1. The Outbound Leisure Market From South Africa
April 2017
Gillian Saunders
Allan Wantenaar
for

2. Contents The Global Picture and Trends Study Methodology
The Outbound Market from South Africa
Size of Travel Agency and Wholesaler Market
South African Outbound Travel and Affordability
Estimates on Outbound Travel Numbers

3. Global International Tourism Growth
2015 4,5% arrivals growth
2015 3,6% receipts growth (blended local currency)

4. Global International Tourism
Lower growth at 3,0% pa
– 3,3%
2020 – 2030 – 2,9%

5. Global International Tourism
Almost 60% of arrivals are to
emerging economies

6. Global International Tourism
Growth at 5,3 % pa
2013 – 2020 – 6,1%
2020 – 2030 – 4,7%
Africa reaches 134m arrivals

7. Global International Tourism
Africa share grows from 3% to 7%

8. Global International Tourism

9. Global International Tourism

10. Global International Tourism

11. Global International Tourism

12. Global International Tourism

13. Global Outlook the long-term tourism growth pattern:
Global growth in international tourism arrivals continues
More moderate pace, from 4,2% per year ( ) to 3,3% ( ):
Substantial potential for further expansion in coming decades
challenges
maximising social and economic benefits
minimising negative impacts
the long-term tourism growth pattern:
more moderate, sustainable and inclusive

14. Demographic Shifts Ageing The number of elderly will explode
Surprisingly, 90% of this growth will take place in emerging markets
Non-retirement will increasingly be a major theme.

15. The Wealthy In America over 50s control 75% of the country's wealth
The UK’s 17 million Baby Boomers hold an estimated 80% of the country’s wealth
Baby Boomers – aim to stay mentally and physically fit – "forever young"
Travel is a high priority for Baby Boomers.

16. The Wealthy
High Net Worth Individuals’ wealth grew 4% in 2015 to US$61.1 trillion
The global population of HNWIs grew 4.9% to m
The US has largest HNW segment
HNWIs expanded to 4.4 m - increase of 8.6%,
the investable wealth grew by 9.4% to US$15.2 trillion.
since 2008, US accounts for 28.6% of new HNWI wealth globally
Asia-Pacific
strongest rates of HNWI population growth – 9.4% to 5.1 m
surpassed Europe with HNWI population 4.2 m
Europe lower than global average growth - 4.9%, due to ongoing fragile economies
The HNWI population is becoming more fragmented across the globe
Ultra-HNWI - grew by 4.2% in 2015 and wealth by 2.5%
Ultra-HNWIs accounted for ±35% of global HNWI wealth
but only 0,9% of the global HNWI population.

17. The Consumer Psyche Will emerging market consumers adopt this Psyche?
Cartography of the emerging consumer psyche - ConsumerShift Andy Hines
Authenticity, Connection, Anti-Consumerism, Self-Expression, & Enoughness
Modern, Post Modern, Integral
"Mindful Consumption " – "Deep Travel" idiosyncrasies and detail
"slow travel" boat, bike and train
Give back to destinations
"Carbon guilt" – geo-local travel
"mass localisation" - not if, but when!
Hyper-local sourcing
Reflect my values
Spending my money and time
Declining trust in brands (gen Y)
Will emerging market consumers adopt this Psyche?

18. Outbound Tourism

19. Outbound Tourism

20. The South African Market
New wealthy class
New middle class
Promoting new travel experiences & destinations
Economy / budget travel packages
Growth of independent travel
Regional market

21. Study Methodology Methodology: Research Tools
Personal interviews with outbound leisure travel agencies: 
ASATA membership list, past attendees to WTM Africa
telephone interviews, online surveys, and a focus group workshop held in Johannesburg.
Interviews with outbound travel market industry partners and associations
Research and analysis of available statistics on the size of the outbound travel market
StatsSA, ASATA, ACSA, key international destinations, population and income data, sales data from outbound leisure travel agencies, and other sources 

22. Study Methodology
Key Survey Respondents:

23. The Outbound Market from South Africa
The Travel Intermediary Chain:
Include source -
Source: Lubbe, B. A New Revenue Model for Travel Intermediaries in South Africa, 2005

24. The Outbound Market from South Africa
Number of Travel Agencies and Wholesalers in South Africa
225 outbound leisure travel agencies
22 wholesalers in South Africa
around 600 travel agency branches
5 Brands - Harvey World Travel, Pentravel, Sure Travel, XL Travel Leisure and Flight Centre - account for 50% of all travel agency branches
34 wholesaler branches

25. 600 225 The Outbound Market from South Africa
Number of Travel Agencies in South Africa
600
Travel agency branches
225
Travel agency head offices

26. Wholesaler head offices
The Outbound Market from South Africa
Number of Wholesalers in South Africa 22
Wholesaler head offices 34
Wholesaler branches

27. January (2017 YTD) Air Departures
The Outbound Market from South Africa
Number of Outbound Travelers from South Africa (2016)
Total Departures
2.5% increase vs 2015
Total Air Departures
-0.01% decline vs 2015
3,5 million
2.05 million
Total Road Departures
3.96% increase vs 2015
9 957
Total Sea Departures
71.11% increase vs 2015
5,55 million in 2016
January (2017 YTD) Air Departures
0.6% increase vs 2016
Source: Stats SA, Tourism Migration Survey, 2016

28. The Outbound Market from South Africa
South Africans who can afford to Travel
400,000 Households
(3% of households)
18 Years or older (Head of Household)
2.1 People Per Household
Income Threshold
R51,200 per month (R614,400 per annum)
860,000 Individuals
(3% of population)
Big income disparity
Source: Stats SA, 2011 Census

29. Assumption on % Leisure Visitors South Africa Leisure Visitors
The Outbound Market from South Africa
Estimating Outbound Travel Market - Key Destination Arrival Data
Destination
Assumption on % Leisure Visitors
All SA Visitors
South Africa Leisure Visitors
USA
15%
18 580
Australia
20%
57 600
11 520
Britain
Actual (12,4%)
28 615
Germany *
27 838
Indonesia
75%
13 795
10 346
Zanzibar *
95%
13 152
12 494
Mauritius
96 856
New Zealand
30%
17 008
5 102
Thailand
75 825
72 034
Other Destinations 5%
61 501
Total
Source: Various Statistical Publications from each Destination / Country, 2016
* - Indicates projection

30. 140,000 leisure travel policies
The Outbound Market from South Africa
Estimating Outbound Travel Market – Travel Insurance Sales
75% Market Share
Leisure Travel Policy Market
105,000 leisure travel policies
Leisure Travellers Covered
140,000 leisure travel policies
Leisure Travellers Covered
35,000 people
25% of policies are for families (2 people)
25,000 people
Credit Card Cover
200,000 leisure travellers
Excludes un-ensured travellers

31. 250,000 to 310,000 including Independents outbound leisure travellers
The Outbound Market from South Africa
Estimating Outbound Travel Market - Travel Agency and Wholesale Sales
75% Market Share
of outbound intermediary chain
250,000 to 310,000 including Independents
Assuming 20% book through this channel
150,000 to 186,000 outbound leisure travellers
Bookings through dominant players
200,000 to 250,000
through outbound intermediary chain in total – adjusted for double counting
250,000 to 310,000
outbound leisure travellers
Including traditional intermediary channel and Independent / Online

32. Summary of Findings and Conclusion
860,000
Potential Travelers
Conclusions:
Not Travelling
due to various
reasons
South Africans that can Afford to Travel
+/- 345,000
Travelers
200, ,000 Travelers
Outbound Destination Arrival Estimate
200, ,000 Travelers
Travel Channel Sales Estimate
200,000
Travelers
Travel Insurance Proxy Estimate
Low End Estimate

33. Summary of Findings and Conclusion
Conclusions:
Market
200,000 to 345,000 travelers (from 400,000 households)
225 travel agencies and 22 wholesalers (dominated by key players)
South African's are not very adventurous
Market under pressure
Exchange rates
Cost of travel
Pressure on disposable income
VISAs
Growth potential exists
Key considerations:
Connectivity to markets and product
Cost of Travel / Competition
Culture of Travel (also growth of independents)
Currency Stability / Economic Climate
Ease of Travel / Booking

34. Thank You