0. PRESENTATION TO THE PORTFOLIO COMMITTEE ON TOURISM ORGANISATIONAL PERFORMANCE RESULTS QUARTER 4: /17
25 August 2017

1. Table of Contents Situational Analysis
Organisational Performance Overview
Leisure Tourism Overview
Business Events Overview
Tourism Grading Overview
Human Capital Update
Financial Performance Overview
Governance
Acronyms

2. Situational Analysis

3. Situational Analysis
Following the acceleration in the second quarter, South Africa’s GDP growth was recorded at 0.3% in the fourth quarter.
Inflation was considerably above the desired limit at 6.6% in Q4 of 2016.
Unemployment was notably high at 26.5%, up two percentage points from Q
Retail spending was also on the downturn in December 2016, further indicating a constrained economy.
Together with the ongoing drought - which impacted food prices and availability as well as water consumption - consumers were generally restrained in their spending in spite of the usual season’s festivities.

4. Organisational Performance Overview

5. Reporting Periods - KPIs
Key Performance Indicator
Reporting Period
Number of international tourist arrivals
January - December
E.g. Q1= January –March as approved in Strategic Plan and Annual Performance Plan
Number of domestic holiday trips
Total revenue achieved
E.g Q1= January –March as approved in Strategic Plan and Annual Performance Plan
A percentage of brand positivity of South Africa as a tourist destination achieved
Twice a year February and November
Q1 and Q2 Financial year reporting = February Brand Tracker results
Q3 Financial year reporting = November Brand Tracker results
Annual Financial year reporting = Average of February and November
Number of graded establishments
April – March
aligned to the financial year as per the approved Strategic Plan and Annual Performance Plan
Number of business events hosted in South Africa
E.g Q1 Financial year reporting = January –March as approved in Strategic Plan and
Annual Performance Plan

6. Organisational Performance for Q4
SA Tourism achieved quarterly targets for 5 of its 14 KPIs:
Number of international tourist arrivals achieved;
Reviewed leisure tourism market portfolio;
Stakeholder engagement matrix in consultation with stakeholders;
Unqualified audit; and
Percentage of staff turnover.
SA Tourism did not achieve targets for 9 of its 14 KPIs:
Number of domestic holiday trips;
Number of business events hosted in South Africa;
Number of business delegates hosted in South Africa;
Total tourism revenue;
Percentage of brand positivity achieved;
Stakeholder satisfaction score;
Number of graded accommodation establishments;
Number of graded rooms; and
Staff satisfaction score.
Although the quarter 4 target for Total Tourism Revenue was not achieved, the annual target was exceeded.

7. 2016/17 Organisational Performance Results – Quarter 4
Strategy One: Invest in selected markets for leisure tourism to deliver volume (travellers) and value (tourism revenue)
Strategy Two: Work with trade partners to leverage resources to deliver travellers to and within South Africa.
Strategic Objectives
Number of international arrivals achieved
Annual Target
Quarterly Target
Progress/
Achievements
Reasons for deviation
Contribute to the South African economy by increasing the number of travellers into and within South Africa.
Number of international tourist arrivals achieved
Q1: 
Q1:
Target for the quarter has been exceeded. The performance was driven by:
Improved value for money due to the depreciation of the rand;
Improved perception of safety vis-a vis the world competitive environment;
Economic recovery by some source markets;
Additional visa facilitation centres across China; re-introduction of a direct air route from Brazil and China; and
Various in-market promotional activities
Q2:
Q2:
Q3:
Q3:
Q4:
Q4:

8. 2016/17 Organisational Performance Results – Quarter 4
Strategy One: Invest in selected markets for leisure tourism to deliver volume (travellers) and value (tourism revenue)
Strategy Two: Work with trade partners to leverage resources to deliver travellers to and within South Africa.
Strategic Objectives
Key Performance Indicator
Annual Target
Quarterly Target
Progress/
Achievements
Reasons for deviation
Contribute to the South African economy by increasing the number of travellers into and within South Africa.
Number of domestic holiday trips achieved  
Q1:
Q1:
Both the annual and quarterly performance on domestic holiday trips are below target by 15% and 14% respectively.
The underperformance was driven by an overall decline in number of trips taken in quarter 4 from 8.4 million in to 7.1 million in 2016.
As in previous quarters throughout the year, affordability remained the main deterrent to taking a trip.
Q2:
Q2:
Q3:
Q3:
Q4:
Q4:

9. 2016/17 Organisational Performance Results – Quarter 4
Strategy One: Invest in selected markets for leisure tourism to deliver volume (travellers) and value (tourism revenue)
Strategy Two: Work with trade partners to leverage resources to deliver travellers to and within South Africa.
Strategic Objectives
Key Performance Indicator
Annual Target
Quarterly Target
Progress/
Achievements
Reasons for deviation
Contribute to the South African economy by increasing the number of travellers into and within South Africa.
Total tourism revenue achieved (in billions)
R95.7
Q1: R22.8
Q1: R31.3
The quarter 4 under- performance was driven mainly by a 10% decrease in TDDS from the same period in 2015.
The decline in TDDS came from an overall decline in number of domestic trips taken in this period.
There was also a decline in TTFDS due to the overall decline in spend per arrival from R9 490 in 2015 to R in quarter 4 of 2016.
Q2: R21.6
Q2: R23.2
Q3: R23.3
Q3: R20.9
Q4: R28.0
Q4: R 26,6

10. 2016/17 Organisational Performance Results – Quarter 4
Strategy One: Invest in selected markets for leisure tourism to deliver volume (travellers) and value (tourism revenue)
Strategy Three: Position South Africa among the top ten long-haul business events destinations by 2025 while collaborating to convert business travellers to leisure tourists
Strategic Objectives
Key Performance Indicator
Annual Target
Quarterly Target
Progress/
Achievements
Reasons for deviation
Build positive awareness of the South African experience.
Percentage of brand positivity achieved
40%
N/A
38%
SA Tourism’s funding has been significantly impacted by the depreciating rand against major currencies and increasing inflation resulting in currency loss. This impacted SA Tourism’s ability to market South Africa as a top of mind tourism destination at the same rate given the declining international budget.
Consequentially, SA Tourism's impact on brand positivity in our Core and Investment markets has declined below target in the following markets. Core: Australia (26%), France (38%), Germany (39%), Nigeria (36%), UK (35%) and USA (38%). Investment: Canada (27%), Ghana (25%), Japan (5%), South Korea (8%) and Uganda (36%). Positivity in core markets is at 39% and investment markets at 27%.

11. 2016/17 Organisational Performance Results – Quarter 4
Strategy Three: Position South Africa among the top ten long-haul business events destinations by 2025 while collaborating to convert business travellers to leisure tourists
Strategic Objectives
Key Performance Indicator
Annual Target
Quarterly Target
Progress/
Achievements
Reasons for deviation
Contribute to the South African economy by increasing the number of travellers into and within South Africa.
Number of business events hosted in South Africa
138
N/A
117 Conferences registered on the ICCA Database.
The audit process on the number of ICCA events was not yet completed at the end of the quarter.
Number of business delegates hosted in South Africa
77 567
Delegates attended the 117 ICCA registered events.
The audit process on the number of business delegates was not complete at the end of the quarter.

12. 2016/17 Organisational Performance Results – Quarter 4
Strategy Four: Revamp the value proposition of tourism grading to inspire partners and stakeholders to deliver on the brand promise and quality visitor experience.
Strategic Objectives
Key Performance Indicator
Annual Target
Quarterly Target
Progress/
Achievements
Reasons for deviation
Improve visitor experience in line with the brand promise.
Number of graded establishments
5 650
Q1: 1 273
Q1: 1 251
A total of graded establishments were recorded as at end March This is an underperformance of 5.2%. There was a net cancellation of establishments with 252 of these being new establishments that applied for star grading membership but failed to pay the membership fees.
Q2: 1 362
Q2: 1 321
Q3: 1 457
Q3: 1 279
Q4: 1 558
Q4: 1 211
Number of graded rooms
Q1:
Q1:
The number of graded rooms as at end March 2017 was which was an underperformance of 3.1%. The 252 new applications that failed to honour the membership invoices accounted for graded rooms.
Q2:
Q2:
Q3:
Q3:
Q4:
Q4:

13. 2016/17 Organisational Performance Results – Quarter 4
Strategy Five: Revamp the value proposition of tourism grading to inspire partners and stakeholders to deliver on the brand promise and quality visitor experience.
Strategic Objectives
Key Performance Indicator
Annual Target
Quarterly Target
Progress/
Achievements
Reasons for deviation
Collaborate with stakeholders and partners to deliver on SA Tourism’s mandate.
Stakeholder satisfaction score
Set baseline
N/A
Stakeholder satisfaction survey was not conducted in this quarter.
The stakeholder consultation process on the Tourism Growth Strategy took that was to precede the survey took place later than scheduled.
Stakeholder engagement matrix in consultation with stakeholders
Approved stakeholder engagement matrix in consultation with stakeholders
Target achieved. The stakeholder engagement matrix has been included in the Stakeholder Management Framework and is aligned to the stakeholders that were surveyed during the Ministerial Review as well as those identified as important/ influential in delivering against business objectives.

14. 2016/17 Organisational Performance Results – Quarter 4
Strategy Six: Create a culture of excellence and innovation to improve effectiveness and operational efficiency.
Strategic Objectives
Key Performance Indicator
Annual Target
Quarterly Target
Progress/
Achievements
Reasons for deviation
Create an organisational culture of work satisfaction, excellence and innovation to improve effectiveness and operational efficiency.
Staff satisfaction score
3.7
N/A
2.9
The report identified the following as areas of improvement:
- Training and development;
Pay and benefits;
South African Tourism’s operations in jurisdictions other than South Africa find it difficult to implement some aspects of the PFMA and National Treasury regulations.
Unqualified audit
Unqualified annual report
Target achieved.
The staff turnover due to voluntary terminations was 6.6%.
Percentage of staff turnover 7%
6,6%

15. Leisure Tourism Performance Overview

16. Leisure Tourism Performance in Quarter 4 of 2016/17

17. International Tourist Arrivals
Foreign arrivals accounted for 2.6 million of total tourism trips an increase of 8.7% compared to Africa remains SA Tourism’s biggest source region followed by Europe and North America.
The fastest growing regions were Central & South America (73.8%), Indian Ocean Islands (30.6%), Middle East (29.1%) and Europe (15.7%).
The main driver of the increase in foreign trips was tourists visiting for leisure.
MICE tourists and business shopping remained relatively stable compared to 2015 while business travellers (corporate travel) saw a -49.4% decline from last year.

18. South Africa received 2. 6 million tourists with a growth of 8
South Africa received 2.6 million tourists with a growth of 8.7% from 2015 and CAGR of 0.8% from 2014 in this quarter. Arrivals from Central & South America led the double-digit growth when compared to last year and CAGR of over 30% with Asia, Indian Ocean Islands and Middle East also growing by CAGR in double digits.

19. Geographic Spread
The provincial spread in South Africa has improved from an international perspective with the arrivals increasing in 6 of the 9 provinces in this quarter.
The provinces that lead the growth were Northern Cape, Eastern Cape and Free State with the double digit growth over 2015.
Gauteng was the most visited province in this quarter and grew to reach million tourist arrivals with a total of 9.22 million bednights generating an estimated R8.12 billion in revenue. On average tourists stayed 8.2 nights.
Western Cape is the 2nd most visited province with tourist arrivals generating 4.93 million bednights and R5.10 billion in revenue.

20. Geographic Spread

21. Total Foreign Direct Spend (TFDS)

22. International Tourist Arrivals
This year-on-year growth is on par with Australia and well ahead of Thailand for this quarter but our compound annual growth rate (CAGR( )) for 2016 is behind both Australia and Thailand.
Leading our growth are the Central & South American, Middle Eastern & Asian markets each with double digit CAGR and year-on-year growth.
Africa-air also grew by double-digits compared to last year (10.8%), with Africa-land growing below the average for the quarter (6.4%). However in terms if CAGR Africa land saw a -2.4% decline from 2014 levels.
Australasia is the only other major sub-region after Africa-land to not have grown above 2014 levels.
% Y-o-Y Growth
* CAGR Growth ( )
-0.9%
*1.9%
8.8%
*9.4%
8.7%
*0.8%

23. The pipeline is looking positive for South Africa as the number of bookings are showing a positive trend, if things remain the same we can expect more tourist arrivals for the beginning half of 2017.
Source: Forward Keys

24. Domestic Tourism Performance Indicators
Domestic tourism generated a total of R7,7 billion in Q4 2016, which is a 10% decrease from the same period in 2015.
The decline in revenue was due to a decline in number of trips taken in this period. Domestic tourists that took trips in this period increased their length of their trips but were budget conscious as they did not increase their average expenditure.
Revenue from visiting friends and relatives (VFR) orientated trips remained the biggest contributor but the share thereof decreased from 46% to 45%.
Holiday trip contribution accounted for about a third of revenue – down from 34% to 32%.
Almost 2 in 5 (38%) South Africans could not afford to take a domestic trip in Q A constrained economy alongside high unemployment deterred people from taking a trip.
The decrease in total trips was largely driven by a decrease in leisure related trips (VFR and holiday trips).
Business trips increased in this period
Limpopo continued to receive the most number of trips, followed by KwaZulu-Natal and Gauteng. The number of VFR trips were the cause of increased visits to Limpopo.

25. Domestic Tourism Performance
*Provinces with sample sizes of less than twenty (20) during this period are excluded from the report as they are statistically insignificantly.  
**Average spend is the average of the tourist's trip spend across the following categories (where applicable): Accommodation, Transport, Food, Shopping, Leisure, Medical, Shopping, Other.

26. Domestic Tourism Performance: Purpose of Travel
SA Tourism currently reports on VFR, Holiday and Business on a quarterly basis however data is also collected on Religious, Medical and Other as per table below.
*Though there is growth noted in the medical purpose of travel, the percentage contribution to the total number trips tracked is still insignificant.

27. Business Events Overview

28. Bid Submissions : Quarter 4, 2016-2017
Financial Year
Number of Submissions
Delegate Numbers
Conferences Days
Estimated Economic Impact 57
78 843
237
R977m 52
(Aids Assn Delegates)
230
R1.4bn 54
86 692
247
R 1.28b
Q1&Q2 48
57 355
207
R 968m
As at Q3
66 100
233
R 1,1bn
As at Q4 78
139 936 (50 000 delegates from Animatronics expo
401
R 1.3bn

29. Bid Submissions : Quarter 4, 2016-2017
Year
Cape Town
Durban
Johannesburg
Tshwane
Ekurhuleni
Multi City Proposals
38 (67%)
11 (19%)
7 (12%)
1 (2%)
34 (65.4%)
9 (17.3%)
8 (15.4)
1 (1.9%)
28 (51,85%)
14 (25,93%)
3(5.56%)
2 (3,70%)
7 (12,96%)
Q1 & Q2
27 (56,25%)
5 (10,42%)
8 (16,67%)
1 (2,08)
7 (14,58%) Q3
35 (64.8%)
5 (9.3 %)
10 (18.5%)
1 (1.9 %)
4 (7.4%)
As at Q4
47 (54.1%)
6 (10.4 %)
10 (20.8 %)
1 (2.8 %)
14 (4.1%)

30. Bid Secured Pipeline for the next 5 years
Number of Secured Bids
Conference Days
Delegates
Estimated Economic Impact
2018 29
135
31 478
R469m
2019 9 42
6 982
R113
2020 7 31
37 600
R 494
2021 3 11
11 000
R135m
2022 5 22
10 100
R 231m

31. Regional Distribution

32. Tourism Grading Overview

33. Grading of Establishments
The TGCSA quality grades establishments according to eleven categories across all 9 provinces
The categories are as follows:
Backpacker & Hostelling
Bed & Breakfast
Caravan & Camping
Country House
Game Lodge
Nature Reserve
Guest House
Hotel
Lodge
MESE (Meetings, Exhibitions, and Special Events venues)
Self catering
Exclusive Use
Shared vacation

34. Total Number of Graded Establishments
As at 31 March 2017

35. Total Number of Graded Rooms
As at 31 March 2017

36. Annual Growth/Decline: Graded Establishments/Rooms by Province
2016/2017 Financial Year

37. Annual Growth/Decline: Graded Establishments/Rooms by Product Type
2016/2017 Financial Year

38. Human Capital Update

39. Workforce Profile SA Tourism’s workforce profile is as follows: StatusNo %
Permanent Employees
146
81%
Fixed-Term Contracts (Country Managers & EXCO) 11 6%
Contract employees 19
10%
Internship 5 3%
TOTAL
181
100%

40. Vacancy and Occupancy Report per Business Area
The organisation is operating at 77% (157) capacity against the approved staff establishment of 202. The remaining 23% (45 vacancies) is recorded as vacancies as a percentage of headcount. To ensure business continuity and fulfillment of the vacant roles, SA Tourism has appointed temps and interns as per the last two (2) columns in the table below.
A detailed analysis on occupancy and vacancy rate has been provided below:
Business Unit
Approved positions
Occupied positions
Vacant positions
Temporary staff
Interns
Office of the CEO 6
Operations 30 28 2 5
Finance 23 22 1
SANCB 15 10
Marketing
114 79 35 4
TGCSA 14 12
Total
202
157 45 19

41. Employment Equity Update
*Interns are part of the temporary staff because they are on fixed term contracts.

42. Organisational Review Project

43. Outcomes of the Ministerial Review in relation to Organisational Structure and HR Development
Key Priorities
Conduct a review of the role, performance and capabilities of the HR function
Create a culture of engagement and empowerment within and across all levels and units of the organisation
Introducing ways for middle management to engage in strategic discussions
Effective Delegations of Authority to devolve decision making to management
Change management process to shift organisational culture
Staff satisfaction surveys and implementation of recommendations
Skills Audit to understand the skills gaps
Build and enhance EXCO and leadership team capabilities to carry out their roles and duties as per their KPAs
Review and redesign the organisation structure taking into account the funding and resource constraints including currency risks and losses

44. Summary of the key activities completed to date
Below is a summary of the key activities completed in the project initiation and assessment phases
Define scope
Develop project plan and management approach
Align leadership team to drive the case for change
Conduct change readiness survey
Define data requirements
Data collection
Desktop analysis of documents
Conduct interviews with the relevant stakeholders
Understand current business process mapping of the functions
Develop a change management strategy and plan
Develop tailored design principles
Develop organisational process landscape
Define operating model
Develop a proposed optimal high level structure
Design a detailed organisational micro structure based on the agreed high level design
Review and develop job profiles in line with proposed structure
Define head count implications and costs
Develop leadership competency frameworks
Develop people migration plan
Develop an IT strategy to align processes
Develop an Implementation plan.
Placement and recruitment
Conduct skills audit
Develop training plans
Project closure and reporting
Initiation & kick off
Current state
Design
Implementation planning
Project imitation
Plan for implementation
Develop the detailed design
Develop the high level design
Conduct current state assessment
Change management, programme management
Phase 1
Phase 2
Phase 4
May 2016
May-July 2016
August- December 2016
January 2017
Phase 3

45. Financial Performance Overview

46. Revenue streams graphical illustration

47. Quarterly Revenue Analysis
*Other Income = Indaba, Meetings Africa, Interest and Grading.

48. Statement of Financial Performance-Expenditure by accounting classification.
Marketing expenses of R mil makes up 73% of total expenditure whilst remaining 27% is made up of Administration costs. Included in Administration cost is Personnel costs which makes up 14% of the of the total budget.
The administration expense balance of R mil comprises of operating expenses.
Marketing expenditure relates to investment in leisure marketing, quality assurance and business events.

49. Marketing Expenditure

50. SA Tourism per objective analysis

51. Governance

52. Board Meeting Attendance Q4

53. Board Meeting Attendance Q4
 Name
Remuneration
Flights
Accommodation
Car Hire
Tanya Abrahamse
(Chairperson
Non-Remunerated position
Thebe Ikalafeng
(Deputy Chairperson)
R28,935
Ayanda Ntsaluba
R36,693
Graham Wood
R31,987 R R R
Chichi Maponya
R14,118
Oregan Hoskins
R25,883 R R R
Michelle Constant
R31, 987
Colin Bell R R
Amor Malan
R16,471
Judy Nwokedi
R26,582
Mmaditonki Setwaba
Non-remunerated position
Yacoob Abba Omar
Enver Duminy
R8271
Mmatsatsi Ramawela
R9,412

54. Abbreviations and Acronyms
CAGR Compound Annual Growth Rate
MICE Meetings, Incentives, Conferencing and Exhibitions
VFR Visiting Friends and Relatives
EAP Economically Active Population (People from years of age who are either employed or unemployed and seeking employment)
TDDS Total Domestic Direct Spend.
The average spend comprises of amounts spent on Transport, Food, Shopping (personal), Accommodation and Leisure.
TGCSA Tourism Grading Council of South Africa
TOMSA Tourism Marketing South Africa
TTFDS Total Tourist Foreign Direct Spend
UNWTO United Nations World Travel Organisation

55. Thank You
Slide no. 55