
June
July
August
September
Totals
40
260
2,490,932
36,890,283
3,028,062.60
6,497,862.71
9,084,187.79
19,493,588.13
75
46
285
10,337,676
2,675,355
39,554,907
1,063,842.44
3,031,774.22
6,782,826.78
3,191,527.30
9,095,322.65
20,348,480.34
Month
Total articles
Circulation
Ad Value in ZAR
PR Value in ZAR
14 736,887 92,770.09 278,310.27
68 6,196,592 424,715.86 1,274,147.58
67 18,050,208
1,949,980.92 5,849,942.77
71 9,415,664
1,002,333.24 3,006,999.70
17 1,127,088
119,650.09 358,950.27
70 6,196,592 467,198.86 1,401,596.58
77 19,218,196
2,100,361.17
6,301,083.52
N/A N/A N/A N/A
N/A N/A N/A N/A
Total Value of Editorial Coverage Over the Period Global & Corporate
Slide no. 76 © South African Tourism 2010
655 219,471,423
15,084,510.57
815 234,845,511
17,247,342.76
45,244,530.70
51,733,027.27
Period
Total articles
Circulation
Ad Value in ZAR
PR Value in ZAR
Apr 09 – Sep 09
Apr 10 – Sep 10
334 54,490,968
7,848,774.38
353 58,273,231
8,261,505.53
23,546,323.14
24,784,516.59
Agency Generated / All
ROI
The PR Value is calculated by multiplying the Ad Value by a factor of 3 – this is because
editorial is universally regarded as more credible, and therefore more valuable, than
advertising.
ROI is calculated by dividing the total PR Value for the period by the total retainer for the
periodROI = 1 : 9Includes EVERYTHING done by FD– Global, Corporate, Business Tourism, Product & Itinerary, Domestic, SADC etc.
Please note that 2010 coverage is only for 5 months as the September figures were not available at the time of the report
S.A. / Comparison of Editorial Coverage and ROI
Slide no. 77 © South African Tourism 2010Slide no. 77 © South African Tourism 2010
Total value of Editorial Coverage in Rands over the Period Worldwide
Agency Generated
Australia
France
India
Japan
Netherlands
South Africa *
USA
69,193,397.82
44,104,331.81
1 : 195
1 : 58
98,889,731.61
93,889,965.00
1 : 389
1 : 153
6,102,742.43
9,051,754.02
1,459,061,115.44
1 : 30
1 : 39
1 : 213
6,044,847.05
10,988,375.55
10,148,416,107.92
1 : 38
1 : 434
1 : 1,621
Country
2009
ROI
2010
ROI44,213,631.
241 : 107 61,042,597
.661 : 171
291,304,084.74
1 : 629184,719,571.8
8
1 : 554
77,840,818.76
1 : 23822,533,790.3
8
1 : 83
270,162,202.50
1 : 371481,692,281.4
0
1 : 782
150,853,457.19
1 : 450 521,414,587.52 1 : 2,059
226,311,779.43
1 : 3458,036,782,616
.55
1 : 14,412
52,048,565.07
1 : 147474,187,460
.55
1 : 1,838
45,244,530.70
1 : 13 25,512,737.00 1 : 9 (approx)
172,629,819.73
1 : 148 132,683,959.63
1 : 146
•South Africa includes 2010 tactical, Fly the Flag, Sho’t Left Global, Corporate, Business Tourism , Product & Itinerary, Domestic and SADC
China
Germany
Italy
Kenya
Nigeria
UK
Total
Please note that 2010 coverage is only for 5 months as the September figures were not available at the time of the report
Slide no. 78 © South African Tourism 2010Slide no. 78 © South African Tourism 2010
South African Tourism spent R 315,8 million or 81% of its budget of R 389,9 million budget during the first 5 months of the 2010/11 financial year.
The reasons for this underspent situation are: some projects have been slightly delayed for a number of
reasons; the continued strength of the Rand has resulted in forex profits of
which some has been reallocated to new and existing marketing projects; however, some profits have not been reallocated yet
South African Tourism’s finances as at 31 August 2010
Slide no. 79 © South African Tourism 2010Slide no. 79 © South African Tourism 2010
Winning in 2011/12
Slide no. 80 © South African Tourism 2010Slide no. 80 © South African Tourism 2010
Marketing Focus - 2011/12
1. Winning in 2011/12 is about pushing harder and leveraging our phenomenal Brand awareness/positivity from the 2010 World Cup. It took the UK 25 years to host the Cricket, Rugby and Football World Cups. South Africa achieved this in 15 years.
1. Our key marketing strategy will continue to focus on protecting our leadership in wildlife and adventure which will be supported by our hospitality and welcoming people. The critical factor is to develop a stronger ‘emotional connection’ with our people/destination and our consumer heartland. Building our emotional positioning will assist us in our strategy to engage and convert more visitors as opposed to just building awareness in the Global space.
Slide no. 81 © South African Tourism 2010Slide no. 81 © South African Tourism 2010
Marketing Focus - 2011/12
3.The advertising medium will move more towards personalised customised communication mainly through online media/campaigns for conversion. However, we are still building Global awareness but traditional advertising will be used strategically to complement our 360 brand communication strategy.
Slide no. 82 © South African Tourism 2010Slide no. 82 © South African Tourism 2010
How to Win in 2011/12
1. Launch new Global BIG Idea with new images to support 2011/12 campaign that improves conversion and relevancy.
a. Build positive awareness by developing fewer and bigger executions that can be leveraged online and on global platforms. (Discover why South Africa hosted the most experiential and adventurous World Cup)
b. Develop stronger emotional connections with SA people/key experiences – Key is to focus on experiences that are highly memorable.
1. Global Media
a. Assess media landscape and develop Global media strategy that talks to the hearts and minds of our core target audience
b. Global media buy to cover massive opportunities in Africa , Asia + South America
3. eMarketing to form even bigger part of marketing activity leveraging social media platforms and key travel sites.
4. National convention and events bureau to be set up to enhance national bidding capacity and delegate boosting. (examples: Climate change, Airport games, Architects congress, Cardiology, Olympics, etc.)
Slide no. 83 © South African Tourism 2010
83
REVENUE TARGETS 2008 Actual
2009 Baseline 2010T2011T2012T2013T2014T2015T
Total foreign direct spend (R-bn) 100.1 109.2 117.2 126.1 135.7 146.0 157.0 169.0
Assumptions:1. 2009 was used as the baseline for setting the targets
2. 2009 estimates was calculated based on the available data for the year collected through the departure and domestic surveys
3. 2009 estimates were then corrected to real values using CPI of 6.2% as published by StatsSA
4. A forecast CPIX of between 5 to 7% was assumed
5. For these targets, the middle of the range CPIX value of 6% was assumed
6. The targets are represented in real terms as adjusted for assumed CPI of 6%
The outcome we are working towards will result in an additional R69 billion revenue by 2015
Slide no. 84 © South African Tourism 2010Slide no. 84 © South African Tourism 2010
KEY CHALLENGES FOR TOURISM
• Our competitiveness – 16.1 arrivals per job; revenue low• Barriers to travel – Value; safety remain • Risks – natural disasters; economic recession• Transformation is slow• Positioning – our culture is undersold and under packaged• Oversupply in the industry driven by world cup
Slide no. 85 © South African Tourism 2010
85
1. Safety & security of tourists
Research confirms that this represents the biggest deterrent to aggressively growing tourist arrivals to South Africa over the next 5 years. SA Tourism will continue to work with its stakeholders in Government and the private sector to address this.
Following the recent completion of the Safety and Security study, we will now draft a letter from our Board to the Minister of Tourism and the Office of the President given the earlier Board decision in this regard (see the separate slide on this topic from our recent research on this matter, we now know that crime is costing South Africa R 32,22 billion per annum in lost foreign direct spend from tourists and 183 000 direct jobs lost per annum).
2. Provincial- and Local Authority Tourism Authorities
Like in most other countries, South Africa needs to create a culture of more domestic travel as that is the biggest contributor to sustainable businesses and jobs in tourism industry. Realizing that the bulk of domestic tourism growth should come from the metropolitan areas, Provincial Tourism Authorities should be encouraged to spend the bulk of their budgets on:
2.1 the aggressive promotion of travel to their provinces within the metropolitan areas (e.g. through billboards and radio advertising) and not on overseas marketing and travelling (which is SA Tourism’s primary responsibility);
2.2 creating a culture of a “welcoming-towards international- and-domestic-tourists” public in their provinces that will also be the eyes and ears of Government (to deter/report crime).
SA Tourism’s medium to longer-term challenges
Slide no. 86 © South African Tourism 2010
86
Extract from SA Tourism’s latest Strategic Plan (until 2015/16) (R’mil)
Detail/Financial year Audited 2008/9 Audited 2009/10 Approved Approved Approved Approved Approved Approved
budget 2010/11 budget 2011/12 budget 2012/13 budget 2013/14 budget 2014/15 budget 2015/16
Total revenue budget 740 945 454
866 743 518
823 180 293
828 319 148
865 538 067
902 005 698
942 228 662
944 280 546
Less: Overheads & CAPEX 227 611 967
206 481 360
217 102 177
223 377 489
230 910 020
236 536 278
242 594 771
248 469 347
Total HR mainline expense items 110 911 933
111 459 183
118 341 747
127 309 611
131 128 900
135 062 767
139 114 650
143 288 089
Total Net premises mainline expense items 16 867 439
17 397 452
25 445 252
23 395 901
29 611 230
31 064 523
30 301 372
30 966 549
Total Other operating expenses mainline expense items
68 548 759
72 296 489
58 135 178
56 611 537
53 290 368
52 753 007
54 710 594
55 377 190
CAPEX 31 283 836
5 328 236
15 180 000
16 060 440
16 879 522
17 655 980
18 468 156
18 837 519
Total amount available for marketing and research 513 333 487
660 262 158
606 078 116
604 941 658
634 628 047
665 469 420
699 633 891
695 811 199
Total marketing expenses 537 669 992
652 238 113
606 078 116
604 941 658
634 628 047
665 469 420
699 633 891
695 811 199
Net surplus/deficit for the year -24 336 505
8 024 044
- -
- -
-
-
Total non-marketing overheads 83 496 136
74 997 889
76 038 627
80 200 955
82 937 242
85 617 189
86 123 210
87 880 575
Non-marketing overheads as a % of total marketing revenue
11.8% 9.0% 9.7% 10.2% 10.1% 10.0% 9.6% 9.8%
Slide no. 87 © South African Tourism 2010
87
SAT marketing expenses: 2009/10 – 2011/12
Country office Currency
of officeAudited 2009/10
Audited 2009/10
Approved Approved Approved Approved
(forex) (R’mil) budget 2010/11 (forex)
budget 2010/11
budget 2011/12 (forex)
budget 2011/12
(R’mil) (R’mil)
1. USA USD 5.666 43.631 5.074 42.406 5.074 42.423
2. UK GBP 3.025 37.745 2.740 34.348 2.740 34.335
3. Germany EUR 4.052 43.517 3.371 36.128 3.371 36.133
4. France EUR 2.840 30.916 2.375 25.461 2.189 23.465
5. Netherlands EUR 2.042 22.409 1.813 19.432 1.720 18.435
6. Italy EUR 1.215 13.165 0.690 7.392 0.690 7.393
7. India INR 67.102 13.420 105.882 18.000 88.235 15.000
8. China CNY 10.593 12.712 15.250 15.250 11.585 14.238
9. Japan JPY 79.786 6.736 59.663 8.811 59.663 5.395
10. Australia AUD 2.347 15.407 2.339 12.400 2.339 15.906
11. Domestic ZAR 19.500 - 19.500
12. Nigeria USD 6.813 - 6.991
13. Kenya USD 5.110 - 3.610
14. SADC USD 7.133 - 6.633
15. Angola USD - - 7.133 - 9.633
16. DRC USD - - 7.133 - 5.633
Slide no. 88 © South African Tourism 2010
88
SAT marketing expenses: 2009/10 – 2011/12
• Please note that the 2009/10 Africa figure includes Indaba•2010/11 strategy for Americas & Europe Portfolio’s are to stabilise while we increase funding in Africa and Asia Portfolio’s•Finance’s & Office of the CEO’S 2008/9 audited figures were negative due to exchange profits
Business Unit Audited 2009/10 Approved Approved
(R’mil) budget 2010/11 budget 2011/12
(R’mil) (R’mil)
1. Americas & UK Portfolio
84.284 79.544 79.709
2. Europe Portfolio 109.838 91.203 87.379
3. Asia Portfolio 48.169 54.562 52.144
4. Africa Portfolio including Domestic*
35.858 55.000 52.000
5. Business Tourism 27.078 10.500 11.109
6. Central Marketing 199.824 183.000 189.635
7. PR & Comms 17.546 12.000 11.000
8. Events 31.394 10.000 8.000 9. TGCSA 4.570 22.936 25.410
10. TECSA 1.061 - -
11. Finance 7.738 5.798 6.134
12. HR 0.185 2.005 2.121
13. e-Marketing 25.219 18.000 14.000
Sub total 592.762 544.547 538.642
Slide no. 89 © South African Tourism 2010
89
SAT marketing expenses: 2009/10 – 2011/12
Business Unit Audited 2009/10
Approved Approved
(R’mil) budget 2010/11 budget 2011/12
(R’mil) (R’mil) Sub total from previous page 592.762 544.547 538.642 14. Business Systems (IT) - - -
15. Office of the CEO/COO 1.988 6.500 6.877
16. Research 45.600 46.531 49.230
17. Product 11.889 8.500 10.193
Total Marketing expenses 652.238 606.078 604.942
Slide no. 90 © South African Tourism 2010
90
Changes to SAT’s non-financial resources during the 2011/12 financial year
1. People1.1. Number of employees
SA Tourism’s current staff complement of 174 will be increased by 3 staff members to 177 to cater for the Luanda office staff effective 1 April 2011 (Country Manager, Trade Relations/Marketing Communications Manager and Finance & Admin Manager). No other changes will take place in terms of SA Tourism’s staff compliment until 31 March 2012 and sufficient provision has been made in the budget to fund it.
Slide no. 91 © South African Tourism 2010
91
Changes to SAT’s non-financial resources during the 2010/11 financial year
1. People (continue)1.2. Skill set of staff members
No changes are foreseen.
1.3. Time allocation/management of marketing staff members
1.3.1 In terms of SA Tourism’s Board-approved market prioritization, marketing staff
members will continue to spend the following proportion of total available time on the
different types of markets: Core markets: 60%, Investment markets: 20%, Tactical markets:
15% and Watch-list markets: 5%.
1.3.2 In terms of maximizing available time of all SAT managers,:
1.3.2.1 SAT will continue to encourage short to-the-point meetings preferably not
exceeding 3 hours;
1.3.2.2 SAT will continue to encourage staff members to rather attend to e-mails after
13h00 every day (and not during the mornings when productivity is at its optimum);
1.3.2.3 SAT will continue to enforce the following management routines (where proper minutes should be kept available for audit-inspection purposes):
1.3.2.3.1 An Exco meeting every Tuesday
1.3.2.3.2 A Manco meeting twice a month (on Wednesday’s)
1.3.2.3.3 A Country Office meeting twice a month
1.3.2.3.4 A Business Unit meeting twice a month
Slide no. 92 © South African Tourism 2010
92
Changes to SAT’s non-financial resources
2. Systems
No change is foreseen at this stage to SA Tourism’s 3 primary
systems (Oracle, EPM Project Management and the QIT Grading Backoffice system) except for the implementation/loading of regular updates/patches.
Slide no. 93 © South African Tourism 2010
93
Changes to SAT’s non-financial resources
3. Infrastructure
3.1 Head Office
No change
3.2 Country offices
SA Tourism’s 11 country offices will be retained and no additional offices are planned due to the budget constraints.
Slide no. 94 © South African Tourism 2010
94
Changes to SAT’s non-financial resources
4. Business Units
No changes are necessary in SAT’s current 15 business units.
• Office of the CEO/COO (including Legal, Internal Audit & Admin)• Human Resources• Africa Portfolio (including Domestic Marketing)• Asia, Australasia and Americas Portfolio• Europe & UK Portfolio• Events• Business Tourism• Central Marketing (including Global Brand, Channel & Agency Management)• E-Business• Research• PR & Comms• Product & Itinerary • Finance• TGCSA• Business Systems (previously known as IT)
Slide no. 95 © South African Tourism 2010
95
Changes to SAT’s non-financial resources effective 1 April 2011
The budget cuts of R 50,4 million, R 53,4 million and R 57,0 million over the 2010/11, 2011/12 and 2012/13 financial years have been fully catered for and no staff reduction or office closures are foreseen until 31 March 2012 unless the Rands weakens dramatically against major currencies in which case the situation will be re-assessed.
Slide no. 96 © South African Tourism 2010Slide no. 96 © South African Tourism 2010
SA Tourism’s KPI’s and targets for 2011/2 (get from Gomo)
SA Tourism’s KPI’s and targets for 2011/12 (please note that a projection for a financial year, e.g. 2011/12 will lead to the achievement or non-achievement of a projection during the previous calendar year, in this case the 2011 calendar year)
Indicator Programme/ Activity Past Current Projected
2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2012/13
Number of international
tourist arrivals per year
Arrival statitics 9 090 881 9 591 828 9 933 966 10 193 585 10 295 520 10 398 475 10 502 460
- number of land arrivals 6 626 731 7 087 452 7 490 425 7 834 324 7 912 667 7 991 793 7 452 532
- number of air arrivals 2 464 150 2 504 376 2 443 541 2 359 ,261 2 382 853 2 406 681 3 049 927
Average spend per
international tourist in
the country
Spend statitics R7 000 R8 100 R8 400 R8 700 R9 222 R9 775 R10 300
- average spend per
land tourist
R5 800 R6 200 R7 100 R7 100 R7 500 R7 900 R8 400
- average spend per air
tourist
R10 200 R13 800 R13 000 R14 200 R15 000 R15 900 R16 800
Percentage of global
brand awareness
Brand awareness
75% 76% 79% 77% 78% 79% 79%
Percentage of brand
positivity
38% 37% 38% 40% 41% 42% 42%
Total number of
accommodation
establishments graded
5 400 7 209 8 196 8 288 8 288 9 117 10 029
Transformation of the
tourism sector
10% response from
the industry TECSA moved
back to the Dept of
Tourism
TECSA moved
back to the Dept of
Tourism
TECSA moved
back to the Dept of
Tourism
TECSA moved
back to the Dept of
Tourism Host 12 workshops
Renew 10 MOUs with
associates
Slide no. 97 © South African Tourism 2010Slide no. 97 © South African Tourism 2010
Moving forward – CEO
• I will lead the organisation forward on these key areas and give personal attention to some of them:
• First and Foremost to raise the profile of tourism within government and continue the battle for more funds especially post 2010.
• Partnerships with industry via TBCSA and others to promote brand competitiveness ito value for money; access and quality experience.
• Defend core markets – convert awareness to arrivals
• New growth – Brazil, India, Angola, Nigeria and DRC offer quick wins for growth
• Watchlist – Spain, Argentina and Portugal – tactical opportunities
Slide no. 98 © South African Tourism 2010Slide no. 98 © South African Tourism 2010
Moving Forward continued
• Setting up of national conventions and events bureau – critical bidding support, positioning for meetings/events and research. Linked to Sports bidding strategy with SRSA
• Staff development and internal communication to drive results focussed and people centred organisation. To make SAT a top best company to work for. Also look at succession planning and coaching.
• Stakeholder management intra-government especially Home Affairs; DIRCO; DOT, Arts and Culture and Safety and Security
• Quality assurance and visitor experience – new grading critieria to be launched.
Slide no. 99 © South African Tourism 2010Slide no. 99 © South African Tourism 2010
SiyabongaThank You