sa tourism presentation to the parliamentary …
TRANSCRIPT
© South African Tourism 2009
Slide no. 1
SA TOURISM PRESENTATION TO THE
PARLIAMENTARY PORTFOLIO COMMITTEE
13 October 2009
© South African Tourism 2009
Slide no. 2
Index
1. Brief recap of SA Tourism (part A: slides 3 - 10)2. 2008/9 results (part B: slides 11 - 18)3. 2008/9 & future objectives (part C: slides 19 - 28)4. Measuring ROI in SA Tourism markets (part D: slides 29 - 33)5. How SA Tourism selects its markets (part E: slides 34 – 36)6. Executive summary of SA Tourism’s Strategic Plan (part F: slides 37 – 46)7. SA Tourism’s performance April – August 2009 (part G: slides 47 – 59)8. Corporate Governance @ SA Tourism (part H: slides 60 – 76)9. Tourism Grading Council statistics (part I: slides 77 – 86)10.Update on transformation in the Tourism sector (part J: slides 87 – 94)
© South African Tourism 2009
Slide no. 3
Part A
A brief recap of the organization, its
objectives and markets
© South African Tourism 2009
Slide no. 4
South African Tourism – Vision, Mission and Values
Vision
For South Africa to be the preferred tourist destination in the world, in order to maximize theeconomic potential for tourism for our country and its people.
Mission
To develop and implement a world class international tourism marketing strategy forSouth Africa. In pursance of this, SAT will:
• Facilitate the strategic alignment of the provinces and the 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
Values
We unconditionally respect our organization's people, its purpose and its assets. Living this respectwith integrity translates into an authentic caring for South Africa and each other, a feeling ofresponsibility and the acceptance of accountability for the outcomes of our actions. Our team pushesthe boundary of excellence in everything we do.
© South African Tourism 2009
Slide no. 5
Share our vision with stakeholders
Share our vision with stakeholders
Use the trade to grow our business
Use the trade to grow our business
Grow & nurture our staff
Grow & nurture our staff
Improve brand traction in markets
Improve brand traction in markets
Increase value- extraction in SA from
all tourists
Increase value- extraction in SA from
all tourists
Fine-tune internal systems and
communication
Fine-tune internal systems and
communication
SA Tourism mandate, key business objectives and strategies
Sustainable GDP Growth
Sustainable GDP Growth
Sustainable job creation
Sustainable job creation
Redistribution and transformation
Redistribution and transformation
The Tourism Act’s 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 targeted total arrivals to SA in 2007 - 2010
Achieve total average tourist spend inside 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 to be the most preferred tourist brand by 2014
SA Tourism to be the best tourism organisation by 2010
SA Tourism to be the best tourism organisation by 2010
© South African Tourism 2009
Slide no. 6
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
• 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
* The China office currently operates from the Embassy
© South African Tourism 2009
Slide no. 7
South African Tourism has 17 business units
• Office of the CEO/COO (including Legal, Internal Audit & Admin)• Human Resources• Africa Portfolio (including Domestic Marketing)• Asia Portfolio• Europe Portfolio• Americas Portfolio (including UK)• Events• Business Tourism• Central Marketing (including Global Brand, Channel & Agency Management)• E-Business• Research• PR & Communications• Product & Itinerary • Finance• TECSA*• TGCSA• Business Systems (previously known as IT)
* TECSA will move back to the Department of Tourism on 1 April 2010.
© South African Tourism 2009
Slide no. 8
SA Tourism’s methodology for selecting markets and the allocation of resources to such markets:
LESS ATTRACTIVE BUT EASIERTACTICAL MARKETS
Markets where there are particular opportunities, i.e. “low hanging fruit”15% of organisation’s effort deployed against these markets
ATTRACTIVE & EASIERCORE MARKETS
• Markets that deliver the “bread & butter”
• 60% of organisation’s effort deployed against these markets
• Best capabilities allocated to these markets
LESS ATTRACTIVE & DIFFICULTWATCH-LIST MARKETS
Markets that are on the radarActivity in these markets will only occur if there is spare capacity in the organisation5% of organisation’s effort deployed against these markets
ATTRACTIVE BUT DIFFICULTINVESTMENT MARKETS
Invest in these markets ahead of return, i.e. invest for the future20% 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.
© South African Tourism 2009
Slide no. 9
SA Tourism has selected the following markets until 31/3/2011:• Core markets:
Botswana, Kenya, Nigeria, USA, UK, Australia, India, France,Germany, the Netherlands and the domestic South African market.
• Investment markets:
Angola, Democratic Republic of the Congo, Mozambique,Zimbabwe, Canada, China (including Hong Kong), Japan, Italy andSweden
• Tactical markets:
Ghana, Swaziland, Tanzania, Lesotho, Singapore, Ireland andSwitzerland
© South African Tourism 2009
Slide no. 10
• Strategic hubs:
Ethiopia, Zambia, Senegal, Argentina, Thailand, Greece, Bahrain,Oman, Qatar and Saudi Arabia
• Watch-list markets:
Egypt, Namibia, United Arab Emirates, Brazil, Malaysia, NewZealand, Republic of Korea, Austria, Belgium, Denmark, Norwayand Spain.
SA Tourism has selected the following markets until 31/3/2011 (cont.):
© South African Tourism 2009
Slide no. 11
Part B
The organization’s achievements during the
2008/9 financial year
© South African Tourism 2009
Slide no. 12
Non-financial achievements of SA TourismSociety 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.
S. Pellegrino 100 World’s Best Restaurant Awards
Five South African restaurants in the 2009 top 100 world’s best restaurants:Le Quartier Francais in Franschoek (37th Best restaurant in the Middle East and ); La Colombe in Constantia (38th place); Jardine’s in (79th place); Aubergine in (96th place); Rust en Vrede in Stellenbosch(98th place)
Chinese Tourists Welcoming Award 2009
The Voortrekker Monument 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 Beijing
Luxury Tourism Awards 2009 Cape Town has been awarded in the Best Entertainment Category of the Luxury Tourism Awards 2009 held at the International Luxury Travel Exhibition held in Lugano, Switzerland
Online poll by Travel + Leisure magazine
Cape Town has been voted second in the world’s top City in the 2009 Travel and Leisure online poll. Bushman’s Kloof was also voted number one hotel in the world by Travel & Leisure magazine.
2009 World Travel Awards. The South African winners
Some of the accolades include: SAT as the best national tourism marketing agency in Africa; International Convention Centre Durban– Leading Conferencing Centre in Africa; Sun City Resort – Leading Resort in Africa; Saxon Boutique Hotel & Spa Africa’s Leading Boutique Hotel; Arabella Western Cape Hotel & Spa Africa’s Leading Luxury Hotel
© South African Tourism 2009
Slide no. 13
2009 Trip Advisor Travellers’ Choice awards
Some of the top accolades include: •Derwent House Boutique Hotel, Western Cape, (2nd place)– Best World Service, (4th place) in Top World 100 Hidden Gems and( 5th place) Top World 100 Best Bargains• Cape Heritage Hotel, Western Cape (8th place) – Top 100 Best Luxury Hotels
Great Wine Capitals Global Network The Vergelegen wine estate was announced Global winner in The 2009 Best of Wine Tourism award in the Innovative Wine Tourism Experiences category. The awards were awarded by Great Wine Capitals Global Network
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 London
US Incentive Industry Award South African Tourism’s US operation has been named a 2009 winner of Incentive magazine’s prestigious Platinum Partner Award. More than 65,000 of America’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.
National Business Awards for Marketing Excellence
Awarded to a company that displays outstanding marketing innovation and creativity in a campaign that effects both turn-over and brand promotion. Won against Vodacom, Volkswagen SA and Cadbury.
SATSA Personality of the Year Hanneli Slabber awarded the SATSA personality of the year 2009 at the annual SATSA conference in Cape Town.
Indaba Daily News – finalist in Best Newspaper competition
Indaba Daily News was a finalist in the Best Newspaper category of the 2009 corporate publication competition of the SA Publication Forum.
Non-financial achievements of SA Tourism (cont.)
© South African Tourism 2009
Slide no. 14
European CEO Magazine Award European CEO Magazine’s Tourist Board of the Year Award for its outstanding efforts in marketing South Africa as a destination
Hospitality India & Explore the World International Awards Best NTO in India 2008
Best NTO in India 2008
World Travel Awards Africa’s leading travel exhibition (Indaba)
TTG Travel Awards - UK Shortlisted for the Best Tourism Board Award, with Australia, Barbados, Canada, Dubai and Jamaica
Today’s Traveller Magazine (India) Best International Adventure Tourism Destination (India)
Travel Weekly China Awards Best Destination (long haul) Best Eco-tourism Destination
2008 Ethical Traveler Report One of the developing world’s Ten Best Ethical Travel Destinations
Non-financial achievements of SA Tourism (cont.)
© South African Tourism 2009
Slide no. 15
On the financial side…
South African Tourism achieved its 8th consecutive
unqualified (no emphasis of matter) audit report from theAuditor General and holds the record in Government(including all Departments, Public entities and LocalAuthorities) with the most consecutive unqualified no--emphasis audit reports!
But we realize it’s eventougher to stay Nr. 1!(slide 72 elaborates on the reasonsfor SA Tourism exceptional audit reports)
© South African Tourism 2009
Slide no. 16
Overview of SAT’s financial position and financial performance for the 2008/09 financial year
• SA Tourism total expenditure increased by 15% (2008/09 R 724.27 million, 2007/8: R 627.75 million) during the 2008/9 financial year leaving a net surplus of R 6.94 million (2007/8: R 23.6 million) thus a total reduction of net surplus by 71%.
• A total increase of 13% over the previous year of SA Tourism’s funding, representing 80% (2007/8: 79%) of R 586.09 million (2007/8: R 517.6 million) of total revenue, came from Government.
• Other revenue of R 154.86 million (2007/8: R 139.25 million), an increase of 11% over 2007/8, was earned from voluntary Tourism levies, interest received, exhibitions, grading activities, sale of marketing items, sale of advertisement space in publications and raising sponsorships.
© South African Tourism 2009
Slide no. 17
• Total non current assets comprising of PPE and intangible assets increased by 39% (2008/09 R 86.9 million ,2007/8: R 62.6 million).
• Approximately 24% (R 6.03 million ) of total costs on PPE for the year (R 25.29) was spent on renovations.
• Approximately 73% (R 6.49 million ) of total costs on intangible assets for the year (R 8.94) was spent on website costs.
• Cash and cash equivalents deceased by 9% (2008/09 R 162.61 million ,2007/8: R 178.60 million).
• Total current assets decreased by 10% (2008/09 R 199.41 million ,2007/8: R 220.54 million) while overall total assets increased by 1% (2008/09 R 286.32 million ,2007/8: R 283.09 million)
Overview of SAT’s financial position and financial performance for the 2008/09 financial year (cont.)
© South African Tourism 2009
Slide no. 18
• Trade and other payables (2008/09 R 180.55 million, 2007/8: R 202.33 million) representing approximately 89% (2007/8: 98%) of total current liabilities (2008/09 R 203.09 million, 2007/8: R 205.64 million) decreased by 11% over the previous financial year.
• Total non current liabilities comprising of provisions and finance lease liabilities decreased by 8% (2008/09 R 14.19 million, 2007/8: R 15.36 million) whilst total liabilities decreased by 2% (2008/09 R 217.28 million, 2007/8: R 221 million) over 2007/8 financial year.
• Accumulated surplus increased by 15% (2008/09 R 54.57 million, 2007/8: R 47.37 million) over the previous year. It largely represents tangible and non-tangible assets on SA Tourism’s Balance Sheet.
Overview of SAT’s financial position and financial performance for the 2008/09 financial year (cont.)
© South African Tourism 2009
Slide no. 19
Part C
SA Tourism’s delivery on its objectives during
2008/9 and objectives going forward
© South African Tourism 2009
Slide no. 20
SA Tourism’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)
2010 calendar year target: 10 384 337 (5.7% increase over 2009)
2011 calendar year target: 10,4 million (0.5% increase over 2010)
© South African Tourism 2009
Slide no. 21
Arrivals increased by 1.6% for the period Jan to July 2009 compared to 2008. This increase was driven by an increase in Africa land arrivals
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
2008 5,495,904 178,399 4,048,039 532,113 191,456 508,904 36,993
2009 5,585,240 178,166 4,240,625 495,442 179,456 447,563 43,988
Difference 89,336 -233 192,586 -36,671 -12,000 -61,341 6,995
% change 1.6% -0.1% 4.8% -6.9% -6.3% -12.1% 18.9%
Grand Total Africa - Air Africa - Land Americas & UK Asia & Australasia
Europe excl UK Unspecified
Arri
vals
Arrivals to South Africa by region, January to July
2009 Annual Growth target 3.6% 4.8% 4.3% 1.0% 1.2% 1.2% 2.0%
Source: Table A July 2009 & Targets 2010_v7_27012009
© South African Tourism 2009
Slide no. 22
SA Tourism’s 4 high-level objectives (cont.)
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 9 900 per person (Total R 97,3 billion)
2010 calendar year target: R10 500 per person (Total R107,5 billion)
2011 calendar year target: R11 100 per person (Total R115,4 billion)
© South African Tourism 2009
Slide no. 23
Average spend per tourist increased by approximately 13% in Q1 2009 compared to Q1 2008.
R 0
R 2 000
R 4 000
R 6 000
R 8 000
R 10 000
R 12 000
R 14 000
R 16 000
Q1 2008 R 7 700 R 6 100 R 11 900Q1 2009 R 8 700 R 7 100 R 13 900% change 12.9% 16.4% 16.8%
All foreign tourists Land markets Air markets
Ave
rage
spe
nd p
er to
uris
t per
trip
TFDS (excluding capital expenditure) by region, Q1 2009 vs Q1 2008
2009 Growth target (revised) R9,900 R6,900 R14,600
Source: SAT Departure Surveys & Targets 2010_v5_26012009
© South African Tourism 2009
Slide no. 24
The major currencies have gained against the Rand, thus tourists got more Rands for their currency when visiting SA in Q1 2009 compared to Q1 2008. The Rand strengthened against the British Pound in this period.
US Dollar Pound EuroQ1 2008 7.55 15.18 11.31Q1 2009 9.96 14.32 13.0109 vs 08 32% -6% 15%
-202468
10121416
Exch
ange
rate
Major currency exchange rates
© South African Tourism 2009
Slide no. 25
SA Tourism’s 4 high-level objectives (cont.)
Objective 3
South Africa to be a most preferred Tourism Brand by 2014:
South Africa must be a top 3 destination on the consideration list of anytourist planning to travel long-haul from any of our core markets, butpreferably NUMBER 1!
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 Feb Actual 78% 38% 21% 10%
Global Target 2010 77% 40% 26% 14%
Global Targets
© South African Tourism 2009
Slide no. 26
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
edia
te F
ocus
2008
to 2
010
Long
Ter
m B
uild
Reinforces Memorable
Performance in 2008 on knowledge of the brand slipped from the 2007 levels on most attributes with the exception of “breathtaking” and “safety & security”
5.65 (2008) 5.68 (2007)5.68 (Feb 09)
6.07 (2008) 6.10 (2007)6.11 (Feb 09)
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-08 (merged for each year) and Feb-09
4.73 (2008) 4.75 (2007)4.72 (Feb 09)
5.69 (2008) 5.70 (2007)5.71 (Feb 09)
5.62 (2008) 5.67 (2007)5.65 (Feb 09)
5.51 (2008) 5.51 (2007)5.56 (Feb 09)
5.49 (2008) 5.51 (2007)5.53 (Feb 09)
4.56 (2008) 4.58 (2007)4.53 (Feb 09)
3.54 (2008) 3.53 (2007)3.44 (Feb 09)
© South African Tourism 2009
Slide no. 27
Key Brand Journey Metrics (Feb 2009)
Total Awareness Positivity Likely to Visit
in FutureLikely to Seek
Info Sought InfoPlan to Visit in
Next 18 Months
Visited Recently
Australia 81% 29% 26% 10% 13% 6% 4%
France 76% 40% 31% 21% 24% 10% 6%
Germany 69% 35% 28% 16% 17% 9% 8%
India 54% 30% 26% 27% 23% 14% 10%
Netherlands 92% 47% 39% 19% 30% 13% 8%
UK 92% 39% 38% 16% 21% 13% 9%
USA 78% 37% 31% 13% 15% 7% 4%
China 66% 30% 35% 29% 33% 18% 12%
Japan 21% 9% 13% 2% 4% 1% 1%
Italy 72% 42% 31% 23% 25% 10% 7%
Core Markets 80% 39% 33% 17% 21% 10% 7%
Investment Markets 57% 30% 28% 20% 22% 10% 7%
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%; All rating questions have been analyzed using top 2 box approachSource: SAT BrandTracker Feb-08 and Nov-08 and Feb-09
© South African Tourism 2009
Slide no. 28
Objective 4
SA Tourism to be the Best Tourism Organization by 2010:
As decided by the Annual Tourism Awards Committee of the WorldTourism Organization, and as attested to by the most credible awardcommittees in our chosen core markets
TGCSA, a business of SA Tourism, is currently busy with theappointment of Provincial Master Assessors in provinces (which willsignificantly improve the quality of assessments). Furthermore, arecommendation is currently been made to the Minister on theappointment of a new TGCSA Awards Sub Committee of SA Tourism’sBoard effective 1/11/09. They will meet monthly to award stars toqualifying establishments.Refer to the slide “Achievements as an organisation” (see slides 12 – 14)
SA Tourism’s 4 high-level objectives (cont.)
© South African Tourism 2009
Slide no. 29
Part D
SA Tourism’s methodology for
measuring Return on Investment in markets
© South African Tourism 2009
Slide no. 30
Marketing investment ROI model Traditionally marketers measure whether they are getting traction in the market by using research studies. In this case, the Brand Tracking study will be used to evaluate traction.
In addition to this two main marketing ROI measures will be calculated i.e. cost per person reached and Return on every Rand / $ / € etc spent on marketing.
Marketing Investment
TV Radio
PROutdoor
Research Measures
Plan to visit
Have visited
Awareness / +ve / Consideration
Arrivals??
PrintCinemaInternet
Brand Tracking Advertising Measures
ROI Measures
Cost per person
reached
Return on every Rand / $ / € etc spent on marketing
© South African Tourism 2009
Slide no. 31
Marketing investment ROI model Timelines A tracked ROI will be done after the April 09 Brand Review as more data will become available.
J F M A M J J A S O N D
11st Brand reviewApr 08 – Sep 08
2nd Brand reviewOct 08 – Mar 09 2
1 Interim ROI 2 Tracking of ROI
•Feb 08 Brand Tracking•July Arrivals
•Full year of Brand Tracking•Feb 09 Brand Tracking•Annual Arrivals
© South African Tourism 2009
Slide no. 32
Value / Spend Ratio analysis across countries Ratio definition: Value gained for every Rand / $ / € / £ spent on marketing
4,104
597
Reported in € Reported in £ and $Reported in AUD, $, JPY and INR
Spen
d Valu
e Rati
o
© South African Tourism 2009
Slide no. 33
Cost per person reached across countries
Reported in € Reported in £ and $Reported in AUD, $, JPY and INR
Country Apr 08 – Sep 08 Oct 08 – Mar 09
Australia AUD 0.08 AUD 0.06
China $0.0006 $0.01
Japan JPY 0.0014 JPY 0.70
India INR 0.29 INR 0.71
France €0.19 €0.04
Germany €0.0097 €0.0003
Netherlands €0.14 €0.07
Italy €0.01 €0.07
UK £0.06 £0.0005
USA $0.03 $0.01
© South African Tourism 2009
Slide no. 34
Part E
SA Tourism’s methodology for selecting markets (Portfolio Review
process done every 3 years) and outcomes of the 4th Portfolio Review process done during
July/August 2009
© South African Tourism 2009
Slide no. 35
Exclude markets of less Exclude markets of less than 3 million people or than 3 million people or GDP per capita is less GDP per capita is less
than US$2,000than US$2,000
How attractive are these markets in the short term
and the long term?
Exclude subExclude sub--Saharan Saharan AfricaAfrica
Unattractive markets
Core, tactical, investment and watch-
list markets
Top 50 markets in terms of outbound volume and
value
Exclude markets with less than 4 million
people living in urban areas
Top sub-Saharan Africa markets PLUS Africa
land markets*
2nd filter
Salient set
Key Steps of the Portfolio Review Process
Application of cost- benefit evaluation
1st filter
3rd filter4th filter
*Africa land markets are markets where more than 60% of arrivals to SA arrive by land.
Exclude Africa land markets*
© South African Tourism 2009
Slide no. 36
Outcomes of the fourth portfolio review process that took place during July/August 2009 and which will be implemented from 1/4/2011 (* indicates business tourism hubs)
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, Senegal, UAE
MalaysiaSingapore
Portugal
Cou
ntry
Man
ager
Reg
iona
l Dire
ctor
Sta
keho
lder
M
anag
er
Glo
bal
Cha
nnel
M
anag
er
Responsibility
2011 - 2013
© South African Tourism 2009
Slide no. 37
Part F
Executive summary of SA Tourism’s 5-year Strategic
Plan
© South African Tourism 2009
Slide no. 38
What will be our “Big 6” strategies to achieve the 4
high-level objectives?
Strong leadership is required from all EXCO,MANCO and Country Managers for the execution ofthese 6 strategies:
*during the 2009/10 until 2010/11 financial years
OBJECTIVE STRATEGY
1. Achieve total arrivals to SA
2. Achieve average spend per tourist inside SA
Strategy 2: Use the trade to grow our business
Strategy 6: Increase value extraction in SA from all tourists
3. South Africa to be a most preferred Tourism Brand by 2014
Strategy 4: Improve brand traction in markets to increase positive awareness
4. SA Tourism to be the Best Tourism Organization by 2010
Strategy 1: Share our company’s vision with key stakeholders and influencers Strategy 3: Grow & nurture our staffStrategy 5: Develop or fine-tune and integrate
yardsticks and systems to obtain operational excellence
© South African Tourism 2009
Slide no. 39
Approved CPIX parameters for Budgeting Purposes (for the calculation of overhead budgets)
Country/region Average CPIX for 2009/10
Average CPIX for 2010/11
Average CPIX for 2011/12
Average CPIX for 2012/13
Average CPIX for 2013/14
Average CPIX for 2014/15
South Africa 8,1%1 6,0% 5,8% 5,1% 4,6% 4,6%
United States (USD) (also used by SAT for Africa, India & China) 1,6%1 2,0% 2.1% 2.1% 2.1% 2.1%
Europe (Euro) 2,6%1 2,0% 2,0% 2,0% 2,0% 2,0%
UK (GBP) 2,0%1 2,0% 2,0% 2,0% 2,0% 2,0%
Australia (AUD) 3,2%1 2,8% 2.8% 2.8% 2.8% 2.8%
Japan (JPY) 0,5%1 1.5% 1.50% 1.50% 1.5% 1,5%
Notes:
1. Calculated taking into consideration latest IMF figures adjusted for:
• SA Reserve Bank expectations that SA’s CPIX will fall within the 3 – 6% bracket from the latter part of 2009;
• Bureau for Economic Research indicators
• The Economist predictions
© South African Tourism 2009
Slide no. 40
Revised exchange rates approved by the Board on 10 February 2009 (to be used for 2010/11 Business
Planning & Budgeting)
Notes:
1. Based on the 6 month forward exchange rates as published in the Business Day on 19 January 2009 (the % change to previous exchange rates used by SAT for 2009/10 are indicated in brackets)
Currency Average exchange rate for 2009/10
Average exchange rate for 2010/11
(subject to change – Nov’09 Board
meeting)
Average exchange rate for 2011/12
Average exchange rate for 2012/13
Average exchange rate for 2013/14
Average exchange rate for 2014/15
USD ($) 1 = R 10,401
(-17%)
R 10.92 R 11,24 R 11,59 R 11,82 R 12,05
Euro (€) 1 = R 13,801
(-19%)
R 14,14 R 14,50 R 14,78 R 15,08 R 15,39
GBP (£) 1 = R 15,501(unchanged)
R 15,97 R 16,28 R 16,61 R 16,94 R 17,28
AUD ($) 1 = R 6,961
(-4%)
R 7,03 R 7,10 R 7,21 R 7,32 R 7,42
ZAR 1 = JPY (¥) ¥ 8,661
(-35%)
¥ 8,57 ¥ 8,44 ¥ 8,31 ¥ 8,19 ¥ 8,06
© South African Tourism 2009
Slide no. 41
SA Tourism high-level budget summary: 2008/9 – 2014/15 (R’mil)
Detail/Financial year Audited2008/9
Total budget
2009/10
Total budget
2010/11
Total budget
2011/12
Total budget
2012/13
Total budget
2013/14
Total budget
2014/15
Total revenue budget* 740,9 821,0 850,9 901,4 959,4 1 033,9 1 087,7
Breakdown:
Received from Government 586,1 682,5 686,5 729,8 779,6 845,3 889,5
Revenue from other sources 154,8 138,5 164,4 171,6 179,8 188,6 198,2
* Including confirmed MTEF funding until 2011/12
* = excludes a R 4 million and R 5 million allocation respectively in the 2009/10 and 2010/11 financial years which DEAT subsequently agreed to project manage themselves
Detail/Financial year Audited2008/9
Total budget
2009/10
Total budget
2010/11
Total budget
2011/12
Total budget
2012/13
Total budget
2013/14
Total budget
2014/15
Total expense budget 765,2 821,0 866,1 901,4 959,4 1 033,9 1 087,7
Breakdown:
Overheads and capex 227,6 211,6 225,2 TBA TBA TBA TBA
Marketing and research 537,6 609,4 640,9 TBA TBA TBA TBA
© South African Tourism 2009
Slide no. 42
SAT marketing expenses: 2008/9 – 2010/11
* Including confirmed MTEF funding until 2011/12
© South African Tourism 2009
Slide no. 43
SAT marketing expenses: 2008/9 – 2010/11
• Please note that the 2008/9 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
© South African Tourism 2009
Slide no. 44
SAT marketing expenses: 2008/9 – 2010/11
* Including confirmed MTEF funding until 2011/12
© South African Tourism 2009
Slide no. 45
Stakeholder Details of cooperation
1. 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 levies1.2 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 service4.3 SANBI4.4 TEP
Lobby SANPARKS to also start collecting TOMSA levies. Provide exhibition space at exhibitions at beneficial rates Share informationShare informationJoint funding of ETEYA project
Areas of cooperation with stakeholders
© South African Tourism 2009
Slide no. 46
Stakeholder Details of cooperation
5. IMC, GCIS and the Department of Trade & Investment
2010 Fly-the-flag nation-building projectSharing 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 Cup
8. 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
Areas of cooperation with stakeholders (cont.)
© South African Tourism 2009
Slide no. 47
Part G
Executive summary of SA Tourism’s performance
against its 2009/10 Business Plan & Budget
(Apr – Aug’09)
© South African Tourism 2009
Slide no. 48
Actions & measures for strategy 1 … (1/3)
Strategy 1 : Share our company’s vision with key stakeholders and influencers
Actions (& “owners” in brackets)
How it will be measured?
Progress Gaps/ challenges / comments
1. Increase/improve dialogue with stakeholders as per board document -Look for insights to the needs of key stakeholders so we can service them better-Understand how to win with each key stakeholder (All SAT managers)
• Conduct industry perception baseline study by Apr’07 and measure perceptual shift in Mar’08
(Global Channel Manager)• Number of
meetings/engagements/r oad shows with DFA and embassies globally(Quarterly reports from PR and Comms)
• Trade participation improved, but perception study not done.
• Routine engagements – marketing comms through LRPs in watch-list markets – weekly and or prompted & delivered X 6 media hostings since start of fiscal ( Spain, Argentina TV, Malaysia tv., etc)
• Material left over from last fiscal dispatched through head office and new material briefed in for Sept –March 2010 time-frame
• Monthly meetings with DICO on stakeholder forum chaired by DG:DICO which included IMC & GCIS
• Hosted 50 DFA officials and 3 trade media at INDABA 2009: (LRPs only)
• Held a 2010 briefing workshop on the 3rd day of INDABA
• Bilaterals with officials from watch-list and other markets during INDABA (Portugal/Argentina)
• First quarter: Diplomats designate appointed hosted by MANCO at Bojanala house
• Heads of Missions Aug 13-15• Bilaterals:• Amb John Davies – Saudi Arabia• CG M Basadien – UAE• Amb D Msimang – Denmark • Amb Andries Venter – Russia & Ukraine • Amb B Koloane – Spain
• SA trade study to be included in GCP 3 study in 2009. Tender process completed but has not yet been awarded.
• International trade perception study not done due to problems with the contact management system – unable to access trade contacts in database
© South African Tourism 2009
Slide no. 49
Actions & measures for strategy 1 … (2/3)
Strategy 1 : Share our company’s vision with key stakeholders and influencers
Actions (& “owners” in brackets)
How it will be measured? Progress Gaps/ challenges / comments
2. Messaging – Align stakeholders and influencers to support vision that we all have a collective responsibility for uplifting SA (GM: PR and Comms)
• Track media to measure message alignment :
80% positive about SAT
20% negative about SAT
(GM: PR and Comms)
• Media monitoring ongoing:Local media:89% positive and neutral vs.
negative.International media:83% positive and neutral vs.
negativeCommunication shared by
stakeholders locally increased from 50% to 77% between Oct 2008 and Jan 2009
(Source: Media Tenor media analysis and Dow Jones media analysis)
• Brand Messaging book launched• Online brand book platform being
designed• Brand book presented to SATSA,
Heads of Missions• Ongoing work with FIFA; LOC and
Host Cities• Industry Cocktail planned for 15
October
© South African Tourism 2009
Slide no. 50
Actions & measures for strategy 1 … (3/3)
Strategy 1 : Share our company’s vision with key stakeholders and influencers
Actions (& “owners” in brackets)
How it will be measured? Progress Gaps/ challenges / comments
3. Identify and agree on areas of co-operation with stakeholder organisations(EXCO)
• Documents of understanding with the 3 most critical stakeholders and influencers as identified by EXCO (CEO)
• Agreements/ areas of co- operation:• MOUs with DEAT & TBCSA• CEO participation in Minmec &
Miptech• SAT chairs CEO’s Forum &
Provincial Marketing Managers Forum
• Participate in DoT, BASA negotiations and meetings
• Partnerships with Fifa/LOC• Partnership with IMC/GCIS on
brand alignment• Participate in Fair Trade in
Tourism board
• Not able to participate in all BASA meetings
© South African Tourism 2009
Slide no. 51
Actions & measures for strategy 2 … (1/2)
Strategy 2 : Use the trade* to grow our business
Actions (& “owners” in brackets)
How it will be measured? Progress Gaps/ challenges / comments
1. Trade and business tourism strategies are implemented in full across all focus markets(PMs and CMs)
• As per sales contact management system
(Quarterly reports by PMs)• Number of
meetings/engagements/road shows (Quarterly reports from RDs)
• Leisure trade marketing strategy approved by EXCO
• Business Tourism marketing strategy rolled out globally, and next set of targets to be defined
• 42,257 trade contacts in database at end of Q1 09/10
• 670 products trained (Jan – June 09) (P&I)• Packaging workshops• Product newsletters - monthly• In-country TO itineraries• Indaba hosting• One provincial workshop
• EUROPE Q1 09/10:• Trade trained in country = 2354• RD meetings with local trade = 120
(speed marketing and one on ones)
• AMERICAS Q1 09/10:• Trade trained in country = 778• RD meetings with local trade = 60
(speed marketing and one on ones)
• ASIA & AUSTRALASIA Q1 09/10:• Trade trained in country = 963• RD meetings with local trade = 8
• AFRICA & MIDDLE EAST Q1 09/10:• Trade trained in country = 44• RD meetings with local trade = 5
• No reports available on sales contact management system. Updated review of system and VPN implications occurring in next month
• No integrated trade marketing strategy document as agreed that BT and leisure will be remain separate.
* Trade includes product owners and travel operators and agents
© South African Tourism 2009
Slide no. 52
Actions & measures for strategy 2 … (2/3)
Strategy 2 : Use the trade* to grow our business
Actions (& “owners” in brackets)
How it will be measured? Progress Gaps/ challenges / comments
2. Educate the trade to sell us better (from both a leisure & Business Tourism point of view including addressing perceptions around safety & security) (TRMs, Fundi and BT managers)
• Increase Trade Extranet Registrations from 2,500 to 5,000
• Increase FUNDI graduates from 1066 to 2000
• Increase Expedia pax sales to SA by 15%
• Increase Trade databases from 20,000 records to 25,000 records
• (GM: BT, Channel and E-Business managers)
• Extranet registrations = 9590• 2,393 FUNDI graduates• Achieved 73% of annual Expedia
target as at 31 Aug 2009. Estimated y-o-y growth of 19% worldwide.
• 42,257 trade contacts in database at end of Q1 09/10
* Trade includes product owners and travel operators and agents
© South African Tourism 2009
Slide no. 53
Actions & measures for strategy 2 … (3/3)
Strategy 2 : Use the trade* to grow our business
Actions (& “owners” in brackets)
How it will be measured? Progress Gaps/ challenges / comments
3. Build & retain relationships with Leisure & Business Tourism trade (including on- line submissions of JMA proposals by trade) (TRMs, BT & Channel managers)
• As per sales contact management system
(Quarterly reports by PMs)
• EUROPE Q1 09/10:•Trade trained in country = 2354• JMAs= 23
AMERICAS:•Trade trained in country = 778• JMAs= 12
• AFRICA Q1 09/10:•Trade trained in country = 44• JMAs= 1
• ASIA & AUSTRALASIA Q1 09/10:•Trade trained in country = 963•JMAs= 20
•BUSINESS TOURISM Q1 09/10• Active leads = 48• Leads to convention centre= 5
• Implementation of Sales and Contact Management (training and VPN access issues)
* Trade includes product owners and travel operators and agents
© South African Tourism 2009
Slide no. 54
Actions & measures for strategy 3 … (1/2)
Strategy 3 : Grow & nurture our staff in order to realize our operational goals
Actions (& “owners” in brackets)
How it will be measured? Progress Gaps/ challenges / comments
1. Improve effectiveness and transparency of performance measurement in the organization (aligned to project plans and company goals) and integrate our values into our work and performance contracts
(GM:HR)
• Successful and complete implementation of business plans on budget in achievement of Big 4 company objectives (all SAT staff)
• Performance contracts aligned to new reporting format and templates updated.
• Not all performance contracts for the period 2009/10 have been received as yet.
2. Produce a skills competency database (“dictionary”) for each function and develop & implement job-specific training(GM: HR)
•Do skills audit & measure 12 months later whether skills gap has been narrowed
(GM:HR)
• Job profiles have been audited and validated by 21st Century. 98% of profiles verified were sent to 21st Century
• Remaining budget is R515,973.87 as at December 2008
• Training spent at H/O R440,656.44 (excl. bursaries)
• Training spent in C/O R96,955.47 (excl. bursaries)
• TOTAL SPENT R537,611.91 (excl. bursaries)
• Delayed response in some Business Units to verify the validation of job profiles slowed the process.
• Validation of some EXCO profiles have still not been received.
• Consequently the database compilation is delayed.
• Training Committee to develop a process and criteria to be used in approving training plans.
• Bursaries are on the same budget vote and those are the ones that HR has to closely monitor regarding the pass rate of the people awarded bursaries.
© South African Tourism 2009
Slide no. 55
Actions & measures for strategy 3 … (2/2)
Strategy 3 : Grow & nurture our staff in order to realize our operational goals
Actions (& “owners” in brackets)
How it will be measured? Progress Gaps/ challenges / comments
3. Improve retention of marketing staff(MANCO)
• Reduce staff turnover by 5% over previous year (GM:HR with Manco)
• Reach a 70% participation rate in the Deloitte’s Best Company to Work For Survey (GM:HR with Manco)
• Create a competency database (GM:HR)
• Ensure the roll-out of the induction programme (GM:HR)
HR stats for SAT only (99 marketing and 53 support posts)
• April 2009 to date- 6 exits: 3 marketing and 3
support
• March 2008 – April 2009- 15 new appointments and 18
exits (11,8%)- Marketing 9 (9%) 3 contract
terminations Support 6 (11%)- New hires: 6 marketing and 7
support- Promotions: 5 marketing and 4
support
• March 2007 – April 2008- 22 new appointments and 19
exits (12,5%)- Marketing 7 (7%) and support 8
(15%)- New hires marketing 20 and
support 12- Promotions: 4 marketing and 2
support
• March 2006 – April 2007- 46 new appointments and 29
exits (19%)- Marketing 17 and 12 support - New hires: marketing 31 and14
support- Transfers and promotions:
marketing 9
• Skills audit report on complete• Succession planning system
not developed and committee has not met
© South African Tourism 2009
Slide no. 56
Actions & measures for strategy 4
Strategy 4 : Improve brand traction in markets to increase positive awareness
Actions (& “owners” in brackets)
How it will be measured? Progress Gaps/ challenges / comments
1. Expand existing successful ways & find additional innovative ways to reach our target audience per market while being true to the brand key (All SAT marketing managers)
• GLOBAL TARGET FOR 2010:• Total awareness = 77%• Positivity = 40%• Sought info in the past = 26%• Likely to seek info in the next 18
months = 14%(SRU manager)
• FEB 2009 ACTUAL• Total awareness = 78% (+2%
over 2008)• Positivity = 38% (+1% over
2008)• Sought info in the past = 21%
(-1% over 2008)• Likely to seek info in the next
18 months = 10% (-1% over 2008)
• UNWTO predicts between 0 and -2% decline in arrivals globally due to economic crisis.
• IMF forecast world GDP to decline by 1.3%.
• Unemployment globally increases.
• No indication yet of when and how the global financial crisis will be addressed.
2. Implement the Brand Key in CI manual for Leisure, Business Tourism & events (CMO)
• CI manual approved and distributed by end April 2007
• Number of exceptions in Brand Review limited to 10%
(CMO)
• CI manual delivered. We are waiting for GCIS/cabinet approval on our new logo.
• Achieved: 2.5% - of the 200 pieces of collateral (print, collateral and in-market brand campaigns), 5 were not approved by Ian.
• The new logo is supported by our existing CI principles and execution.
• We are developing a ‘quick & dirty’ manual to assist application and execution. (The full version will be used by agencies/business partners)
3. Improve staff members’ understanding of the Brand and integrate our values and vision into our daily work(Exco and Manco)
• All staff to have completed LTB training by July 2007
• Implement 2 LTB training sessions per year
• All staff inducted by end of 2009
(Manco and GMHR)
• Induction programme developed and implementation with HO already underway.
© South African Tourism 2009
Slide no. 57
Actions & measures for strategy 5 … (1/2)
Strategy 5 : Develop or fine-tune internal systems and communication for better results (to obtain operational excellence)
Actions (& “owners” in brackets)
How it will be measured? Progress Gaps/ challenges / comments
1. Develop & implement internal communication strategy based on our values and business strategy (COO)
• Improve rankings in Best Company to Work For survey by 5 each year
(all SAT staff)
• BCTWF survey for 2009 completed.• Induction programme developed
and rolled out with HO staff. • Budget for induction for overseas
staff and TGCSA & TECSA allocated.
• SATclimate survey conducted and report sent to committee.
• “Guide to a successful career at SAT” in production
• Intranet review still outstanding• Internal communications strategy
will be drafted now that climate survey results are available.
2. Implement the company- wide Project Management System (Executive Project Manager with EXCO- appointed Project Team)
•Projects executed as planned on time and in compliance with budget
•Budget reallocations are within the agreed parameters
(all business unit managers)
• Projects loaded on EPM• # staff trained:
• 5 Executives• 52 Project managers• 3 EPM administrators
• All users that require Oracle licenses have now been allocated licenses. Review has also been done to determine if there is an opportunity to reduce the number of licenses and no reduction is recommended at this stage.
• VPN problems result in problems connecting to EPM and other systems.
• Training has been put on hold until all technical problems have been resolved.
• Oracle system upgrade to be fast-tracked during this fiscal despite other challenges (new Accounting statements, keeping data real-live, etc.)
© South African Tourism 2009
Slide no. 58
Actions & measures for strategy 5 … (2/2)
Strategy 5 : Develop or fine-tune internal systems and communication for better results (to obtain operational excellence)
Actions (& “owners” in brackets)
How it will be measured? Progress Gaps/ challenges / comments
3. Ongoing refinement of mapped SAT Business Processes to increase alignment, integration and efficiencies (MANCO + ISO Manager)
•ISO compliant of HR, Admin and Finance by 2010(all HR, Admin & Finance managers with ISO Manager)•All other business policies and procedures filed on intranet(all business unit managers with ISO manager)•Code of good governance adopted by Board and all staff (all business unit managers)
• Approved policies & procedures = 69
• External business system review conducted and alignment to the new IT Strategy now being implemented
• Code of Good Conduct signed by Board members. Staff code of good conduct not yet developed.
• Business system review recommendations not yet completed but will align to the IT Strategy, workflow and Management Information Systems
© South African Tourism 2009
Slide no. 59
Actions & measures for strategy 6
Strategy 6 : Increase value extraction in SA of all tourists
Actions (& “owners” in brackets)
How it will be measured? Progress Gaps/ challenges / comments
1. Mine country research data to establish clear insights into needs and desired experience of target segments (PMs and SRU)
Achieve spend targets in Targets from 2008 to 2011
(SRU Manager)
• 12.9% increase in spend per person in Q1 2009 compared to Q1 2009.
2. Develop, negotiate & package “products” to upsell tourists and provide them with the right information at the right time and place in SA to maximise their spend(Product & Itinerary Manager & Global Channel Manager)
Achieve spend targets in Targets from 2008 to 2011
(SRU Manager)
• 12.9% increase in spend per person in Q1 2009 compared to Q1 2009.
• Information in SAT tools are no longer highlighted by province rather by experience to showcase the diversity.
© South African Tourism 2009
Slide no. 60
Part H
Executive summary of Corporate Governance at
SA Tourism
© South African Tourism 2009
Slide no. 61
Background to Governance/Corp. Governance
1. In latin, “Governance” means “to steer”/Corp Governance
1.1 Steering to protect against the 5 sins: greed (Enron – USD 4 billion off-balance sheet finance over 3 years), fear, sloth, pride and arrogance:
greed (self-interest), fear (self-concern), sloth (imbalance), pride (egg on face) and arrogance (we are right!)
1.3 Guide through uncertain future events
1.2 Disclosure (triple bottom-line: economic, social, environment)/transparency
1.4 Sarbanes Oxley (US), Cadbury & King, but you cannot legislate honesty and competency!
© South African Tourism 2009
Slide no. 62
Background to Governance (cont.)
2. King 3: Voluntary →
Compulsory (Companies Bill 61/2008)
3. 5 Duties of a Director/Board member (faith, skill, care, best interest, diligence) – now 6 incl good board attendance!
4. Sect 75 (5) : If personal financial interest, must leave room
5. Far more powerful Audit Committee – appointment by shareholders
6. Why relevant? New PFMA end of 2009 incl Comp Bill
7. Secondly, cost of compliance in US > total losses incurred as a result of top 3 multinational failures – compliance with PFMA too onerous!
© South African Tourism 2009
Slide no. 63
From the PFMA/Treasury Regulations
Means expenditure lost in vain which could have been avoided if reasonable care was exercised.
6. Fruitless and wasteful expenditure?
- Were goals achieved through the expenditure undertaken? - If not …why not?- Could the outcome be predicted ahead through exercising reasonable diligence?- Value for money
Considerations:
© South African Tourism 2009
Slide no. 64
From the PFMA/Treasury Regulations
Means expenditure incurred which is not in accordance with the requirement of any applicable internal or external legislation, including the PFMA, approved budget/business plan, Delegation of Authority & Procurement Policy
7. Unauthorized expenditure?
- Until a budget vote has been approved, you cannot spend/incur liabilities!- Flexibility comes from better planning
Considerations:
© South African Tourism 2009
Slide no. 65
From the PFMA/Treasury Regulations
8. Who is responsible for compliance within SAT?
8.1 Executive Authority (Minister)
8.2 Accounting Authority (Board)
8.3 CEO, CFO and rest of Executive Management
© South African Tourism 2009
Slide no. 66
Governance @ SAT
3.1 LEGISLATION (Tourism Act, PFMA/Treasury regulations, etc.
3.2 DELEGATION OF AUTHORITY (including Board Terms of Reference)
3.3 CREATE & ENFORCE/MANAGE POLICIES, PROCEDURES & BUSINESS PROCESSES
3.4 ALL THE ABOVE + ORGANIZATIONAL VALUES SAFEGUARD ORGANIZATION AGAINST 5 SINS (GREED, FEAR, SLOTH, PRIDE AND ARROGANCE)
© South African Tourism 2009
Slide no. 67
DOA & Code of Corporate Governance at SA Tourism
1. DOA – “10 commandments” at SAT
2. Deals extensive with SA Tourism’s structure, all delegations made to different designations within SA Tourism and the TOR and functions of the Board and its Sub Committees
4. Gets updated regularly & together with remuneration and supply chain (procurement) matters, features prominently at all SAT Board & Board Sub Committee meetings
3. In line with King 3, one of the key functions of the Board is to evaluate annually the effectiveness/success of the Board, its Sub Committees, its individual Board members and the Internal Audit Management (at last meeting every calendar year – November)
© South African Tourism 2009
Slide no. 68
Finances at SA Tourism
1. Budget has grown from R 309,1 million (2001/2) to R 807,9 million (2009/10)
2. Critical to SA Tourism is understanding its Strategic & Business Planning process (which is fully aligned to Government’s Annual Cycle)
© South African Tourism 2009
Slide no. 69
Annual Planning cycle for government
andMedium Term Strategic
Framework cycle
Cabinet lekgotla to identify overarching priorities and review
progress in past year
(January)Departmental programmes
(Business Plans)(February - March)
DG clusters finalise
Programme of work for clusters for approval by
Cabinet(February – June)
Implementation of programmes and strategies (Feb –
June)
Mid year Cabinet Lekgotla to review
progress(July )
Annual report & Financial Statements
(August)
Implementation and measurement of impact(July – December)
DG cluster priorities identified from departmental plans(Nov – December)
Allocations & ENE document
Departmental annual Progress review report to President’s office and plans for next MTEF years(Nov)
DEAT Lekgotla & Business Plan
Workshop with Parliamentarians (February)
4th Performance Report and Compliance report (April)
Budget Vote
Strategic Plan (May)
1st Performance & Compliance Report (June)
Progress reports to DG clusters MTEF
DEAT Mid-year review and MTSF planning (Sept)
2nd Performance & Compliance Report MTEC
Strategic Plan (Sept)
Budget allocations (Oct/Nov)
3rd Performance & Compliance Report (Dec)
Government’s Annual Cycle
© South African Tourism 2009
Slide no. 70
Review of SAT Big 4 objectives and 6 strategies
to achieve objectives
Exco/Manco Lekgotla
JANUARY
Update SAT 5-yr Strat Plan and
next yr’s Bus Plan &
Budgets incl:1. Revised arrival & spend targets
2. Budget parameters
3. Bus unit & country budget
allocations
Board approval
FEBRUARY
Board review of annual
performance & approval of Annual Fin Statements
MAY
Board approval of detailed Bus
Plans
OCTOBER
Do Bus. Unit &
Country Detailed Business
Planning & Budgeting
MARCH - JULY
Marketing BUs brief agencies
DECEMBER
Exco approves creative
JANUARY
Board approval of creative to be used
effective 1 April (and next yr’s 5-year Strat Plan)
FEBRUARY
Submission of updated 5-yr
Strategic Plan & High-level Bus
Plan & Budget to DEAT
END JUNE
MTEF submission to Treasury via DEAT
JULY
Finalize Performance contracts with all SAT employees: MARCH
HIGH-LEVEL OVERVIEW OF SAT BUSINESS PLANNING PROCESS
Performance Information
2nd 6 months
APRIL
DEAT
EXCO
BOARD
EXECUTE!
Submission to detailed budgetvotes by all & loading Oracle
DECEMBER
Performance information1st 6 months: NOVEMBER
Approval of detailed Bus
Plan & Budgets by
MancoAUGUST
Approval of detailed Bus
Plan & Budgets by
Exco
SEPTEMBER
Approved by Exco 28 April 2009
© South African Tourism 2009
Slide no. 71
Financial management at SA Tourism (cont.)
3. Complex – AG (account 8 different currencies, forex mgmt to avoid shortfalls, ERP, real-time & 17 business units incl TGCSA/TECSA & 10 country offices)
2001/2Unpaid creditors, reconstruction accounting
records, unauthorised expenditure,no strat plans/bus plans & budgets,
no DOA policies/procedures/bus processes,no respected,
archaic 1993 DOS version financial system,weak/non-existent internal controls,
5 consecutive qualified audits demotivated & untrained staff
2008/9Pay ahead of time,
leading policies, procedures and business processes,cutting-edge real-time ERP financial system (Oracle),
amongst the first with Strat/Business Planning,ISO-compliant & up-to-date DOA policies/procedures
/bus processes, happy hard-working trained &committed staff members with high morale that goes
the extra mile, pride in their work and adds valuebeyond Finance,
extremely low Finance staff turnover,very strong internal controls,
8 consecutive unqualified no-emphasis-of-matter auditreports (RECORD IN GOVERNMENT!)
© South African Tourism 2009
Slide no. 72
Reasons for SA Tourism’s Financial & Corporate Governance success
1. Culture of compliance (Board, CEO & management lead by example, enforce compliance)
2. Detailed planning earlier (Strategic Plan/Business Plan & Budget/Calendar/Contracts/Tenders)
3. Sound business processes, policies & procedures that gets updated immediately (audit findings, changing business requirements, Treasury/legislation changes – implement first!)
6. Annual working & formal training session (resolve problems, prep year- end, agree work plan next year/foresee problems/changes & team building)
4. Culture of “immediate decision-making” (resolutions/open-door policy)
5. Culture of non-monetary recognition in Finance
→CULTURE TEAM > INDIVIDUAL!
7. Correct appointments & training
8. Focus on cost & efficiencies (e.g. external checking mark cost APCC)
© South African Tourism 2009
Slide no. 73
Future Governance at SAT
1. Massively impacted by Performance Management in Government (which is now falling together with Planning as two new key priorities under 2 new Ministers in the Office of the President of South Africa)
© South African Tourism 2009
Slide no. 74
Table on Government’s approach and thinking
Before Now1. All entities must have a Performance Information system setting KPA’s and targets
The AG expresses an audit opinion on whether the organization has achieved its KPA’s and targets (“What gets measured gets done!”)
2. Variances on expenditure and designation KPA’s not monitored and addressed
The AG expresses an opinion on whether management has taken immediate action as soon as variances are known on quarterly expenditure vs budgets or designation KPA’s
3. Performance Bonus systems varying from one Government entity to another
Entities Performance Bonus policies should be aligned to its Performance Management system
4. Many different reports from entities One set of 3 standard Quarterly Performance Information reports (templates) for all spheres of Government
5. Unrealsitic targets were set by entities Realistic targets should be set and delivered upon to avoid sanctions
6. Treasury guideline that entities should limit their overheads to 10% of total budget
10% guideline replaced by:-compulsory focus by executive management at entities to reduce discretionary expenditure (travel cost, catering during meetings, external consultants, conference attendance, etc.);-work smarter and bring in more technology-time-management important-hire sufficient qualified and experienced staff to deliver on KPA’s and targetsALL THE FOCUS IS NOW ON DELIVERY AND ROI ONLY!
7. MTEF allocations based largely on historic MTEF budget allocations with Government priorities getting bigger increases
7. MTEF allocations based on historic delivery of the entity (from PI) and ROI taking into consideration new Government priorities
© South African Tourism 2009
Slide no. 75
Treasury Regulations specifies the following around the Performance management cycle
Policy development
Strategic planning
Implementation planning and
budgeting
Implementation
End-year reporting
Oversightby Parliament, provincial legislature or municipal council
INSTITUTIONnational department
provincial departmentmunicipality
state controlled institutionmunicipal entity
Specification of outcomes and outputs
Setting targets and resource allocation
Monitoring and management
Evaluation and adjustment
Identifying desired impacts
Policy development
Strategic planning
Implementation planning and
budgeting
Implementation
End-year reporting
Oversightby Parliament, provincial legislature or municipal council
INSTITUTIONnational department
provincial departmentmunicipality
state controlled institutionmunicipal entity
Specification of outcomes and outputs
Setting targets and resource allocation
Monitoring and management
Evaluation and adjustment
Identifying desired impacts
© South African Tourism 2009
Slide no. 76
Future Governance at SAT (cont.)
2. Only as good as last success!
3. IFRS/GAAP more complex - audit reports4. Continuous change & being pro-active!
5. Limited funding/forex – working smarter/innovation
© South African Tourism 2009
Slide no. 77
Part I
TGCSA stats
© South African Tourism 2009
Slide no. 78
Establishments SummaryEstablishments SummaryAs at end September 2009As at end September 2009
Non‐Hotel Accommodation EC FS GP KZN LP MP NW NC WCGrand
Total
Backpacker & Hostelling 11 ‐ 9 10 5 3 4 4 25 71
Bed & Breakfast 312 76 251 334 19 42 38 58 350 1,480
Caravan & Camping 9 4 5 22 20 25 7 22 10 124
Country House 16 7 17 32 7 18 4 1 74 176
Guest House 308 137 530 201 80 148 129 135 813 2,481
Lodge 63 19 57 84 79 81 54 18 41 496
Self Catering 176 59 143 328 136 135 43 58 975 2,053 Non‐Hotel Accommodation
Total 895 302 1,012 1,011 346 452 279 296 2,288 6,881
Hotel Total 67 25 146 73 36 33 16 26 189 611
Accommodation Grand Total 962 327 1,158 1,084 382 485 295 322 2,477 7,492 MESE Total (Business
Tourism) 6 4 109 15 15 21 26 4 18 218 Grand Total Graded
Properties 968 331 1,267 1,099 397 506 321 326 2,495 7,710
How this information was retrieved:
This information was retrieved from the ‘post meeting’
download on the TGCSA back office.
This information was retrieved using the total of all new and renewal properties from 2008/09 and the sum total of new properties
only for 2009/10 as at the period mentioned in the title of this
document
NB: This data does not
include cancelled and overdue properties
© South African Tourism 2009
Slide no. 79
Rooms SummaryRooms SummaryAs at end September 2009As at end September 2009
Non‐Hotel Accommodation EC FS GP KZN LP MP NW NC WC Grand Total
Backpacker & Hostelling 472 ‐ 1,451 751 189 174 154 503 1,014 4,708
Bed & Breakfast 1,753 373 1,194 1,892 159 251 255 343 1,557 7,777
Caravan & Camping 393 234 230 1,606 1,243 1,463 824 1,012 586 7,591
Country House 116 75 250 409 110 244 42 4 744 1,994
Guest House 2,646 1,120 4,496 1,707 886 1,451 1,471 1,171 5,523 20,471
Lodge 573 297 1,125 1,200 1,061 1,331 866 218 413 7,084
Self Catering 1,206 426 828 2,014 2,594 2,547 989 467 4,200 15,271 Non‐Hotel Accommodation
Total 7,159 2,525 9,574 9,579 6,242 7,461 4,601 3,718 14,037 64,896
Hotel Total 3,660 1,376 14,005 4,815 1,776 1,625 1,624 932 12,410 42,223 Accommodation Grand
Total 10,819 3,901 23,579 14,394 8,018 9,086 6,225 4,650 26,447 107,119 MESE Total (Business
Tourism) 34 9 676 56 60 77 73 9 69 1,063 Grand Total Graded
Properties 10,853 3,910 24,255 14,450 8,078 9,163 6,298 4,659 26,516 108,182
How this information was retrieved:
This information was retrieved from the ‘post meeting’
download on the TGCSA back office.
This information was retrieved using the total of all new and renewal properties from 2008/09 and the sum total of new properties
only for 2009/10 as at the period mentioned in the title of this
document
NB: This data does not
include cancelled and overdue properties
© South African Tourism 2009
Slide no. 80
TGCSA/SAT/MATCH Stats Per Province TGCSA/SAT/MATCH Stats Per Province (accommodation only)(accommodation only)
As at September 2009As at September 2009
Province
TGCSA Graded Stats South African Tourism (NPDB) Stats MATCH Stats
Establishments Rooms EstablishmentsMarket Share
(Graded Vs total
Product) %
2010 Host CityMATCH
Rooms
Eastern Cape 962 10,819 1,983 49%Port Elizabeth 5,199
Free State 327 3,901 760 43%Bloemfontein 1,849
Gauteng 1,158 23,579 2,678 43% Johannesburg 9,692
Pretoria 3,286
Kwazulu Natal 1,084 14,394 3,124 35%Durban 6,252
Limpopo 382 8,018 661 58%Polokwane 1,425
Mpumalanga 485 9,086 1,016 48%Nelspruit 2,162
North West 295 6,225 501 59%Rustenburg 2,528
Northern Cape 322 4,650 541 60%n/a
Western Cape 2,477 26,447 7,590 33%Cape Town 7,020
Grand Total 7,492 107,119 18,854 40% 39,413
-This data does not include cancelled and overdue properties
- These stats do not include SAT reported stats in the accommodation sector for: Resorts, Cultural, Golf Estates, Health & Spa, Romantic & Honeymoon, Spiritual and Unusual - this amounts to 1909 properties
₁
Subject to updates
₂
includes Hotel & Non-Hotel Accommodation (defined as: Timeshare, Apartments, SMME, Team Base Camp and SANParks , and exclude international countries Botswana, Namibia, Swaziland and Zambia
Please see slides 3 & 4 for ‘how this information was retrieved’ for the TGCSA Graded Stats
© South African Tourism 2009
Slide no. 81
TGCSA/SAT/MATCH Stats Per CategoryTGCSA/SAT/MATCH Stats Per CategoryAs at September 2009As at September 2009
Non Hotel Category
Total Graded
Establishments
Total RoomsSouth African
Tourism (NPDB)
Stats
Current TGCSA Market
Share
(%)TGCSA Target
Market
Signed up with
MATCH
Backpacker &
Hostelling 71 4,708 180 39% 233Bed & Breakfast 1,480 7,777 2,847 52% 2,726
Caravan & Camping 124 7,591 384 32% 429Country House 176 1,994 619 28% 211Guest House 2,481 20,471 9,299 27% 1,585Lodge 496 7,084 952 52% 2,053Self Catering 2,053 15,271 2,268 91% 2,311Non‐Hotel
Accommodation Total 6,881 64,896 16,549 42% 9,324 13,557³Hotel Total 611 42,223 2,158 28% 1,327 25,856
Accommodation
Grand Total 7,492 107,119 18,707 40% 1,327 25,856MESE Total (Business
Tourism) 218 1,063 216 101%Grand Total Graded
Properties 7,710 108,182 18,854 41% 10,651 39,413₂
MATCH Target 55, 000
shortfall 15,587-This data does not include cancelled and overdue properties
- These stats do not include SAT reported stats in the accommodation sector for: Resorts, Cultural, Golf Estates, Health & Spa, Romantic & Honeymoon, Spiritual and Unusual - this amounts to 1909 properties
₁
Subject to updates
₂
includes Hotel & Non-Hotel Accommodation (defined as: Timeshare, Apartments, SMME, Team Base Camp and SANParks , and exclude international countries Botswana, Namibia, Swaziland and Zambia
Please see slides 3 & 4 for ‘how this information was retrieved’ for the TGCSA Graded Stats
© South African Tourism 2009
Slide no. 82
Growth & Decline by Month Growth & Decline by Month -- per Provinceper Province
Province
As at end August 2009 As at end September 2009 Variance on Establishments Variance on Rooms
Establishments Rooms Establishments Rooms Number % Number %
Eastern Cape 948 10,737 962 10,819 14 1.48% 82 0.76%
Free State 318 3,855 327 3,901 9 2.83% 46 1.19%
Gauteng 1,101 23,217 1,158 23,579 57 5.18% 362 1.56%
Kwazulu Natal 1,053 14,262 1,084 14,394 31 2.94% 132 0.93%
Limpopo 378 7,976 382 8,018 4 1.06% 42 0.53%
Mpumalanga 476 9,038 485 9,086 9 1.89% 48 0.53%
North West 290 6,193 295 6,225 5 1.72% 32 0.52%
Northern Cape 319 4,626 322 4,650 3 0.94% 24 0.52%
Western Cape 2,435 26,241 2,477 26,447 42 1.72% 206 0.79%
Grand Total 7,318 106,145 7,492 107,119 174 2.38% 974 0.92%
This information was retrieved from the ‘post meeting’
download on the TGCSA back office.
NB: This data does not
include cancelled and overdue properties
© South African Tourism 2009
Slide no. 83
Growth & Decline by Quarter Growth & Decline by Quarter -- per Provinceper Province
Province
Quarter 1 (April 09 –
June 09) Quarter 2 (July 09 –
September 09) Variance on Establishments Variance on Rooms
Establishments Rooms Establishments Rooms Number % Number %
Eastern Cape 66 597 54 389 ‐12 ‐18% ‐208 ‐35%
Free State 24 192 25 240 1 4% 48 25%
Gauteng 133 1597 127 1461 ‐6 ‐5% ‐136 ‐9%
Kwazulu Natal 37 314 80 309 43 116% ‐5 ‐2%
Limpopo 12 184 11 156 ‐1 ‐8% ‐28 ‐15%
Mpumalanga 19 141 19 123 0 0% ‐18 ‐13%
North West 25 250 20 229 ‐5 ‐20% ‐21 ‐8%
Northern Cape 17 297 8 50 ‐9 ‐53% ‐247 ‐83%
Western Cape 271 992 102 516 ‐169 ‐62% ‐476 ‐48%
Grand Total 604 4564 446 3473 ‐158 ‐26% ‐1091 ‐24%
This information was retrieved from the ‘post meeting’
download on the TGCSA back office.
This data was taken from the stipulated periods mentioned above
NB: This data could include cancelled and overdue properties
© South African Tourism 2009
Slide no. 84
Growth & Decline by Month Growth & Decline by Month -- per Categoryper Category
Non Hotel Category
As at end August2009 As at end September 2009 Variance on establishments Variance on rooms
Total Graded
Establishments
Total RoomsTotal Graded
Establishments
Total Rooms Number % Number %
Backpacker and Hostelling 71 4,708 71 4,708 ‐ 0.00% ‐ 0.00%
Bed and Breakfast 1,453 7,664 1,480 7,777 27 1.86% 113 1.47%
Caravan and Camping 123 7,581 124 7,591 1 0.81% 10 0.13%
Country House 173 1,971 176 1,994 3 1.73% 23 1.17%
Guest House 2,423 19,998 2,481 20,471 58 2.39% 473 2.37%
Lodge 484 6,983 496 7,084 12 2.48% 101 1.45%
Self‐Catering 1,983 15,038 2,053 15,271 70 3.53% 233 1.55%
Total Non‐Hotel 6,710 63,943 6,881 64,896 171 2.55% 953 1.49%
Hotel Category 608 42,202 611 42,223 3 0.49% 21 0.05%
Grand Total 7,318 106,145 7,492 107,119 174 2.38% 974 0.92%
This information was retrieved from the ‘post meeting’
download on the TGCSA back office.
NB: This data does not
include cancelled and overdue properties
© South African Tourism 2009
Slide no. 85
Growth & Decline by QuarterGrowth & Decline by Quarter-- per Categoryper Category
Non Hotel Category
Quarter 1 (April 09 –
June 09) Quarter 2 (July 09 –
September 09) Variance on Establishments Variance on Rooms
Establishments Rooms Establishments Rooms Number % Number %
Backpacker and
Hostelling 1 518 ‐1 ‐100% ‐518 ‐100%
Bed and Breakfast 93 481 84 425 ‐9 ‐10% ‐56 ‐12%
Caravan and Camping 6 234 3 95 ‐3 ‐50% ‐139 ‐59%
Country House 4 40 8 74 4 100% 34 85%
Guest House 143 1014 127 1028 ‐16 ‐11% 14 1%
Lodge 28 393 25 247 ‐3 ‐11% ‐146 ‐37%
Self‐Catering 290 974 172 558 ‐118 ‐41% ‐416 ‐43%
Total Non‐Hotel 565 3654 419 2427 ‐146 ‐26% ‐1227 ‐34%
Hotel Category 20 848 15 991 ‐5 ‐25% 143 17%
MESE 19 62 14 70 ‐5 ‐26% 8 13%
Grand Total 604 4564 448 3488 ‐156 ‐26% ‐1076 ‐24%
This information was retrieved from the ‘post meeting’
download on the TGCSA back office.
This data was taken from the stipulated periods mentioned above
NB: This data could include cancelled and overdue properties
© South African Tourism 2009
Slide no. 86
Total Properties Cancelled Total Properties Cancelled As at end SeptemberAs at end September
Reason EC FS GP KZN LP MP NW NC WC Grand Total
Cannot afford fees 21 11 31 25 3 5 10 10 37 153
Due to current economic
climate 1 3 4 8
Establishment no longer
operating 38 25 51 78 22 28 28 14 182 466
Establishment sold ‐
new
owners 15 11 15 26 8 10 14 12 47 158
Graded just for 2010 1 1 2
Grading expired 4 3 13 7 1 2 11 4 13 58
Grading not seen as beneficial 31 17 43 29 23 23 14 5 77 262
Not yet ready for grading 27 22 133 65 28 38 36 21 93 463 Unsatisfactory service from
TGCSA 3 4 4 4 4 3 9 31
Will Renew another year 21 12 35 35 16 18 11 27 74 249
Grand Total Cancelled 161 105 326 273 101 128 127 93 536 1,850
This information was retrieved from the ‘cancellations’
download on the TGCSA back office.
This data represents ALL
cancellations that have taken place since the TGCSA’s inception.
NB: This data excludes reinstatements that have occurred during the month of August.
© South African Tourism 2009
Slide no. 87
Part J
Update on transformation in the Tourism sector
© South African Tourism 2009
Slide no. 88
TECSA’s Goal
Facilitate transformation of the tourism
industry – increase of transformed
businesses, March 2010.
© South African Tourism 2009
Slide no. 89
Status of Gazetted Tourism Code
Gazetting of the Tourism BB-BEE Code under section 9
Enables:
– Private sector compliance through a standard measurement criteria
– Public sector to implement policy more vigorously
© South African Tourism 2009
Slide no. 90
Key Projects of TECSA
To date the following key activities have been embarked on in facilitating private sector compliance:
• Information workshops held nationally in partnership with private sector and government stakeholders with approximately 850 participants
• Quarterly BB-BEE reporting by the provincial and metro focal points ongoing
• Training of Verification agencies in partnership with SANAS taking place 20th October 2009
© South African Tourism 2009
Slide no. 91
State of Transformation
State of Transformation by Sub Sector – Aggregates
Accommodation: 51.9%
Hospitality: 53.5%
Travel: 57.1%
© South African Tourism 2009
Slide no. 92
Equity Deals
Nr# Target Company Buying Company % Stake Rand Value (in Millions)
1 Imperial Holding Ltd Lereko Mobility 7.25% 1402 Tusk Casino Resorts & Hotels Group Peermont Global Ltd n/a 583
3 Sun International Ltd Dinokana Investments (Pty) Ltd 7% 392
4 Protea Hospitality Corporation BEE Consortium 37.5% 1005 Vaal Mall Igwa Investments 20% 856 IFA Zimbali Lodge (Pty) Ltd Moribo Leisure Limited 100% 85
7 Gatsby International Hotels & Resorts
Community Investment Holdings (CIH)
51% 40
8 Halcyon Hotels Group Akani Hotels 100% 35
9 Wild Coast Sun Mbizana Development Trust 30% 25.5
© South African Tourism 2009
Slide no. 93
Equity Deals
10 Moribo Leisure Limited (Note 1) DNR Capital 100% 7
11 Mpekweni SunSilvercharm Investments 99 (Pty) Ltd
100% n/a
12 Club Travel UniPalm Investment Holdings 30% n/a
13 Title South Africa Jacob Matlala 24% n/a14 Peermont Global MIC 75% 7000 (R7bn)
15 Hospitality Property Fund Nobuntu Investments II (Pty) Limited n/a n/a
16 City LodgeVuwa InvestmentsStaff trustUniversity of Jhb
15% 485
17 Tourvest Guma Investments and partners 51% 2000 (R2bn)
© South African Tourism 2009
Slide no. 94
Closing
Thank you/Siyabonga
Questions/comments?