South African Tourism –Capitalising on the successful hosting of

SWC to grow Business Tourism

Nomasonto Ndlovu

Sept.15,2010

Contents• Background• Market Overview• Lessons learnt from SWC• Beyond the SWC• Conclusion

2

Market Overview

There are more than 6,6 billion people in the world …

DO ALL

OF THEM

WANT TO

COME TO

SOUTH

AFRICA?

And since we don’t give

away holidays to our

country, can they afford it?

5 Copyright © 2010 South African Tourism

Arrivals to South Africa continues its upward climb reaching 9,9 million arrivals in 2009

9,9 million

arrivals in 2009

*Comments captured above based on opinion of participants interviewed and anecdotal evidence

Source: StatsSA, Tourism & Migration release

State of Emergency

Foreign Tourist Arrivals to South Africa, 1967-2009

Arr

ivals

(M

illio

ns) First

Democratic Elections

Nelson Mandela released

Sanctions against

South Africa lifted

1970s and 80s – Stagnation

Stagnation drove low investment, focus on narrow white domestic market and costs

1990-1998 – Growth Initial period of short-term

profit-taking followed by period of investment growth and entry of foreign players

1998-2004 – Cyclicality Global events, currency volatility

drove uncertainty and short-term strategy by firms

Investment rates remain weak overall

Sanctions Era

Rugby

World Cup9/11

2010 SWC

2010

SA continues to outperform global tourism growth, which declined by 4.3% in 2009 while arrivals to South Africa grew by 3.6%

Note: UNWTO estimates incorporate provisional data for some regions

Source: Statssa Tourism & Migration release December 2009, SAT analysis; UNWTO World Tourism Barometer, Jan 2010

Year-on-Year Change in Foreign Arrivals to each region%

Change

2008Arrivals (Millions) 9.6 45.7 184.1 487.1 55.6 147.1 920

2009 Arrivals (Millions)

9.9 48.1 180.5 459.7 52.5 139.6 880

7 Copyright © 2010 South African Tourism

AFRICA 7,744,176 arrivals 5.7% up from 2008

Central & South America 65,211 arrivals

3.5% up from 2008

North America 314,696 arrivals

-8.6% down from 2008

Europe 1,348,502 arrivals

-4.1% down from 2008

Asia 209,110 arrivals

3.7% up from 2008

Australasia 113,180 arrivals

-6.4% down from 2008

Middle East 44,625 arrivals

-2.5% down from 2008

Indian Ocean Islands 18,745 arrivals

-4.0% down from 2008

Source: SAT Table A December 2009

Arrivals to South Africa grew to 9,933,966 in 2009. This growth was driven by growth in the Africa, Asia and Central & South America regions

Copyright © 2010 South African Tourism9

Average Number of Provinces Visited by All Tourists, 2002-2009Average Number of Provinces Visited by All Tourists, 2002-2009

Source: SAT Departure Surveys

Num

ber

of

Pro

vin

ces

Vis

ited

CAGR02–09 = -5.4%

There has been a steady decline in the number of provinces visited by foreign tourists overall since 2002

Copyright © 2010 South African Tourism10

Total Nights Spent in SA by Province and by Type of Accommodation, 2009Total Nights Spent in SA by Province and by Type of Accommodation, 2009

Source: SAT Departure Surveys

Nig

hts

Total Nights (‘000s)

26,854 17,924 3,090 7,458 4,773 3,774 2,087 653 4,909

%of Total Nights (2009)

37.7% 25.2% 4.3% 10.5% 6.7% 5.3% 2.9% 0.9% 6.4%

(Friends / Family)

(B & B, Backpackers’, Self-catering,

Camping)(Hotel, Game Lodge,

Guest House, Train/Ship)

Gauteng and Western Cape are by far the most visited provinces, and account for the bulk of the bednights spent in South Africa

Countr

y M

anager

Regio

nal D

irect

or

Sta

kehold

er

Manager

Glo

bal

Channel

Manage

r

Responsibility

Note: Markets marked with an asterisk indicate business tourism hubs.

But...we needed to know where to play. The portfolio review provides the answer to this strategic question and is refreshed every 3 years to ensure that we invest for the greatest returns.

AFRICA AMERICAS & the UK ASIA & AUSTRALASIA EUROPE

CORE MARKETS

AngolaBotswana

Kenya Nigeria

South Africa*

USA*UK*

Australia*India

France*Germany

Netherlands

INVESTMENT MARKETS

DRCMozambique

BrazilCanada

China (including Hong Kong)Japan

ItalySweden

TACTICAL MARKETS

LesothoSwaziland

Ireland New Zealand

WATCH-LIST MARKETS

MalawiNamibiaZambia

Zimbabwe

Argentina Republic of Korea BelgiumSwitzerland

Spain

STRATEGIC IMPORTANCE

Bahrain, Oman, Qatar, Saudi Arabia

STRATEGIC LINKS/HUBS

Egypt, Ethiopia, Ghana, Senegal,

Tanzania, UAE

MalaysiaSingapore

Portugal

2011 - 2013

Core Markets

Angola

Botswana

Kenya

Nigeria

USA

UK

Australia

India

France

Germany

Netherlands

South Africa

Tactical Markets

Lesotho

Swaziland

Ireland

New Zealand

Investment Markets

DRC

Canada

China

Japan

Italy

Sweden

Mozambique

Brazil

Watch-List Markets

Malawi

Namibia

Zambia

Zimbabwe

Belgium

Korea DPR

Korea Republic

Spain

Argentina

Switzerland

Strategic Importance / Hubs

Bahrain

Oman

Qatar

Saudi Arabia

Ethiopia

Egypt

Tanzania

Malaysia

Senegal

UAE

Ghana

Singapore

Portugal

Participating Countries

A large number of participating countries were from South African Tourism’s key source markets

Participating countries not part of SAT Portfolio: Uruguay, Greece, Algeria, Slovenia, Serbia, Denmark, Cameroon, Paraguay, Slovakia, Cote d’Ivoire, Honduras & Chile

Core Markets

Market presence

ATL + BTL

promotions

2010 activations

Media hosting

JMA with trade

TV & cinema

Tactical Markets

Limited

educational

trade workshops

Media hosting

TV & cinema

Investment Markets

JMA with trade

Media hosting

TV & cinema

Watch-List Markets

Print advertorials

Media hosting

Limited

activations

TV

Strategic Importance / Hubs

Opportunistic

activations

Partnership with

embassies

TV

SA Tourism Role in Markets

However: Business Tourism not the same as Leisure tourism…

• Business Tourism approach does not follow leisure portfolio approach.

• Cognisant that the fact that with our key focus being the Associations & IGO segments – we need to focus on their HQ and do more work in those markets

• We have Business Tourism hubs: Europe, UK & Ireland, Australia/Ausralasia; and USA/Canada and we have access to the country resources in other markets as needed and also our embassies.

• It envisaged that with the National Conventions & Events Bureau that this will strengthen our international operations.

• We want to intensify our efforts around Meetings Africa as a lever to further build on the SWC infrastructure legacy and grow business tourism.

Lessons Learnt from SWC

Post the SWC...what we know for sure

• Our mandate remains..i) Sustainable GDP Growth ii) Sustainable job creation iii) Redistribution and transformation.

There is no time like now to visit SA as we now have another reason to believe i.e. successful hosting of the 2010 Football World Cup (infrastructure, key experiences & welcoming people). This evidence will assist us in our strategy to engage and convert more visitors as opposed to just building awareness in the Global space.

Business Tourism is the key beneficiary of the SWC infrastructure: improved accessibility, additional capacity – accommodation and conference venues, better security, improved IT infrastructure...all key elements for BT

However, we need to continue building Global awareness via key global partners viz, CNN, BBC World, Fox International (Sky News/Sports & ESPN), National Geographic, EUROsport and Global Cinema. Our investment of R88 Million Rand ($11.8 Million) will ensure that we reach just over R1.4 Billion consumers in the 2010/11 fiscal.

The big job post the World Cup is to convert WC awareness into arrivals to continue to upward trend in overall arrivals to South Africa.

Lessons Learnt• Excellent partnership approach at national level but challenges at

coordinating provincial and host city initiatives

• Strong coordination of effort and communication messages was required nationally for a successful hosting of SWC

• In phases 1 and 2 most of the communication focused on addressing negative issues and convincing the world of our ability to host a successful event

• Generic domestic campaigns with no restrictions resulted in greater support from corporate organizations and the South African public

• Success of the world cup must inform future campaigns aimed at capturing the experiences of visitors during the event

• Excellent cooperation between the tourism and sports industries need to be encouraged and result in positioning SA as a mega events destination

• South African People made the SWC a huge success- our unique combinations: people, culture and place + excellent infrastructure!

2010 SWC has come and gone…what’s next?

Post 2010 Event StrategyNational Events Bureau• Minister of Tourism announced establishment of an Events Bureau within SAT in his 2010

budget speech• Appointed international expert to conduct study aimed at setting up unit• Study to analyse best practice, review current strategies & recommend type of unit to be

established within SAT with key focus areas and resource allocation requirements• Unit to focus on meetings, conferences, sport and lifestyle events• Draft report to be made available for comment by Oct 2010

Sports Bidding Strategy• Partnership project with SRSA / SASCOC / NDT & SAT• Draft report completed and needs stakeholder consultation• Aim is to define criteria to support bids to host mega sports events, understand capacity of

cities to host such events, identify key international events to pursue, provide a tool kit to support bids, define structural coordination in bidding processes and examine need for a National Bidding Fund – based on best practice

• SAT to be a key partner in this process

Sports Tourism Exhibition• Exhibition to encourage closer cooperation between tourism & sports sectors to be hosted

in Cape Town in July 2011 aimed at show casing our ability to host mega international events in SA

• Partnership between SAT / Thebe Exhibitions / Cape Town

Convention Bureau: What is it?

The Convention Bureau’s primary responsibility is to market and sell the destination

“A Convention Bureau is a destination’s marketing body, and its main focus or purpose is to increase the number of events, conferences and meetings held in the destination; whether a city, a region or a country” (ICCA)

A Convention bureau is starting point for anyone who wants to organize a meeting, a congress or event in a specific destination

Establishment of National Convention & Events Bureau - Market Reality Testing

Market conditions Trends Strategic opportunities

Stakeholder views Customer Views SAT Views

Alternate delivery approaches / outsourcing opportunities

Leveraging opportunities at events in South Africa and overseas

Pros and cons of national convention and events bureau

Roles of other organisations and possible support mechanisms

Competition / SWOT

Views on the positioning / branding of South Africa

Project Plan

Views on current SAT strategy to support events

South Africa

Australia

Brazil

Singapore

Canada

Ireland

Germany

Best Practices Case Studies

Events performance metricso Outcomes – events securedo ROI / Social & Econ Impacts

Leveraging techniques Investment levels Funding levels and sources Event development structureso Operational approacheso Roles of key players

Resource comparisonso Events v Conventions

Bid processing Bidding fundo Management and Opso Subvention criteria

UK Scotland

Conclusion

In conclusion: Strategic Focus going forward: Business Tourism1. Aggressively, grow Meetings Africa as a platform to

showcase SA as a business tourism destination

2. Equip national associations to bid for international congresses – more aggressive approach.

3. Align the association activities with national and private sector priorities in order to get bidding support & position South Africa as the destination for conventions and congresses

4. Identify & partner with trade/ corporates to attract more conferences and incentives

 

 

The high-level goals of SAT are met along several dimensions by business tourism

Business tourism is not a large market in comparison to the leisure market

However, there is strong growth in the market in South Africa

Business tourists are not attractive on a total spend basis when compared to other categories of travellers, but on a spend per day level they perform well

In absolute terms, spend by business tourists has shown significant fluctuation in the last few years

BUT Golfers spenf 7 to 10 times more than usual tourist

The length of stay of business tourists is in general shorter than for other visitor types

However there is an opportunity to increase length of stay by encouraging pre- and post-tours to extend length of stay

BUT Golfers prefer longer stay t to play a few rounds of golf per trip

Business tourists are less likely than leisure travellers to move around the country

However, a coordinating body could ensure more equitable spread of events, especially with facilities opening in Bloemfontein and elsewhere

BUT opportunity to cross sell other destinations across the country

The meetings market in particular is attractive from a seasonal distribution perspective, since there is an opportunity to influence time of arrival by targeting meetings that are scheduled for off-peak periods

VolumeVolume

SpendSpend

Length of StayLength of Stay

Distribution by Province

Distribution by Province

Distribution by Season

Distribution by Season

X/

X

X/

Keeping the momentum of the SWC alive…

The FIFA World Cup was not a cure-all; but showed what is possible in South Africa and within Africa.

It shielded the country from a worse fate in the global economic crisis.

Creating new physical and emotive infrastructure: South Africans will have

been part of rebuilding the country significantly, and will have a greater sense of self-belief and confidence.

The world is now looking at South Africa and Africa more positively than it has up to now.

This will be a lever for greater levels of tourism, trade and investment - and we

need to milk this for as long as possible

So what did she say….On the key themes…

Devising an action plan to grow year-round demand that meets our supply;Keeping the World Cup momentum going;The key issues affecting year-round sustainability;Seasonality & events strategy

The establishment of a national convention and bureau will assist in addressing these issues

× Marketing plans to increase the number of right visitors to Cape Town

Primary efforts of the City and the Province. SAT provides support