1. ORGANISATIONAL PERFORMANCE RESULTS 2015/16
SOUTH AFRICAN TOURISM
ORGANISATIONAL PERFORMANCE RESULTS
2015/16
Select Committee on Trade and International Relations
08 February 2017
Slide no. 1

2. Contents Strategic Overview (slides 4-8) - Vision and Mission
- Organisational Values
- Legislative Framework and Governance
Governance Structure (slides 9-10)
Auditor General’s Report (slides 11-12)
Organisational Environment (slides 13-16)
- Funding
- Key Policy Developments and Legislative Changes
2015/16 Audited Performance Information (slides 17-66)
- Performance Information by Objective
- Strategies to Overcome Areas of Under-performance
- Performance Information by Activity
- Tourism Grading Council of South Africa (TGCSA)
- South African National Convention Bureau (SANCB)
Slide no. 2

3. Contents Governance Information (slides 67-73)
- South African Tourism Board
- Board Tenure ended 31 May 2015
- Newly Appointed Board from 1 June 2015
- Board Remuneration For the period 1 April 2015 to 31 May 2015
- Report from the Audit and Risk Committee
Human Resource Management (slides 74-76)
- Human Resource Information
- South African Tourism Employment Equity Statistics
Audited Statement of Financial Performance for 2015/16 (slides 77-81)
- Financial Performance
- Financial Performance against Budget
- Audited Financial Performance
Slide no. 3

4. Strategic Overview
Slide no. 4

5. Vision
Mission
For South Africa to be one of the preferred tourist destinations in the world and to maximise the economic potential of the tourism industry for the benefit of our country and its people.
To develop and implement a world-class tourism marketing strategy for South Africa. In pursuance of this, South African Tourism will:
Develop and implement domestic, regional and international marketing strategies informed by research, information and knowledge-sharing;
Develop and implement a business events strategy;
Implement and maintain a recognisable, credible and globally benchmarked system of quality assurance;
Facilitate strategic alignment of provinces and industry, in support of the marketing of tourism;
Continuously align efforts to support tourism growth; and
Ensure the efficient utilisation of resources in order to deliver against the tourism strategy.
Slide no.5
Annual Report Page 22

6. Organisational Values
Our values are:
Showing respect and recognition for our people;
Acting with integrity;
Caring for our employees;
Exercising responsibility and accepting accountability for the outcomes of our actions; and
Pushing the boundaries of excellence in everything we do.
Slide no. 6
Annual Report Page 22

7. Legislative Framework and GovernanceNO
LEGISLATIVE FRAMEWORK
BRIEF DESCRIPTION APPLICABLE TO SOUTH AFRICAN TOURISM 1.
South African Tourism established in terms of the Tourism Act (No. 3 of 2014)
Establishes the governance and accountability of South African Tourism to the South African Tourism Board appointed by the Minister:
To provide for the continued existence of the South African Tourism Board;
To establish a National Convention Bureau to market South Africa as business tourism destination; and
To provide for the establishment of the Tourism Grading Council of South Africa. 2.
Public Finance Management Act (PFMA)
Established in terms of the Tourism Act (No. 3 of 2014) and listed as a Schedule 3a Public Entity (PFMA).
Promotes transparency, accountability and sound management of the revenue, expenditure, assets and liabilities of the institutions to which this Act applies. 3.
National Treasury Regulations and related Practice Notes
Regulates financial, non-financial as well as fiscal matters. 4.
Reserve Bank Regulations
Relates to the management of international payments, the opening of foreign bank accounts and the transfer of funds.
Slide no. 7
Annual Report Page

8. Legislative Framework and Governance (cont.)NO
LEGISLATIVE FRAMEWORK
BRIEF DESCRIPTION APPLICABLE TO SOUTH AFRICAN TOURISM 5.
National Tourism Sector Strategy (NTSS)
Sector strategy aligned with the priorities of the Medium Term Strategic Framework (MTSF):
Growing tourism beyond 2020;
Aligning with the government’s priorities of job creation and contribution to GDP; and
Growing the domestic tourism market and positioning SA as tourism and business events destination. 6.
National Development Plan (NDP)
Chapter 3 identifies tourism as one of development pillars for economic growth.
Slide no.8
Annual Report Page

9. Governance Structure
Slide no. 9

10. Governance Structure
Slide no.10
Annual Report Page 24

11. Auditor General’s Report
Slide no. 11

12. Auditor-General’s Report
SA Tourism received its 15th unqualified audit report in 2015/16.
The Auditor General certified that:
- the financial statements were free from material misstatements;
- no instances of material non-compliance to specific matters in key legislations were found; and
- no significant deficiencies were found in internal controls.
Predetermined Strategic Objectives
Usefulness
Reliability
Strategic Objective 1
Contribute to the growth of International tourist arrivals in South Africa.
Unqualified
Strategic Objective 2
Contribute to the growth of domestic tourists in South Africa
Strategic Objective 3
Grow Tourism Revenue
Strategic Objective 4
Improve Brand Awareness of South Africa as a tourist destination
Annual Report page 105 – 107
Slide no. 12

13. Organisational Environment
Slide no. 13

14. Organisational Environment
The 2015/16 organisational environment performance was commendable, particularly in light of the following changes:
- areas of concern in the organisation highlighted in the Ministerial Review Report;
- a constrained regulatory and compliance environment posed by the PFMA and international laws;
- A change of leadership in the Board resulting in the composition of a new Board and Chairperson with new ideas and direction for the entity;
- The resignation of the CEO bringing about a period of transition for the organisation.
Annual Report Page

15. Funding
South African Tourism, as a global organisation with operations in about 13 international markets, has experienced approximately R350 million in currency losses in the past five years due to the depreciation of the rand against major currencies.
This has substantially reduced South African Tourism’s marketing budget in real terms. This loss of marketing budget has resulted in a drop in total overseas awareness of South Africa as a leisure destination. This awareness is measured through South African Tourism’s annual brand tracker study. In 2015 this stood at 78%, compared to 80% in 2014.
The cost of doing business abroad has also increased substantially, with the ratio between the marketing and overheads budget skewed to 65:35 – an unfavourable position, given the target of 70:30.
As part of South African Tourism’s intention to reduce overheads, and improve efficiency and return on investment, it will continue to reprioritise its market portfolio as well as its marketing operations through the hub model.
Over and above the grant allocation from the government, South African Tourism received R123 million of its budget from the Tourism Marketing South Africa (TOMSA) levy allocated through the TBCSA. This accounted for 10% of the budget as a contribution from the private sector.
This partnership increases South African Tourism’s ability to market South Africa internationally.
The TGCSA’s expanded mandate, although it was included in the TGCSA strategy, remained unfunded in the year under review
Annual Report Page 32

16. Key Policy Developments and Legislative Changes
The functions of the TGCSA, as outlined in Chapter 4 of the Tourism Act (Act No. 3 of 2014), have been assigned by the Minister of Tourism to the South African Tourism Board.
Policy reviews are expected to address policy gaps and the expanded mandate of the TGCSA.
Annual Report Page 32

17. Performance Information by Objective
Slide no. 17

18. Performance Information for 2015/16
Strategic Objective
Performance Indicator
Actual Achievement 2014/2015
Planned Target
2015/2016
Actual Achievement
Deviation from Planned Target to Actual Achievement for 2015/2016
Comment on Deviation
Contribute to the growth of international tourist arrivals in South Africa
Number of international tourist arrivals achieved
(foreign visitor arrivals)
-18.9%
All markets showed a decline except for the Middle East, with a notable decrease from Central and South America (-22.7%) and Australasia
(-10%). The main reasons were:
- Lack of forward bookings arising from the aftermath of the Ebola outbreak in some parts of West Africa;
- Visa processing capacity constraints; and
- Lack of understanding of the visa requirements and associated perceptions that South Africa is not safe for children.
Global issues that affected arrivals:
- Negative news about global safety and security;
- Some of South Africa’s source markets were in recession; and
- Competition from in-country domestic or regional travel.
Annual Report Page

19. Performance Information for 2015/16
Strategic Objective
Performance Indicator
Actual Achievement 2014/2015
Planned Target
2015/2016
Actual Achievement
Deviation from Planned Target to Actual Achievement for 2014/2015
Comment on Deviation
Contribute to the growth of domestic tourism in South Africa
Number of holiday trips achieved
-5%
The target has not been achieved due to South Africa’s poor economic growth, and due to many South Africans not having a culture of taking holiday trips. The domestic driver remained visiting friends and relatives (VFR).
Annual Report Page

20. Performance Information for 2015/16
Strategic Objective
Performance Indicator
Actual Achievement 2014/2015
Planned Target
2015/2016
Actual Achievement
Deviation from Planned Target to Actual Achievement for 2015/2016
Comment on Deviation
Grow tourism revenue
Total revenue achieved (billion rand)
R billion
R107.4 billion
R91.7 billion
-14.6%
TTFDS (billion rand)
New KPI
R83.1 billion
R68.1 billion
-18.1%
In spite of the target not being met, the TTFDS increased by 6.2% year on year. Tourism revenue is derived from tourist arrivals, therefore the decline in arrivals affected revenue.
TDDS (billion rand)
R24.3 billion
R23.6 billion
-2.8%
The target was not achieved despite the average spend per trip having increased from R950 to R960. This was due to the country’s poor economic performance, high unemployment and declining disposable income.
Slide no. 20
Annual Report Page
Slide no. 20

21. Performance Information for 2015/16
Strategic Objective
Performance Indicator
Actual Achievement 2014/2015
Planned Target
2015/2016
Actual Achievement
Deviation from Planned Target to Actual Achievement for 2015/2016
Comment on Deviation
Improve brand awareness of South Africa as a tourist destination
Brand awareness achieved (%)
80%
78%
-2%
The target was not achieved due to a substantial reduction in the marketing and advertising budget, thus affecting brand visibility globally and in-market as well as compromising brand building and awareness.
Provide quality assurance for tourism products
Number of graded accommodation establishment members achieved
5 369
6 493
5 230
-19.5%
The annual performance is 19.5% below target due to the cost versus the value of grading and business closures as a result of the unfavourable economic climate.
Increase number of business events in South Africa
Number of business events achieved in South Africa
New KPI 87
108
+24.1%
The target was exceeded due to improved business events infrastructure as well as improved sales strategies.
Slide no. 21
Annual Report Page

22. Strategies to Overcome Areas of Underperformance
Slide no. 22

23. Strategies to Overcome Areas of Under-performance
KEY PERFORMANCE INDICATOR
MITIGATION STRATEGIES
Number of international tourist arrivals achieved
Future performance is expected to grow due to the following:
Amendment of the immigration regulations;
Better alignment with industry, cities and provincial tourism agencies;
Improved airlift strategy; and
Implementation of the South African Tourism enhanced growth strategy.
South African Tourism will begin implementing its enhanced growth strategy to increase travellers by five million within five years. This figure targets an increase in the number of tourist arrivals and domestic holiday trips. The following initiatives are planned:
Undertaking the sixth review of the leisure tourism market portfolio in 2016/17 and implementing it from 2017/18 to 2019/20, coupled with an investment model to maximise return on investment;
Undertaking a domestic target market segment refresh exercise to inform a more robust domestic marketing strategy; and
Embarking on programmes that will seek to create a culture of travel.
Total revenue achieved
Number of holiday trips
Number of graded establishments
A policy review will be undertaken to address possible policy amendments and updates, to enable South African Tourism to implement the expanded mandate of the Tourism Grading Council.
As part of the policy review, South African Tourism will seek to create and implement a revised business model and value proposition in order to attract more establishments to become graded, and strengthen capabilities to improve client servicing and retention. 
An integrated and targeted marketing and communications strategy will be implemented.
Annual Report Page 60

24. Performance Information by Activity
Slide no. 24

25. Leisure Marketing Overview in 2015
Slide no. 25

26. Central & South America
Tourist arrivals to South Africa from January to December 2015 declined by 6.8% compared to the previous year. There were declines from all regions, with the exception of the Middle East and Indian Ocean Islands.
Europe
1,317,291 arrivals
3.5% down from 2014
North America
353,450 arrivals
4.4% down from 2014
Middle East
53,338 arrivals
1.4% up from 2014
Asia
251,682 arrivals
6.7% down from 2014
Central & South America
50,304 arrivals
22.7% down from 2014
Australasia
118,923 arrivals
10% down from 2014
AFRICA
6,722,800 arrivals
7.4% down from 2014
Indian Ocean Islands
GRAND TOTAL
23,314 arrivals
5.5% up from 2014
8,903,773 arrivals
6.8% down from 2014
Note : Tourist arrivals figures shown above for January-December 2015
Source: Stats SA Tourism & Migration release December 2015, SAT analysis

27. Neighbouring markets continue to be the major source of tourist arrivals in South Africa.
Top 20 source markets
Tourist arrivals
Note: *A tourist arrival is defined as a non-resident who stays for more than 24 hours but less than one year in the country and excludes “workers” and “contract workers”. As of 2014, Statistics SA is no longer able to provide statistics on transit tourists and therefore a new baseline is now created.
Source: Stats SA Tourism & Migration release December 2014, SAT analysis

28. The UK, USA, Germany, France and Netherlands are the top five long-haul source markets.
Top 20 long-haul markets
Tourist arrivals
Source: Stats SA Tourism & Migration release December 2015, SAT analysis

29. Estimated total tourist foreign direct spend increased by 6
Estimated total tourist foreign direct spend increased by 6.2% between 2014 and Increases were recorded from all regions, with the exception of Africa land markets.
2013
R7,300
R5,500
R10,600
R13,100
R14,100
R12,300
2014
R7,000
R4,900
R11,000
R13,400
R12,700
R14,400
2015
R8,100
R5,200
R19,200
R18,600
R14,800
R15,800

30. The average length of stay of all tourists remained fairly flat, while tourists from both African land and air markets stayed longer on average.

31. Six of the nine provinces recorded an increase in their share of total arrivals in 2015.

32. Tourist arrivals in South Africa from the Americas, Jan-Dec 2015
Arrivals from all major markets in the Americas region decreased in 2015, with sharp decreases noted from Brazil and Argentina.
Tourist arrivals in South Africa from the Americas, Jan-Dec 2015
Tourist arrivals
Source: Stats SA Tourism & Migration release December 2015, SAT analysis

33. There has been a 9.1% decrease from markets in the “Other Americas” region, with the exception of Jamaica and Cuba.
Tourist arrivals in South Africa from the top “Other Americas” markets, Jan-Dec 2015
Tourist arrivals *
NB:* 2014 missing arrivals from Stats SA in November & December
Source: Stats SA Tourism & Migration release December 2015, SAT analysis

34. Tourist arrivals in South Africa from Europe, Jan-Dec 2015
There was 3.5% decrease in tourist arrivals from Europe, with the UK and Spain being the only major markets that recorded growth in 2015.
Tourist arrivals in South Africa from Europe, Jan-Dec 2015
Tourist arrivals
Source: Stats SA Tourism & Migration release December 2015, SAT analysis

35. Tourist arrivals from top “Other Europe” markets, Jan-Dec 2015
Only Denmark recorded a growth in tourist arrivals within the “Other Europe” category.
Tourist arrivals from top “Other Europe” markets, Jan-Dec 2015
Tourist arrivals
Source: Stats SA Tourism & Migration release December 2015, SAT analysis

36. Tourist arrivals in South Africa from Asia & Australasia, Jan-Dec 2015
Asia & Australasia saw a 7.7% decrease in tourist arrivals, with declines from all markets in the region except China, which is up 2.2%.
Tourist arrivals in South Africa from Asia & Australasia, Jan-Dec 2015
Tourist arrivals *
NB:* 2014 missing arrivals from Stats SA in November & December
Source: Stats SA Tourism & Migration release December 2015, SAT analysis

37. The 3.8% decrease from “Other Asia & Australia” markets was driven by decreases from most markets in this category.
Tourist arrivals from top “Other Asia & Australasia” markets, Jan-Dec 2015
Tourist arrivals *
NB:* 2014 missing arrivals from Stats SA in November & December
Source: Stats SA Tourism & Migration release December 2015, SAT analysis

38. Tourist arrivals in South Africa from Africa air markets, Jan-Dec 2015
Africa air markets showed a decline of 3.1%, with declines recorded across all major markets in the region.
Tourist arrivals in South Africa from Africa air markets, Jan-Dec 2015
Tourist arrivals *
NB:* 2014 missing arrivals from StatsSA in November & December
Note: Africa air markets are markets where at least 60% of arrivals in SA use air transport; Africa land markets are markets where at least 60% of arrivals in SA use road transport. Long-haul markets include all countries outside Africa
Source: Stats SA Tourism & Migration release December 2015, SAT analysis

39. Most of the markets in the “other” Africa air category showed positive growth, with the exception of Rwanda.
Tourist arrivals in South Africa from the top “Other Africa air” markets, Jan-Dec 2015
Tourist arrivals
Source: Stats SA Tourism & Migration release December 2015, SAT analysis

40. There was a 7.5% decline in tourist arrivals from Africa land markets, led by a strong decline from Zimbabwe. Botswana and Namibia were the only markets that recorded growth in 2015.
Tourist arrivals in South Africa from Africa land markets, Jan-Dec 2015
Tourist arrivals
Note: Africa air markets are markets where at least 60% of arrivals in SA use air transport; Africa land markets are markets where at least 60% of arrivals in SA use road transport. Long-haul markets include all countries outside Africa
Source: Stats SA Tourism & Migration release December 2015, SAT analysis

41. Headline indicators for domestic tourism performance
Key Metrics
2013
2014
% change ’14 vs ’13
2015
% change ’15 vs ’14
Number of Trips
Annual
25.2 million
28.0 million
11.1%
24.5 million
-12.5%
travellers
12.0 million -
12.4 million
3.3%
Average Trips Taken
2.1
2.3
9.5%
2.0
-13%
By Purpose
VFR: 70% Holiday: 12% Business: 8%
VFR: 73% Holiday: 10% Business: 6%
15.7%
-9.1%
-19.7%
VFR: 71% Holiday: 11% Business: 10%
-15.8%
-2.6%
43.6%
Spend
Total Annual Spend
R24.3 billion
R26.8 billion
10.3%
R23.6 billion
-11.9%
VFR: 47% Holiday: 26% Business: 19%
VFR: 51% Holiday: 22% Business: 20%
19.0%
-7.2%
18.8%
VFR: 52% Holiday: 25% Business: 19%
-10.1%
-2.3%
16.8%
Average Spend per Trip/per Day
R980/Trip
R950/Trip
-3.1%
R960/Trip
1.1%
R210/Day
R230/Day
Annual Report Page
Slide no. 41

42. Number of Domestic Trips by Purpose
Slide no. 42

43. Number of Domestic Trips per Province
Slide no. 43

44. Domestic Trips per Province by Purpose
Slide no. 44

45. Length of Stay
Slide no. 45

46. Domestic Revenue Spend by Province
Slide no. 46

47. Domestic Revenue by Purpose
Slide no. 47

48. Reasons for not travelling
Slide no. 48

49. Tourism Grading Council Of South Africa
Slide no.49

50. TGCSA Performance
In the year under review, the TGCSA did not meet its annual target of graded establishments by the end of March 2016, but there was considerable growth in new establishments joining the system as well as in the number of graded rooms. In the graded properties achieved, 755 were new and of them were renewals.
Total number of graded establishments as at 31 March 2016
Slide no.50

51. Total Number of Graded Rooms
As at 31 March 2016
No.
Non-Hotel Accommodation EC FS GP
KZN LP MP NW NC WC
Grand Total 1
Backpacker & Hostelling
665 92
4,085
801 87 86
200
1,265
7,281 2
Bed & Breakfast
1,212 72
1,071
1,532
230
450
273
135
1,279
6,254 3
Caravan & Camping
707
334 50
1,025
1,426
1,161
420
188
1,476
6,787 4
Country House
311 55
275
223
172
138 42 18
787
2,021 5
Game Lodge
363 24
162
338
632
173
256 16
114
2,078 6
Guest House
2,399
711
3,879
1,769
931
1,615
941
585
4,247
17,077 7
Nature Reserve 13 11 59 88 8
Lodge
182
190
952
592
900
987
439 54
350
4,646 9
Self catering
991
406
839
1,862
1,598
1,417
794
237
3,864
12,008
Non-Hotel Accommodation Total
6,830
1,889
11,313
8,155
5,976
6,027
3,165
1,444
13,441
58,240 10
Hotel Total
3,489
1,650
19,209
10,095
1,872
2,333
2,602
897
13,116
55,263
Accommodation Grand Total
10,319
3,539
30,522
18,250
7,848
8,360
5,767
2,341
26,557
113,503
MESE Total (Business Tourism) 20 12
483 25 57 32 15 80
778
Grand Total Graded Rooms
10,339
3,551
31,005
18,275
7,902
8,417
5,799
2,356
26,637
114,281
Slide no Of the 5,230 graded establishments, 131 are NEW applications that are still in progress

52. Year-to-date as at 31 March 2016
Total Number of Cancelled Establishments
Year-to-date as at 31 March 2016
No.
Non-Hotel Accommodation EC FS GP
KZN LP MP NW NC WC
Grand Total 1
Backpacker & Hostelling 3 2 9 17
Bed & Breakfast 51 10 47 35 4 16 6 77
263
Caravan & Camping 5
Country House 8 28
Game Lodge
Guest House 85 25 11 42 21 75
348 7
Nature Reserve
Lodge 12 55
Self catering 15
181
309
Non-Hotel Accommodation Total
122 50
170
105 65 76
364
1,057
Hotel Total 46 27
Accommodation Grand Total
137 54
216
120 69 80 59 53
391
1,179
MESE Total (Business Tourism) 13 38
Grand Total Cancelled Establishments
141 57
229 72 63 56
394
1,217
Slide no Of the 5,230 graded establishments, 131 are NEW applications that are still in progress

53. Year-to-date as at 31 March 2016
Total Number of Cancelled Rooms
Year-to-date as at 31 March 2016
No.
Non-Hotel Accommodation EC FS GP
KZN LP MP NW NC WC
Grand Total 1
Backpacker & Hostelling 32 4 18
200
268
554 2
Bed & Breakfast
351 71
297
222 43
304 47
185
396
1,916 3
Caravan & Camping
179
157 40
559
Country House 9 72 34 24 90
239 5
Game Lodge 11 8 44
160 6
Guest House
504
181
978
288 99
562
249
214
488
3,563 7
Nature Reserve 16 20 36
Lodge 19
176
308
149
294 75 87
162 98
1,368
Self catering 89
138
141
197
178 63 52
524
1,425
Non-Hotel Accommodation Total
1,013
778
1,822
904
965
1,032
673
645
2,067
9,899 10
Hotel Total
1,652
277
4,035
1,113
264
195
233
2,398
10,352
Accommodation Grand Total
2,665
1,055
5,857
2,017
1,150
1,296
868
878
4,465
20,251
MESE Total (Business Tourism) 13 74 12 17
194
Grand Total Cancelled Rooms
2,705
1,068
5,931
1,162
1,308
885
895
4,474
20,445
Slide no Of the 5,230 graded establishments, 131 are NEW applications that are still in progress

54. South African National Convention Bureau
Slide no.54

55. Business Events and Meetings Market Portfolio
The prioritised markets for business events and meetings are in major decision-making centres where the headquarters of international associations are located. These priority markets (shown below) were identified in terms of:
- Geographic locations or centres where decisions about the staging of major international business events are taken;
- Priority targets within those markets; and
- South Africa’s potential to attract delegates to the country.
Annual Report Page

56. PR, Media and Advertising Capacity Building/ Research
DELIVERABLES
Create a “marketing platform” for local business events industry players through trade shows
Trade Shows
Provide support to regional and/or city convention bureaus (CBs) in bidding for key business events
Bidding Support
Generate maximum delegate attendance at business events
Building Attendance
On-Site Support
Increase awareness about South Africa as a business events destination
PR, Media and Advertising
Develop a co-ordinated approach to generate leads for business events
Lead Development
Create a more professional environment in which more business events will come to South Africa
Capacity Building/ Research
Strategic Goal: Increase the size of SA’s business events industry
Annual Report Page

57. BID SUBMISSION ANALYSIS 2015-2016
53 Submissions
4 Incentives/ Association - Meetings
Number of Delegates:
Number of Conference Days: 242
Estimated Economic Impact: R1.27 billion
BID SUBMISSIONS CITY BREAKDOWN
Cape Town 27
Durban 13
Johannesburg 3
Port Elizabeth 1
Tshwane 2
Incentives 4
National Expressions of Interest
SUBMISSION ANALYSIS
Bids Won 3
Awaiting Outcome 47
Lost Bids
Total Bids Submitted 53
Annual Report Page

58. DELEGATE BOOSTING ACTIVATIONS
Target: 35 Activations
38 Activations
DELEGATES REACHED:

59. ON-SITE EVENT SERVICES
Target: 30 Activations
34 Activations
DELEGATES REACHED:

60. INDABA 2016 SMEs Programme
Slide no. 60

61. INDABA SMEs Programme
The National Department of Tourism introduced the Tourism Incentive Programme (TIP) with the aim of stimulating the development and growth of small and medium-sized enterprises (SMEs). The programme is designed to contribute towards achieving the objectives of the National Development Plan (NDP), the National Tourism Sector Strategy (NTSS) and other government policy documents.
One of the focus areas of the TIP is to improve international market access for tourism enterprises through the Market Access Support Programme. This is in line with one of the key objectives of the Tourism Incentive Programme, which is:
“To drive sales and grow the customer base of small tourism establishments by providing them with better access to tourism buyers and potential guests.”
In order to effectively support the abovementioned objective, South African Tourism embarked on the following programmes at the Tourism INDABA, which took place on 7 – 9 May 2016 at the Inkosi Albert Luthuli Convention Centre (Durban ICC):
New Products & Development Zone
Hosted Local Buyer Programme
Action Adventure Pavilion
Training Programme Support Pre-INDABA
INDABA Readiness Training

62. INDABA SME Programme Hidden Gems Zone
In order to facilitate the market access of SMEs at INDABA, SA Tourism created space for SMEs to exhibit their products. This space, called the Hidden Gems Zone, hosted 50 SMEs selected in partnership with Tourism Enterprise Programme. The selected SMEs had unique products and had already gone through the relevant training to make them exhibition ready.
Action Adventure Pavilion
The objective of having the adventure pavilion at INDABA was to showcase market ready SMEs to the international market. Adventure as an experience, is a key element of the South African Brand for tourism and is desired by most of our core and investment markets. Theming an adventure pavilion created interest and demand of South African adventure products.
The Action Adventure pavilion was in addition to the Hidden Gems Zone, but specifically targeted at 20 Action Adventure SME products.

63. INDABA SME Programme Hosted Local Buyer Programme   
In order to channel business to the SMEs that were exhibiting at INDABA, both at the Hidden Gems Zone and also those that were shared exhibitors in the provincial stands, SA Tourism hosted 86 local buyers.
In total, the Local Hosted Buyers had 928 meetings that were recorded with the SMEs. This amounted to an average of 11 meetings for all the buyers that were hosted that were tracked.

64. Pre and Post Tours
Slide no. 64

65. Meetings Africa 2016 Meetings Africa 2016 Tours NO Tour Destinations
No of Pax 1
KwaZulu-Natal
Post Tour 17 2
Western Cape 65 3
City of Tshwane 30 4
Northern Cape 10 5
Nelson Mandela Bay
Pre Tour 14 6
North-West 7
Gauteng 20

66. INDABA 2016 INDABA 2016 Tours NO Tour Destinations Tour No of Pax 1
Gauteng
Trade and Media Tours 32 2
North-West 3
Limpopo 4
KwaZulu-Natal
103 5
Western Cape 36 6
Eastern Cape 7
Northern Cape 8
Free State 9
Mpumalanga 13

67. Governance Information
Slide no. 67

68. South African Tourism Board
In accordance with the Tourism Act no.3 of 2014, the Minister of Tourism appoints members serving on the Board for a period of three years and consists of nine Non-Executive Directors and includes a representative from the National Department of Tourism.
The Board members fulfil their roles, duties and functions with due regard to the fiduciary responsibilities bestowed on them in line with the Tourism Act and the King III Report on Corporate Governance.
The Board meets quarterly, or more frequently if circumstance require it to do so. The members provide oversight to the executive management by ensuring that all material matters are subject to Board approval. The Board meetings were well attended in the year under review.
A Board Effectiveness Evaluation is conducted on an annual basis.
For the period under review South African Tourism had two Boards, with the first Board’s term ending 31 May The current Board was appointed by the Minister with effect from 1 June 2015 for a period of three years.
Annual Report Page

69. Board Tenure ended 31 May 2015 Special Board Meeting Board Meeting
Special Board Meeting
Board Meeting
NAME
21 April 2015
29 May 2015
Zweli Mntambo (Chairperson) P
Siza Mzimela (Deputy Chairperson )
Ayanda Ntsaluba O
Graham Wood
Dirk van Schalkwyk
Kananelo Makhetha
Thebe Ikalafeng
Tumi Makgabo
Monwabisi Kalawe
Miller Matola

70. Newly Appointed Board from 1 June 2015
Board Induction
Blue Skies Session
Board Lekgotla
Special Board Meeting
Board Meeting
NAME
5-Jun-15
3-Jul-15
4-Mar-16
22-
Jul- 15
23-25 AUGUST 2015
26-
Oct- 9-
Nov- 2-
Dec-
12-
Feb- 16
16-
Mar-
Zweli Mntambo (Chairperson
resigned on 22 October 2015) P
Tanya Abrahamse
(Deputy Chairperson
appointed acting chairperson on 27 October 2015)
Ayanda Ntsaluba O
Graham Wood
Thebe Ikalafeng
Chichi Maponya
Oregan Hoskins
Monhla Hlahla
(resigned on 04 January 2016)
Michelle Constant
Colin Bell
Amor Malan
Judy Nwokedi
Mmaditonki Setwaba
Iraj Abedian
(resigned on 27 July 2015)
Yacoob Abba Omar
(appointed on 19 November 2015)

71. Board Remuneration For the period 1 April 2015 to 31 May 2015
Name
Flights
Accommodation
Car-hire
Remuneration
Total
Zweli Mntambo (Chairperson)
Resigned
22 October 2015 -
Sizakele Mzimela (Deputy Chairperson)
Kananelo Makhetha
Ayanda Ntsaluba
Tumi Makgabo
Dirk Van Schalkwyk
Graham Wood
Thebe Ikalafeng
Miller Matola
Monwabisi Kalawe
 Total

72. Board Remuneration For the period 1 June 2015 to 31 March 2016
Name
Flights
Accommodation
Car-hire
Remuneration
Total
Zwelibanzi Mntambo (Chairperson
Resigned
22 October 2015
82 559.76
Tanya Abrahamse (Deputy Chairperson)
505.98 -
Ayanda Ntsaluba
Graham Wood
28 388.61
6 680.98
32 144.00
Thebe Ikalafeng
97 860.04
11 080.16
6 382.74
47 408.00
Chichi Maponya
5 490.58
588.00
25 256.00
Oregan Hoskins
17 051.90
56 342.38
Monhla Hlahla
Resigned 4 January 2016
28 232.00
Michelle Constant
44 244.00
Colin Bell
24 504.09
3 900.00
2 487.95
63 036.04
Amor Malan
15 774.00
47 918.00
Judy Nwokedi
Appointed 11 May 2015
92 144.88
2 600.00
1 215.04
16 752.00
112 711.92
Mmaditonki Setwaba
Iraj Abedian
Resigned 27 July 2015
4 592.00
Yacoob Abba Omar
Appointed 19 November 2015
18 368.00
 Total
536 735.00
58 317.62
41 198.09
380 436.00
1 016 686.71

73. Report from the Audit and Risk Committee
In line with the PFMA and the King III Report on Corporate Governance, the Internal Audit Unit provides the Audit and Risk Committee and management with the assurance that the internal controls are appropriate and effective.
A formal risk assessment was conducted during the period under review and the top 10 strategic risks affecting the business were identified.
There were no matters reported that indicated any material deficiencies in the systems of internal control or any deviations thereof.
In line with the statutory requirements and Audit Standards, the independence of the Internal Audit Unit has been assessed.
Annual Report Page 88

74. Human Resource Management
Slide no. 74

75. Human Resource Information
The Board-approved structure has 202 positions versus our head count of 173 positions.
South African Tourism works towards maintaining a vacancy rate of below 16.76%.
South African Tourism converted its employees (excluding executives and country managers) from fixed-term contracts to permanent employment with effect from 1 April 2015.
This was in an effort to ensure business continuity, minimise the depletion of institutional memory, increase staff retention and create a sense of belonging among employees.
At the end of March 2016 a staff turnover rate of 11.5% was recorded as a result of employee resignations, an increase on the previous year’s turnover for the same period of 5.85%.
In the year under review, South African Tourism also saw the departure of the CEO, Mr Thulani Nzima.
Annual Report Page

76. South African Tourism Employment Equity Statistics
The employment equity (EE) figures are based on the South African employees at head office and South African country managers based in-country.
While international offices have the promotion of diversity in their labour laws, EE targets do not bind them and South Africa’s EE legislation does not affect them.
For the period of under review, the EE targets for South African Tourism were determined in consideration of EE legislation, and the economically active population (EAP) profile for Gauteng as a guideline.
In South Africa, 67.63% of South African Tourism staff are locally recruited. The figures below are based on the South African employees at the Head Office and South African country managers based in-country offices.
Annual Report Page 97

77. Audited Statement Of Financial Performance For 2015/16
Slide no. 77

78. Financial Performance in 2015/16
The two main sources of income for South African Tourism are income from the NDT (R977.7 million) and the TBCSA (R123.2 million). These two revenue streams contribute 92% to South African Tourism’s total income.
The remaining 8% derives from interest income (R11.9 million), grading income (R18.4 million) and sundry income of R81.5 million.
Sundry income comprises income from exhibitions such as INDABA and Meetings Africa.
Annual Report Page
Slide no.78

79. Financial Performance in 2015/16
An audited amount of R982 million was spent on marketing expenses during the 2015/16 financial year. This represents South African Tourism’s highest cost. The balance of R100 million received during the financial year for domestic marketing.
Employee costs made up 13% of total expenses, including salaries and cost-of-living allowances for locally recruited international staff members.
Slide no.79
Annual Report Page

80. Financial Performance against Budget in 2015/16
Objective
Budget
Actual Expenditure
(Over) / Under Expenditure
R'000
Administration
(7 655)
Contribute to the growth of international tourist arrivals in South Africa
(11 842)
Increase domestic tourism in South Africa
(590)
Increase tourism trended revenue contribution
to the economy
Marketing Increase South Africa brand awareness*
(40 672)
Provide quality assurance for tourism products
48 425
34 528
13 897
Increase business events
33 700
57 613
(23 913)
Total
(82 617)
*South African Tourism’s global media budget is included in this figure and includes global media platforms such as CNN, BBC and National Geographic
Slide no. 80

81. Audited Financial Performance in 2015/16
South African Tourism is proud of maintaining its clean audit status as reported by the Auditor-General.
The audited financial results show an operating deficit of R46.7 million, which was fully offset by unrealised exchange foreign gains of R62.3 million.
The audited surplus for the financial year was R15.6 million.
Annual Report Page
Slide no. 81

82. Abbreviations and Acronyms
AGSA Auditor-General of South Africa
APP Annual Performance Plan
CPI Consumer Price Index
CPIX Consumer Price Index (excluding mortgage costs)
DMC Destination Management Companies
DTGS Domestic Tourism Growth Strategy
ICCA International Congress and Convention Association
JMA’s Joint Marketing Agreements
MICE Meetings, Incentives, Conventions and Events
MESE Meetings, Exhibitions and Special Events
NAA National Association of Accommodation
OD Organisational Development Review Project
PCO Professional Conference Organisers
PTA Provincial Tourism Agency
ROI Return on Investment
TDDS Total Domestic Direct Spend
TIP Tourism Incentive Programme
TOMSA Tourism Marketing South Africa
TTFDS Total Tourist Foreign Direct Spend
UNWTO United Nations World Travel Organisation
VFC Visa Facilitation Centre
VFM Value for Money
VFR Visiting Friends and Relatives
Slide no.82

83. THANK YOU
Slide no.83