PRESENTATION TO THE PORTFOLIO COMMITTEE ON TOURISM ORGANISATIONAL PERFORMANCE RESULTS QUARTER 2 & 3: 2017/18 7 March 2018.

PRESENTATION TO THE PORTFOLIO COMMITTEE ON TOURISM ORGANISATIONAL PERFORMANCE RESULTS QUARTER 2 & 3: /18 7 March 2018

Table of Contents Situational Analysis (Slide 2)
Key Focus Areas for SA Tourism in 2017/18 (slides 3 to 5) Organisational Performance against Annual Performance Plan: (Slides 7 to 25) Programme 1 - Corporate Support Programme 2 - Business Enablement Programme 3 - Leisure Tourism Marketing Programme 4 - Business Events Programme 5 - Visitor Experience Financial Performance (slides 26 to 31) Human Capital Update (slides 32 to 37) Governance Information (slides 38 to 41) Acronyms (slide 42)

Situational Analysis (October to December 2017)
July to September 2017: Gross Domestic Product (GDP) took a positive turn in this period, growing by 2.5% (quarter-on-quarter), primarily driven by 33% growth in the agricultural sector. Unemployment continued to rise during the same period, growing to 27.7%, leaving consumers cash-strapped with limited/no income in spite of the economic growth experienced. Spending on non-essentials such as travel continues to be under threat (as seen among VFR tourists). October to December 2017: According to the FNB/BER Consumer Confidence Index, consumer confidence remains low at - 8 having improved slightly from April - June 2017 which was - 9. While consumers are slightly more positive on the outlook of the domestic economy, there is a poor outlook on their own financial position. According to FNB/BER, low consumer confidence levels point to a low willingness to spend among consumers. Unemployment declined slightly in this quarter, from 27.7% to 26.7%. There has been increases in employment in the informal sector (4.4%) and the agricultural sector (4.8%). Despite the improvement, unemployment still remains high. Keeping in mind that one income in SA typically supports four to ten people, job losses have a far reaching effect especially on discretionary items including travel. The Rand strengthened by 8.3% against the US Dollar in December following the ANC Elective Conference. According to the South African Chamber of Commerce, business confidence also improved steadily from October 2017 to December 2017 due to the political developments. Article on Fin24: “Rand in for a bumpy ride on key economic events” 16 Jan. 2018

Key Focus Areas for SA Tourism in 2017/18

Leisure Tourism Marketing: Key Focus Areas for 2017/18
Drive volume and value through strategic partnerships. Influence transformation through partnerships agreements by introducing new experiences into the itineraries and showcasing hidden gems and a variety of tourism offerings South Africa has to offer, particularly in emerging markets such the Nordics and Middle East. During off-peak seasons and in cases of low forward bookings to South Africa, to collaborate with trade to package affordable deals to improve seasonality. Collaborate with Provincial Tourism Authorities to immerse and educate Trade and Media about new experiences and offerings across different provinces in South Africa using hosting, familiarisation trips and SA Specialist. Maximise resources and global footprint, South African Tourism by leveraging on DIRCO’s infrastructure to promote tourism. Partner with trade, media and Team South Africa (SAA, Brand South Africa, etc.) in order to ensure that South Africa is marketed in a manner that enhances the brand and traveller experience. Promote a unified brand by developing global tool kits, virtual training through SA Specialist, Trip Planners among other things to enable countries to customise for their markets. Identify barriers to entry and collaborate with NDT to address barrier removal – visa processing, airlift, immigration regulations etc.

Business Events: Key Focus Areas for 2017/18
Develop an aggressive and coordinated approach to developing leads for business events - executed in conjunction with the provincial and city Convention Bureaus and the broader business events industry in South Africa. Promote and incentivise hosting of conferences and incentives in the secondary cities. Support and capacitate provincial and city convention bureaus through regular engagements in the business events coordinating forum. Address geographic spread through the pre and post Meetings Africa and Indaba tours conducted to immerse international, regional and domestic buyers and media into smaller towns and alternative products.

Grading Council: Key Focus Areas for 2017/18
Understand needs around quality assurance in light of a pervasive traveller review landscape and allow consumer needs and insights to drive expansion while considering global best practice. Improvement of reputation through regular trade engagements and consumer campaigns. Focus and emphasis on the eradication of the illegal use of stars to drive trade and consumer confidence. Partnering with members to drive their profitability by growing and sustaining their quality of business, i.e.. our value. Leverage access and participation to SA Tourism platforms as well as information and market data for our members. Position the TGSCA brand as a holistic assessment of quality and service offering by graded establishments using Tourism Analytics Programme (TAP).

Organisational Performance Overview by Programme

2017/18 Organisational Performance Results – Quarter 2 & 3
Strategic Objective Six: To achieve operational efficiencies in all activities, including human, marketing and other resources available to South African Tourism. Programme Key Performance Indicator Annual Target Quarterly Target Progress/Achievements Reasons for deviation Programme 1: Corporate Support Staff satisfaction score 3.8 N/A Annual target - not due for reporting. The next survey is scheduled to be conducted in February 2017. No deviation. Percentage Staff turnover maintained 7% Annual target - not due for reporting. SA Tourism has achieved a 0.6% staff turnover in Q2 and 1.1% staff turnover in Q3. Percentage Vacancy rate maintained Annual target - not due for reporting. SA Tourism has achieved a vacancy rate of 20% (41 vacancies out of 202) as at the end of Q2 and 15.35% (31 vacancies out of 202) as at the end of Q3, recruitment is underway to fill the remainder of the vacancies. During the organisational design (OD) project, fixed term contractors were used to ensure business continuity and reduced contractual obligations arising from permanent employment. Percentage implementation of Work Skills Plan 100% SA Tourism tracks performance on the Work Skills Plan and 50% has been implemented thus far for Q2. For Q3, the submitted WSP is tracking well. However due to the skills audit following OD, the submitted WSP will be augmented to align with the outcomes of the skills audit. PDP Development and implementation in progress.

Strategic Objective Six: To achieve operational efficiencies in all activities, including human, marketing and other resources available to South African Tourism. Programme Key Performance Indicator Annual Target Quarterly Target Progress/ Achievements Reasons for deviation Programme 1: Corporate Support Percentage representation of employees with a disability 1% N/A Annual target - not due for reporting. SA Tourism tracks performance on percentage representation of employees with a disability. SA Tourism has achieved 0.6% representation in Q2 and 1.2% representation in Q3. No deviation. Percentage staff migration from old to new structure 100% Q1: 30% Q1: 90% Q2: 50% Q2: 152 out of the 155 (98%) permanent employees were directly or alternately placed in the new organisational structure. At the end of the quarter only three employees were in the talent pool. Q3: 70% Q3: 169 out of the 171 (99%) permanent employees were directly or alternately placed in the new organisational structure. At the end of the quarter only two employees were in the talent pool during the period under review. Contract employees and internships were excluded from this process. Q4: 100%

Strategic Objective Six: To achieve operational efficiencies in all activities, including human, marketing and other resources available to South African Tourism. Programme Key Performance Indicator Annual Target Quarterly Target Progress/Achievements Reasons for deviation Programme 1: Corporate Support Unqualified audit achieved Unqualified Audit Q1: Submission of the: - Annual Financial Statements, Performance Information Report, Corporate Governance Report for 2016/17 to the Auditor-General, National Treasury and NDT Q1: The Annual Financial Statements, Annual Performance Information Report and the Corporate Governance Report were submitted to AGSA, National Treasury and NDT on 31 May 2017 in line with the statutory requirements. No deviation. Q2: Unqualified Audit Q2: SA Tourism received an unqualified audit by the AGSA for the 2016/17 Annual Report. Q3: Monitoring compliance with PFMA Q3: Achieved, consistent monitoring through out the reporting period. No non compliance matters were identified Q4: Monitoring compliance with PFMA Percentage of spend from B- BBEE compliant suppliers 75% N/A Annual target - not due for reporting. Q2: 80% B-BBEE Procurement Spend was achieved Q3: 80% B-BBEE Procurement Spend was achieved

Strategic Objective Three: To enhance stakeholder and partnership collaboration to better deliver on South African Tourism’s mandate Programme Key Performance Indicator Annual Target Quarterly Target Progress/ Achievements Reasons for deviation Programme 2: Business Enablement Stakeholder satisfaction score achieved Maintain stakeholder satisfaction score Q1: Develop improvement plan for areas that require improvement Q1: The stakeholder satisfaction survey was launched in quarter one in order to determine a baseline. Q2: Implement improvement plan Q2: SA Tourism scored 3.9 on the stakeholder satisfaction survey. SA Tourism had already started implementing the improvement plan through engagements with stakeholders via webinars and Provincial Roadshows. Q3: Stakeholder AGM Q3: Provincial engagements and Roadshows were prioritised in lieu of a stakeholder AGM. The next AGM will be at the end of the financial year. Q4: Set percentage improvement on the baseline Trade webinars conducted 10 Trade webinars conducted Q1: 3 No deviation. Q2: 3 Q2: 3 The three trade webinars were held in July, August and September Q3: 2 Q3: 2 The two trade webinars were held in October and November Q4: 2

Strategic Objective Three: To enhance stakeholder and partnership collaboration to better deliver on South African Tourism’s mandate Programme Key Performance Indicator Annual Target Quarterly Target Progress/ Achievements Reasons for deviation Programme 2: Business Enablement Approved Tourism Growth Strategy Q1: Produce Draft Tourism Growth Strategy Q1: The draft Tourism Growth Strategy has been approved by Exco. Awaiting Board approval at the Board Lekgotla. No deviation. Q2: Conduct stakeholder engagement sessions Q2:The stakeholders were engaged through the Provincial Roadshows and the strategy has been documented and accepted. The draft Tourism Growth Strategy has been completed and approved by Board at the Board Lekgotla in September 2017. Q3: Approved Tourism Growth Strategy Q3: Tourism Growth Strategy approved in Q2 at the Board Lekgotla. Q4: Implement Tourism Growth Strategy

Strategic Objective Three: To enhance stakeholder and partnership collaboration to better deliver on South African Tourism’s mandate Strategic Objective Five: To position South African Tourism’s corporate brand to be recognised as a tourism and business events industry leader in market intelligence, insights and analytics Programme Key Performance Indicator Annual Target Quarterly Target Progress/ Achievements Reasons for deviation Programme 2: Business Enablement Number of strategic reports approved 7 strategic reports approved: 2018/2022 Strategic Plan; 2018/19 APP; 2016/17 Annual Report including Annual Financial Statements; 4 Quarterly performance reports Q1: - First Draft 2016/17 Annual Report including Annual Financial Statements; Quarter 4 performance report Q1: The Annual Financial Statements, Annual Performance Information Report and the Corporate Governance Report were submitted to AGSA, National Treasury and NDT on 31 May 2017 in line with the statutory requirements. No deviation. Q2: First draft 2018/2022 Strategic Plan; First draft 2018/19 APP; Final 2016/17 Annual Report including Annual Financial Statements; Quarter 1 performance report Q2: The first draft 2018/19 APP, Final 2016/17 Annual Report and Quarter 1 Performance Report were submitted by their respective statutory deadlines. Q3: Second Draft 2018/2022 Strategic Plan; Second Draft 2018/19 APP; Quarter 2 performance report Q3: The second draft 2018/19 APP and Quarter 2 Performance Report were submitted by their respective statutory deadlines. Q4: Final 2018/2022 Strategic Plan; Final 2018/19 APP; Quarter 3 performance report

Strategic Objective Three: To enhance stakeholder and partnership collaboration to better deliver on South African Tourism’s mandate Strategic Objective Five: To position South African Tourism’s corporate brand to be recognised as a tourism and business events industry leader in market intelligence, insights and analytics Programme Key Performance Indicator Annual Target Quarterly Target Progress/Achievements Reasons for deviation Programme 2: Business Enablement Number of market intelligence reports produced 7 market intelligence reports: 4 quarterly Tourism industry performance analysis reports (South African Tourism index); 1 annual Tourism industry performance analysis reports (South African Tourism index); 2 Global Brand Tracker reports Q1: 2016/17 Quarter 4 Tourism industry performance analysis report delivered Q1: The quarter 4 report has been consolidated with the annual report. No deviation Q2: 2017/18 Quarter 1 Tourism industry performance analysis report delivered Q2: The first draft 2018/19 APP, Final 2016/17 Annual Report and Quarter 1 Performance Report were submitted by their respective statutory deadlines. Q3: 2017/18 Quarter 2 Tourism industry performance analysis report delivered; 1 Global Brand Tracker report (November wave) Q3: The second draft 2018/19 APP, Final 2016/17 Annual Report and Quarter 2 Performance Report were submitted by their respective statutory deadlines. November wave Brand Tracker report was delivered Q4: 2017/18 Quarter 3 Tourism industry performance analysis report delivered; 1 Global Brand Tracker report (February wave)

Strategic Objective One: To contribute to inclusive economic growth by increasing the number of international and domestic tourists Programme Key Performance Indicator Annual Target Quarterly Target Progress/Achievements Reasons for deviation Programme 3: Leisure Tourism Marketing Number of international tourist arrivals achieved (millions) Calendar Year: 10.9m Calendar Year YTD (Jan to Sep): 8.1m Calendar Year YTD (Jan to Sep): 7.5m Q1: 2.7m Q1:2.6m Q2: 2.9m Q2: 2.4m Q2: There was a 1% year-on-year increase in tourist arrivals. This was mainly driven by: Safety and security concerns in China; Visa processing issues in China and India; Recession in Namibia; Foreign currency restrictions in Nigeria; and Unstable political climate in the DRC, among others. It is envisaged that Quarter 3 results will improve due to: Media and trade exposure (hostings, B2B meetings as well as pre-and-post tours) from Indaba; and use of digital/social media, PR, hosting and partnering with key influencers to address barriers. Q3: 2.5m Q3: Target achieved. The growth in this quarter was driven by Africa-land markets (+4.2%), the Americas (+12.8%) and Europe (+9.3%). There has been an increase in holiday tourists in this quarter from these regions. The northern hemisphere summer season which is the major period for outbound travel falls within this quarter and supports the growth in holiday tourists. Q4: 2.8m Financial Year: 11.1m Financial Year: YTD (Apr to Dec): 8.2m Financial Year YTD (Apr to Dec): 7.6m Q1: 2.5m Q1: 2.4m Q2: 2.7m Q2: 2.5m Q3: 3.0m Q3: 2.7m* Q4: 2.9m *Note: Latest international tourist arrivals statistics released by StatsSA on 21 February 2018 has been included in this report.

Strategic Objective One: To contribute to inclusive economic growth by increasing the number of international and domestic tourists Programme Key Performance Indicator Annual Target Quarterly Target Progress/Achievements Reasons for deviation Programme 3: Leisure Tourism Marketing Total tourist foreign direct spend (TTFDS) (R billion) Calendar Year R80.3b Calendar Year YTD (Jan to Sep): R 58.5b Calendar Year YTD (Jan to Sep): R 56.6b Q1: R 19.6b Q1: R19.0b Q2: R 19.3b Q2: 17.6b Q2: Target not achieved as there was a 2.0% year-on-year decrease in average spend. Some markets showed a decline in tourism revenue due to: unstable political climate in the DRC; reduced disposable income due to increased property prices in China; and markets such as Angola and Nigeria faced forex restrictions. Q3: R 19.6b Q3: 20.0b Q3: Target for this quarter was exceeded. The increase in revenue recorded in this quarter is supported by the increase in the volume of tourist arrivals overall as well as an increase in average spend per trip. Q4: R 21.8b Financial Year R86.5b Financial Year YTD (Apr – Sep 2017): R40.9b Financial Year YTD (Apr – Sep 2017): R37.6b Q1: R17.6b Q2: R21.3b Q2: R20.0b Q3: R 23.7b Q3: Data not yet available

Strategic Objective One: To contribute to inclusive economic growth by increasing the number of international and domestic tourists Strategic Objective Two: To contribute to an enhanced, recognised, appealing, resilient and competitive tourism and business events brand for South Africa across the target markets and segments Programme Key Performance Indicator Annual Target Quarterly Target Progress/Achievements Reasons for deviation Programme 3: Leisure Tourism Marketing Percentage geographic spread of international tourist arrivals achieved Set percentage improvement on the baseline Q1: Develop methodology for target setting Q1: The methodology for target-setting has been developed No deviation. Q2: Internal stakeholder engagement and approval Q2: SA Tourism has agreed with Provincial Tourism Agencies on their contribution to 5-in-5 by setting provincial targets Q3: External stakeholder engagement and approval Q3: External stakeholder engagement was done through Provincial Roadshows in 2017. Q4: Set percentage improvement on the baseline

Strategic Objective One: To contribute to inclusive economic growth by increasing the number of international and domestic tourists Strategic Objective Two: To contribute to an enhanced, recognised, appealing, resilient and competitive tourism and business events brand for South Africa across the target markets and segments Programme Key Performance Indicator Annual Target Quarterly Target Progress/ Achievements Reasons for deviation Programme 3: Leisure Tourism Marketing Percentage seasonality of international tourist arrivals achieved Set percentage improvement on the baseline Q1: Develop methodology for target setting Q1: Research is underway for the development of the target-setting methodology Q2: Internal stakeholder engagement and approval Q2: Stakeholders have been engaged to develop & agree on target-setting methodology. Q2: Work is still underway to develop the methodology and the revised timeline for completion is Q4. Q3: External stakeholder engagement and approval Q3: Engagement and approval is still underway as the inputs received is being factored into the approach to improve seasonality. Q3: Target not achieved as methodology development is being finalised. Q4: Set percentage improvement on the baseline

Strategic Objective One: To contribute to inclusive economic growth by increasing the number of international and domestic tourists Strategic Objective Two: To contribute to an enhanced, recognised, appealing, resilient and competitive tourism and business events brand for South Africa across the target markets and segments Programme Key Performance Indicator Annual Target Quarterly Target Progress/Achievements Reasons for deviation Programme 3: Leisure Tourism Marketing Percentage brand positivity achieved 40% N/ A Annual target – not due for reporting. Brand positivity is measured twice per annum. Brand positivity will be reported from the November and February Brand Tracker waves. No deviation. Percentage brand awareness achieved 80% N/A Annual target – not due for reporting. Brand awareness is measured twice per annum. Brand awareness will be reported from the November and February Brand Tracker waves.

2017/18 Organisational Performance Results – Quarter 2 &3
Strategic Objective One: To contribute to inclusive economic growth by increasing the number of international and domestic tourists Strategic Objective Two: To contribute to an enhanced, recognised, appealing, resilient and competitive tourism and business events brand for South Africa across the target markets and segments Programme Key Performance Indicator Annual Target Quarterly Target Progress/Achievements Reasons for deviation Programme 3: Leisure Tourism Marketing Number of total domestic trips (millions) achieved Calendar Year: 24.9m Calendar Year YTD (Jan – Sep 2017): 15.5m Calendar Year YTD (Jan – Sep 2017): 11.9 Financial Year: 25.1m Q1: 6.1m Q1: 4.4 Q2: 4.9m Q2: 4.8 Q2: The decline was caused by the decrease in VFR trips. The unemployment rate which remained at its ultimate high of 27.7% in Q2 and total earnings paid to employees also declined by R2 billion (-0.4%) to R586 billion in June. This led to a reduction in disposable income which impacts spend on discretionary items such as travel. Q3: 4.5m Q3: 2.7 Q3:Target not met. A 39% decline in total domestic trips was recorded in this quarter driven by a 48% decrease in VFR trips. Affordability remains the biggest barrier to travel. Consumer confidence in South Africa declined in the second half of 2017 on the back of South Africans concerns of the future outlook of the economy. Food prices remain high, especially for low-income households, which is where a fair share of the VFR market sits. The negative impact of personal disposable income, high rate of unemployment and poor economic growth has forced consumers to reevaluate their household expenditure. Q4: 9.4m Financial Year YTD (Apr - Sep 2017): 5.6m Financial Year YTD (Apr – Sep 2017): 4.8m Q1: 5.6m Q1: 4.8m Q2: 4.6m Q2: 2.7m Q3: 7.3m Q3: Data not yet available Q4: 7.5m

Strategic Objective One: To contribute to inclusive economic growth by increasing the number of international and domestic tourists Strategic Objective Two: To contribute to an enhanced, recognised, appealing, resilient and competitive tourism and business events brand for South Africa across the target markets and segments Programme Key Performance Indicator Annual Target Quarterly Target Progress/Achievements Reasons for deviation Programme 3: Leisure Tourism Marketing Number of domestic holiday trips achieved Calendar Year: Calendar Year YTD (Jan - Sep 2017): Calendar Year YTD (Jan – Sep): Q1: Q1: Q2: Q2: Q2: Target exceeded due to marketing activities to promote deals to increase travel during Easter and several long weekends in Q2, resulting in the percentage share of holiday trips increasing from 11% to 15% of the total domestic trips. Q3: Q3: Q3: While the prevailing economic condition has resulted in not meeting the quarterly target, there was an 11% increase in domestic holiday trips in this quarter compared to the same period in The biggest barrier to domestic travel is affordability and the low consumer confidence has dampened consumer spend in the first half of South Africans spending behaviour in the first half of 2017 has demonstrated cost-cutting and a higher propensity towards savings. Domestic holiday travel is a discretionary expense and the poor economic outlook impacts performance. Q4: Financial Year: Financial Year YTD (Apr - Sep 2017): Financial Year YTD (Apr- Sep 2017): Q1: Q1: Q2: Q2: Q3: Q3: Data not yet available Q4:

Strategic Objective One: To contribute to inclusive economic growth by increasing the number of international and domestic tourists Strategic Objective Two: To contribute to an enhanced, recognised, appealing, resilient and competitive tourism and business events brand for South Africa across the target markets and segments Programme Key Performance Indicator Annual Target Quarterly Target Progress/Achievements Reasons for deviation Programme 3: Leisure Tourism Marketing Total domestic direct spend (TDDS) (billion rand) Calendar Year: R24.6b Calendar Year YTD (Jan to Sep) : R15.5b Calendar Year YTD (Jan to Sep): R14.7b Q1: R6.1b Q1:R5.4b Q2: R4.9b Q2: R6.4b Q2 target exceeded due to marketing activities to promote deals during Easter and several long weekends were in Q2, which resulted in an increase in holiday travel and spend. Q3: R4.5b Q3: R2.9b Q3: Quarterly target was not met due to the decrease in the volume of total domestic trips in this quarter. We did, however, note an increase in average spend per trip (in nominal terms) and coupled with a shorter length of stay, we have seen an increase in the spend per day. Prevailing poor economic conditions have impacted consumer confidence and household spend on discretionary items as food and fuel prices have increased. Q4: R9.3b Financial Year: R24.8b Financial Year YTD (Apr to Sep):R9.6b Financial Year: YTD (Apr to Sep): R9.3b Q1:R6.2b Q1: R6.4b Q2:R3.4b Q2: R2.9b Q3:R7.4b Q3: Data not yet available Q4:R8.5b

Strategic Objective One: To contribute to inclusive economic growth by increasing the number of international and domestic tourists Strategic Objective Two: To contribute to an enhanced, recognised, appealing, resilient and competitive tourism and business events brand for South Africa across the target markets and segments Programme Key Performance Indicator Annual Target Quarterly Target Progress/Achievements Reasons for deviation Programme 3: Leisure Tourism Marketing Domestic holiday revenue (billion rand) Calendar Year: R7.6b Calendar Year YTD (Jan – Sep): R5.3b Calendar Year YTD (Jan – Sep): R4.8b Q1: R1.5b Q1: R2.2b Q2: R1.7b Q2: R1.9b Q2: Target exceeded due to 19% increase in holiday trip revenue from R1.6 billion in 2016 to R1.9 billion in This increase was mainly driven by the increase in holiday trips. Q3: R2.1b Q3: R0.7b Q3:Target not achieved. Prevailing poor economic conditions have impacted consumer confidence and household spend on discretionary items as food and fuel prices have increased. While there was an increase in the number of domestic holiday trips, there was a decrease in the average spend and length of stay per trip. South Africans who took a holiday trip this quarter have adapted their travel behaviour by compromising on the length of the holiday and its cost rather than not taking a holiday. Q4: R2.3b Financial Year: R7.8b Financial Year YTD (Apr-Sep 2017): R2.9b Financial Year YTD (Apr-Sep 2017): R1.9b Q1:R1.9b Q1: R1.9b Q2:R1.0b Q2: R0.7b Q3:R2.3b Q3: : Data not yet available Q4:R2.6b

Strategic Objective One: To contribute to inclusive economic growth by increasing the number of international and domestic tourists Strategic Objective Two: To contribute to an enhanced, recognised, appealing, resilient and competitive tourism and business events brand for South Africa across the target markets and segments Programme Key Performance Indicator Annual Target Quarterly Target Progress/Achievements Reasons for deviation Programme 3: Leisure Tourism Marketing Percentage geographic spread of domestic tourists achieved Set percentage improvement on the baseline Q1: Develop methodology for target setting Q1: The methodology for target-setting has been developed No deviation. Q2: Internal stakeholder engagement and approval Q2: SA Tourism has agreed with Provincial Tourism Agencies on their contribution to 5-in-5 by setting provincial targets Q3: External stakeholder engagement and approval Q3: External stakeholder engagement was done through Provincial Roadshows in 2017. Q4: Set percentage improvement on the baseline

Strategic Objective One: To contribute to inclusive economic growth by increasing the number of international and domestic tourists Strategic Objective Two: To contribute to an enhanced, recognised, appealing, resilient and competitive tourism and business events brand for South Africa across the target markets and segments Programme Key Performance Indicator Annual Target Quarterly Target Progress/ Achievements Reasons for deviation Programme 3: Leisure Tourism Marketing Percentage seasonality of domestic tourists achieved Set percentage improvement on the baseline Q1: Develop methodology for target setting Q1: Research is underway for the development of the target-setting methodology. Q2: Internal stakeholder engagement and approval Q2: Stakeholders have been engaged to develop & agree on target-setting methodology. Q2: Work is still underway to develop the methodology and the revised timeline for completion is Q4. Q3: External stakeholder engagement and approval Q3: Engagement and approval is still underway as the inputs received as being factored into the approach to improve seasonality. Q3: Target not achieved as methodology development is being finalised. Q4: Set percentage improvement on the baseline

Strategic Objective One: To contribute to inclusive economic growth by increasing the number of international and domestic tourists Strategic Objective Two: To contribute to an enhanced, recognised, appealing, resilient and competitive tourism and business events brand for South Africa across the target markets and segments Programme Key Performance Indicator Annual Target Quarterly Target Progress/ Achievements Reasons for deviation Programme 4: Business Events Number of business events hosted in South Africa 145 N/A Annual target – not due for reporting. No deviation. Q2: SA Tourism recorded 83 (57%) business events hosted - 42 in Western Cape, 20 in Gauteng, 12 in KZN, 2 in Mpumalanga, 1 Free State and 4 Eastern Cape amongst others. Q3: SA Tourism recorded 120 (82%) business events hosted. Data collection process is on-going and will be completed in March 2018. Number of international delegates hosted in South Africa 81 678 Q2: SA Tourism recorded (75%) business delegates hosted. Q3: SA Tourism recorded (84%) business delegates hosted. Data collection process is on-going and will be completed in March 2018.

Strategic Objective One: To contribute to inclusive economic growth by increasing the number of international and domestic tourists Strategic Objective Two: To contribute to an enhanced, recognised, appealing, resilient and competitive tourism and business events brand for South Africa across the target markets and segments Programme Key Performance Indicator Annual Target Quarterly Target Progress/Achievements Reasons for deviation Programme 4: Business Events Number of bids supported for international and regional business events 58 YTD (Apr - Sep 2017): 44 YTD (Apr - Sep 2017): 58 Q1: 16 Q1: 26 The SANCB already reached the set target for the financial year. Q2: 14 Q2: 23 Q3: 14 Q3: 9 Q4: 14

2017/18 Organisational Performance Results – Quarter 2 &3
Strategic Objective Two: To contribute to an enhanced, recognised, appealing, resilient and competitive tourism and business events brand for South Africa across the target markets and segments Programme Key Performance Indicator Annual Target Quarterly Target Progress/Achievements Reasons for deviation Programme 4: Business Events Number of market access platforms that South African Tourism manages 2 Market access platforms: Tourism Indaba; Meetings Africa Q1: 2017 Tourism Indaba Tourism INDABA was delivered on time (16-18 May 2017) and within budget No Deviation. Q4: 2018 Meetings Africa Number of international tourism market access platforms where South Africa participates 6 Q1: 1 No deviation. Q2: 1 Q2: 1 South African Tourism participated at IBTM China which took place in August 2017. Q3: 3 Q3: 3 Target achieved. SA Tourism participated at IMEX America, WTM London, IBTM World (Barcelona, Spain) completed in quarter 3. Q4: 1 Number of Provincial signature events supported 11 N/A Annual target – not due for reporting. Though no quarterly target has been set, SA Tourism tracks the number of Provincial signature events supported. SA Tourism supported approximately 15 signature events from April to September 2017.

Strategy Objective Four: To contribute to an improved tourist experience in line with the brand promise. Programme Key Performance Indicator Annual Target Quarterly Target Progress/Achievements Reasons for deviation Programme 5: Tourist Experience Number of graded accommodation establishments achieved 5 932 YTD (Apr - Sep 2017): 2 821 YTD (Apr - Sep 2017): 2 361 Q1: 1 376 Q1: 1 190 Q2: 1 445 Q2: 1 171 Target not achieved due to 339 cancellations in Q2. Q3: 1 517 Q3: 1 218 Target not achieved due to 328 cancellations in Q3. SA Tourism continues to strengthen the value proposition to be compelling for grading. Sales drive and supporting marketing campaign in place to assist new and renewal memberships. There is a growing trend in SME Properties where properties are closing, converting back to family residences and listing on AirBnB and failing to see Grading as a commercial benefit. NDT has already been engaged on Home sharing policy in order to curb this trend. Q4: 1 594

Strategy Objective Four: To contribute to an improved tourist experience in line with the brand promise. Programme Key Performance Indicator Annual Target Quarterly Target Progress/Achievements Reasons for deviation Programme 5: Tourist Experience Number of graded rooms achieved YTD (Apr - Dec 2017): YTD (Apr - Sep 2017): Q1: Q1: Q2: Q2: Q2: Target not achieved due to 339 cancellations of establishments in quarter two consisting of 3987 rooms. Of the 339 establishments cancelled, 18 were hotels. It is envisaged that the introduction of the new National Travel Procurement Framework by National Treasury from 01 October 2017 will have a positive impact on graded numbers. TGCSA is working with National Treasury on a project which will see the NT Central Supplier Database updated with Graded Establishments for use of State Officials. Q3: Q3: Q3:Target not achieved due to 328 cancellations in quarter three. SA Tourism continues to strengthen the value proposition to be compelling for grading. Q4:

Finance

BUDGETED AND ACTUAL REVENUE REVIEW AS AT 30 SEPTEMBER 2017 PER PROGRAMME
AENE BUDGET R'000 ADJUSTMENT ADJUSTED AENE BUDGET R'000 PLANNED INCOME BY 30 SEP 2017 R'000 REVENUE R'000 % OF ACTUAL INCOME ON AENE BUDGET % OF ACTUAL INCOME ON PLANNED INCOME TO DATE REASONS FOR VARIANCE 1 Government grant 1,134,288 826,161 826,160 73% 100% 2 TOMSA levies 124,586 62,293 73,019 59% 117% SA Tourism received additional funds from Tourism Business Council of South Africa in line with collaborative funding MOU. R10.9million received to date 3 Indaba and Meetings Africa 63,391 41,445 38,000 60% 92% Preliminary INDABA 2017 revenue figures.Actual revenue figures will be available post internal audit review 4 Grading fees 21,344 10,672 10,273 48% 96% 5 Sundry revenue* 20,000 9,455 29,455 19,455 18,440 95% Sundry income due to 5% lower than budgeted interest income TOTAL 1,363,609 1,373,064 960,026 965,892 71% 101% * R9.5 million income received in advance recognised in the 2nd quarter for Indaba Hidden Gems

BUDGET AND EXPENDITURE REVIEW AS AT 30 SEPTEMBER 2017 PER PROGRAMME
AENE BUDGET R'000 ADJUSTMENT ADJUSTED AENE BUDGET R'000 PLANNED EXPENDITURE BY 30 SEP 2017 R'000 EXPENDITURE R'000 % OF ACTUAL EXPENDITURE ON AENE BUDGET % OF ACTUAL EXPENDITURE ON PLANNED INCOME TO DATE REASONS FOR VARIANCE 1 Corporate Support 99,361 58,973 59,097 59% 100% 2 Business Enablement 87,561 47,072 60,780 69% 129% 29% variance is due to upfront investments in strategic research and insights projects 3 Leisure Tourism Marketing 1,007,079 559,372 530,687 53% 95% 5% variance mainly due to change in marketing tactical approach given the extensive research and insights undertook in Q1, funds are to be utilised in the remaining quarters of the year 4 Business Events 107,467 9,455 116,922 90,991 88,732 83% 98% 2% variance due to nature of SANCB subvention funding and bid support, which are committed upfront and based on opportunities which arise 5 Visitor Experience 62,141 37,832 25,668 41% 68% TGCSA planned much of spending around marketing and socialisation of the new grading criteria. This can only be done once approval of new grading criteria has been granted TOTAL 1,363,609 1,373,064 794,240 764,964 56% 96% Included in programme 4: Leisure Tourism Marketing is investment in domestic marketing with annual budget of R ; YTD Budget: R ; YTD Actual: R i.e. 122% of planned year to date budget.

PLANNED Q2 EXPENDITURE BY 30 SEP 2017 R'000
BUDGET AND EXPENDITURE REVIEW AS AT 30 SEPTEMBER 2017 PER ECONOMIC CLASSIFICATION ECONOMIC CLASSIFICATION AENE BUDGET R'000 ADJUSTMENT ADJUSTED AENE BUDGET R'000 PLANNED Q2 EXPENDITURE BY 30 SEP 2017 R'000 Q2 EXPENDITURE R'000 % OF ACTUAL EXPENDITURE ON ADJUSTED AENE BUDGET % OF EXPENDITURE ON PLANNED EXPENDITURE TO DATE REASONS FOR VARIANCE Current Spending 1,340,757 30,320 1,350,212 784,182 751,724 56% 96% Compensation of Employees* 163,752 193,982 82,345 81,150 42% 99% SA Tourism expenditure on employee costs was within budgeted thresholds Good and Services: ex capex 1,177,005 1,156,230 701,837 670,574 58% Graphical breakdown of Goods and Services is included in the next slide Capital Assets 22,852 10,058.23 13,240 132% Building and other Fixtures No procurement during Q2 Machinery and Equipment 10,698 1,524.57 337 3% 22% Limited procurement due to planned Office space planning Software and other intangibles 12,153 8,534 12,903 106% 151% This represents initial capital outlay for the procurement of IT systems: (i) Performance management; and (ii) Contract management systems TOTAL 1,363,609 1,373,064 794,240 764,964 * Adjustment due to phased in restructuring costs

GRAPHICAL REPRESENTATION OF EXPENDITURE: GOODS AND SERVICES AS AT 30 SEPTEMBER 2017

BREAKDOWN OF EXPENDITURE: GOODS AND SERVICES AS AT 30 SEPTEMBER 2017

BUDGETED AND ACTUAL REVENUE REVIEW AS AT 31 DECEMBER 2017 PER PROGRAMME
AENE BUDGET R'000 ADJUSTMENT ADJUSTED AENE BUDGET R'000 PLANNED INCOME BY 31 DEC 2017 R'000 REVENUE R'000 % OF ACTUAL INCOME ON AENE BUDGET % OF ACTUAL INCOME ON PLANNED INCOME TO DATE REASONS FOR VARIANCE 1 Government grant 1,134,288 980,224 86% 100% 2 TOMSA levies 124,586 93,440 104,914 84% 112% SA Tourism received additional funds from Tourism Business Council of South Africa in line with collaborative funding MOU. R15.7million received to date 3 Indaba and Meetings Africa 63,391 41,445 51,417 81% 124% Preliminary INDABA 2017 revenue figures.Actual revenue figures will be available post internal audit review 4 Grading fees 21,344 16,008 15,388 72% 96% Entity within acceptable variation for expected revenue 5 Sundry revenue* 20,000 10,581 30,581 19,455 18,440 60% 95% Additional funds from international roadshows of 1.1m TOTAL 1,363,609 1,374,190 1,150,572 1,170,383 85% 102% * R9.5 million income received in advance recognised in the 2nd quarter for Indaba & additional funds collected by offices for exhibitions/roadshows in Q3

BUDGET AND EXPENDITURE REVIEW AS AT 31 DECEMBER 2017 PER PROGRAMME
AENE BUDGET R'000 ADJUSTMENT ADJUSTED AENE BUDGET R'000 PLANNED EXPENDITURE BY 31 DEC 2017 R'000 EXPENDITURE R'000 % OF ACTUAL EXPENDITURE ON AENE BUDGET % OF ACTUAL EXPENDITURE ON PLANNED INCOME TO DATE REASONS FOR VARIANCE 1 Corporate Support 99,361 18,630 117,991 87,824 77,180 65% 88% Variance mainly attributable to accounting entries & foreign exchange gains 2 Business Enablement 87,561 8,984 96,545 71,268 66,423 69% 93% Tenders in finalisation stage, funds to be utilised in the 4th quarter 3 Leisure Tourism Marketing 1,007,079 (39,186) 967,893 784,547 777,677 80% 99% 4 Business Events 107,467 20,988 128,455 115,636 111,239 87% 96% 5 Visitor Experience 62,141 1,165 63,306 49,012 38,473 61% 78% TGCSA planned much of spending around marketing and socialisation of the new grading criteria. This can only be done once approval of new grading criteria has been granted. TOTAL 1,363,609 10,581 1,374,190 1,108,287 1,070,992 97% Included in programme 4: Leisure Tourism Marketing is investment in domestic marketing with annual budget of R ; YTD Budget: R ; YTD Actual: R i.e. 96% of planned year to date budget.

PLANNED Q3 EXPENDITURE BY 31 DEC 2017 R'000
BUDGET AND EXPENDITURE REVIEW AS AT 31 DECEMBER 2017 PER ECONOMIC CLASSIFICATION ECONOMIC CLASSIFICATION AENE BUDGET R'000 ADJUSTMENT ADJUSTED AENE BUDGET R'000 PLANNED Q3 EXPENDITURE BY 31 DEC 2017 R'000 Q3 EXPENDITURE R'000 % OF ACTUAL EXPENDITURE ON ADJUSTED AENE BUDGET % OF EXPENDITURE ON PLANNED EXPENDITURE TO DATE REASONS FOR VARIANCE Current Spending 1,340,757 34,328 1,351,338 1,092,302 1,057,752 78% 97% Compensation of Employees 163,752 198,080 141,344 112,831 57% 80% employee costs provisions still to be raised in quarter 4 Good and Services: ex capex 1,177,005 1,153,258 950,958 944,921 82% 99% Graphical breakdown of Goods and Services is included in the next slide Capital Assets 22,852 15,985 13,240 58% 83% Building and other Fixtures No procurement during Q3 Machinery and Equipment 10,698 1,524.57 337 3% 22% Limited procurement due to planned Office space planning Software and other intangibles 12,153 14,460 12,903 106% 89% TOTAL 1,363,609 1,374,190 1,108,287 1,070,992

GRAPHICAL REPRESENTATION OF EXPENDITURE: GOODS AND SERVICES AS AT 31 DECEMBER 2017

BREAKDOWN OF EXPENDITURE: GOODS AND SERVICES AS AT 31 DECEMBER 2017

Human Capital

Workforce Profile SA Tourism’s Workforce Profile at the end of December 2017 was as reflected below, against an approved headcount of 202. SA Tourism has achieved a vacancy rate of 15% due to the organisational redesign process (Project Ignite). Internships and contract employees are used to ensure business continuity. Recruitment for vacancies commenced in June 2017. Status No % Permanent Employees 161 80% Fixed-Term Contracts: Hub Heads (4) EXCO (6) 10 5% Contract employees 12 6% Internship 1 0.5% TOTAL 184 Permanent and Fixed Term constitutes 85% occupancy and 15% vacancy rate

Employment Equity Update

Organisational Review Project Update
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

Summary of the Key Activities Completed as at end of Q3
Below is a summary of the key activities completed in the project initiation and assessment phases. SAT has completed all the key activities and is currently on a drive to fill vacancies to complete the staff establishment 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

HUMAN CAPITAL INITIATIVES UPDATES
Business objectives/ imperatives (5 Thrusts) Strategic goals for HC Strategic pillars Key initiatives Overarching goal: 5 million more visits in 5 years (~3.9 mil more int visits, ~1.0 mil more local visits) Develop and implement market investment strategy that allows SA Tourism to focus on prioritised markets and segments Build a recognised, appealing, resilient and competitive tourism brand for South Africa Collaborate with partners, both local and international to maximise synergies, enhance traveller experience and close sales Drive operational efficiency in all activities Build an inspiring and energised organisation To create a high-performance culture that enables the delivery of strategic business priorities in a sustainable manner. To build human capital competitiveness as a core driver of SA Tourism’s performance through integrated talent management and learning & development . To support the change agenda inherent in SA Tourism’s business strategies and priorities through organisational development mindset, including the anchoring of Project iGnite. To ensure human capital basics are in place, promote organisational health and sound ER climate and foster a culture of reward and recognition. 1. High Performance Culture Revamped PMP 360o feedback 2. Integrated Talent Management Talent Management Framework EVP Priority roles succession plan Hi-Po programme 3. Learning and Development People Management Framework Competence Development Process Mentorship and coaching Knowledge Management 4. Organisational Development and Change Capability Culture alignment Employee Engagement Survey 5. Reward and Recognition Remuneration philosophy revamp Recognition in support of PMP 6. Organisational Health and Employment Relations Internal ER capability Employee Wellness Plan 7. Human Capital Basics Mobility management Talent Management Suite Policy and process alignment Performance management system signed off and automation process in progress Talent management framework signed off, will be implemented in Q2 of 2018/19 Personal Development Plans put in place, implementation progressing well, ongoing development of initiatives, onboarding, value chain capability build SAT Values reviewed and value-linked behaviours will be introduced to support integration and a high performance culture. Engagement survey to be conducted in March 2018 Remuneration Review currently underway. This will be all encompassing to include recognition initiatives. Recently launched Chairing Disciplinary Hearings for line managers. This will be rolled out to all line managers. Other ER topics to follow. There is an employee wellness programme in place, currently being implemented Recently appointed a mobility advisory agent. Finalising the mobility framework in the background as well. The configuration of the talent management suite underway, all encompassing to cover Human Capital from end to end. Payroll will be configured at a later stage

Governance

Board Meeting Attendance Q2 2017/18
NAME NUMBER OF MEETING(S) DATE(S) OF MEETING ATTENDANCE BOARD CHARTER / TERMS OF REFERENCE SAT Board 1 11 September 2017 14/14 Y Audit & Risk Committee 2 26 July 2017 12 September 2017 6/7 Marketing Committee Remuneration Committee 5/6 TGCSA Awards Committee 06 September 2017 9/14 National Convention Bureau Marketing Subcommittee -

Name Board 11 Sept 2017 Audit and Risk 12 Sept 2017 Audit and Risk 26 July 2017 Marketing 12 Sept HC Remco Awards 06 Sept 2017 Tanya Abrahamse (Chairperson ) P Thebe Ikalafeng (Deputy Chairperson) Ayanda Ntsaluba Graham Wood Chichi Maponya O Oregan Hoskins Michelle Constant Colin Bell Amor Malan Judy Nwokedi Mmaditonki Setwaba Yacoob Abba Omar Mmatsatsi Ramawela Enver Duminy

NAME NUMBER OF MEETING(S) DATE(S) OF MEETING ATTENDANCE BOARD CHARTER / TERMS OF REFERENCE SAT Board 1 22 November 2017 9/14 Y Audit & Risk Committee 21 November 2017 4/7 Marketing Committee 5/7 Remuneration Committee 3/6 TGCSA Awards Committee 14 November 2017 National Convention Bureau Marketing Subcommittee 2 November 2017 6/9

Name Board 22 November 2017 Audit and Risk 21 Nov 2017 Marketing 22 November 2017 HC Remco 21 November 2017 Awards 14 Nov 2017 SANCB 02 Nov 2017 Tanya Abrahamse (Chairperson ) O - Thebe Ikalafeng (Deputy Chairperson) P Ayanda Ntsaluba Graham Wood Chichi Maponya Oregan Hoskins Michelle Constant Colin Bell Amor Malan Judy Nwokedi Mmaditonki Setwaba Yacoob Abba Omar Mmatsatsi Ramawela Enver Duminy

Board Remuneration and Travel Costs for Q2 & Q3 2017/18
Name Remuneration Flights Accommodation Car Hire Tanya Abrahamse (Chairperson R 16369,38 R R 2 352,27 Q2: R 1 834,24 Q3:R2 558,36 Thebe Ikalafeng (Deputy Chairperson) R ,78 Q2: R Q2: R Q2: R Q3: R ,72 Q3: R 2 352,27 Q3: R2 128,24 Ayanda Ntsaluba R ,78 - Graham Wood R ,64 Q2: R 9 902,38 Q2: R 4 164,36 Q3: R ,16 Q3: R 1 685,82 Q3: R 2 010,24 Chichi Maponya R ,15 Oregan Hoskins R ,06 Q2: R 9 265,04 Q2: R 1 735,82 Q2: R 4 264,36 Q3: R 9 417,44 Q3: R 4 685,82 Q3: R 3 688,36 Michelle Constant R ,78 Q2: R6 726,52 Q2: R Q2: R Colin Bell R ,23 Q2: R6 669,12 Q2: R1 830,12 Q3: R 7 285,92 Q3: R1 430,12 Amor Malan R ,40 Judy Nwokedi R ,67 Q3: R Q3: R Q3: R Mmaditonki Setwaba Non Remunerated Yacoob Abba Omar R ,23 Enver Duminy R ,23 Q2: R ,84 Q2: R Q3: R ,56 Q3: R 4 571,64 Mmatsatsi Ramawela R ,98

Abbreviations and Acronyms
AENE Adjusted Estimates of National Expenditure AGM Annual General Meeting CAGR Compound Annual Growth Rate DDC Deal Driven Campaign EAP Economically Active Population (People from years of age who are either employed or unemployed and seeking employment) ENE Estimates of National Expenditure FNB-BER First National Bank & Bureau of Economic Research MICE Meetings, Incentives, Conferencing and Exhibitions SANCB South African National Convention Bureau TAP Tourism Analytics Programme TDDS Total Domestic Direct Spend is the amount spent by South African residents on domestic trips excluding any prepaid amounts and reported in nominal terms TGCSA Tourism Grading Council of South Africa TOMSA Tourism Marketing South Africa TTFDS Total Tourist Foreign Direct Spend is the total amount spent directly in South Africa by all foreign tourists and reported in nominal terms UNWTO United Nations World Travel Organisation VFR Visiting Friends and Relatives YTD Year to Date

Thank You Slide no. 55

PRESENTATION TO THE PORTFOLIO COMMITTEE ON TOURISM ORGANISATIONAL PERFORMANCE RESULTS QUARTER 2 & 3: 2017/18 7 March 2018.

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PRESENTATION TO THE PORTFOLIO COMMITTEE ON TOURISM ORGANISATIONAL PERFORMANCE RESULTS QUARTER 2 & 3: 2017/18 7 March 2018.

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Presentation on theme: "PRESENTATION TO THE PORTFOLIO COMMITTEE ON TOURISM ORGANISATIONAL PERFORMANCE RESULTS QUARTER 2 & 3: 2017/18 7 March 2018."— Presentation transcript:

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