SA Tourism s 5-year strategy

Transcription

1 SA Tourism s 5-year strategy Progress Report February 2016

2 TABLE OF CONTENTS: Introduction and context Objectives of this intervention Findings from Phase 1 Next steps 2

3 Background The Ministerial Review of SA Tourism conducted in 2015 initiated the rethink of the strategy of SA Tourism. Initially termed the updating of the Tourism Growth Strategy, a process was introduced to review the strategy of SA Tourism that considered both our performance to date and global trends, as well as inputs from key stakeholders to develop a 5-year strategy for SA Tourism that will steer its agenda to bolster the contribution of the sector to the overall economy 3

4 What is the Tourism Growth Strategy? The Tourism Growth Strategy project started in 2001 to develop a data-driven strategy so that SA Tourism could market South Africa more effectively in the increasingly competitive global tourism and travel market. The strategy was launched at the annual tourism Indaba in Durban in May The first phase of the project culminated with the adoption of the strategy by Cabinet in July As the tourism industry is vulnerable to global events, the Tourism Growth Strategy (TGS) was meant, from the outset, to be a living document that sets out a vision for tourism, and then provides a framework for making the hard on-going choices about marketing investments against the best return measured by our mandate in the Tourism Act. The revisions to the TGS did not change our vision for tourism; but updated and consolidated the strategy with the growing body of knowledge and experience as we worked through a set of critical strategic questions: Where do we play? How will we win? What capabilities do we need? What management systems should we put in place? At the heart of the TGS was the critical choice about where to play i.e. where we must grow or defend our market share or where we must invest for returns in the future. With more than 200 countries in the world and limited resources, effort had to be focused on markets where we were most likely to earn returns in the short- to medium-term, and not narrow niche opportunities where the risk was higher and the economic impact less. Given the rapidly changing global tourism and travel markets, SA Tourism undertook a rigorous and data-driven assessment of all the global markets with a fresh eye every three years - the portfolio review which set the marketing portfolio for the next three years. 4

5 The Tourism Growth Strategy vs The National Tourism Sector Strategy In 2010, the newly formed National Department of Tourism tabled and launched the National Tourism Sector Strategy (NTSS). The NTSS was the first co-ordinated strategic approach for the entire sector that would ensure that tourism, one of the six pillars in country s growth path, would deliver the outcomes as per the National Development Plan. The NTSS therefore include strategic outcomes and KPIs that covered the mandate of SA Tourism and this meant that SA Tourism no longer produced it s Tourism Growth Strategy, but continued to review and update its Portfolio every 3 years to guide its investment in geographies and segments that would maximize its returns. SA Tourism s strategy was captured in it s Strategic Plan which complied to the National Treasury s framework and standards. 5

6 TABLE OF CONTENTS: Introduction and context Objectives of this intervention Findings from Phase 1 Next steps 6

7 Mandate of SA Tourism SA Tourism postulates its strategic plan based on the objectives of the National Tourism Sector Strategy (NTSS). This strategy falls under the ambit of the National Development Plan, the overall development plan and aspirations set for the country. SA Tourism s Position within the Country s Development Aspirations Government and Society s National Development Plans Department of Tourism and Stakeholders National Tourism Sector Strategy SA Tourism s Strategic Plan 7

8 Considerations Governing the Mandate of SA Tourism Responsibilities Entrusted with SA Tourism within The Tourism Act of 2014 Draft Priorities Pillars for the Revised NTSS Provide for the effective domestic and international marketing of South Africa as a tourist destination Promote growth in and development of the tourism sector Promote the practising of responsible tourism for the benefit of the Republic and for the enjoyment of all its residents and foreign visitors Promote quality tourism products and services Effective Branding and Marketing Supportive regulatory environment Deliver a world class quality visitor experience Promote responsible tourism practices within the sector Enhance cooperation and coordination between all spheres of government in developing and managing tourism Achieve transformation in the tourism sector through inclusive growth 8

9 Objectives of this intervention The Ministerial Review of SA Tourism conducted in 2015 initiated the rethink of the strategy of SA Tourism. Initially termed the updating of the Tourism Growth Strategy, a process was introduced to review the strategy of SA Tourism that considered both our performance to date and global trends, as well as inputs from key stakeholders to develop a 5-year strategy for SA Tourism that will steer its agenda to bolster the contribution of the sector to the overall economy Objectives The purpose of this exercise is to lead to a restatement of the key marketing strategies of SA Tourism, as an organisation The broader objective of the exercise will be to steer the marketing efforts to achieve higher value (spend) and volume (arrivals), by focusing on international leisure tourists, business tourists and also the domestic population 9

10 Approach to the Intervention Phase 1: Identification of Opportunities/Gaps through Internal and External Scrutiny What Needs to be Done? To meet the requirements, at the core of the intervention, we will: Review the current state of the brand, and tourism, on the whole; Understand the opportunities that need to be targeted, or determine the gap that needs to be filled; and, Define key action steps to achieve the desired outcomes Internal Scrutiny Review of South Africa s tourism performance through: Analyses of international and domestic tourists data on key performance indicators (Volume, Spend, Length of Stay, Geographical Spread and Seasonality) Sessions with internal stakeholders from SA Tourism, National Department of Tourism and board members Phase 2: Selection of Key Strategic Thrust Assess and prioritise the key strategic insights derived from the workshop, through Assessment of old strategic plan, NTSS, and insights from key team members Discussion with SA Tourism executive team to finalise approach Strategic Imperative Workshop, with broader SA Tourism team, to finalise the way ahead Phase 3: Action Planning External Scan Gain a view of trends impacting leisure and business tourism at global and regional level, through review of literature and inputs from industry stakeholders Understand the expectations of the industry through interviews with external stakeholders such as trade partners and product owners A full-day workshop to cluster key opportunities/issues based on the inputs garnered from the internal scrutiny and the external scan, to determine the strategic thrusts that need to be considered Review and re-alignment of current plans for each business unit/country team, based on the identified strategic imperatives 10

11 Project Plan Project status (as of): February 2, 2016 Study Checkpoints / Milestones Description Scheduled Date Status PHASE I: External Scan and Internal Scrutiny Preliminary assessment of existing information Analyses of portfolios, across the five (5) key performance indicators, i.e., volume, value, length of stay, seasonality and geographical spread Oct 30, 2015 Draft Prepared Stakeholder interviews Interviews with stakeholders at SAT (Audience: Steering committee of 4 5 members); SA Tourism board; and industry partners Nov 2, 2015 Dec 11, 2015 WIP External scrutiny, and domestic and business segments Global travel trends on value and volume movement, and developments related to technology, media and trade; KPI assessment on domestic and business segments Nov 9, 2015 Nov 27, 2015 Draft Prepared Workshop: Full-day workshop to cluster key opportunities/issues Inputs from broader SAT team to determine opportunity and issue clusters (Audience: SAT management team) Scheduled: Jan 13/14, 2016 TBD Delivery of workshop synthesis Share essence of workshop output with SAT management team for refinement/agreement/buy-in Jan 22, 2016 Draft Prepared PHASE II: Selection of Key Strategic Thrusts Assess findings from Phase I Inputs from Old Strategic Plan, NTSS, and Insights from key team members Jan 25 Feb 5, 2016 WIP Workshop to finalise approach Discussion to finalise approach (Audience: SAT management team) February 15, 2016 WIP Workshop: Share outcomes with stakeholders Share essence of workshop output with stakeholders for refinement/agreement/buyin To be completed by March 2016 TBD Phase III: Action Planning Action planning Strategic imperatives become benchmarks against which each country / planning unit measures its effectiveness. Action planning to develop detailed implementation plan To be completed by March 2016 TBD 11

12 Guiding Principles of the SA Tourism 5-year strategy 1 Focused Leverage limited human and financial resources efficiently to make effective choices or explicit trade-offs that have a long-term strategic impact on SA Tourism, aimed at making choices and decisions based on ROI and business objectives 2 Data Driven and customer focused Formulate strategic decisions based on sound data and analysis, and not anecdote. Understand consumers who are attractive for South Africa in terms of our objectives and develop the immediate focus on people who are interested in travelling to South Africa 3 Consultative to build sector co-opetition 1 Develop a consultative process, incorporating input from as many stakeholders as possible. Build co-opetition in the sector so that we co-operate on building volume and compete on service and move away from the current destructive competition 4 Goals are GDP, jobs and transformation Promote GDP growth and job creation and the transformation of our economy through six key objectives, as defined in the mandate and the national tourism goals in the Tourism Act 5 Transparent Ensure transparency in choice-making processes and source of data to build consensus on building tourism against the broader nation s goals while informing business-level decision making within a broader context 6 Brand Focus Drive the brand in a holistic manner, and also provide inputs to the overall organisation structure that needs to be in place to deliver on the defined actions 1 The concept of Co-opetition is used here with the same meaning as that described by Adam Brandenburger and Barry Nalebuff in their book of the same title 12

13 TABLE OF CONTENTS: Introduction and context Objectives of this intervention Findings from Phase 1 Next steps 13

14 Inputs from the key stakeholders can be summarised as follows: To perform in the next phase, SA Tourism needs to consider the following: Flexibility The tourism landscape evolves rapidly, and agility is the key to stay ahead of the competition. SA Tourism is perceived to be an organisation that is very methodical which is good. However, going forward, the organisation needs to be flexible and agile to respond to market situations and evolve according to the needs of the industry and consumers Focus Points Corporate Image/Role clarity Transparency Value Chain Ownership The role and mandate of SA Tourism, in the tourism value chain, is not clearly defined and not well understood both by internal, and especially the external stakeholders. This often leads to dissatisfaction amongst the external stakeholders in terms of SA Tourism's performance on its perceived mandate. To ensure effective performance, SA Tourism needs to ensure its mandate is effectively laid and communicated It is alleged that the strategies, measures and knowledge of SA Tourism is internal to the organisation. This creates an environment where it is believed that the organisation does not work in collaboration with the rest of the industry. SA Tourism needs to effectively collaborate with the rest of the industry and inform/empower the stakeholders in the value chain to effectively contribute to the industry SA Tourism s role in the value chain is well appreciated by the stakeholders. However, it is expected that SA Tourism extends its role in connecting the markets with the trade partners. It needs to work together with the trade partners from marketing campaigns to product development to create better offerings for the consumers Practical Tourism Quotient It is expected that SA Tourism needs to further its ability to apply its tourism knowledge in practical situations. Moreover, SA Tourism needs to communicate its knowledge of the impact of external factors/scenarios to respective stakeholders in the value chain, enabling them to react appropriately 14

15 Snapshot: Performance of South Africa in International Markets During , South Africa s international tourist arrivals grew by CAGR 6.4%... placing South Africa ahead of Australia, Brazil and Kenya, and behind Thailand and India, among key competitors After growing at a rate of 5.5% between 2009 and 2012, TTFDS witnessed a sharp decline in 2013, which can be primarily attributed to the drop in spending from Africa Land tourists. The overall growth for the duration was recorded as 1.6% The overall length of stay among tourists visiting South Africa is consolidating on weekly durations of 7, 14 and 21 days. The average length of stay has increased from ~7 in 2009 to ~8 in 2014 Gauteng continued to be the most visited province whereas, Limpopo saw an impressive growth in tourist arrivals during (>10%), to become the second most visited province in 2014 South Africa had an improved seasonality index (annual) during thus, the portrayal of a round-the-year holiday destination. December and January were the peak seasons for arrivals. The annual index improved from 1.7% in 2009 to 1.6% in

16 Summary : Leisure Tourists The leisure tourist arrivals to South Africa increased at a CAGR of 11%... to reach 6.7 million in 2014 from 4 million in 2009, primarily driven by a considerable increase in the VFR tourists However, the growth in TTFDS was lower compared to arrivals growth in the same period and the TTFDS increased from ZAR 26.9 Bn in 2009 to ZAR 39 Bn in 2014 at a CAGR of 8%. Though the arrivals for holidays tourists has declined, the TTFDS for the segment increased slightly The average length of stay of holiday and shopping personal tourists remained stagnant while the length of stay of VFR tourists increased from 9 to 10 days during the same time period The number of provinces visited by holiday tourists has declined slightly to 1.5 in 2014 from 1.7 in 2009, while it declined from 1.2 to 1 for VFR tourists The seasonality for holiday and shopping personal tourists has improved post 2010 however, the seasonality of VFR tourists deteriorated to 18% in

17 Summary: Business Tourists 1 The business tourist arrivals to South Africa increased to 0.68 million to 2014 from 0.32 million in 2009, registering a CAGR of 16.5% During the same period, the TTFDS from business tourists also increased from ZAR 1.8 Bn in 2009 to ZAR 6 Bn in 2014 The average length of stay of business tourists improved to 6.4 days in 2014 from 4.9 days in 2009 The number of provinces visited declined marginally from 1.2 in 2009 to The seasonality of Business tourist arrivals has improved from 8.5% in 2009 to 1.1% in 2014 however, in 2013 the seasonality spiked to 25.6% Note: 1 In this section Business tourists have been defined as tourists who travelled to South Africa for business-conventions, conferences, exhibitions; business exhibitions and public events. From Q4 2013, individuals who travelled to South Africa for business meetings, incentive trips and to attend a meeting were also recorded, however, for consistency, they have not been considered in this assessment 17

18 Summary: Domestic Tourism The total number of domestic trips decreased to 28 million to 2014 from 30.3 million in 2009, registering a negative CAGR of 1.5%; moreover number of travellers have declined by a CAGR of 3.8% During the same period, the TTFDS from domestics tourists increased from ZAR 22 Bn in 2009 to ZAR 27 Bn in 2014 with VFR contributing more than half of the total revenue Limpopo has risen in popularity among domestic tourists with number of trips to the province increasing from 1.2 million in 2009 to 7.2 million in 2014; however, tourists tend to spend more when visiting Western Cape The seasonality of domestic travel is consistent with International travel with December and January being the peak months. Seasonality of domestic trips has deteriorated from 2.5% in 2009 to 10.2% in

19 Snapshot: Key Drivers of Growth Market / Regions Africa Land market saw the biggest increase in tourist arrivals, at CAGR 7.6%, during , however, TTFDS from the region has declined TTFDS from Europe and Americas increased by a CAGR greater than 5% during the same period Purpose of Travel While the share of VFR in tourist arrivals has increased considerably during , share of holiday has declined However, the share of holiday tourists in total spend is highest and has grown significantly Except shopping business, all tourist categories spend the highest on shopping Travel Characteristics First time visitors has recorded a lesser growth rate compared to repeat tourists, subsequently their share in total tourists has declined during However, they tend to visit more number of provinces and also have the highest average length of stay 19

20 TABLE OF CONTENTS: Introduction and context Objectives of this intervention Findings from Phase 1 Next steps 20

21 We are currently in Phase 2 of the project Study Checkpoints / Milestones Description Scheduled Date Status PHASE I: External Scan and Internal Scrutiny Preliminary assessment of existing information Analyses of portfolios, across the five (5) key performance indicators, i.e., volume, value, length of stay, seasonality and geographical spread Oct 30, 2015 Draft Prepared Stakeholder interviews Interviews with stakeholders at SAT (Audience: Steering committee of 4 5 members); SA Tourism board; and industry partners Nov 2, 2015 Dec 11, 2015 WIP External scrutiny, and domestic and business segments Global travel trends on value and volume movement, and developments related to technology, media and trade; KPI assessment on domestic and business segments Nov 9, 2015 Nov 27, 2015 Draft Prepared Workshop: Full-day workshop to cluster key opportunities/issues Inputs from broader SAT team to determine opportunity and issue clusters (Audience: SAT management team) Scheduled: Jan 13/14, 2016 TBD Delivery of workshop synthesis Share essence of workshop output with SAT management team for refinement/agreement/buy-in Jan 22, 2016 Draft Prepared PHASE II: Selection of Key Strategic Thrusts Assess findings from Phase I Inputs from Old Strategic Plan, NTSS, and Insights from key team members Jan 25 Feb 5, 2016 WIP Workshop to finalise approach Discussion to finalise approach (Audience: SAT management team) February 15, 2016 WIP Workshop: Share outcomes with stakeholders Share essence of workshop output with stakeholders for refinement/agreement/buyin To be completed by March 2016 TBD Phase III: Action Planning Action planning Strategic imperatives become benchmarks against which each country / planning unit measures its effectiveness. Action planning to develop detailed implementation plan To be completed by March 2016 TBD 21

22 Towards SAT s 5-year strategy: 2017/18 to 2021/ /17 put in place the foundations of the strategy by completing all the actions identified in phase 3 of this intervention as this will be the inputs to the 5-year strategy 2016/17 write the strategy clearly articulating the goal, the strategies, the resources and the measures of success for approval aligned the statutory framework of National Treasury, i.e. deliver a 5-year strategy supported by a 5-year strategic plan 2017/18 year one of the implementation of the strategy as outlined in the format of an APP that clearly aligns to the Strategic Plan 2017/18 to 2021/22 The 2016/17 Strategic Plan is an interim plan that will be tabled as per the statutory requirements. This plan, where possible, includes the new thinking as developed through the current intervention. However, the 5-year Strategy that will be table a year from now will be markedly different from this and previous years plans. 22

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