Contents. 1. Hotel Sector FDI into the South African Hotel Industry Corporate Activity and Recent Developments...

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1 Hotel and Travel According to Business Monitor International (2015) the tourism sector is currently very strong and positive growth is expected over the forecast period. South Africa offers a wide variety of holiday options including beaches, mountains, large cities and abundance of nature reserves. Therefore, it s not dependent on one aspect of the sector. Traditionally and currently the large markets for outbound tourism to South Africa are other African countries. This is due to the ease of travel across land borders, the good road air links between the neighbouring countries and the cultural links between the populations. Although, numbers of inbound tourists from Africa will increase, stronger growth will be seen by other areas, such as the Middle East and Asia. This will be the result of improving transport links between the area and the development of the country s international airports. Travellers from Europe are expected to increase as long-distance travel continues to become more viable after the global economic crisis. More and more visitors continue to arrive in South Africa, with major increases in arrivals from Asia and the Middle East which is expected to attract additional international chains to set up hotels in the country and encourage existing chains to expand. New hotels and resorts are expected to be spread between urban hotspots, such as Cape Town in the Western Cape. It is anticipated that there will be rise in demand for accommodation available for business visitors as well as high-end accommodation aimed at meeting the expectations of visitors from the Middle East as well as more rustic and adventure-based accommodation for thrill seeking travellers. South Africa has the second largest economy on the African continent and is in a good position to expand its tourism sector and play a part in expanding other sectors within the region. Leading South African hotel chains are increasingly looking to open hotels in neighbouring African countries and are aided by an element of brand recognition. 1 South Africa s tourism sector is relatively balanced in term of the different types of accommodation on offer. Cape Town in particular offers a wide range of accommodation from a wide variety of budget backpackers hostels, as well as 3, 4 & 5 star luxury hotels. These hotels cater for the large number of business travellers visiting the cities and leisure visitors. Cape Town offers good road networks and infrastructure with many amenities, a beautiful coastline and a wide variety of activities and attractions that have attracted the majority of investment to the tourism sector. Among hotel chains that have been increasing their South African operations in recent years are Carlson Rezidor, Accor and Hilton Hotels and Resorts. The leading South African hotel chain was Protea Hotels, but in 2014 the chain was bought by Marriot International. This deal made Marriot the largest foreign hotel player on the African continent with 77 hotels in South Africa under Protea, Fire and Ice, and African Pride brands. Marriot believes that within South Africa its largest source of business following Protea Hotels will be the acquisition of domestic travel. According to the Khulisa Project report by Mckinsey & Company, tourism is a major contributor to economic value and employment in the Western Cape and has the potential to scale. It directly contributes R17 billion in GVA (Gross Value Added) and accounts for 204,000 formal jobs in the province.

2 Contents 1. Hotel Sector FDI into the South African Hotel Industry Corporate Activity and Recent Developments Competitive landscape of hotels in South Africa Cape Town Hotel and Accommodation Statistics FDI in the hotel industry in Cape Town ( ) Recent hotel transactions Tourism Sector International Tourism Indicators South African Tourism Indicators Provincial Tourism Indicators National Parks Lodging statistics for National Parks Attraction Trends ACSA Cape Town International Airport ACSA George Airport Cape Town Port Statistics Business Tourism in the Western Cape... 20

3 Value (Rm) 1. Hotel Sector 1.1 FDI into the South African Hotel Industry Below are all the headline figures derived from the foreign direct investment into the South African hotels and tourism industry. Headline Figures No. of Projects 25 Total Job creation 4,444 Average project size (jobs) 177 Total Capital Investment (Capex) Average project size (capex) ZAR28.31bn ZAR1,131.87m The graph below illustrates a total of 25 FDI projects which were recorded between January 2003 and April These projects represent a total capital investment of ZAR28.31bn which is an average investment of ZAR1,131.87m per project. During this period, a total of 4,444 jobs were created. All capex figures shown are in ZAR (South Africa Rand) millions (converted from US Dollar). SUMMARY OF VALUE, JOBS CRETAED AND PROJECTS, Projects Value (Rm) 3 041, , , , , , , ,00 Jobs Created Projects Source: FDI Intelligence, 2015 The table below illustrates the top 10 countries investing in South Africa s hotels & tourism sector between January 2003 and April United Kingdom and Belgium had the highest number of projects, value and jobs created from their investment into the tourism and hotels industry of South Africa.

4 TOP SOURCE MARKETS FOR FDI INTO THE SOUTH AFRICAN HOTELS AND TOURISM INDUSTRY, JAN 2003-APR 2015 Source Country Projects Value (Rm) Jobs Created Companies UK Belgium United States India Kuwait France Bahamas Nigeria Germany Zimbabwe Total Source: FDI Intelligence, 2015 TOP INVESTING COMPANIES INTO SA HOTELS & TOURISM INDUSTRY, JAN 2003 APRIL-2015 Investing company Projects Value (Rm) Indian Hotels Holiday Inn Source: FDI Intelligence, 2015 The hotel and tourism industry business activity comprises of construction as well as sales, marketing and support. However, construction was the biggest business activity for the industry and largest job creator with 4,353 jobs for the country. TOP INWARD FDI BY BUSINESS ACTIVITY INTO SA HOTELS & TOURISM INDUSTRY, JAN 2003 APRIL-2015 Industry Business activity Projects Value (Rm) Jobs Created Companies Construction Sales, Marketing & Support Source: FDI Intelligence, Corporate Activity and Recent Developments The tables below shows corporate acquisitions and new projects in the South African Hotel and Tourism industry. Acquisitions and New Projects in the South African Hotel Sector, Date Target Target Country Acquisitor Acquisitor Country Title Value (Rm) 02/09/ /03/2008 Sun International Ltd City Lodge Hotels Ltd South Africa South Africa Minor International Public Company Ltd Vuwa Investments (Pty) Ltd Thailand South Africa Acquisitions and New Projects in the South African Tourism Sector, Acquisition of major stakes Acquisition of 15% stake Date Target Target Country Acquisitor Acquisitor Country Title Value (Rm) 06/08/2013 Imperial Group Tourism interests 12/06/2008 Tourism Investment Corporation Ltd Source: Who owns Whom, 2015 South Africa Cullinan Holdings Ltd South Africa Bidco - South Africa Acquisition of 100% stake Acquisition of 100% stake R663 R485 R90 R1600

5 1.3 Competitive landscape of hotels in South Africa South Africa's hotel market is well developed, with eight out of the top 10 global hotel chains identified by BMI (2015) having at least one property in the country. The leading domestic hotel and leisure chains include City Lodge Hotel Group, Protea Hotels, Sun International and Tsogo Sun. Below are the international and domestic hotel groups as well as recent developments as provided by Business Monitor International (2015): Domestic Hotel Groups City Lodge is currently eyeing expansion, announcing plans in August 2014 to invest more than ZAR475m in building two new hotels in East Africa over the coming years. The company is also reportedly looking to add further hotels in capital cities across Sub-Saharan Africa in locations such as Kampala, Maputo, Windhoek and Lusaka, according to a report by the SA Commercial Property news website. Protea Hotels (now a wholly owned subsidiary of US hotel chain Marriott International) is South Africa's largest hotel chain. The company operates 77 hotels under three brands: Protea Hotels, Fire and Ice! and African Pride. Sun International established in 1979, Sun International is a South Africa-based hospitality company with interests in hotels and casinos across seven countries in southern Africa and one (Chile) in Latin America. The company's focus is increasingly on its casino operations. However, its hotel division posted revenue of ZAR8.47bn for the fiscal year ending June 2014, up from ZAR8.2bn for the previous year. Minor International (MINT), which will see MINT acquiring majority holdings in the Gaborone Sun in Botswana, the Kalahari Sands in Namibia, the Lesotho Sun and Maseru Sun as well as the Royal Swazi and Ezulwini Sun properties in Swaziland, according to a report in Business Day. Sun International will also reportedly half its 100% stake in the Royal Livingstone and Zambezi Sun in Zambia to 50%, with MINT holding the remainder. Tsogo Sun was established in 1969, Tsogo Sun is one of Southern Africa's leading hospitality companies. Its portfolio of more than 90 hotels includes more than 14,500 rooms spread across all market sectors in Africa, the Middle East and the Seychelles. The company, according to its website, also operates 14 gaming and entertainment sites and more than 250 conference and banqueting facilities. Tsogo Sun operates a range of hotel brands under franchise, from the budget Formula 1 to the high-end InterContinental. 5 International Hotel Groups Marriott International, the leading hotel chain in South Africa is Protea Hotels. In April 2014, Marriott International completed its acquisition of Protea in a deal that makes Marriott the largest foreign hotel player on the African continent. According to a Marriott press release, its presence in the Middle East and Africa region has now nearly doubled to more than 160 hotels and 23,000 rooms. InterContinental after Marriott (via its ownership of Protea), InterContinental is then the best represented international hotel group in South Africa, with nine hotels across its Crowne Plaza, Holiday Inn, Holiday Inn Express and InterContinental Hotels and Resorts brands. Carlson Rezidor comes next, now with seven hotels following the October 2014 opening of the 122-room Park Inn by Radisson Cape Town Newlands. In April 2015, Carlson Rezidor opened its eighth South African property, the refurbished Radisson Blu Le Vendome hotel. This hotel, purchased in 2013, had undergone a major refit before being relaunched as the Radisson Blu Le Vendome Hotel Cape Town. Hilton operates five hotels in South Africa across its Conrad, Doubletree by Hilton and Hilton Hotels & Resorts brands. In 2012, Hilton Worldwide signed a franchise agreement with the locally owned Upper Eastside Hotel to acquire its second hotel in Cape Town and its fifth in South Africa overall. The 183-room Upper Eastside Hotel has now been rebranded as the DoubleTree Cape Town Upper Eastside. Accor's directly owned South African properties are four high-end Mercure hotels. Accor have stated that Sub- Saharan Africa, where the French hotel chain already has 54 hotels (from economy to upscale) in 14 countries, is a 'key area' for the group, and it aims to open 35 hotels there by 2020.

6 Best Western only has one property, the Cape Suites Hotel in Cape Town, consisting of 126 self-catering units. There are currently no plans for Best Western to increase their presence in South Africa. Starwood at the present time, Starwood has no hotels under development in South Africa. However, Africa remains a key focus of its expansion plans, with the company stating that it planned to increase its portfolio there 'by nearly 30%', with 10 new hotels set to open over the coming three years, adding more than 4,200 guest rooms across the continent. Hyatt currently has only one property in South Africa. The Hyatt Regency is situated in the Rosebank district of Johannesburg, close to the Sandton CBD and Constitution Hill. The hotel is aimed at high-end tourists and business travellers. Four Seasons Canadian hotel management company Four Seasons Hotels reopened the former Westcliff hotel in Johannesburg as the new Four Seasons of the Westcliff in December The company has spent 18 months and USD56m on fully refurbishing the 117-room luxury property, which reportedly includes 12 suites. Further amenities include some 1,500 square metres of meeting and event space and a range of new restaurants. Below are the recent developments that took place in the hotel industry of South Africa according to Business Monitor International Industry view Q3 2014: Following 18 months of renovations, Canadian hotel group Four Seasons Hotels reopened the former Westcliff hotel in Johannesburg as the new 117-room Four Seasons The Westcliff. South African-based City Lodge Hotel Group announced plans to invest more than ZAR475mn in two new hotels in East Africa. City Lodge is looking to build an USD23mn 170-room hotel in Nairobi, Kenya (expected to open in mid-2016) and an USD22mn 147-room hotel in Dar es Salaam, Tanzania. In April 2015, Tsogo Sun announced it would be commencing construction of a 500-room hotel complex in Cape Town city centre. The ZAR680mn development is expected to be completed in Also in April 2015, Carlson Rezidor announced plans to open the first hotel in South Africa under its Radisson Red brand. The 235-room hotel will be situated on the V&A Waterfront in Cape Town and is due to open in late Cape Town Hotel and Accommodation Statistics Horwath HTL, on behalf of Cape Town Tourism, conducted a performance review and forecast study amongst respective accommodation establishments within the Cape Metropole. The establishments that participated in the analysis were located across the City Centre, Helderberg, South Peninsula, Northern and Southern Suburbs, Blaauwberg Coast and the Atlantic Seaboard. The participating establishments included guesthouses, hotels, selfcatering, B&Bs and backpackers. The overall performance of the accommodation establishments in the Cape Town Region is depicted in the figures following below; with respect to the percentage occupancy rates, room rates and overall revenue achieved. The Cape Metropole accommodation establishments recorded their strongest occupancy rates during the months of November (78.2%), December (70.3%) and remained steady throughout the peak season period between January and March While a seasonal drop can be seen across the winter months, the accommodation sector continued to welcome visitors during the period. The month of June 2014 held an aggregate of 55.8% of room nights sold to the domestic market, portraying a clear indication of the preferred travel period of the domestic travellers.

7 Value (Rand) % Occupancy 100,0% % OCCUPANCY RATE ACHIEVED IN THE CAPE METROPOLE, JAN-DEC ,0% 80,0% 70,0% 60,0% 50,0% 40,0% 30,0% 20,0% 10,0% 0,0% January February March April May June July August Septemb er October Novemb er % Occupancy 72,0% 87,1% 81,0% 67,9% 54,2% 47,1% 52,8% 51,7% 63,0% 68,8% 78,2% 70,3% Decemb er Source: Cape Town Tourism, 2015 The average room rate and revenue patterns by month portrays a similar trend to the occupancy levels indicated above. From the trend observed below it is evident that the participating accommodation establishments achieved their advertised room rates during the peak season, with the highest overall average rate achieved during the months of February (R1,634) and December (R1,531). R AVERAGE ROOM RATE & REVPAR ACHIEVED IN THE CAPE METROPOLE, JAN-DEC 2014 R R R R R 800 R 600 R 400 R 200 R 0 Source: Cape Town Tourism, 2015 Januar y Februa ry March April May June July August Septem ber Average Room Rate R R R R R R R R R R R R RevPAR R 878 R R R 784 R 564 R 505 R 529 R 526 R 776 R 883 R R Octobe r Novem ber Decem ber When observing the occupancy levels across the respective accommodation categories, it is evident that Cape Town holds a strong demand and popularity for backpacker accommodation. From the representative sample of accommodation establishments, the backpacker establishments held the strongest share throughout the year, with the exception of February, May and August The consistent trend can possibly be attributed to Cape Town s age demographic of visitors, that indicated an age group of years (50.7%) and below 20 years (28.7%) in These key trends underlines the versatility of Cape Town as a tourism destination and the strong appeal the city has to the young market.

8 % Occupancy % Occupancy 100,0% % OCCUPANCY RATES ACHIEVED BY ACCOMMODATION CATEGORY, JAN-DEC ,0% 80,0% 70,0% 60,0% 50,0% 40,0% 30,0% 20,0% 10,0% 0,0% January February March April May June July August September October November December B&B's 70,0% 82,7% 81,1% 62,0% 42,7% 40,7% 36,9% 42,6% 49,5% 62,7% 69,5% 74,2% Guesthouses 73,8% 84,0% 72,0% 60,7% 51,9% 47,3% 47,8% 57,6% 61,4% 66,9% 76,5% 79,3% Hotel 69,9% 87,7% 82,4% 69,5% 53,3% 47,4% 53,5% 50,5% 63,8% 69,2% 79,2% 67,8% Self-Catering 79,3% 89,8% 72,4% 73,5% 70,1% 44,9% 57,2% 59,2% 56,5% 63,7% 60,0% 69,9% Backpackers 82,5% 85,8% 94,0% 78,1% 62,1% 54,7% 69,3% 68,6% 79,8% 85,0% 85,0% Source: Cape Town Tourism, 2015 The Cape Town sub-regions were equally dominated by visitors during the peak season months, portraying strong occupancy levels during the months of February, March, November and December. The strongest occupancy rates were recorded in the City Centre and Atlantic Seaboard across the summer months, in addition to an occupancy rate of 87.6% during December in the Helderberg region. The Southern Suburbs and City Centre regions held the strongest occupancy rates during the winter months, portraying a clear variation in accommodation trends across the respective months ,0% % OCCUPANCY RATES ACHIEVED BY CAPE TOWN REGION, JAN-DEC ,0% 80,0% 70,0% 60,0% 50,0% 40,0% 30,0% 20,0% 10,0% 0,0% January Source: Cape Town Tourism, 2015 Februar y March April May June July August Septem ber October City Centre 73,7% 88,6% 87,7% 73,5% 55,3% 54,2% 60,7% 51,1% 61,7% 77,2% 84,7% 69,8% Blaauwberg Coast 64,0% 80,1% 64,9% 62,8% 45,5% 41,3% 52,4% 49,2% 61,6% 65,1% 65,0% 72,5% Helderberg 68,5% 92,2% 75,5% 44,7% 44,2% 35,1% 32,0% 39,8% 56,4% 52,9% 64,0% 87,6% Southern Peninsula 66,5% 74,3% 56,5% 45,3% 25,7% 39,6% 30,3% 43,0% 49,9% 59,6% 65,3% 79,1% Southern Suburbs 60,8% 93,2% 83,4% 71,3% 61,7% 53,1% 53,9% 66,8% 65,7% 41,0% 56,9% 55,5% Northern Suburbs 57,5% 78,0% 73,6% 56,6% 60,6% 42,6% 54,6% 51,0% 62,9% 68,8% 79,0% 71,7% Atlantic Seaboard 85,6% 91,8% 85,8% 74,6% 56,2% 42,1% 43,6% 52,7% 75,2% 74,8% 88,3% 79,6% Novem ber Decem ber

9 1.5 FDI in the hotel industry in Cape Town ( ) Number of FDI projects - 10 Estimated total FDI investment value - R4.8 billion Average hotel FDI project size for high-end luxury hotels: 200+ rooms R550 million - R1.1 billion Average hotel FDI project size for mid- to luxury hotels: rooms R260 million - R500 million Average hotel FDI project size for boutique hotels: rooms R90 million - R240 million Cross-border inward merger and acquisition investment value - R2.7 billion Source: Financial Times, 2014; Mergermarket, 2014; Pam Golding Hotels (Pty) Ltd, 2014 Prominent FDI projects in the Western Cape include the following (Financial Times, 2014): Park Inn 2010 subsidiary of Rezidor Hotel Group opened a 120 room Park Inn hotel in Cape Town, Foreshore, featuring a grill restaurant, gym, business centre, two rooftop conference rooms, four small breakaway rooms, rooftop terrace, bar and swimming pool. Hilton Hotels 2010 set up a development office in Cape Town with the intention to open hotels in all main cities in South Africa and will seek local partners to develop new hotels or manage existing hotels. Since this investment Hilton Hotels have opened in two locations in Cape Town. The Hilton Cape Town City Centre is a 137 room 5-star hotel located in the CBD and the DoubleTree by Hilton is a 183 room 4-star hotel located in the trendy Woodstock area. Holiday Inn 2007 subsidiary of InterContinental Hotels Group (IHG) announced an investment into four Express by Holiday Inn properties in South Africa with the first 175 room Cape Town hotel located in the CBD. Booking.com 2007 subsidiary of priceline.com opened a new office in Cape Town with local sales and account management teams to ensure closer relationships with hotels and partners in each region served. Indian Hotels 2006 subsidiary of Tata Group, invested in the 176 room Taj Hotel in the Cape Town CBD. The property was developed through a joint venture with Eurocape and Tata Africa. 9 Kerzner International invested in the ultra-luxury One & Only hotel located at the V&A Waterfront in Cape Town with 131 rooms and suites. 1.6 Recent hotel transactions On 1 April 2014, Marriott International, a leading United States hospitality group, completed its acquisition of Protea Hospitality Group for R2 billion. The transaction is in line with Marriott s strategy to expand in the hotel market and thereby to enhance its footprint in Africa. The deal is expected to be positive for South Africa and is an indication of investor interest. Protea, established in 1984, manages 116 hotels with 10,148 rooms in seven African countries under the Protea Hotels, Protea Hotel Fire & Ice and the African Pride Hotels brands. Marriott will manage 45% of the rooms, franchise about 39% and lease the other 16%. The board of directors of Tsogo Sun announced on 2 April 2014 that Southern Sun, a wholly owned subsidiary of Tsogo Sun; Liberty Group; and Cullinan, a company jointly held by Southern Sun and Liberty Group, have concluded agreements in terms of which Southern Sun and Liberty Group will restructure their respective shareholdings in Cullinan.

10 Number of Arrivals (million) 2. Tourism Sector According to the World Tourism Organisation, tourism is a social, cultural and economic phenomenon, involving the movement of people to respective countries or places outside their usual environment, for personal or business/professional purposes. Tourism can also be described as a service based industry, encompassing a vast number of tangible elements; i.e. transport, food and beverages, tours, accommodation, as well as intangible elements; i.e. culture, heritage, adventure, health and wellness, etc. When observing the accommodation sector, hotels are one of the largest categories, catering to both the business and leisure travellers and providing a wide range of accommodation offerings and facilities. According to the Tourism Grading Council of South Africa category definition, a hotel provides formal accommodation with full or limited service to the travelling public. 2.1 International Tourism Indicators According to the United National World Tourism Barometer (2014), international tourist arrivals reached 1,138 million in 2014 seen in the graph below, with a 4.7% increase compared to the previous year. When comparing the years , the highest number of international tourist arrivals have been recorded in 2014 and UNWTO forecasts international tourism to grow further by 3% to 4% in Therefore, illustrating the positive growth in the tourism industry and in turn making a positive contribution to economies worldwide. By region, the strongest growth in 2014 was recorded in the Americas (7% growth), followed by Asia and the Pacific (5%) and Europe (3.9%). By sub region, North America (8%) recorded the best growth, followed by North-East Asia, South Asia, Southern and Mediterranean Europe, Northern Europe and the Caribbean, which.all increased by 7%. In view of this trend, international tourism is set to end 2014 with record numbers, said UNWTO Secretary- General, Taleb Rifai. Over the past years tourism has proven to be surprisingly strong and resilient economic activity and a fundamental contributor to the economic recovery by generating billions of dollars in exports and creating millions of jobs. This has been true for destinations all around the world. INTERNATIONAL TOURIST ARRIVALS, Arrivals Growth 4,3% 4,7% 4,7% 4,8% 4,7% 4,6% 4,5% 4,4% 4,3% 4,2% 4,1% Source: UNWTO, 2014

11 Number of tourist arrivals 2.2 South African Tourism Indicators Source: SATourism, 2014 TOURISM PERFORMANCE INDICATORS SOUTH AFRICA Total number of tourist arrivals 9,188,368 9,616,964 Total spend (excluding capital expenditure) from tourists R74.2b R70.3b Total number of bed nights spent by tourists 67.5 million 79.9 million Total domestic trips 25.4 million 25.2 million 2012/2013 growth in tourist arrivals 4.7% 2012/2013 growth in spend from tourists -5.3% 2012/2013 growth in number of bed nights spent by tourists 18.4% 2012/2013 growth in domestic trips -0.8% Average length of stay of tourists 7.7 nights 8.7 nights Average number of provinces visited In 2013, tourist arrivals to South Africa grew by 4.7%, reaching 9,616,964 million. From South Africa recorded highest number of arrivals in TOURIST ARRIVALS INTO SOUTH AFRICA, Tourist Arrivals Source: SATourism, 2014 Africa & the Middle East was South Africa s leading region and largest contributor to tourist arrivals. The Africa land markets remained South Africa s strongest source of tourist arrivals, reaching 6,515,703 and growing by 3.4%. Tourist arrivals from the Africa air markets reached 455,462 in 2013, while not as strong as the Africa land markets, growth from this region resulted in an impressive 12%, largely attributed to strong growth from Angola (20.1% growth) and Nigeria (15.4% growth). There was also positive growth amongst the Middle East markets. South Africa received 5,305 arrivals from Saudi Arabia in 2013 a positive 19.3% growth compared to the previous year, 1,180 from the United States Emirates with 10.2% growth compared to the previous year and 13,457 arrivals from Turkey with 5.3% growth in 2013 compared to the previous year. Europe ranked as South Africa s second highest source of tourist arrivals.

12 Number of tourist arrivals Source: SATourism, TOURIST ARRIVALS TO SOUTH AFRICA BY REGION, Europe Americas Asia & Australasia Africa & the Middle East When observing the 2013 top ten international markets to South Africa, a parallel trend can be seen in the ranking order of the top ten source markets in From the rankings it is clear that the developed economies; the United Kingdom, United States and Germany remained South Africa s strongest international markets. China, India and Brazil, three of the strongest developing economies ranked in 4 th, 8 th and 9 th positions respectively. China (Incl Hong Kong) retained its position as the 4 th largest source market and proved to be among South Africa s fastest growth markets. China further recorded the highest (14.7%) year-on-year growth of all international markets. Eight of the top ten Africa markets originated from the Africa land region, demonstrating a solid and consistent share from these countries. Zimbabwe, Lesotho and Mozambique remained South Africa s top three source markets, despite the 9.1% decline from Lesotho. Malawi ranked as South Africa s fastest growing market, while off a small base, tourist arrivals grew by an impressive 22.1%. Angola and Nigeria were the only Africa air markets represented in the top 10 ranking. While Nigeria remains the main source of tourist arrivals from the Africa air region, Angola reflected the strongest (20.1%) growth from this region. 12 RANK TOP 10 SOURCE MARKETS TO SOUTH AFRICA, 2012/2013 COUNTRY Source: SATourism, 2014 TOURIST ARRIVALS 12/13 % GROWTH United Kingdom 438, , % 2 United States 326, , % 3 Germany 266, , % 4 China (Incl Hong Kong) 132, , % 5 France 122, , % 6 Australia 120, , % 7 Netherlands 117, , % 8 India 106, , % 9 Brazil 78,376 82, % 10 Canada 66,802 68, % RANK TOP 10 AFRICA MARKETS TO SOUTH AFRICA, 2012/2013 COUNTRY TOURIST ARRIVALS 12/13 % GROWTH Zimbabwe 1,847,974 1,976, % 2 Lesotho 1,618,223 1,470, % 3 Mozambique 1,104,404 1,117, % 4 Swaziland 768, , % 5 Botswana 452, , % 6 Namibia 200, , % 7 Zambia 169, , % 8 Malawi 142, , % 9 Nigeria 73,282 84, % 10 Angola 47,714 57, %

13 Number of tourist arrivals 2.3 Provincial Tourism Indicators TOURISM PERFORMANCE INDICATORS WESTERN CAPE Total number of tourist arrivals 1,354,353 1,569,195 Total spend (excluding capital expenditure) from tourists R18.0b R16.7b Total number of bed nights spent by tourists 16,322,077 19,024,349 Total domestic trips 1,960,000 2,351, /2013 growth in tourist arrivals 15.9% 2012/2013 growth in spend from tourists -7.2% 2012/2013 growth in number of bed nights spent by tourists 16.6% 2012/2013 growth in domestic trips 19.9% Average length of stay of tourists 12.6 nights 12.6 nights Average number of provinces visited - Source: SATourism, 2014 In 2013, the Western Cape recorded a total of 1,569,195 tourist arrivals, representing a significant year-on-year growth of 15.9%. As seen below, 2013 held the highest number of tourist arrivals to the province, exceeding 2010 World Cup tourist arrivals TOURIST ARRIVALS INTO THE WESTERN CAPE, Tourist Arrivals Source: SATourism, 2014 Tourist arrivals to the Western Cape were led by the European region, ranking as the dominant share across the last five years. Africa & the Middle East maintained its position as the Western Cape s second largest source of tourist arrivals across the entire period.

14 Number of tourist arrivals TOURIST ARRIVALS TO THE WESTERN CAPE BY REGION OF ORIGIN, Africa & the Middle East Americas Asia & Australasia Europe Source: SATourism, The table below demonstrates the share of tourist arrivals to each respective province. It is important to note that the table below indicates the provinces visited and not the provinces where nights were spent. When observing the performance of the Western Cape, it is evident that Europe, Asia & Australasia and the Americas ranked as the strongest share of tourist arrivals to the province. Of all the provinces, the Western Cape held the highest share in tourist arrivals from Canada (47.5%), the United States (45.0%), Japan (43.0%), France (47.4%), Germany (60.5%), Italy (49.0%), the Netherlands (61.2%), and the United Kingdom (63.5%) 14

15 PROVINCIAL DISTRIBUTION- SHARE OF TOURIST ARRIVALS, 2013 Gauteng Cape E.Cape KZN Mpumalanga Limpopo N.West N.Cape Free State AFRICA LAND 41.0% 3.4% 0.6% 6.8% 13.4% 19.7% 5.4% 2.0% 11.3% Botswana 47.2% 3.2% 4.0% 0.7% 1.8% 43.3% Lesotho 39.4% 1.5% 0.5% 3.5% 0.8% 5.8% 0.8% 48.1% Malawi 87.4% 4.1% 7.6% Mozambique 55.4% 4.2% 1.3% 41.2% Namibia 12.3% 35.6% 2.2% 51.7% Swaziland 23.9% 0.2% 32.2% 42.1% 1.2% Zambia 84.8% 5.3% 4.9% 6.6% 5.3% 1.8% Zimbabwe 34.6% 1.8% 0.8% 2.9% 1.4% 62.9% 0.7% % AFRICA AIR 61.8% 25.1% 4.2% 9.6% 3.9% 2.0% 3.1% 0.4% 0.8% Angola 64.2% 26.9% 3.2% 7.2% 2.5% 2.7% DRC 69.6% 9.9% 5.1% 12.4% 4.8% Kenya 66.1% 17.5% 4.3% 9.0% 4.3% Nigeria 73.8% 15.9% 9.4% 2.6% 3.1% Tanzania 71.3% 10.5% 11.9% AMERICAS 44.7% 45.7% 10.3% 15.0% 13.0% 7.5% 4.5% 1.7% 2.2% Brazil 54.4% 43.6% 6.4% 9.8% 9.4% 7.1% Canada 38.8% 47.5% 13.2% 17.7% 15.0% 5.8% 3.7% 2.3% United States 43.1% 45.0% 11.0% 15.8% 14.1% 9.6% 4.0% 1.7% 2.5% ASIA & AUSTRALASIA 54.5% 44.4% 6.2% 15.2% 6.2% 3.0% 14.6% 1.4% 1.2% Australia 44.5% 38.1% 11.1% 19.5% 12.4% 6.6% 6.9% 1.9% 2.4% China (Incl H. Kong) 71.6% 64.9% 3.9% 8.3% 4.1% 37.4% India 50.3% 27.7% 4.8% 24.2% 4.6% 1.9% 4.9% Japan 42.0% 43.0% 4.5% 13.0% 5.8% 7.2% EUROPE 32.7% 55.9% 13.1% 13.8% 12.6% 5.2% 3.7% 1.7% 1.9% France 39.3% 47.4% 12.1% 16.1% 15.1% 4.2% 4.7% 1.7% 2.3% Germany 32.9% 60.5% 18.6% 13.9% 14.8% 4.4% 2.6% 1.9% 1.7% Italy 38.1% 49.0% 12.1% 12.3% 14.8% 8.3% 3.6% Netherlands 30.7% 61.2% 17.2% 16.4% 18.0% 6.8% 4.0% 2.5% 2.6% Sweden 38.1% 23.8% 12.3% 16.2% 20.2% 12.1% 7.0% United Kingdom 27.3% 63.5% 9.9% 11.8% 8.5% 3.4% 3.8% 1.5% 1.6% ALL FOREIGN TOURISTS 41.6% 16.3% 3.4% 8.8% 12.5% 15.3% 5.6% 1.8% 8.4% Source: SATourism, *Notes: The table represents the provinces visited by each segment and should be read from left to right. Blank cells indicate that the sample was not big enough for a valid statistical interpretation. The totals will add up to a greater than 100% as tourists visit more than one province.

16 2.4 National Parks In 2013, a total of 3,112,464 visitors were recorded at the South African National Parks across the Western Cape; representing a 4.8% year-on-year increase when compared to 2012 (2,970,321). Listed below is the total number of visitors welcomed at each National Park: Table Mountain National Park (2,531,487); Tsitsikamma National Park (241,005); West Coast National Park (213,721); Wilderness National Park (65,303); Karoo National Park (35,608); Bontebok National Park (13,933); and Agulhas National Park (11,407). VISITORS TO THE SOUTH AFRICAN NATIONAL PARKS IN THE WESTERN CAPE, 2013 Tsitsikamma National Park; Table Mountain National Park; West Coast National Park; Wilderness National Park; Karoo National Park; Bontebok National Park; Agulhas National Park; Source: South African National Parks, Lodging statistics for National Parks In 2013, the Tsitsikamma National Park sold the highest number of unit nights (21,082), bed nights (49,825) and camping nights (13,222). However, the most significant year-on-year growth in unit (13.3%) and bed (14.1%) nights sold was recorded at the Table Mountain National Park, while camping nights increased by an impressive 20.3% at the Wilderness National Park. National Park LODGING STATISTICS FOR SOUTH AFRICAN NATIONAL PARKS, 2012/2013 Unit nights sold Bed nights sold Camping nights sold /13 % Change /13 % Change /13 % Change Karoo 8,434 8, % 21,420 22, % 4,926 5, % Wilderness 7,891 8, % 19,154 20, % 6,993 8, % Tsitsikamma 20,880 21, % 49,332 49, % 12,467 13, % West Coast % 2,703 2, % Bontebok 1,904 1, % 4,412 4, % 2,361 2, % Table Mountain 3,178 3, % 8,995 10, % Agulhas 1,859 2, % 5,218 5, % Source: South African National Parks, 2014

17 2.6 Attraction Trends TOTAL NUMBER OF VISITORS BY PARTICIPATING REGIONAL ATTRACTION, 2013/2014 ATTRACTIONS /14 % Change Cape Town Kirstenbosch Botanical Gardens 696, , % Robben Island - 329,004 - V&A Waterfront Shopping Centre 23,160,894 23,836, % Table Mountain National Park 2,546,629 2,718, % Table Mountain National Park: Boulders 661, , % Table Mountain National Park: Cape of Good Hope 888, , % Table Mountain Aerial Cableway 826, , % Cape Medical Museum 2,219 1, % Hout Bay Museum 10,344 10,699 - SA Sendinggestig Museum 4,873 5, % Simons Town Museum 10,737 13, % Cape Overberg De Hoop Nature Reserve 16,140 21, % De Mond Nature Reserve 6,920 7, % Cape Agulhas Lighthouse 8,077 (Construction) 22,906 - Agulhas National Park 11,407 (Construction) 26,292 - Bontebok National Park 13,933 16, % Harold Porter National Botanical Gardens 47,807 48, % Kogelberg Nature Reserve 5,339 4, % Stony Point 83,173 83, % Caledon Museum 2,102 1,187 - Drostdy Museum 25,582 24, % Genandenal Museum 4,306 4,268 - Old Harbour Museum 97, , % Shipwreck Museum 6,198 19,479 - Cape Garden Route & Klein Karoo Cango Caves 234, , % Wilderness National Park 65,303 79, % Tsitsikamma National Park 241, , % Bartolomeu Museum 87,140 90, % George Museum 10,589 12, % CP Nel Museum 24,582 24, % Greak Brak Museum 3,933 3,007 - Cape West Coast West Coast National Park 213, , % Wheat Industry Museum 6,829 10,379 - Cape Karoo Karoo National Park 35,608 37, % Cape Winelands Worcester 47,393 28,193 - Huguenot Memorial 41,441 43, % Montagu 9,655 13, % 17

18 Number of arrivals Number of arrivals Oude Kerk 9,525 7,199 - Paarl 3,214 3, % Stellenbosch 38,263 35, % Togryers 1,931 4,561 - Wellington 5,894 5,413 - Robertson 1,667 2, ACSA Cape Town International Airport In 2014, Cape Town International Airport recorded a total of 707,783 international passengers and 3,513,794 domestic passengers. Arrival patterns indicate that the largest share of passengers originated from the domestic market, which could be business related as the trends indicated the majority of domestic visitors come go on business trips within the province. Amongst all six years, 2014 had the highest number of international and domestic airport arrivals, therefore more people are travelling that has positive effects on the tourism industry. INTERNATIONAL AND DOMESTIC ARRIVALS THROUGH CAPE TOWN INTERNATIONAL AIRPORT, Source: ACSA, International Arrivals Domestic Arrivals A total of 76,895 regional arrivals entered through the Cape Town International Airport, reflecting a 6.4% increase when compared to the 72,259 recorded in The flow of regional arrivals portrayed a steady growing trend from REGIONAL ARRIVALS THROUGH THE CAPE TOWN INTERNATIONAL AIRPORT, Regional Arrivals Source: ACSA, 2014 Regional arrivals are defined by the Government Gazette by the landing charge in respect of an aircraft which lands at a company airport that has been engaged in a flight where the airport of departure of that aircraft is Botswana, Lesotho, Namibia or Swaziland.

19 Number of passenger vessels Number of Arrivals 2.8 ACSA George Airport The George Airport recorded a total of 296,911 arrivals in 2014 and grew by 6.4% when compared to the previous year. The George Airport serves as an important gateway to the Cape Garden Route & Klein Karoo region making positive contribution to domestic tourism in the region and province ARRIVALS THROUGH GEORGE AIRPORT, Source: ACSA, Total Arrivals Cape Town Port Statistics In 2013, a total of 43 vessels were received through the port of Cape Town, reflecting the highest number of vessels when compared to the preceding eight years. Since 2010, a consecutive year-on-year increase in vessels can be observed, portraying strong growth potential for the Western Cape s cruise liner sector No of vessels Source: Transnet National Ports Authority, 2014 NUMBER OF PASSENGER VESSEL CALLS THROUGH THE PORT OF CAPE TOWN,

20 % share of visitors Number of visitors 3. Business Tourism in the Western Cape South Africa is a popular destination for business travellers, who spend on average three times more than their leisure counterparts when participating in leisure travel themselves, through tours before or after their business activities and through return trips in subsequent years. According to South African Tourism visitor trends, the share of international business travellers to the Western Cape (tourists who only travelled for business) increased from 12.1% in 2009 to 16.6% in The share of international business tourists (tourists who travelled for business and leisure) to the Western Cape grew from 5.7% in 2009 to 7.3% in The steady growth rate in each visitor segment echoes the importance and potential of business tourism for the Western Cape. Growth in business tourists further indicates a rise in business travellers coming to the province for business and leisure purposes. Domestic business travellers to the Western Cape have increased from 46,339 in 2009 to a significant high of 209,848 in 2012, demonstrating the substantial growth pace in the domestic market for business travel. The economic value of major conferences/conventions held in Cape Town are shown in the table below. The significant value of each conference clearly signifies the huge impact a conference has on the host destination. TOP 5 LARGEST CONFERENCES HELD IN CAPE TOWN BY ESTIMATED ECONOMIC VALUE Name of the Conference Venue Estimated delegates Estimated bed nights Estimated economic value Loeries Awards 2012 CTICC R 72,000,000 Global Conference on Osteology 2012/2013 International Gynaecologic Cancer Society Regional Meeting 2014 World Veterinary Poultry Congress 2015 CTICC R 36,000,000 CTICC R 36,000,000 CTICC R 30,000,000 World Congress of the International Federation of Esthetic Dentistry 2012 CTICC R 24,000,000 Source: Cape Town Routes Unlimited Annual Report 2011/ International business travelers to the Western Cape have increased from 12.1% in 2009 to 11.6% in 2013 illustrating the growing importance of marketing of business tourism. International business tourists to the Western Cape grew from 5.7% in 2009 to 12.1% in 2012 further illustrating growing number of business tourists coming to the province for business conferences and events. Domestic business travelers to the Western Cape have increased from in 2009 to significantly high increase of in MAIN PURPOSE OF VISIT OF TOURIST ARRIVALS TO THE WESTERN CAPE, ,0% 16,0% 14,0% 12,0% 10,0% 8,0% 6,0% 4,0% 2,0% 0,0% Business Traveller Business Tourist Source: SATourism, ,1% 14,6% 14,3% 16,4% 11,6% 5,7% 5,9% 6,3% 7,3% 12,1% MAIN PURPOSE OF VISIT OF DOMESTIC TRAVELLERS TO THE WESTERN CAPE, Business

21 KEY TRENDS AND PATTERNS BY VISITOR TYPE, 2014 Visitor Profile Holiday/Leisure Traveller Business Traveller % share of overseas visitors 43.9% 14.8% % share of domestic visitors 55.1% 81.8% Most common travel group size Pairs (53.4%) Alone (45.7%) Most common age group (32.6%) (37.7%) 1 night (38.4%) 1 night (50.2%) Most common length of stay per town 2 nights (27.0%) 2 nights (19.0%) 3 nights (11.7%) 3 nights (9.7%) Most common mode of transport Rented Car (47.4%) Own motor vehicle (70.2%) Top information sources Word of mouth (28.8%) Word of mouth (30.9%) Most common type of accommodation Self-catering (33.2%) Self-catering (33.6%) Average spend on accommodation R501-R1000 (39.1%) R501-R1000 (41.3%) Average daily budget R501-R1000 (39.8%) R201-R500 (43.1%) Scenic drives (18.4%) Meetings/incentives (26.9%) Top three activities Culture/heritage (15.3%) Expos/exhibitions (13.4%) Outdoor Activities (14.9%) Outdoor Activities (13.2%) JOB CREATION OF BUSINESS/EVENT ENTERPRISES GDP FOR THE PROVINCE FROM VISITOR SPENDING 21 ECONOMIC CONTRIBUTION OF BUSINESS TOURISM TO THE WESTERN CAPE INCREASE IN BED NIGHTS AT ACCOMMODATION SECTORS BUSINESS TOURISM BRAND CREATED FOR THE WESTERN CAPE