Understanding the Tourism Puzzle!

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1 Understanding the Tourism Puzzle! Tshwane Tourism Association Tourism Showcase Gillian Saunders Head of Advisory Services : Grant Thornton January Grant Thornton South Africa. All rights reserved Grant Thornton. All rights reserved.

2 Global tourism Africa Tourism Competitiveness and Trends South Africa International tourism Domestic Tourism

3 Global Tourism Performance

4 Global International Tourism Growth ,9% arrivals growth ,6% receipts growth (blended local currency) International arrivals (millions) International Tourist Receipts (US$bn)

5 Global International Tourism Lower growth at 3,0% pa ,3% ,9%

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

7 Global International Tourism Growth at 5,3 % pa ,1% ,7% Africa reaches 134m arrivals

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

9 Global International Tourism

10 Global International Tourism

11 Global International Tourism

12 Global International Tourism

13 Global International Tourism

14 Global Outlook Global growth in international tourism arrivals continues More moderate pace, from 4,2% per year ( ) to 3,3% ( ): Substantial potential for further expansion in coming decades Established as well as new destinations can benefit provided adequate conditions and policies: business environment infrastructure facilitation marketing human resources challenges maximising social and economic benefits minimising negative impacts the long-term tourism growth pattern: more moderate, sustainable and inclusive

15 Global League Tables - Inbound International tourist arrivals (millions) Change (%) Rank Series * 15/14 16*/15 1 France TF United States TF Spain TF China TF Italy TF United Kingdom TF Germany TCE Mexico TF Thailand TF Turkey TF

16 Global League Tables - Inbound International tourist receipts US$ Local currencies (millions) Change (%) Change (%) Rank * 15/14 16*/15 15/14 16*/15 1 United States Spain Thailand China France Italy United Kingdom Germany Hong Kong (China) Australia

17 Africa Tourism Performance

18 Tourist Arrivals World vs Africa

19 Sierra Leone Guinea Guinea-Bissau Chad Niger Gambia Mali Burkina Faso Madagascar Benin Togo Seychelles Reunion Cabo Verde Angola Malawi Ethiopia Swaziland Ghana Zambia Rwanda Senegal Tanzania Kenya Mauritius Nigeria Uganda Namibia Cote d'ivoire Botswana Mozambique Zimbabwe South Africa International Arrivals to African Countries

20 Tourism Competitiveness

21 WEF Tourism Competitiveness Index 2017 Sub-Saharan Africa Rank Global Rank South Africa 1 53 Mauritius 2 55 Kenya 3 80 Namibia 4 82 Cape Verde 5 83 Botswana 6 85 Tanzania 7 91 Rwanda 8 97 Uganda Zambia Ivory Coast Senegal The Gambia Zimbabwe Ethiopia Gabon Ghana Madagascar Mozambique Malawi Cameroon Benin Lesotho Nigeria Mali Sierra Leone Mauritania DRC Burundi Chad

22 WEF Tourism Competitiveness Ranking 2017 South Africa Enabling Environment Business Environment Safety and Security Health and Hygiene HR & Labour Market ICT Readiness T&T Policy & Conditions Prioritization of Travel & Tourism International Openness Price Competitiveness Environmental Sustainability Infrastructure Air Transport Ground & Port Tourist Service Infrastructure Natural and Cultural Resources Natural Resources Cultural & Business Travel

23 Demographic shifts Ageing The number of elderly will explode Surprisingly, 90% of this growth will take place in emerging markets Non-retirement will increasingly be a major theme The wealthy Bay boomers Concentration of wealth High Net Wealth individuals Low income travelers staycations

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

25 The Fourth Industrial Revolution We stand on the brink of a technological revolution that will fundamentally alter the way we live, work and relate to one another. In its scale, scope and complexity, the transformation will be unlike anything humankind has experienced before. We do not yet know just how it will unfold, but one thing is clear; the response to it must be integrated and comprehensive, involving all the stakeholders from of the global polity, from the public and private sectors to academia and civil society. Now the Fourth Industrial revolution is building on the third.. It is characterised by a fusion of technologies that is blurring the lines between the physical, digital and biological spheres Klaus Schwab, Jan 2016, Executive Chairman, World Economic Forum

26 South African Tourism

27 International visitor & tourist arrivals for South Africa ,9 % average annual growth ,7% average annual growth Visitors Tourists (incl) Tourists (Excl) Source: Statistics South Africa Note: Stats SA started publishing information on TOURISTS as defined by United Nations World Tourism Organisation ("UNWTO") with the January 2009 data. Prior to this the volume of TRAVELLERS and VISITOR'S were only reported on.

28 Foreign Tourism Overseas African Air African Land Total Total Tourists Growth 16/ % 5.9% 11.9% 13.0% % Tourists % 6.3% 68.5% 100.0% Holiday Tourists No. on Holiday % of total on holiday 46.2% 21.8% 6.6% 17.5% % of total SA holiday tourists 66.4% 7.9% 25.8% 100.0% Business Tourists No. business tourists % total travelling as business tourists 22.9% 29.0% 4.4% 10.6% % total SA business tourists 54.4% 17.3% 28.3% 100.0% Business Travellers No. business travellers % total travelling for business 5.2% 4.4% 1.0% 2.3% % total SA business travellers 57.4% 12.3% 30.3% 100.0% Length of Stay Average length of stay - nights Most common length of stay Spend Average spend in SA per tourist R R R 4700 R 8100 Average spend in SA per Holiday Tourist R R R 4900 R Average Spend per Business Tourist R R R R R R R Total Tourist Spend - Excl Capital spend R37.1bn R6.2bn R32.3bn R75.5bn Average pre-paid expenditure R R R14 200** R 800 R 8100 Day Visitors Source SAT Reports & StatsSA *SAT reports on Africa Land markets as all neighbouring country tourist arrivals, not tourist arrivals at border posts, we use actual StatsSA Border post arrivals. SAT percentages of holiday makers are on the same basis, but we apply to actual arrivals as indicative

29 Foreign Tourism To Gauteng Gauteng Overseas Africa Air Africa Land Total Total Length of stay Share of total 45.2% 46.2% 42.0% 42.9% Spend per trip R R R 7000 R 8500 Overseas African Air* African Land Total Total Tourists Length of Stay Average length of stay - nights Most common length of stay Spend Average spend in SA per tourist R R R 4700 R 8100 Average spend in SA per Holiday Tourist R R R 4900 R Average Spend per Business Tourist R R R R R R R Total Tourist Spend - Excl Capital spend R37.1bn R6.2bn R32.3bn R75.5bn Average pre-paid expenditure R R R14 200** R 800 R 8100

30 Overseas Tourists Mexico 0% Rep. of Korea 1% Middle East 2% UAE 0% Saudi Arabia 0% Australasia 5% Other C&S America 1% Brazil 2% China 5% Philippines 0% India 4% Taiwan 0% Indonesia 0% Other Asia 3% UK 18% Germany 12% Canada 2% USA 14% Russia 0% Oher Europe 16% Source: StatsSA Netherlands 6% Italy 2% France 6%

31 North Africa 7% African Tanzania 17% East & Central Africa Other 14% Tourists Nigeria 29% Ghana 8% West Africa Other 6% Uganda 6% Kenya 13% Zimbabwe 28% Zambia 2% SADC Other 1% Angola 1% Botswana 9% Lesotho 24% Swaziland 12% Malawi 2% Source: StatsSA Namibia 3% Mozambique 18%

32 Arrivals per province

33 International Tourists Detailed purpose of visit

34 Average length of stay per Province Eastern Cape Free State Gauteng KwaZulu Natal Limpopo Mpumalanga Northern Cape North West Western Cape

35 International Tourists - Most Visited Attractions & Landmarks West Coast Cango Caves Cape Agulhas Blyde River Canyon God's Window Cape Town township tours Lion and Rhino Park The Karoo Ostrich farms Beaches Wild Coast Whale watching Tour of Soweto Durban beach front Apartheid Museum Kruger Park The Garden Route Robben Island The Winelands Cape Point Table Mountain Cableway V&A Waterfront Cape Town Central City

36 Total numbers visiting attractions in Q1&Q Gauteng Sandton City / Mandela Square 51% Apartheid Museum Eastgate Mall Tour of Soweto Mandela house (Soweto) Union Buildings Rhino and Lion Nature Reserve Constitution Hill Maropeng and Sterkfontein Caves (Cradle of Humankind) Lesedi Cultural Village Maboneng Precinct (e,g, Pop Art Theatre, Cinema, Gallery etc) 16% 14% 13% 13% 11% 9% 6% 5% 2% 1% n = Source SAT Reports

37 Domestic Tourism VFR Holiday Business Religious Total No. Tourists Trips No. Tourists Trips No. Tourist Trips Tourist Trip Growth 15/ % -3.57% 50.00% % % % Tourists % 11.02% 9.80% 6.94% 100.0% Average Tourist Length of Stay nts(2015) Average Spend per Tourist Trip in Rand (2015) Total Tourist Spend Rbn Day Trips Day Trips 2015 (m) Day Trips Growth 15/ % Day Trip Average Spend 380 Day Trip Total Spend Rbn 123.3

38 Domestic Tourism Province of Origin

39 Domestic Tourism Provinces Visited

40 Domestic Tourism Activities Undertaken

41 Top three trends Experiential Innovation and technology Inclusive

42 Understanding the Tourism Puzzle Questions? 2012 Grant Thornton South Africa. All rights reserved Grant Thornton. All rights reserved.

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