Update on the Tourism Global
Competitiveness Programme (GCP)
14 September 2010
The original 2003 / 2004 Global Competitiveness Programme (GCP) was part of a
larger initiative to forge and manage strategic alignment across the sector
Sustainable competitiveness is not an accident - it is created through the deliberate development of
the context within which firms compete
SAT, the former DEAT and the
dti launched the first Global
Competitiveness Study
focusing on understanding the
challenges to deliver on the
marketing promise on a
sustainable long term basis
Global Competitors
Global
Demand
Domestic Demand
Consumer Goals
Supporting
Industries
Strategic Context
Competing Product
Owners
GCP review 2010 – Portfolio Committee
National Goals
Competing
Operators
2
Copyright © 2010 South African Tourism
The World Economic Forum has ranked South Africa 8th out of 40 countries regionally and 61st out
of 133 countries globally during 2009. However we expect the rankings to improve due to the
successful hosting of the 2010 FIFA World Cup
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Travel & Tourism Competitiveness Index: SA
2009 Index
2008 Index
T&T regulatory framework
Policy rules and regulations.
Environmental sustainability
Safety and security
Health and hygiene
Prioritization of Travel & Tourism
T&T business environment and infrastructure
Air transport infrastructure
Ground transport infrastructure
Tourism infrastructure
ICT infrastructure
Price competitiveness in the T&T industry
T&T human, cultural, and natural resources
Human resources .
Education and training
Availability of qualified labor
Affinity for Travel & Tourism
Natural resources
Cultural resources.
(out of 133)
61
60
82
36
44
128
94
60
52
43
64
46
80
38
49
112
48
131
43
22
45
Source: Travel & Tourism Competitiveness Report 2009 (World Economic Forum)
GCP review 2010 – Portfolio Committee
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Copyright © 2010 South African Tourism
Out of 133 countries globally, the following are some of South Africa’s rankings globally
during 2009
Some of the Competitive Advantages

28th for Visa requirements

29th for transparency of government policy making

16th for sustainability of Travel and Tourism Industry development

18th for Government prioritization of the Travel and Tourism Industry
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17th for effectiveness of marketing and branding

25th for quality of air transport infrastructure

25th for availability of seat kilometers, international
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30th for number of operating airlines

40th for quality of roads
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37th for quality of rail infrastructure

1st for presence of major car rental companies
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38th for hotel price index
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15th for extent of staff training

49th for attitude of population towards foreign visitors
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10th for number of World Heritage Natural Sites
GCP review 2010 – Portfolio Committee
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Copyright © 2010 South African Tourism
Out of 133 countries globally, the following are some of South Africa’s rankings globally
during 2009
Some of the competitiveness Disadvantages

128th overall ranking for Safety and Security

108th for reliability of police services

126th for quality of ground transport network

131th HIV prevalence
GCP review 2010 – Portfolio Committee
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Copyright © 2010 South African Tourism
First GCP study undertaken in 2003/4
•
•
•
•
Purpose:
– To‫‏‬ascertain‫‏‬factors‫‏‬hindering‫‏‬SA’s‫‏‬competitiveness;
– To understand the challenges to deliver on the marketing promise on a sustainable longer term
basis;
Objectives:
– Benchmark how SA was performing as a destination compared to other successful destinations;
– Ascertain what was driving performance (Strengths and negative Weaknesses);
– Develop approach to address weaknesses and capitalize on strengths;
Project Managed by NDT, the DTI and SAT
Undertaken in two phases:
– Phase 1: Competitiveness of SA as a whole;
– Phase 2:



Skills and Human Resources Development review ;
Product Development incl. proposed product development in rural poverty nodes;
Transformation;
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Copyright © 2010 South African Tourism
First GCP study undertaken in 2003/4 (cont.)
Each focus area or chapter had specific sub-elements
External benchmark
Benchmarking performance
The configuration and functioning
of the value system
Internal benchmark
Mapping the cluster
The Channel
Consumer to market
Market to consumer
Drivers and barriers of growth in
tourism in SA
Market Access
Capacity
Airlift
Car Rental
Accommodation
Product positioning, configuration
and development
Innovation & Competition
Skills and service levels
Product Development
International desire, usage
and satisfaction profiles
Configuration - key markets
Domestic usage and
satisfaction profiles
Transformation of the SA tourism
industry
Investment and implications for
future investment
GCP review 2010 – Portfolio Committee
Key metrics
Drivers and barriers
Current investment status
Investment Issues
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Copyright © 2010 South African Tourism
First GCP study undertaken in 2003/4 (cont.)
•Outcomes:
Factors‫‏‬hindering‫‏‬SA’s‫‏‬competitiveness‫‏‬include‫–‏‬
–Market access
•
–Air access
–Skills
–Public transport
–Transformation
–Information
–Innovation, product
development, investment and
SMME development:
•
GCP review 2010 – Portfolio Committee
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•
•
•
•
Identification of new markets and discussions
around visas ongoing;
Airlift strategy;
HRD Strategy;
Discussions with DoT;
Sector codes gazetted;
One contact number/centre, VICs etc;
Investment portfolio, Implementation of
Second Economy Strategy, SMME
development through TEP;
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Copyright © 2010 South African Tourism
Based on the prioritisation of the twenty development areas, nine areas were selected
by the working team for further analysis
Prioritization Matrix
High
10. Port Elizabeth &
Surrounds
17. Greater Durban &
Pietermaritzburg
16. Drakensberg
6. Garden Route & West
Sunshine Coast
Relative
Market
Potential
(Volume
Weighted)
12. East London & Lower
Wild Coast
18. Elephant Coast & Surrounds
29. Panorama
Region
31. Dolphin Coast &
13. Upper Wild
Southern Zululand
Coast
14. Witteberge
Mountains
19. Pilanesburg,
Madikwe & Mafikeng
3. Whale Coast & Overberg
28. Central Limpopo
1b. West Kalahari
22a. Soweto
22b. Alexandra
1a. Namakwa
5. Beaufort West
7. East Kalahari
Low
0
1 000
9. Eastern Cape Karoo
2 000
3 000
4 000
5 000
7,500
Poverty Gap (Rm)
Note: Areas 12 and 13 were combined and collectively analysed as the Wild Coast
Source: Statssa Census 2001, Demarcation Board, HSRC, Monitor Group analysis
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Copyright © 2010 South African Tourism
The 2010 study reviewed four modules of the original GCP study for the period
2003 – 2008 in order assess progress that the industry has made over this period
Overall Objective
 To support the South African Tourism in formulating future growth strategies by studying the overall performance and levels of
competitiveness of tourism in South Africa
External Benchmarking of
South Africa with Key
Competitors
 Compare the tourism
industry in South Africa with
that of five other key
competitor destinations
(Australia, the US, Kenya,
Thailand, and Brazil) across
several performance
indicators and
macroeconomic factors
Internal Benchmarking of
Tourism sector in South Africa
Analysis of Drivers and
Barriers to Growth
 Assess the current state of
 Study the relative
performance and
contribution of the tourism
sector vis-à-vis other major
economic sectors of the
country
tourism in the country and
analyze the key drivers and
barriers to the growth of
tourism sector
 Analyse the various tourism
products and services
offered by the country and
their accessibility to the
tourists
Desire, Usage and
Satisfaction Level of
Tourists
 Analyse the gaps in
desirability, expectation,
experience, and usage of
various tourism products
and services, for
domestic and
international tourists
 Desktop study
 Sources used in 2010 study
In addition to the sources used in previous study, the current study leverages:
•
•
•
•
Euromonitor International database
Global organizations such as World Economic Forum, UNESCO, IMF, etc.
News and articles published on various portals
Government and related bodies such as Stats SA, South African Reserve Bank, and NEDLAC
GCP review 2010 – Portfolio Committee
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Copyright © 2010 South African Tourism
Five competitor countries were reviewed. These countries were identified as
competitors through consumer research conducted since 2001
Brazil has seen jobs grew in line with tourist arrivals, while Australia has seen jobless growth
Travel and Tourism
Parameters
Tourism Employment in
‘000s‫(‏‬2008)
Growth (03-08)
Tourist‫‏‬Arrivals‫‏‬in‫‘‏‬000s‫‏‬
(2008)
Growth (03-08)
Tourism Contribution to
GDP in USD Bn1 (2008)
Growth (03-08)
Direct Contribution to GDP
in USD Bn (2008)
% contribution
Indirect Contribution to GDP
in USD Bn (2008)
% contribution
Recent Developments
South Africa
Australia
USA
Direct: 439
Direct: 499
Direct: 5,477
Total: 1,042
Total: 1,176
4%
0%
7,0872
Brazil
Kenya
Direct: 1,900
Direct: 2,222
Direct: 168
Total: 14,488
Total: 4,178
Total: 5,507
Total: 406
-1%
2%
4%
1%
5,586.0
58,029.8
14,243.2
5,156.5
1,363.0
9%
3%
7%
6%
5%
4%
23.5
104.7
1,388.7
41.3
99.0
3.2
13%
12%
5%
14%
24%
16%
14.7
62.8
709.7
24.7
58.2
2.0
3%
4.4%
3.5%
6.8%
2.2%
4.8%
8.8
41.8
678.9
16.6
40.8
1.2
8%
11.2%
10%
15.6%
5.7%
10.3%
Current year has
remained the worst
year for Australian
tourism since 1989,
with 4.1% decline in
tourist arrivals
Faith tourism is
emerging as a
popular tourism
sector in the US
Host to 2010 FIFA
World Cup, which is
expected to boost
foreign arrivals
Thailand
Tourism has
suffered in recent
years due to the
economic crisis,
breakout of H1N1, &
internal political
unrest
Host to major sports
Tourism industry
events in 2014
has suffered in
(FIFA World Cup)
recent years due to
and 2016 (Olympics)
political unrest
Note: 1Direct and Indirect contribution of tourism industry to GDP. Numbers have been validated from respective tourism websites of various countries; 2 This number is calculated after removing
‘day‫‏‬tourists’‫‏‬from‫‏‬the‫‏‬overall‫‏‬number‫‏‬of‫‏‬arrivals
Source:‫‏‬The‫‏‬Travel‫‏&‏‬Tourism‫‏‬Competitiveness‫‏‬Report‫‏‬2009’,‫‏‬World‫‏‬Economic‫‏‬Forum,‫‏‬February‫‏‬2009;‫‘‏‬Managing‫‏‬Tourism‫‏‬at‫‏‬World‫‏‬Heritage‫‏‬Sites’,‫‏‬UNESCO,‫‏‬2002;‫‘‏‬Travel‫‏‬And‫‏‬Tourism‫‏‬in‫‏‬the‫‏‬
US’,‫‏‬Euromonitor,‫‏‬September‫‏‬09;‫‏‬Bangkok‫‏‬Post;‫‏‬BBC;‫‏‬CNN;‫‏‬Tourism‫‏‬Research‫‏‬Australia;‫‏‬WTTC;‫‏‬Stats‫‏‬SA;‫‘‏‬The‫‏‬Impact‫‏‬of‫‏‬Tourism‫‏‬on the Economy of South Africa – 2007’,‫‏‬SAT,‫‏‬August‫‏‬2008
GCP review 2010 – Portfolio Committee
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Copyright © 2010 South African Tourism
Drivers of Performance
Drivers
of
Performance
Tourist
Performance
Parameters
Economic
Benefits
 During the period 2002–2008, South Africa witnessed the highest growth in spend by international
visitors (in local currency) as compared to other competitors
 South Africa’s travel and tourism sector witnessed a steady growth of ~3.2% in employment over
the period of 2002–2008
• Employment count for the US witnessed a decline (primarily due to the global recession and
reduced outbound/domestic tourism) over 2003–2008
• Other key competitor countries – Brazil, Kenya and Thailand – witnessed a positive growth in
employment in the travel and tourism sector over 2003–2008
 The government of Australia spends ~1.8 times more than South Africa on travel and tourism
GCP review 2010 – Portfolio Committee
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Copyright © 2010 South African Tourism
Tourism Performance Parameters
Drivers
of
Performance
Tourist
Performance
Parameters
Economic
Benefits
 The total number of international tourists to South Africa has witnessed a strong growth –
significantly higher than many the other key competitors
 South Africa has witnessed a decline in the average length of stay over 2003–2008 while in
countries such as Australia, the average length of stay has grown by 3.9%
• Within South Africa, air arrivals tend to stay for longer duration than land arrivals
 Australia, by far, captures more nights per tourist than any other tourist destination
 Overall, about three-quarters of the visits to South Africa are for leisure purposes
• During the last five years South Africa has outpaced the growth of all the other competitor
locations in the leisure arrivals category
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Copyright © 2010 South African Tourism
Economic Benefits
Drivers
of
Performance
Tourist
Performance
Parameters
Economic
Benefits
 Amongst all the key competitors, South Africa had the highest number of tourists per
direct employee, ~16 tourists per employee - i.e. South Africa creates fewer jobs per
tourist arrival
• Australia, which received ~11 tourists per employee, registered the highest tourism
spend per employee (~USD 43,600, in 2008)
• Tourists to South Africa from air markets creates more jobs than their land counter-parts,
~6 tourists per employee; this compares well with competitors
 South Africa witnessed good growth (~7.9%) in tourist spending per employee between
2002 and 2008 and extracts more value per tourist than Brazil, Kenya and Thailand
GCP review 2010 – Portfolio Committee
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Copyright © 2010 South African Tourism
South Africa
Relative to other markets, SA creates fewer jobs per tourist arrival
Tourist Arrival
Per Employee2,
2008
Tourist Arrivals per Direct Tourism Employee1
18
Australia
11.2
Thailand
7.5
Brazil
2.3
Kenya
8.1
US
10.6
South Africa
16.1
12
Number of Arrivals
per Direct Tourism
Employee
6
0
2002
2003
2004
2005
2007
2006
2008
Note: 1Number of foreign arrivals per direct tourism employee is calculated as follows: Total International Visitors/Number of people employed in the economy
as a direct contribution of the tourism sector; 2Numbers have been validated from respective tourism websites of all the countries. Economy direct employment
means employees directly engaged in the Travel and Tourism industry. The value for this parameter is computed by taking into account the GDP contribution of
the tourism sector. Economy indirect employment considers employees engaged in intermediate sectors such as suppliers of intermediate inputs to tourism
industry as well as suppliers of investment goods to the tourism industry and of goods to tourists overseas such as construction firms building hotels. GDP
contribution of respective sector (in which the intermediate supplier falls into) is used to derive this number. For South Africa, it has been assumed, that ~50% of
the tourists from Botswana, Lesotho, Mozambique and Swaziland are not tourists, and hence, are not considered for calculations
Source: Euromonitor; WTTC; Stats SA
GCP review 2010 – Portfolio Committee
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Copyright © 2010 South African Tourism
South Africa
While SA creates fewer jobs per total foreign tourist arrival, it extracts a fairly high
value per tourist, better than Brazil, Kenya and Thailand
CAGR
(2003–08)
Tourist Spend Per
Employee (USD),
2008
Australia
10.8%
43,597
Thailand
15.1%
8,622
Brazil
14.8%
2,546
Total Spending by International Visitors1 in Country per Direct
Employee2 (USD)
Amount‫(‏‬USD‫‘‏‬000)
50
40
30
20
Kenya
2.7%
6,135
US
10.6%
23,933
South Africa
7.9%
20,729
10
0
2002
2003
2004
2005
2006
2007
2008
Exchange
Rate
2002
2003
2004
2005
2006
2007
2008
1 USD to
Local
Currency
AUD 0.54414
BRL 0.36119
KES 0.01277
ZAR 0.09593
THB 0.02329
AUD 0.65249
BRL 0.33138
KES 0.01326
ZAR 0.13365
THB 0.02413
AUD 0.73712
BRL 0.34256
KES 0.01270
ZAR 0.15621
THB 0.02489
AUD 0.76280
BRL 0.41308
KES 0.01329
ZAR 0.15800
THB 0.02489
AUD 0.75356
BRL 0.46072
KES 0.01398
ZAR 0.14916
THB 0.02644
AUD 0.83898
BRL 0.51630
KES 0.01499
ZAR 0.14236
THB 0.03126
AUD 0.85296
BRL 0.55716
KES 0.01506
ZAR 0.12327
THB 0.03064
South African Tourism could extract more value out of the tourists (as compared to Australia and the USA) – increasing the length of
stay could be one way of achieving this
Note: 1‘Total‫‏‬Spending‫‏‬by‫‏‬International‫‏‬Visitor’‫‏‬has‫‏‬been‫‏‬converted‫‏‬from‫‏‬local‫‏‬currencies‫‏‬to‫‏‬USD‫‏‬by‫‏‬using‫‏‬the‫‏‬conversion‫‏‬ratio‫‏‬for‫‏‬each respective year from Oanda.com
as shown above; 2Total spending by international visitor in country per employee is calculated as follows: Total Spending by International Visitor/ Number of people
directly employed in the tourism sector. The value for this parameter is computed by taking into account the GDP contribution of the tourism sector
Source: Tourism Impact Data and Forecast Tool, WTTC; Euromonitor
GCP review 2010 – Portfolio Committee
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Copyright © 2010 South African Tourism
South Africa
Internal benchmark – tourism’s performance relative to other South African
economic sectors
• South‫‏‬Africa’s‫‏‬tourism‫‏‬industry‫‏‬contributes‫‏‬substantially‫‏‬to‫‏‬the‫‏‬country’s‫‏‬economy.‫‏‬Driven‫‏‬by‫‏‬a‫‏‬growth‫‏‬in‫‏‬foreign‫‏‬
arrivals, its contribution has been increasing in recent years
• Between 2002 and 2008 , the overall tourism industry (direct and indirect) has grown in terms of its
contribution to GDP at a faster rate than all sectors of the economy
– The direct contribution has grown at 10.2% p.a. on par with the construction industry (10.4% p.a.) which
is the fastest growing sector of the economy
– Growth in GDP contribution has not translated into a commensurate increase direct or indirect employment
– Tourism employment witnessed a 3.2% CAGR over 2002–2008
– Employment growth was marginally behind the average growth of all sectors
• In absolute terms, the tourism industry is one of the smaller sectors of the economy both in terms of total GDP
contribution and direct employment
• Also, the employees of the tourism industry contribute substantially to the GDP of the country
– In‫‏‬2008,‫‏‬tourism’s‫‏‬GDP‫‏‬contribution‫‏‬per‫‏‬employee‫‏‬stood‫‏‬at‫‏‬ZAR‫~‏‬167,000‫(‏‬direct)‫‏‬and‫‏‬ZAR‫~‏‬201,000‫‏‬
(indirect)
– GDP contribution per employee has witnessed high positive growth over 2002–2008, with direct
contribution growing at ~7% CAGR, and indirect contribution growing at ~10%
GCP review 2010 – Portfolio Committee
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Copyright © 2010 South African Tourism
Tourism’s overall contribution to GDP has grown at a faster rate than most
sectors of the economy and as fast as the construction sector
CAGR
(2002–2008)
CAGR (2002 – 2008)
GDP Contribution1 by Sector (ZAR Bn), 2002–2008
1 800
1,620
1,560
1,478
1 500
900
29
29
168
119
249
36
103
126
261
36
41
100
297
290
276
33
39
195
132
139
280
296
34
43
207
218
156
147
349
324
36
53
35
49
259
31
34
182
105
105
106
105
244
29
32
173
37
1,330
1,273
233
236
600
35
1,401
1,236
36
1 200
100
Constant
2005
prices
ZAR Bn
37
300
163
140
322 63
308
297 121
270 98 41 280 103 43 285 106
57
50
44
57
60
99
83
71
62
0
2002
2003
2004
2005
2006
2007
-0.1%
Manufacturing
3.9%
Electricity, gas and
water supply
Construction
3.8%
10.4%
Wholesale and retail
trade
4.6%
Transport, storage
and communication
Finance, real estate,
insurance and
business services
Services and others2
5.3%
220
162
377
195
335 73
121
2.1%
Agriculture, hunting,
forestry and fishing
Mining and quarrying
7.1%
3.6%
Tourism (Direct)
10.2%
Tourism (Indirect)
13.5%
Tourism (Overall)
12.2%
2008
Note: 1Quarterly value added by industry and gross domestic product at constant 2005 prices; 2For‫‏‬GDP‫‏‬figures,‫‏‬the‫‘‏‬Services‫‏‬and‫‏‬others’‫‏‬sector‫‏‬includes‫‏‬
‘general‫‏‬government‫‏‬services’‫‏‬and‫‘‏‬personal‫‏‬services’
Source:‫‘‏‬Gross‫‏‬Domestic‫‏‬Product‫(‏‬GDP),‫‏‬3rd‫‏‬Quarter‫‏‬2009’,‫‏‬Stats‫‏‬SA,‫‏‬November‫‏‬2009;‫‏‬WTTC;‫‏‬Grail‫‏‬Research‫‏‬Analysis
GCP review 2010 – Portfolio Committee
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Copyright © 2010 South African Tourism
However, this GDP growth did not lead to a commensurate growth in employment
despite tourism being a labour intensive industry
The tourism sector’s direct contribution to GDP experienced a strong growth between 2002 and 2008,
however, the growth in direct employment was marginally below the average of all sectors
Growth in Employment vs. Growth in GDP Contribution
(CAGR: 2002–2008)
12%
Overall GDP growth over
2002–2008: 4.6%
10%
E
8%
% Growth in Employment
F - Wholesale and retail
trade
B - Mining and
quarrying
G - Transport, storage and
communication
C - Manufacturing
6%
4%
A - Agriculture, hunting,
forestry and fishing
Overall employment
growth over 2002–
2008: 2.3%
D - Electricity, gas and
water supply
H
D
K
2%
K – Tourism (Indirect)
G
I
J
C
Growth (%)
0%
Country
Country
-2%
-4%
-6%
-1%
B
0%
A
1%
2%
3%
4%
5%
I - Services and others
J – Tourism (Direct)
E - Construction
F
H - Financial intermediation,
insurance, real estate and
business services
6%
7%
8%
9% 10% 11%
% Growth in Contribution to GDP
Growth in
Growth
Growth in
Employment
Employment
(%)
Direct
in Direct
Arrivals Arrivals
Spend2
GDP
1
GDP (%)
(%)
1
Direct Direct
IndirectIndirect
Australia
Australia
4.4 4.4
0.2
0.2
0.3
0.3
3.4
3.411.1
Thailand
Thailand
7.1 7.1
1.6
1.6
1.6
1.6
6.2
6.213.8
Brazil
Brazil
11.3 11.3
3.2
3.2
3.2
3.2
4.5
4.517.9
Kenya
Kenya
17.6 17.6
0.7
0.7
0.7
0.7
3.5
3.5 6.5
US
US
3.5 3.5
-0.7
-0.7 -0.7
-0.7 7.1
7.1 7.8
SAAfrica
South
10.2 10.2
1.5
1.5
7.9
7.914.9
4.6
4.6
Note:‫‏‬For‫‏‬employment,‫‘‏‬Services‫‏‬and‫‏‬others’‫‏‬includes‫‘‏‬community,‫‏‬social‫‏‬and‫‏‬personal‫‏‬services’‫‏‬and‫‘‏‬private‫‏‬households’.‫‏‬For‫‏‬GDP,‫‘‏‬Services‫‏‬and‫‏‬others’‫‏‬
includes‫‘‏‬general‫‏‬government‫‏‬services’‫‏‬and‫‘‏‬personal‫‏‬services’.‫ ‏‬1Definition of direct and indirect tourism employee is same as Module 1
Source:‫‘‏‬Labour‫‏‬Force‫‏‬Survey‫‏‬Historical‫‏‬Revision‫‏‬September‫‏‬Series‫‏‬2000‫‏‬to‫‏‬2007’,‫‏‬Stats‫‏‬SA,‫‏‬March‫‏‬2009;‫‘‏‬Quarterly‫‏‬Labour‫‏‬Force Survey (QLFS), 3rd Quarter
2009’,‫‏‬Stats‫‏‬SA,‫‏‬October‫‏‬2009;‫‘‏‬Gross‫‏‬Domestic‫‏‬Product‫(‏‬GDP),‫‏‬3rd‫‏‬Quarter‫‏‬2009’,‫‏‬Stats‫‏‬SA,‫‏‬November‫‏‬2009;‫‏‬WTTC;‫‏‬Grail‫‏‬Research Analysis
GCP review 2010 – Portfolio Committee
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Copyright © 2010 South African Tourism
Market Access
Accessibility of South Africa as a Tourism Destination
Understanding the Accessibility of South Africa as a Tourist Destination
Strength of
South Africa as
a Brand
Source
of Information for
Tourists
Constraints to Visit
South Africa
 The awareness and brand recall of South Africa as a leisure destination is highest across European countries such as Sweden, the
UK and the Netherlands, etc.
• In addition to the European countries, Kenya also shows high consideration to visit South Africa in the future
 Although India and Italy have low levels of brand recall, they consider South Africa to be a very likeable leisure destination
 While the majority of key leisure tourist markets exhibit a high short-term consideration to visit South Africa, only a few actually
view South Africa as their favorite destination
 South Africa is rated significantly above average for its nature & wildlife offerings, however, tourists across all key markets
unanimously perceive South Africa as being unsafe and offering poor value for money
 Tourists across key markets prefer to visit a destination that is memorable, enriching, friendly and unique
• These tourists perceive South Africa as being adventurous, breathtaking and unique
 Tourists primarily use internet search engines and ‘word of mouth’ as the key sources to gather information on South Africa
• Travel brochures, and television programs, have been the most successful media to promote South Africa as a tourism brand
• Only in Africa, where the internet penetration is low, VFR is the primary reason to visit South Africa
 Even after seeking information on South Africa, tourists do not visit South Africa primarily due to safety and security concerns and
high costs of travelling
• Despite these concerns, a high percentage of tourists continue to recommend South Africa as a leisure destination to their friends
and families – indicating an overall positive experience
GCP review 2010 – Portfolio Committee
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Copyright © 2010 South African Tourism
There are a number of barriers to travel to South Africa. However, the negative
perceptions of safety and security and value for money are the biggest barriers
Reasons for Not Visiting South Africa in Past Five Years, 2009 (n=12,911)
Target Population
89.51 MM
30.95 MM
leakage
People who are
aware of South Africa
58.56 MM
(65%)
Percentage of Respondents
40%
36%
32%
30%
29%
28%
26%
18%
20%
14%
12%
9%
10%
0%
7%
7%
4%
6%
Another
Too
General ConcernsUncertain
No
Too Don’t‫‏‬know‫ ‏‬Not a Concern Nothing Other
Too much
destinatio expensive issues
for my
about particular time to expensive anyone relaxing
about interesting
n was
to get
of
personal political reason get there once there there destinatio AIDS
to do
more
there
safety1
safety climate/ci
n
there
appealing
vil unrest
People aware of
South Africa and
considering to visit the
country
24.16 MM
(41%)
People who mentioned
that they will visit
South Africa in next 18
Months
7.59 MM
(33%)
Actual arrivals from
the target segments
(in the next 18
months)
16.57 MM
leakage
6.77 MM
leakage
0.82 MM
Percentage of Respondents
34.4 MM
leakage
Reasons for Not Visiting After Seeking Information on South Africa, 2009 (n=2,023)
40%
37%
34%
30%
27%
18%
20%
13%
12%
12%
10%
8%
0%
General
issues of
safety1
Concerns
for my
personal
safety
Too
Too much
expensive time to get
to get
there
there1
Too
expensive
once there
Don’t‫‏‬know‫‏‬
anyone
there
Not a
relaxing
destination
5%
Nothing
interesting to
do there
Other
Note: Markets include 13 countries, namely Australia, Canada, China, France, Germany, India, Italy, Japan, Kenya, Netherlands, Nigeria, UK and USA
Q.‫‏‬Why‫‏‬haven’t‫‏‬you‫‏‬visited‫‏‬South‫‏‬Africa‫‏‬for‫‏‬leisure‫‏‬purposes‫‏‬in‫‏‬the‫‏‬past‫‏‬5‫‏‬years?;‫ ‏‬1Include concerns over health, weather, roads, crime, etc. Q. After seeking information about South Africa, why are
you no longer planning to visit it for leisure travel?; 1Include concerns over health, weather, roads, crime, etc.
Source: SAT Brand Tracker (combined samples from February 2009 and November 2009 waves)
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Copyright © 2010 South African Tourism
Overall, value for money contributes toward ~36% of tourists not visiting SA - the
price of a plane ticket being the main barrier
Top reasons for not Visiting South Africa as a leisure Destination in the past 5 Years, 2007–2009
80%
60%
% Respondents
40%
37%
32%
34%
30%
36%
32%
20%
11%
10%
12%
2007
2008
2009
0%
Too expensive to get there
Too expensive
once there
Overall Value for
Money Impact
Source: SAT Brand-Tracker Survey 2007–2009; Monitor Analysis
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Copyright © 2010 South African Tourism
Although general issues of safety and security is one of the reasons for not visiting SA, tourists
who have been to SA have a better perception about the country, with their perception having
improved over the years.
Global Perception of 'Safety and Security' Situation in SA Visited Vs Not Visited
2004 - 2009
Describes very
well
7
6
5
4.2
4.6
4.4
4.3
4.6
Not Visited
Visited
4
3.7
3.3
3.3
3.4
3.4
3.4
3.3
3
2
Does not
describe at
all
1
2004
2005
2006
2007
2008
2009
Year
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Copyright © 2010 South African Tourism
Drivers and Barriers to Growth
Capacity Assessment – Snapshot (1/2)
Capacity Assessment
Airlift
 Airlift capacity and connectivity is a possible barrier that hinders the growth of the South African
tourism industry
• In South Africa, the domestic carriers operate at high load factors, and the capacity of
Airlift
international airports only marginally exceeds demand – hence, a possible need for capacity
expansion
• In Jan 2010, ACSA proposed to increase the air tariffs (including passenger charge, landing
fees and rentals) by 133% - together with high fuel prices, this is likely to significantly
increase the cost of an air ticket
 South Africa is well connected to international locations, but mostly through indirect flights – direct
connectivity can result in more tourist inflow
Car Rental
 The car rental industry is a enabler of tourism growth
Car Rental
• With increasing fleet size, and low rentals, the car rental industry appears to be becoming
more competitive and increasing capacity which is important for the growth of tourism
industry, especially in light of the lack of well-developed alternative means of public transport
 The success of the industry is, however, sensitive to fuel prices. In the recent past, the
industry suffered due to an increase in fuel prices in South Africa
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Copyright © 2010 South African Tourism
Most load factors on major routes are high (>75%) and load factors on routes to, and
from, Netherlands and the route to Australia has increased between 2003 and 2008
Load Factors, Routes Between International Locations and South Africa1, 2003–2008
Route from Destination to SA
Route from SA to Destination
77
77
78
88
81
UK
79
82
80
84
Netherlands
85
60
86
US
66
88
66
90
Germany
81
83
80
100
81
Australia
80
2003
79
85
France
60
40
20
0
80
0
Load Factor (%)
20
40
60
80
100
Load Factor (%)
2003
2008
2008
Note: 1Above information is only for direct flights between the departing and arrival country; The six countries chosen in the analysis “International‫‏‬Load‫‏‬
Factors”‫‏‬are‫‏‬the‫‏‬top‫‏‬six‫‏‬non-African nations which South Africa receives the maximum number of tourists (Australia, UK, Netherlands, US, Germany, and
France)
Source: OAG Aviation
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Copyright © 2010 South African Tourism
Low cost domestic airlines such as Kulula, 1time, and Mango (~85%) experienced
higher load factors than South African Airways (68%) in 2008
Load Factors of South African Airlines, Domestic Airlines, 2008
100%
88%
85%
85%
78%
80%
68%
67%
64%
% Load Factor
60%
40%
20%
0%
Kulula
1time
Mango
Nationwide Airlines
South African
Airways
Airlink
SA Express Airways
Source:‫‘‏‬Transportation‫ –‏‬South‫‏‬Africa’,‫‏‬Euromonitor,‫‏‬November‫‏‬2009
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Copyright © 2010 South African Tourism
Drivers and Barriers to Growth
Capacity Assessment – Snapshot (2/2)
Capacity Assessment
Accommodation
 The accommodation industry is another driver of tourism industry growth
• Occupancy rates in the country have been increasing, along with the increase in
average stay unit1 rate
• Growth in accommodation industry revenues have been primarily driven by increases in
Accommodation
total revenues generated by hotels
• Furthermore, with a variety of choices available and abundance of stay units, tourists are
spoilt for selection
Skills and Service Levels
 Access to a skilled workforce with high service levels is a key enabler of growth for the
tourism industry
Skills and
Service
Levels
• Although, the industry has shown higher employment levels in 2009 the quality and skill
level of these employees remain low
» The workforce has been severely affected by the prevalence of diseases such as
HIV/AIDS – the country has taken several initiatives to improve the health of the
workforce by increasing awareness of HIV/AIDS
• However, the condition is expected to improve – The DEAT has launched various
programs such as ABET-THETA, Tourism Learnership Project (TLP) to improve the skill
and service levels in the industry
Note: 1A‫‘‏‬Stay‫‏‬Unit’‫‏‬is‫‘‏‬The unit of accommodation available to be charged out to guests, for example, …a room in a hotel’,
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Copyright © 2010 South African Tourism
Recommendations




The skills and training sector of tourism present the largest and most immediate barrier for future growth
– THETA needs to be equipped with the correct levels of capacity to more effectively plan and facilitate skills
development in the industry
– This should include initiatives to improve the relevance of current training programmes / curriculum and
institutional capacity
– In order to achieve this, THETA needs to collect in-depth data on human resources within the tourism
industry
 This will allow THETA to understand, and plan for, current and future skills gaps more effectively
High load factors along key domestic and international routes could become a barrier to growth and needs to be
monitored actively
The effects of increased accommodation capacity as a result of the 2010 World Cup on industry occupancy
levels should also be actively monitored
Planning for the tourism industry needs to take cognisance of its broader, cross-cutting impact on many
industries especially the Retail & Wholesale, Electricity & Gas and Transport industries
– More industry collaboration, even at a provincial level, between the tourism sector and industries it influences
could facilitate an increase in the total economic contribution of the cluster of industries
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Copyright © 2010 South African Tourism
Moving forward
Moving forward the following aspects are important:
 Work with the International Marketing Council to be undertaken to change the
perception‫‏‬of‫‘‏‬Safety‫‏‬and‫‏‬Security’‫‏‬by‫‏‬potential‫‏‬visitors‫‏‬to‫‏‬SA.‫‏‬Reducing‫‏‬the‫‏‬gap‫‏‬
between the perception of those who visit SA and those who do not visit SA will also be
important in order to reduce the impact of this concerns on travelling;
 Special‫‏‬attentions‫‏‬should‫‏‬be‫‏‬given‫‏‬to‫‏‬perceptions‫‏‬of‫‘‏‬Value‫‏‬for‫‏‬Money’;
 Resourcing of Tourism: The creation of a stand alone Department of Tourism started to
address this aspect;
 The Sector has for the first time a draft National Tourism Sector Strategy that will guide
the sector and ensure alignment and integration with a dedicated focus on competitive
advantage for destination South Africa. This needs to be finalised and implemented;
 Need to forge relationships with other countries to unlock the potential of tourism
through e.g. Comprehensive Tourism Trade Agreements;
GCP review 2010 – Portfolio Committee
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Copyright © 2010 South African Tourism
Thank you