Vision, Mission and Mandate and Governance Strategic Approach and Performance Africa Growth Strategy Domestic Tourism Strategy Strategic Objective Annual Targets, Performance Breakdown of Tourism Budget Concluding Remarks Global Audio Visual – “Reconsider South Africa” Contents Strategic Plan & Annual Performance Plan – 04 July 2014

Vision and Mission Vision Mission To 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 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. Slide no. 2 Strategic Plan & Annual Performance Plan – 04 July 2014

Engage Stakeholders to deliver quality visitor experience that re-affirm the brand promise Invest only in selected markets to deliver volume and value Convince consumers that SA can be trusted to deliver memorable experiences Work the distribution channel to promote SA Energise and empower the organisation to innovate and achieve excellence SA Tourism recently refined its current objectives and strategies for the period until 2014/5 - in line with Government’s Performance Information Management Policy Create a thriving tourism sector by making South Africa a tourism and business events destination of choice Possible Tourism sector outcome which SA Tourism will need to deliver against Make the SA brand a Global Player in portfolio markets, hubs and decision making centres which will grow tourism’s trended revenue to the economy by 1.5% p.a. (excluding inflation) SA Tourism outcome Strategies to deliver outcome Slide no. 3 Strategic Plan & Annual Performance Plan – 04 July 2014

Understand the market Choose the attractive segments Market the Destination Facilitate the removal of identified obstacles Facilitate the product platform Monitor and learn from tourist experience 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 The mandate to SA Tourism is ... Redistribution and transformation Sustainable GDP Growth Sustainable job creation Increase in tourist volume Increase in tourist spend Increase length of stay …through six key objectives Improve geographic spread Improve seasonality patterns Promote transformation …by acting in a focused way to Strategic Plan & Annual Performance Plan – 04 July 2014

Business Focus LEISURE TOURISM“preferred tourism destination GRADING/ QUALITY ASSURANCE ”improve quality visitor experience” BUSINESS EVENTS & MEETINGS “preferred business events destination SUPPORT Strategic Plan & Annual Performance Plan – 04 July 2014

Minister of Tourism South African Tourism Board NDT: Director General NDT DG South African Tourism Board Chief Executive Officer Global Manager: Product Chief Financial Officer Chief Marketing Officer Chief Quality Assurance Officer Chief Convention Bureau Officer Chief Operating Officer Regional Director: Europe QAO Global Manager: Stakeholder/ Global Trade Slide no. 6 Strategic Plan & Annual Performance Plan – 04 July 2014

Steps of the Portfolio Review 3rd filter 2nd filter 1st filter 133 117 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 Exclude Africa and subdivide it into 5 regions 199 countries Exclude SADC (Africa Land markets) from the elimination process (proximity to SA). 42 Salient set From the remaining countries. Excludes countries with less than 150k outbound Travel and Population of less than 3 Million 40 How attractive are these markets in the short term and the long term? 24 The remaining countries including SADC (Africa land markets) qualify for Africa Salient set of countries Core Tactical Investment and Watch-List markets 4th filter Final portfolio Application of cost-benefit evaluation *Africa land markets are markets where more than 60% of arrivals to SA arrive by land. Strategic Plan & Annual Performance Plan – 04 July 2014

Key things that have changed in the 5th Portfolio Review APPROACH: 1. We treat the African continent differently from the rest of the world • Africa gets subdivided into 5 different regions / hubs • Countries with outbound less than 150K per year and a population of 3 Million are 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) automatically qualify because of its proximity. 2. For the rest of the world, we no longer use the $2 000 Gross Domestic Product (GDP) filter. Instead weuse GDP Purchasing Power Parity (PPP) of $11 000 per annum as a filter for affordability. This is similar to the Big Mac Index. 3. We plan to use the Hub Strategy approach 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 – for instance, the US and Canada; Japan and Korea as well as Netherlands and Belgium – among others. Strategic Plan & Annual Performance Plan – 04 July 2014

5th Portfolio Review Outcome to be Implemented - effective 01/04/2014 – 30/03/2017 Brazil – 7/’14 Australia Angola: 6/’14 France USA India Germany Nigeria Netherlands Kenya: 05/’14 China UK Japan Italy South Korea Planned Country Offices Existing Country Offices Strategic Plan & Annual Performance Plan – 04 July 2014

The Hub Strategy for Global Markets to increase market penetration, footprint and efficient resource utilisation. Americas Asia & Australasia Europe Latin Americas Asia Pacific Central Europe North Americas United Kingdom Africa West Africa East Africa Benelux & Scandinavia Australasia France (Office) India Central Africa Italy (Office) Asia Air Link Hub SADC Notes: * Planned SA Tourism Offices (2013/2014 to 2014/2015) ** 1 Trade Relations Manager will be appointed – approved by Board (2014/2015) (Shanghai, South Korea, Russia, Scandinavia as well as Tanzania and Uganda) *** Future Plans (2015/16 and Beyond) Strategic Plan & Annual Performance Plan – 04 July 2014

MTEF Allocation to Aggressively Grow Africa • Ring fenced budget to increase arrivals and spend from Africa to contribute to GDP and job creation. • R50 million (2012/13) and R84 million for the MTEF period up to 2016/17 • Setting up five marketing offices in key African markets by 2020 • Implementation of regional tourism programmes • In Africa Air markets, sizable opportunity exists to attract high value business and leisure travellers. Strategic Plan & Annual Performance Plan – 04 July 2014

Regional Hub Strategy Strategic Plan & Annual Performance Plan – 04 July 2014

Domestic Tourism • A new Domestic Tourism Campaign, Nothing is more Fun Than a Sho’t Left was launched in September 2013 to promote the following: • Discover own country and its hidden gems • The culture of taking short breaks • Total annual spend has increased from R21.8 billion in 2012 to R24.3 billion in 2013 and average spend from R850 per trip to R960 per trip. • The number of trips undertaken decreased from 25.4 million in 2012 to 25.1 million and the number of nights from 4.8 to 4.4. • Additional budget of R100 million has been allocated to increase domestic tourism. • Engage low cost airlines to improve regional distribution • Radio DJ Programmes • Strive to influence and promote the culture of domestic tourism

Vision, Mission and Mandate and Governance Strategic Approach and Market Portfolio Africa Growth Strategy Domestic Tourism Strategy Strategic Objective Annual Targets, Performance Breakdown of Tourism Budget Concluding Remarks Global Audio Visual – “Reconsider South Africa” Contents Strategic Plan & Annual Performance Plan – 04 July 2014

Strategic Outcome Oriented Goals, Goal Statement and Objectives Strategic Plan & Annual Performance Plan – 04 July 2014

Strategic Outcome Oriented Goals, Goal Statement and Objectives Slide no. 20 Strategic Plan & Annual Performance Plan – 04 July 2014

Strategic Outcome Oriented Goals, Goal Statement and Objectives Strategic Plan & Annual Performance Plan – 04 July 2014 Slide no. 21

Strategic Outcome Oriented Goals, Goal Statement and Objectives Strategic Plan & Annual Performance Plan – 04 July 2014

8 Tourism’s GDP contribution increased from 2.8% (2011) to 3.0% (2012) Tourism Contribution to GDP, 2008-2012* Tourism share of SA GDP Tourism direct GDP Tourism Share of Direct GDP Total Direct GDP (Billions) Source: TSA, Statistics SA – Preliminary figures are used for 2011 and 2012 Strategic Plan & Annual Performance Plan – 04 July 2014

Tourist arrivals to South Africa grew by almost 5% in 2013 in line with global growth Year-on-Year Change in Tourist Arrivals to each region % Change Note: UNWTO estimates incorporate provisional data for some regions Source: Statssa Tourism & Migration release December 2013, SAT analysis; UNWTO World Tourism Barometer, Volume 12, April 2014 – Statistical Annex Strategic Plan & Annual Performance Plan – 04 July 2014 Slide no. 24

Foreign arrivals to South Africa for January to December 2013 grew by 10.5% over 2012 to reach 14.8 million Europe • 1,628,154 arrivals • 6.7% up from 2012 North America • 467, 956 arrivals • 6.1% up from 2012 Middle East • 61, 994 arrivals • 6.4% up from 2012 Asia • 480, 064 arrivals • 9.6% up from 2012 Central & South America • 133, 959 arrivals • 6.40% up from 2012 Australasia • 162, 356 arrivals • 2.3% up from 2012 AFRICA GRAND TOTAL • 11, 585,206 arrivals • 12.4% up from 2012 Indian Ocean Islands • 14, 806, 216 arrivals • 10.5% up from 2012 • 27, 486 arrivals • 13.4% up from 2012 Note : Tourist Arrivals figures shown above for Jan. - Dec 2013 Source: Statssa Tourism & Migration release December 2013, SAT analysis Strategic Plan & Annual Performance Plan – 04 July 2014 Slide no. 25

Tourist arrivals to South Africa in 2013 grew by 4.7% over 2012 to reach 9,616,964. All regions showed positive growth in tourist arrivals in this period Europe • 1,494,978 arrivals • 7.0% up from 2012 North America • 417,582 arrivals • 6.1% up from 2012 Middle East • 57,382 arrivals • 5.9% up from 2012 Asia • 435,076 arrivals • 9.2% up from 2012 Central & South America • 129,463 arrivals • 8.0% up from 2012 Australasia • 148,660 arrivals • 4.0% up from 2012 AFRICA GRAND TOTAL • 6,889,389 arrivals • 3.8% up from 2012 Indian Ocean Islands • 9,616,964 arrivals • 4.7% up from 2012 • 24,394 arrivals • 13.3% up from 2012 Note : Tourist Arrivals figures shown above for Jan. - Dec 2013 Source: Statssa Tourism & Migration release December 2013, SAT analysis Strategic Plan & Annual Performance Plan – 04 July 2014 Slide no. 26

Europe remains the main source of tourist arrivals to South Africa while Asia remains buoyant with the highest growth. Europe Europe “RETAIN & DEFEND” • 430,910 arrivals • 9.2% up from 2012 North America North America “GROW” • 92,727 arrivals • 5.2% up from 2012 Africa Air “GROW” Asia & Australasia Asia “GROW” • 108,272 arrivals • 27.1% up from 2012 Central & South America Brazil “GROW” • 35,535 arrivals • 15.2% up from 2012 AFRICA Australasia Australia “RETAIN & DEFEND Africa Land “GROW” • 1,736,166 arrivals • 7.6% up from 2012 Strategic Plan & Annual Performance Plan – 04 July 2014

All markets grew faster than global growth rate between 2011 and 2013 Tourist Arrivals to South Africa and the World, 2011 to 2013 CAGR 11 to 13 1000 4.5% 7.4% Tourist Arrivals (Millions) 5.7% 11% 13.1% 15% 6.8% % change y-o-y 4.7% 14.2% 12% 10.2% 8.2% 3.4% 5% 4.0% Africa Air Markets Africa Land Markets Long-haul Markets Global Arrivals All Markets Slide no. 28 Note: Africa Air Markets are markets where at least 60% arrives to SA use air transport; Africa Land Markets are markets where at least 60% of arrivals to SA use road transport. Long-haul markets include all countries outside of Africa Source: Statssa Tourism & Migration release December 2013, SAT analysis; UNWTO World Tourism Barometer, Volume 12, April 2014 – Statistical Annex

Number of Graded Establishments as at end March 2014 Slide no. 29

Number of Graded Rooms as at end March 2014 Slide no. 30 Strategic Plan & Annual Performance Plan – 04 July 2014

SA National Convention Bureau Update and Performance (2013-2014) Strategic Plan & Annual Performance Plan – 04 July 2014 Slide no. 31

Revenue and Expenditure Estimates Strategic Plan & Annual Performance Plan – 04 July 2014 Slide no. 33

Revenue and Expenditure Estimates per KPI Strategic Plan & Annual Performance Plan – 04 July 2014 Slide no. 34

SA Tourism Budget (Breakdown) by Country Strategic Plan & Annual Performance Plan – 04 July 2014

Other Resource Considerations Current staff complement of206 is not expected to change in the 2014/15 financial year. Estimated Capital Expenditure (CAPEX) of R9.82m (2014/15) in respect of Head Quarters (HQ) office extension for Phase 1 and 2 respectively. Estimated R8.01m (2014/15) for software, hardware, vehicles and lease improvements. Strategic Plan & Annual Performance Plan – 04 July 2014

Concluding Remarks • Fragile economic recovery and expected economic recession • Promising outbound tourism growth but short –haul travel • Shrinking disposable income due to austerity measures • Exchange currency weakness • Growing middle class in Africa • Unemployment dampening domestic tourism Strategic Plan & Annual Performance Plan – 04 July 2014

Reconsider South Africa (New South African Tourism brand video) Strategic Plan & Annual Performance Plan – 04 July 2014

Thank You Slide no. 41 Strategic Plan & Annual Performance Plan – 04 July 2014

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