SA Tourism Updated 2013/2014 Annual Performance Plan and 5 Year Strategic Plan 23 April 2013.

SA Tourism

Updated 2013/2014 Annual Performance

Plan

and 5 Year Strategic Plan 23 April 2013

Slide no. 2 © South African Tourism 2012

Contents

• Vision, Mission and Mandate

• Steps of Portfolio Review and Hub Strategy

• Africa Growth Strategy

• Domestic Tourism Strategy

• Strategic Objective Annual Targets, Performance

• Breakdown of Tourism Budget

Strategic Plan & Annual Performance Plan - 23 April 2013


Vision and Mission• VISION OF SA TOURISM

For South Africa (SA) to be the preferred tourist destination in the world, in order to maximise the economic potential of tourism for our country and its people.

• MISSION OF SA TOURISMTo develop and implement a world-class tourism marketing strategy for SA. In pursuance of this SA Tourism will:

• Implement domestic, regional and international marketing strategies informed by research

• Implement a business events strategy• Implement and maintain a recognisable, credible and globally

benchmarked system of quality assurance• Facilitate strategic alignment of provinces and industry in

support of global marketing of tourism.• Facilitate the removal of identified obstacles to tourism growth. • Ensure the efficient utilisation of resources to deliver the tourism

strategy

Updated SAT 2013/14 APP and 5 Year Strategic Plan


Values of SA Tourism



SA Tourism’s Mandate set out in the Tourism Act makes it clear that it needs to make choices that will benefit all South Africans

Sustainable GDP Growth

Sustainable GDP Growth

Sustainable job creation

Sustainable job creation

Redistribution and

transformation

Redistribution and

transformationThe mandate to SA Tourism is ...

. . . through six key

objectives . . .

. . . by acting in a

focused way to . . .

Increase in tourist volume

Increase in tourist volume

Increase in tourist spendIncrease in

tourist spendIncrease length

of stayIncrease length

of stay

Improve geographic

spread

Improve geographic

spread

Improve seasonality

patterns

Improve seasonality

patterns

Promote transformation

Promote transformation



Contents






• Break down of Tourism Budget

Updated SAT 2013/14 APP and 5YR StratPlan


How attractive are these markets in the short term and the

long term?

CoreTactical

Investment and Watch-List

markets

2nd filter

Salient set

Steps of the Portfolio Review

Application of cost-benefit evaluation

1st filter

4th filter

*Africa land markets are markets where more than 60% of arrivals to SA arrive by land.

3rd filter

Final portfolio

Exclude Africa and subdivide it into 5

regions

Exclude SADC (Africa Land markets) from

the elimination process (proximity to

SA).

From the remaining countries. Excludes countries with less

than 150k outbound Travel and Population of less than 3 Million

Exclude markets population less than 3 million people OR GDP PPP of less than $11

000

Top markets in terms of outbound volume

and value

The remaining countries including SADC (Africa land

markets) qualify for Africa Salient set of

countries

199

countries

133

24

117

42

40



Key things that have changed in the 5th Portfolio Review.

1. We treat the African continent different from the rest of the world. Subdivide the Africa continent into 5 different regions / hubs Countries with outbound less than 150K per year and a population of 3

Million will be filtered out. The average outbound per annum for African countries is 500K , while population is 7 million. The aim is to include as many countries as we can hence the very low threshold.

SADC (Africa Land Markets) will automatically qualify because of its proximity.

2. For the rest of the world, we will no longer use the $2 000 GDP filter. Instead we will use GDP PPP of $11 000 per annum as a Filter for affordability. Its similar to a Big Mac Index.

3. We plan to use the hub strategy around the world to increase market penetration, the hub approach will also be applied when markets have been filtered through all the other criteria so that we can combine markets in the portfolio based on proximity, language, trade links eg USA and Canada; Japan and Korea; Netherlands and Belgium.



4th Portfolio Review Outcome Implemented effective 01/04/2011 to 30/03/2014

AFRICA AMERICAS & UK

ASIA & AUSTRALASIA

EUROPE

CORE MARKETS AngolaBotswana

Kenya Nigeria

South Africa*

USA AustraliaIndia

FranceGermany

NetherlandsUK*

INVESTMENT MARKETS

DRCMozambique

BrazilCanada

China (including Hong Kong)

Japan

BelgiumItaly

Sweden

TACTICAL MARKETS

LesothoSwaziland

New Zealand Ireland

WATCH-LIST MARKETS

MalawiNamibiaZambia

Zimbabwe

Argentina Republic of Korea AustriaDenmarkPortugal

SpainSwitzerland

STRATEGIC IMPORTANCE

Bahrain, Oman, Qatar, Saudi Arabia

STRATEGIC AIR LINKS/HUBS

Egypt, Ethiopia, Ghana, Mauritius,

Senegal, Tanzania, UAE

MalaysiaSingapore

Cou

ntr

y

Man

ag

er

Reg

ion

al D

irecto

r G

M:

Watc

hlist

Glo

bal

Sta

keh

old

er

Man

ag

er

2011 – 2013/4



5th Portfolio Review Outcome to be Implemented Effective 01/04/2014 – 30/03/2017

Africa AMERICAS ASIA & AUSTRALASIA EUROPE & the UK

CORE MARKETS Angola, Domestic, Kenya, Mozambique,

Nigeria, Tanzania

BrazilUSA

AustraliaChinaIndia

FranceGermany

NetherlandsUK

INVESTMENT MARKETS

Botswana, DRC, Ghana, Lesotho,

Uganda, Zimbabwe

Canada JapanSouth Korea

Italy Russia

TACTICAL MARKETS

NamibiaUAE

Zambia

Singapore Switzerland

WATCH-LIST MARKETS

EthiopiaMalawi

Swaziland

Argentina New Zealand Austria Belgium

Denmark FinlandNorwaySpain

Sweden Turkey

STRATEGIC IMPORTANCE

Egypt, Israel, Morocco, Saudi Arabia, Tunisia,

Malaysia

Cou

ntr

y

Man

ag

er

Reg

ion

al D

irecto

r

Sta

keh

old

er

Man

ag

er

Responsibility

TR

M:

G

lob

al



Proposed Hub Strategy commencing 1 April 2014Objective of the Hub Approach

To link and combine markets of strategic importance as hubs to

realise a greater return on investment.

Factors considered:

a)Combined outbound travel

b)Proximity

c)Airlinks

d)Culture

e)Language



USA (Office) - Hub

Canada

India (Office) – Stand Alone

North AmericasNorth Americas

Asia & Australasia

Asia & Australasia EuropeEurope

Germany (Office) - Hub

Russia **

Brazil (Office) - Hub

*** Argentina

*** Chile

Latin AmericasLatin Americas Central EuropeCentral Europe

IndiaIndia

AustralasiaAustralasia

Australia (Office) - Hub

New Zealand

AmericasAmericas

Norway

Sweden

Denmark

Finland

United Kingdom (Office) - Hub

Ireland

Scotland

Wales

United KingdomUnited

Kingdom

Benelux & Scandinavia

(**)

Benelux & Scandinavia

(**)Netherlands (Office) - Hub

Belgium

China - Office ** - Hub

Hong Kong

Macau ***

Japan

South Korea **

Asia PacificAsia Pacific

Asia Air Link HubAsia Air Link Hub

Proposed Hub Approach for Implementation from 2014 to 2017

Austria

France – Stand Alone

France (Office)France (Office)

Switzerland

Spain

Turkey

Malaysia

Singapore

Kenya (Office) - Hub

Tanzania & Uganda **

*** Ethiopia

East AfricaEast Africa

AfricaAfrica

Nigeria (Office) - Hub

Ghana*** ECOWAS countries

West AfricaWest Africa

Angola (Office) – Stand Alone

DRC – Hub

Central AfricaCentral Africa

Italy – Stand Alone

Italy (Office)Italy (Office)

Botswana

Malawi

SADCSADC

Zimbabwe

Lesotho

Mozambique Zambia

Namibia

Notes: ** 1 Trade Relations Manager will be appointed – approved by Board (Shanghai, South Korea, Russia, Scandinavia as well as Tanzania and Uganda)

*** Future Plans



Contents









MTEF Allocation to Aggressively Grow Africa

Objectives to Drive Growth from the Continent to meet NTSS Target

•Increasing regional awareness of South Africa as a tourism and leisure destination.

•Increase arrivals and spend from Africa to contribute to GDP and job creation.

•In SADC, our market penetration is high but opportunities exist to promote repeat travel and to turn shoppers into holiday travel.

•In Africa Air markets, sizable opportunity exists to attract high value business and leisure travellers.

•Setting up five marketing offices in key African markets by 2020.

•Implementation of regional tourism programmes.





Contents• Vision, Mission and Mandate








Domestic Tourism Strategy



Key Initiatives

• Complete Brand Audit of current Domestic Tourism

Campaign

• Re-launch new improved strategic Domestic Campaign,

aligned with 5 segments

• Apply digital best practice, integrated into new campaign

execution

• Engage low cost airlines to improve regional distribution

• Radio DJ Programmes



Contents








Strategic Outcome Oriented Goals, Goal Statement and ObjectivesStrategic Outcome Oriented Goal

Increased Contribution of the tourism sector to inclusive economic growth

Goal Statement Implement marketing strategies that increase arrivals and increase tourism spend thereby growing tourism’s contribution to SA economy

Strategic Objective

Objective Statement Baseline Justification NTSS Alignment & Objectives

1 Increase foreign visitor arrivals to SA

Implement an international marketing strategy to increase arrivals from 9 933 966 (2009) to 15 million (2020)

9.933.966(2009)

More foreign visitors will yield more tourism spend resulting to increased GDP contribution

15m

2 Increase domestic tourism in SA

Implement the domestic tourism strategy to increase the number of travellers from 13.5 million (2012) to 18 million (2020)

13.5m(2010)

Making SA more attractive to South Africans. This will increase tourism spend and GDP contribution

14.6 – 18m travellers30 – 54m trips4 – 9m holiday trips

3 Increase tourism trended revenue contribution to the economy

Attract tourist that will ensure that the trended revenue contributes to SA economy more than 1.5% growth per year

Average spend/arrival R11.646 (2010) = Total revenue: R99.6m

Attract tourists that will increase trended revenue contribution to GDP

R499bn (50-60% domestic contribution)225 000 additional jobs



Strategic Outcome Oriented Goals, Goal Statement and ObjectivesStrategic Outcome Oriented Goal

Increased Contribution of the tourism sector to inclusive economic growth

Goal Statement Implement marketing strategies that increase arrivals and increase tourism spend thereby growing tourism’s contribution to SA economy

Strategic Objective

Objective Statement Baseline Justification NTSS Alignment & Objectives

4 Increase SA brand awareness

Positioning as the most preferred Tourism brand by 2015 in order to reaffirm the brand promise

79% (2010) Making SA more attractive to visitors and results in increased spend

Aligned

5 Provide quality assurance for tourism products

Implement the tourism grading system to increase graded establishments by 10%

4.886 (2011/12)

Marketing through word of mouth of the quality experience offered in SA

Aligned

6 Increase business events

Market SA as a meetings destination and provide support for bids

None Selling SA as a “Meetings Destination”

Aligned



Strategic Outcome Oriented Goals, Goal Statement and ObjectivesStrategic Objective

Key Perform -ance Indicator

Audited Outcome/ Actual Performance

Estimated Perform-ance

Medium Term Targets

2009 / 10

2010 / 11

2011 / 12

2012/13 2013/14

Quarterly Targets

2014/15 2015/16

Increase foreign visitor arrivals to SA

# of foreign visitor arrivals(annually)

9 933 966(2009)

11 395 700

12 255 155

12 518 310

13 021 979

Q1: 3 125 275Land: 2 277 572Air: 777 779

13 300 5352.2% Land: 10 048 643Air: 3 251 892Tourist arrivals estimate: 8 987 279

13 579 9992.1% Land: 10 257 533Air: 3 322 466Tourist arrivals estimate: 9 256 597

Q2: 2 995 055Land: 2 260 193Air: 800 039

Q3: 3 385 715Land: 2 515 665Air: 835 819

Q4: 3 515 934Land: 2 595 434Air: 959 434

Increase domestic tourism in SA

# of domestic travellers

14.6m 13.5m 13.9m 14.5m 15.0m Q1: 4m 15.6m 4%

16.2m3.8%

Q2: 4m

Q3: 3m

Q4: 4m



Strategic Outcome Oriented Goals, Goal Statement and Objectives

Strategic Objective

Key Performance Indicator


Estimated Performance

Medium Term Targets

2009/10

2010/11

2011/12

2012/13

2013/14 Quarterly Targets

2014/15 2015/16

Increase tourism trended revenue contribution to the economy

Amount of Trended revenue

R8 100

R8 400

R8 600

R12 536 (NITS)

R115.4b(TFDS)

Q1: R27.7b

R119.6b(TFDS) 3.6%

R124 b (TFDS) 3.6%

Q2: R26.5 b

Q3: R30 b

Q4: R31.2b

Increase SA brand awareness

Brand Awareness

79% 79% 77% 79% 79% N/A 80% 80%



Strategic Outcome Oriented Goals, Goal Statement and Objectives

Provide quality assurance for tourism products

# of graded establishment

8196 5 932 4 886 6 172 6 789(1 086 New 5 703 renewals)

Q1: 1 697(198 new +1 499 renewals)

7 468(1 195 new + 6 273 renewals)

8 215(1 314 new + 6 901 renewals)

Q2: 1 697(30/09/’13)231 new + 1 466 renewals

Q3: 1 697(31/12/’13)271 new & 1 426 renewals

Q4: 1698(31/03/’14)386 new & 1 312

Increase business events

# of delegates

N/A N/A N/A 18 000 delegates at international conventions

56 000 delegates at international conventions

N/A 58 500 delegates at international conventions

61 500 delegates at international conventions

Strategic Objective

Key Performance Indicator


Estimated Performance

Medium Term Targets

2009/10 2010/11 2011/12 2012/13 2013/14 Quarterly Targets

2014/15 2015/16



Number of Graded Establishments - as at end March 2013

Non-Hotel Accommodation EC FS GP KZN LP MP NW NC WC

Grand Total

Backpacker & Hostelling 15 3 8 9 1 4 3 1 41 85

Bed & Breakfast 212 21 193 260 25 37 36 35 360 1 179

Caravan & Camping 19 6 1 9 7 6 11 4 28 91

Country House 31 3 24 17 8 9 4 2 72 170

Guest House 237 64 451 150 56 113 110 79 624 1 884

Lodge 53 11 44 57 81 48 13 45 30 382

Self Catering 117 30 103 190 80 67 35 27 908 1 557Non-Hotel Accommodation Total 684 138 824 692 258 284 212 193 2 063 5 348

Hotel Total 57 23 174 108 32 34 26 21 183 658Accommodation Grand Total 741 161 998 800 290 318 238 214 2 246 6 006MESE Total (Business Tourism) 5 21 79 7 14 18 13 14 17 188Grand Total Graded Properties 746 182 1 077 807 304 336 251 228 2 263 6 194

Annual Target was 6 172



Number of Bids Secured for South Africa: 2013 - 2017

Total Bids Total Number of Days

Estimated Delegate Numbers

Estimated Economic Impact

38 Secured 159 57150 R 680 008 000.00

Bids 2013




21 Secured 91 45600 R 588 420 000.00

Bids 2014







16 Secured 79 48100 R 659 680 000.00

Bids 2015




10 Secured 51 40550 R 649 460 000.00

Bids 2016







2 Secured 9 4500 R 57 400 000.00

Bids 2017

# Of Meetings Estimate Delegate Numbers


19 46 210 R616 million

Bids 2017



Contents









Revenue & Expenditure Estimates

Revenue2009/10

2010/11

2011/12

2012/13 2013/14 2014/15 2015/16

ENE Estimate

Adjust-ment

Approved

Rand Thousand

Audited

Audited

Audited

Budget Budget Budget Budget BudgetEstimate*

1Government grant

698,949

631,685

668,613

753,303 753,303 829,973 875,844 880,772

2TOMSA levies

75,490104,973

98,169 78,000 78,000 87,472 82,000 85,772

3Indaba & Meetings Africa

38,503 38,803 37,868 40,059 40,059 42,464 41,677 43,594

4Grading fees (note 1)

16,692 6,376 5,284 14,050 14,050 15,736 14,618 15,290

5Sundry revenue

37,109 52,567 19,045 26,668 26,668 16,667 27,635 28,906

Total866,744

834,404

828,979

912,080 912,080 992,3121,041,774

1,054,334

Note 1: Only the net grading revenue after the deduction of assessor fees were disclosed in the audited Annual Financial Statements for 2010/11 and 2011/12 respectively.



Revenue & Expenditure EstimatesName of the Goal

2009/10

2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

ENE Estimate

Adjust-ment

Approved

in Rand Audited Audited Audited Budget Budget Budget

Major Goal853,391

856,088 863,295 912,080 - 912,080 992,3121,041,774

1,054,334

1

Increase foreign visitor arrivals coming to South Africa

233,013

224,655 257,502 249,495 - 249,495 336,952 353,940 352,321

-International 199,495 199,495 252,952 269,940 268,321- Regional Africa

50,000 50,000 84,000 84,000 84,000

2

Increase domestic tourism in South Africa

40,000 40,000 42,400 43,672 44,000

3

Increase tourism trended revenue contribution to the economy

292,488

296,953 290,367 271,711 271,711 336,952 353,940 352,321

4

Marketing Increase SA Brand Awareness

292,487

296,953 290,367 271,712 271,712 206,828 219,238 232,392

5

Provide quality assurance for tourism products

35,403 37,527 25,059 39,689 39,689 37,115 37,377 39,300

6Increase business events

39,473 39,473 32,065 33,607 34,000

Total853,391

857,809 863,295 912,080 - 912,080 992,3121,041,774

1,054,334



SA Tourism Budget (Breakdown)Country Office Expense Budgets

Grand 2013/14 total Grand 2012/13 total Grand 2013/14 total Grand 2012/13 total

Other ope- Marketing ex- Overheads and Overheads and overheads and overheads and

rating penses excl CRM marketing marketing marketing marketing

Country offi ce Currency HR Net premises expenses and Hosting CRM Hosting budget budget budget in ZAR budget in ZAR

in diff. currencies in diff. currencies

1. USA USD 988 803 593 609 134 484 4 156 531 247 343 777 154 6 897 924 6 756 047 65 323 340 60 998 994 2. UK GBP 578 302 59 907 143 246 1 836 662 457 093 419 250 3 494 460 3 425 941 49 726 166 46 361 208 3. Germany EUR 629 970 193 763 132 253 2 697 458 224 901 515 710 4 394 055 4 307 897 51 454 384 49 875 110 4. France EUR 724 605 244 388 65 324 1 528 728 136 515 363 447 3 063 007 3 002 948 35 867 812 34 766 930 5. Netherlands EUR 403 413 83 601 106 896 1 349 421 127 300 277 389 2 348 020 2 301 981 27 495 314 26 651 415 6. Italy EUR 378 640 84 547 79 452 541 821 70 179 105 517 1 260 156 1 235 447 14 756 427 14 303 516 7. India INR 6 278 532 8 064 178 9 831 087 74 231 579 2 343 421 16 215 882 116 964 679 114 558 941 27 691 388 21 033 022 8. China CNY 1 521 145 591 483 490 207 12 248 869 454 752 2 335 538 17 641 994 14 634 665 23 816 692 16 653 707 9. Japan JPY 17 949 246 16 915 811 10 017 780 49 418 160 2 056 266 9 083 722 105 440 985 103 882 744 12 639 571 8 696 901 10. Australia AUD 601 523 132 563 72 257 1 990 215 120 986 360 683 3 278 227 3 188 937 32 683 923 23 419 551 11. Angola USD 176 745 58 915 58 915 859 350 60 517 290 484 1 504 926 1 009 930 14 251 649 9 118 456 12. Nigeria USD 104 102 156 151 38 765 1 720 531 312 044 312 044 2 643 637 1 588 159 25 035 247 14 341 080 13. Brazil (Am) USD 203 522 45 227 2 008 676 2 257 425 1 206 359 21 377 815 10 893 420 14. Kenya USD 90 985 123 104 37 553 1 156 327 168 695 210 286 1 786 950 1 062 625 16 922 417 9 595 500

Overhead mainline items Marketing expense mainline items



Budget for Africa Growth Strategy

BREAKDOWN OF PROJECT AFRICA GROWTH

2013/14 2012/13

CONTRIBUTION TO ANGOLA OFFICE BUDGET 10 688

737 6 838 842

CONTRIBUTION TO NIGERIA OFFICE BUDGET 18 776

435 10 755 810

CONTRIBUTION TO KENYA OFFICE BUDGET 12 691

812 7 196 625 CONTRIBUTION TO OFFICE OPENING EXPENDITURE KENYA 1 MAR ‘14

1 850 000

CONTRIBUTION TO OFFICE OPENING EXPENDITURE NIGERIA 1 MAR ‘13 1 500 000

CONTRIBUTION TO AFRICA HEAD OFFICE BUDGET 3 553

652 4 930 158

DRC 1 985

625 1 985 625

BOTSWANA, ZIMBABWE AND ZAMBIA 1 658

250 1 658 250

MOZAMBIQUE AND MALAWI 1 658

250 1 658 250

LESOTHO, SWAZILAND AND NAMIBIA 1 658

250 1 658 250 PROMOTION OF DOMESTIC EVENTS IN NEIGHBOURING SADC

5 008 000 5 008 000

CONTRIBUTION TOWARDS AFRICAN RESEARCH 12 854

027 2 143 344 CONTRIBUTION TOWARDS AFRICA E-MARKETING INCLUDING SOCIAL MEDIA AND MOBI

8 241 962 1 516 847

AFRICA SHARE OF ADVERTISING AGENCY FEES 3 375

000 3 150 000

CONTRIBUTION TOWARDS AFRICA CONTINENT MEDIA

- -

84 000

000 50 000 000



Other Resource Considerations• Expected expenditure growth at CPIX except for the

Marketing functional units where emerging economies and domestic market will expend more.

• Staff increase expected from 189 to 194.

• Estimated CAPEX of R21.58 (2012/13) and R18.75m (2013/14) in respect of opening of new offices – Brazil, Nigeria, Angola and Kenya estimated.

• Estimated CAPEX of R5m (2012/13) and R6.29m (2013/14) in respect of HQ Office extension for Phase 1 and 2 respectively.

• Estimated R13.08m (2012/13) and R10.6m (2013/14) for software, hardware, vehicles and lease improvements.


Thank You

SA Tourism Updated 2013/2014 Annual Performance Plan and 5 Year Strategic Plan 23 April 2013.

Documents

tourism growth

mission of sa tourism

south african tourism

tourism act

mission vision of sa

tourism budget updated

south africa sa

year strategic plan