THE SOUTH AFRICAN TRAVEL SECTOR IN 2017

THE SOUTH AFRICAN TRAVEL SECTOR IN 2017 FULL REPORT - MAY 2018 Prepared on behalf of the Association of Southern African Travel Agents by Grant Thornton

THE SOUTH AFRICAN TRAVEL SECTOR IN 2017 FULL REPORT - MAY 2018 Prepared on behalf of the Association of Southern African Travel Agents by Grant Thornton

02 CONTENT THE SOUTH AFRICAN TRAVEL SECTOR IN 2017 FULL REPORT - MAY 2018 INTRODUCTION DEFINING THE TRAVEL SECTOR IN SOUTH AFRICA STRUCTURE OF THE TRAVEL SECTOR TRAVEL SECTOR TURNOVER AIR TRAVEL BOOKINGS LAND ARRANGEMENTS EMPLOYMENT IN THE TRAVEL SECTOR TRENDS AND THREATS FOR THE TRAVEL SECTOR GLOBAL OUTLOOK FOR THE TRAVEL SECTOR 04 05 08 12 14 18 22 25 27

03 ACRONYMS AI ASATA BA BBBEE GDS IOT ITC KZN NDC OTA SA SAA TMC Artificial Intelligence Association of Southern African Travel Agents British Airways Broad-Based Black Economic Empowerment Global Distribution System Internet Of things Independent Travel Consultant KwaZulu-Natal New Distribution Capability Online Travel Agent South Africa South African Airways Travel Management Company

04 INTRODUCTION Objective of the Study The Association of Southern African Travel Agents (ASATA) commissioned Grant Thornton to create an Annual South African Travel Market Index Report to determine the state and size of South Africa s travel sector. The objective of the study is to create an accurate picture of the travel market in South Africa which can be utilized by ASATA and its members for strategic management. This is the first time such a study and in-depth analysis has been undertaken in South Africa and it is envisaged that the resulting data will provide a baseline against which the industry would be able to measure growth and track market changes over time. Included in this study is an analysis of the Broad-Based Black Economic Empowerment (B-BBEE) profile of the travel sector. The results of this analysis are summarized in a separate report. Methodological Approach To inform the study, Grant Thornton conducted personal interviews with a selection of companies operating in the travel sector in order to gain an understanding of the industry and the extent of information that is realistically obtainable from industry players. A detailed questionnaire was distributed to all ASATA members and a selection of non-members for completion. The Grant Thornton team encouraged participation in the research process and accurate completion of questionnaires. Useable and valid data was received for 57% of the travel sector in terms of number of branches. However, as the majority of the large groups participated in the research, data provided in the survey responses received represents 70% of the market in terms of turnover; 65% of all employees in the sector; 67% of air travel spend; and 72% of roomnight demand. Where possible, the results presented in this report have been extrapolated to the entire industry. Challenges Identified As this is the first comprehensive study of the travel sector in South Africa, obtaining buy-in and support for the process proved to be challenging. The industry is competitive and players are reluctant to share strategic information and company secrets even to independent third parties under a non-disclosure agreement. As such not all of the big groups in the sector provided a comprehensive response to the questionnaire. Despite this, the majority of the large groups responded willingly and provided comprehensive and accurate data and were extremely helpful and cooperative in providing further information and guidance to the research team. Although the questionnaire was simplified as much as possible in order to make it easier, and less daunting for operators to participate in the process, they still found the extent of information required to be onerous. In many cases responding to the questionnaire was viewed as superfluous to business needs, especially for ITCs and small and medium sized independents and entrepreneurs. It thus took a lot of convincing and cajoling to encourage participation. In some cases data provided was incomplete or inaccurate and thus where possible the team attempted to obtain the correct information. However, some respondents did not / could not provide the data due to limitations within their own systems/ organization. As this is the first attempt at gathering extensive data from the travel sector, and cognisant of data constraints especially within small and medium sized TMCs, the team had to balance the need for data with the buy-in and support from the industry. It is hoped that in future years, as the industry grows to support and trust the process, more comprehensive data will be willingly supplied, extracted and analysed. Thank you Thank you to all participants in the research process, for your time, enthusiasm and willingness to cooperate and participate in the survey. We, the research team, hope that you find value in the data presented and that you will continue to cooperate, and encourage others to participate, in years to come. Thank you also to the ASATA team for your ongoing support and guidance.

05 DEFINING THE TRAVEL SECTOR IN SOUTH AFRICA Defining the Travel Sector The main task of travel agents is to sell travel services to the general public and commercial clients. A travel agency operates as a broker, bringing buyers and sellers together, for the suppliers of travel such as airlines, hotels, car rentals, ground operators, tour companies, travel insurance, etc. Travel agents are not be to confused with tour operators, who are responsible for arranging or assembling tours that are sold by travel agencies or directly by tour operators. Travel agents can be categorized in several ways, on the basis of size, the market/s they serve, the services they provide and/or delivery models offered. Size refers to the number of branches or outlets in a group/ company and the dispersion of these from a small, owner-managed independent agency to large, national and multinational agencies with branches distributed across South Africa or even across the world. Independent Travel Consultants (ITCs) are self-employed, independent travel agents, many of whom affiliate with a national or multinational host agency. In terms of services offered, travel agencies can provide all services to all markets (these are known as fullservices agencies), all services to select markets e.g. corporates or they can be niched and focus on a specific, narrow market e.g. incentive groups. A Travel Management Company (TMC) is a corporate or business travel agency that manages the business travel requirements of corporates/ individuals. TMC services to corporates are aimed at providing cost savings, keeping control of travel policy and minimizing client time spent on travel arrangements. When it comes to delivery mode, travel agents can provide their services via a retail/ office outlet and/or online. A number of multinational and national agencies offer both delivery options. Size Multinationals: with offices worldwide National: with offices throughout the country Independents: with anything from one to a handful of outlets Independent Travel Consultants (ITC): self-employed business owners Service Full-service travel agency: offering all services and products related to international and domestic travel, for leisure and holiday purposes and for individual or group travel Corporate/ Business travel agency also known as a Travel Management Company (TMC): specialising in servicing the comprehensive travel needs of business or corporate clients In-house travel agency: providing business travel services to only one corporate account. Specialty agencies: focuses on a specific market need, such as leisure, incentive groups, etc Delivery Retail Travel Agents: offers services via a retail outlet Online Travel Agents (OTAs): all services are provided online, with telephonic support In South Africa, there a number of national travel agency groups in the travel sector, each offering a combination of services, to different markets, through a variety of delivery tools and brands, making the industry a complex web of products and services all geared towards serving customer needs. The Association of Southern African Travel Agents Established in 1956, the Association of Southern African Travel Agents (ASATA) is a representative forum that promotes professional service in the travel industry for its members and their clients. ASATA's role is to ensure the sustainability and profitability of its members as well as ensuring the delivery of professional service to the travelling consumer. This is achieved through strong relationships and open and ongoing dialogue with all stakeholders. Travellers who make use of an ASATA-accredited agency are assured of professional service, ethical conduct, trustworthy behaviour and that they are dealing with a market leader. In total, some 1 741 travel agencies, TMCs and ITCs are members of ASATA, either directly or via the travel group they are affiliated to. Although the exact size of the travel sector in South Africa is unknown, it is estimated that more than 90% of the travel sector are members of ASATA (directly or by affiliation).

06 Structure of the travel sector in South Africa In South Africa there are around 15 large, national travel groups, 13 of which are ASATA members. These travel groups each have one or more well-known travel brands, many of which are home-grown South African brands. Some have international brands acquired via license/ other affiliations or they are part of an international group. In total, there are 1741 travel agencies branches or outlets (including TMCs and ITCs) in South Africa that are members of ASATA of which 1670 are linked to the 13 large travel groups. These branches/ outlets represent 96% of ASATA's membership affiliations. The remaining of ASATA's members (~70 companies/ branches) are independent travel agents, with no linkages to a large travel group. 96% of ASATA's members are associated with one of 13 large travel groups: Independents There are 15 large national travel groups, 13 of which are ASATA members. Of the 13 ASATA-affiliated large travel groups, 8 own and operate travel agencies under one or more of their travel brands either as Online Travel Agencies (OTAs), Travel Management Companies (TMCs), In-house Corporates, or branded retail outlets. In total there are around 250 branded branches or outlets owned by these 8 travel groups (representing 14, of ASATA's membership base). 4 Of these 8 groups only operate through owned branches/ outlets and they do not have any franchised or affiliate branches, or any other model where their brand is assigned to a branch/ outlet wholly owned by another entity. The other 4 of these 8 groups with owned branches/ outlets also have franchised branches, franchised ITCs and/or affiliates, which may or may not carry one of the group's brands. The remaining 5 travel groups, out of the 13 large groups that are ASATA members, are franchisors only and do not own or operate their own outlets. Independents Part of a group Part of a group 96% 96% There are approximately 1 430 franchised or affiliated branches across these 9 franchisors, the majority of which are unbranded ITCs (unbranded ITCs represent close to 55% of ASATA's membership base). Franchisors offer franchisees the benefit of booking and distribution technology/ systems, group buying power together with group commissions and supplier relationships and in some cases brand and marketing benefits. There are a variety of franchise or licence models adopted in South Africa, viz: unbranded franchise, branded franchise, unbranded ITC and branded ITC. 13 Large, National Travel Groups 1670 branches/ outlets 70 Independent Travel Agencies 96% 8 Groups with wholly owned, branded branches 9 Franchisor Groups: 5 are franchisors only, 4 have franchises in addition to wholly owned branches Branded, wholly owned Branches (-250) Branded Franchises (-194) Unbranded Franchises (-41) Branded ITCs (-152) Unbranded ITCs (-947) Affiliates (-86) 15% 12% 2% 9% 57% 5% 100%

07 Travel branches by business model In South Africa, the predominant business model for travel agencies is that of Independent Travel Consultant (ITC). Close to 6 of all travel agents operate under this model (1 100). Of these 1 100 ITCs, the majority (86%) are unbranded but are still affiliated to a "franchisor"/ large travel group and 1 of all ITCs are branded. For the travel agency market as a whole, 5 of all travel agents are unbranded ITCs and 9% are branded ITCs. The ITC business model offers individual travel agents the opportunity to be self-employed, work at their own pace and output and manage their own client relationships. The travel group partner provides the ITC with ticketing services through a GDS and access to negotiated fares, travel technology, training, group deals, etc (the range of benefits will vary between travel groups). The second largest group of agents belong to branded branches and in-house corporates, wholly owned by travel groups. These account for 14, of the market. Franchised branches/ outlets make up 13,5% of the market, the majority of which are branded franchises i.e. independently owned but group branded outlets. Branded franchises account for 11% of the market or around 194 outlets. Unbranded franchises are in the minority, accounting for 2, of the market. In the franchised branch model the travel agency typically has their own IATA license, GDS system and sometimes branding but they benefit from group deals with airlines, accommodation providers and other preferred partners as well as access to training, other support, etc (as with ITCs, the benefits vary by travel group). Affiliate travel agents typically refer to a partnership agreement, the terms of which vary by partner. An examples of an affiliated travel agent could be a retail clothing store branded travel agent providing travel services to loyalty card holders. Affiliated travel agents account for 4,9% of the market. As discussed previously, independent travel agents account for 4,1% of the market and are those not linked to any large travel group. Distribution of Travel Branches by BUSINESS MODEL 5 Unbranded ITCs 1 Branded Wholly Owned Branch/ in-house corporate 9% Branded ITCs Branded Franchises Independent 11% 2% Unbranded Franchises 5% Affiliates Unbranded ITC Branded wholly owned branch / in-house corporate Branded franchise Branded ITC Affiliate Unbranded franchise Independent 54. 13.9% 11% 9. 5% 2.2% 4.1%

08 STRUCTURE OF THE TRAVEL SECTOR Flight Centre = Australian based travel company = All outlets are wholly owned Travel With Flair = Home-grown South African brand, large independent = Group owned and operated outlets Duma Travel = Home-grown South African brand, large independent = Group owned and operated outlets = Partnered with Uniglobe in 2017 Wings Travel Management = Home-grown South African brand, large independent = Group owned and operated outlets and in-house corporates Bidvest = Subsidiary of the Bidvest Group Limited = Number of travel agency brands that are wholly owned and operated i.e. Rennies Travel, MyMarket.com, BCD Travel, Travel Connections and Carlson Wagonlit Travel = Harvey World Travel brand operated on a franchise model: branded franchisees etravel = F ra n c h i s e / A ffi l i a t e m o d e l f o r unbranded ITCs South African Travel Centre = Franchise model: branded franchisees = Supported by South African Airways Club Travel = Own branches and in-house corporates = Majority of outlets are unbranded and branded franchisees, ITCs and affiliates Serendipity Worldwide Group = Home-grown South African brand = Group owned outlets and unbranded ITC franchises XL Travel = Franchise model: branded franchisees = Affiliated with Flight Specials and other brands Travel Counsellors = Franchise model for branded ITCs = UK based travel company Sure Travel = Southern African travel brand = Franchise model: branded franchisee Tourvest Travel Services = Division of Tourvest Holdings (Pty) Ltd = Number of owned and operated agency brands i.e. Seekers Travel, American Express Global Business Travel, Maties Travel, Indojet Travel, Travel IT, Travel.co.za, Go Travel.co.za and Go Golf Travel.co.za = Franchisor with unbranded franchisees and unbranded ITCs The South African travel sector is concentrated in the country's 3 economically strong and populous provinces, viz: Gauteng with 46% of all travel branches/ outlets, the Western Cape with 30% of all branches/ outlets and KwaZulu-Natal with 12% of all branches/ outlets. Thus there are approximately 810 ASATA affiliated branches/ outlets in Gauteng, 520 in the Western Cape and 220 in KwaZulu-Natal. With 6% of all branches/ outlets (approximately 100), the Eastern Cape is the fourth most preferred destination for travel branches. The remaining 5 provinces (Free State, Limpopo, Mpumalanga, North West and Northern Cape) all have low levels of representation, with each having between 1% and 2% of all travel branches.

09 Distribution of Travel Branches by Province Eastern Cape Free State Gauteng KwaZulu Natal Limpopo Mpumalanga North West Northern Cape Western Cape 5.6% 1.6% 46. 12.5% 1.1% 1.3% 0.8% 1.0% 29.7% Gauteng: Distribution of Travel Branches by Business Model Although unbranded ITCs are the dominant business model in Gauteng (50%), proportionately it is significantly lower than the national average of 54. and the Western Cape where this model dominates at 66% of all branches/ outlets. In Gauteng the number of branded, wholly-owned branches is significantly higher than the national average (17% versus 14,). This is attributed to the predominance of head offices and main outlets for large travel brands in the province, which correlates with the province's economic dominance in the country's economy. Gauteng also has a slightly higher than fair share presence of affiliates, independent travel agents and branded ITCs. Affiliate 6% Independent 5% Branded wholly owned branch / in-house corporate 17% Branded franchise 10% Unbranded franchise 2% Unbranded ITC 50% Branded ITC 10% Unbranded ITC Branded wholly owned branch / in-house corporate Branded franchise Branded ITC Affiliate Independent Unbranded franchise 49. 17% 10.3% 10.1% 6% 4.9% 2.3%

10 KZN: Distribution of Travel Branches by Business Model KwaZulu-Natal (KZN) has a proportionately lower number of branded ITCs and independents when compared to the national average. Although the proportion of unbranded ITCs is higher than the national average this is not considered to be significant. Overall, ITCs are underrepresented in the province. On the other hand, franchises (both branded and unbranded) are overrepresented when compared to the national average. Franchises account for 19,3% of all branches in the province, compared to the national average of 13,2%. Affiliate Independent 2% Branded wholly owned branch / in-house corporate 15% Branded franchise 1 Interestingly the number of wholly owned branches is also higher than the national average in KZN (14,9% compared to 13,9%). This may be attributed to at least of the large groups being predominantly KZN based. Unbranded ITC 56% Unbranded franchise 5% Branded ITC Unbranded ITC Branded wholly owned branch / in-house corporate Branded franchise Branded ITC Affiliate Independent Unbranded franchise 55.7% 14.9% 14. 4. 1.8% 4.9% Western Cape: Distribution of Travel Branches by Business Model The Western Cape is the ITC capital of South Africa, with 74,8% of all branches/ outlets being ITCs. This is 11 percentage points higher than the national average of 63,8%. Most of these ITCs are unbranded. The dominance of ITCs in the province drives down the representation of the other business models. But of particular relevance is the low number of independent businesses operating in the Western Cape (less than 1%). Wholly owned branches make up nearly 10% of all branches/ outlets in the province (compared to the national average of 13,9%). Franchises (branded and unbranded) account for 10.3% of all outlets compared to the national average of 13,2%. Affiliate 5% Independent 0% Branded wholly owned branch / in-house corporate 10% Branded franchise 8% Unbranded franchise 2% Branded ITC 9% Unbranded ITC 66% Unbranded ITC Branded wholly owned branch / in-house corporate Branded franchise Branded ITC Affiliate Independent Unbranded franchise 65.7% 9.9% 8.5% 9.1% 4.6% 0. 1.8%

11 Comparison to National: Provincial Distribution of Travel Branches by Business Model NATIONAL GAUTENG KWAZULU-NATAL WESTERN CAPE Branded wholly owned 13.9% 17.0% 14.9% 9.9% Branded franchise 11.0% 10.0% 14. 8.5% Unbranded franchise 2.2% 2.3% 4.9% 1.8% Branded ITC 9. 10.1% 4.0% 9.1% Unbranded ITC 54. 49. 55.7% 65.7% Affiliate 5.0% 6.0% 4. 4.6% Independent 4.1% 4.9% 1.8% 0. TOTAL 100.0% 100.0% 100.0% 100.0% NATIONAL GAUTENG KWAZULU-NATAL WESTERN CAPE Branded wholly owned 13.9% 17.0% 14.9% 9.9% Branded franchise 11.0% 10.0% 14. 8.5% Unbranded franchise 2.2% 2.3% 4.9% 1.8% Branded ITC 9. 10.1% 4.0% 9.1% Unbranded ITC 54. 49. 55.7% 65.7% Affiliate 5.0% 6.0% 4. 4.6% Independent 4.1% 4.9% 1.8% 0. TOTAL 100.0% 100.0% 100.0% 100.0%

12 TRAVEL SECTOR TURNOVER Estimated Annual Turnover R' million 40,000 39,500 39,000 38,500 38,000 37,500 37,000 In 2017, the travel sector generated total turnover of R39,5bn. This is an increase of s o m e 6, 2 % ove r 2 0 1 6 r eve n u e o f approximately R37 bn. Note: This statistic does not refer to revenue (the amount of money earned from selling travel agency services) but rather turnover, which is the gross sales of the sector, including cost of sales and travel agency revenue. 36,500 36,600 35,500 2016 2017 Year 2016 37 138 2017 39 439 Growth 6.2% Travel Sector compared to SA nominal growth In 2017, the travel sector underperformed when compared to South Africa's nominal economic growth (6,2% compared to 6,6% for the country as a whole). The SA economy grew by 6,6% in 2017 but only 1,3% of this growth was real, with the balance of 5,3% being CPI inflationary growth. 7.0% 6.0% 5.0% 6.6% 6.2% With CPI inflation at 5,3%, real growth in the travel sector was approximately 0,9% in 2017. 4.0% 3.0% Industry sectors with above average real growth in 2017 included agriculture, mining, finance and transport. The trade, catering and accommodation sector contracted by 0,6% in 2017. Growth in business and leisure travel is dependent on economic growth and activity in an economy. However, during periods of low economic growth, the travel sector tends to underperform the economy as a whole and during periods of high economic growth the sector often outperforms economic growth. 2.0% 1.0% 0.0% SA TOTAL SA Total Travel Sector 2017 TRAVEL SECTOR 6.6% 6.2% During 2017 South Africa's economy started off on a pessimistic note but rebounded in the latter part of the year and ended up exceeding forecasts. Under these tough economic conditions the travel sector performed well in 2017. Even though the travel sector as a whole performed well, only 60% of the travel companies experienced growth in 2017. 40% Of the travel companies reported a decline in turnover in 2017 when compared to 2016. Of those companies that reported growth, more than half experienced growth above the industry average of 6,2%. Percentage of Travel companies 2017/16 Decline 2017/16 Growth <6,2% 2017/16 Growth <6,2% 40% 25% 35%

13 Turnover by CLIENT CATEGORY In 2017, corporate travel accounted for 56% of all travel turnover (R22 bn), with large corporates accounting for a slightly higher share (R11,3 bn) than SME corporates (R10,7 bn). 29% 27% 21% Government (Incl. Parastals and State Owned Enterprises) Government spend on travel with ASATA affiliated travel companies accounted for around R8,2bn in 2017 (21% of total turnover). Large Corporate (Private Sector) SME Corporate (Private Sector) 20% Leisure / Private Individuals Other The leisure market spent R7,8bn with ASATA a ffi l i a te d t rave l co m p a n i e s i n 2 0 1 7 (accounting for 20% of total turnover). Large Corporate (Private Sector) 28.6% The balance of sector turnover () was generated by clients that don't fall within the above 4 categories ( "other"). SME Corporate (Private Sector) Government (incl. Parastatals and State Owned Enterprises) Leisure / Private Individuals 27.1% 20.9% 19.8% Other 3.6% Turnover by TRANSACTION TYPE 60% Air 7% Tour Packages (incl. Cruises) 22% Accommodation and Venues 6% Other (eg. rail, sightseeing trips, transfer, visas, insurance, et.c 5% Car Hire Air travel accounted for 60% of all travel turnover some R23,6 bn from ASATA affiliated travel companies in 2017. Nearly a quarter (22%) of total travel turnover was spent on accommodation/ venues (R8,6 bn), 7% on tour packages (R2,7 bn) and 5% (R2 bn) on car hire. Air Accommodation and Venues Tour Packages (incl Cruises) Other (eg. Rail. Sight-seeing trips, transfers, visas, insurance, etc.) Car Hire 60% 21.8% 6.9% 6.2% 5.1% Turnover by BUSINESS TYPE 60% Of sector turnover (R23,7 bn) is generated by branded branches, in-house TMCs and ITCs linked to groups with own brands (where ITC revenue can't be separated from other revenue). Nearly a quarter of turnover (23%) is generated by branded and unbranded franchises (R8,9 bn). Unbranded and branded ITCs (not linked to groups with own branches) generated 9% of total turnover in 2017 (R3,6 bn). The balance of turnover (8%) was generated by affiliates and independents (R3,3 bn). 60% Branded branch, In-house & Group ITCs Branded branch, In-house & Group ITCs Branded & Unbranded Franchises Branded & Unbranded ITCs Affiliates & Independents Branded & Unbranded Franchises 9% Branded & Unbranded ITCs 23% 8% Affiliates & Independents 60.0% 22.5% 9.0% 8.

14 AIR TRAVEL BOOKINGS Air Travel: Number of Bookings and Turnover In 2017, close to R24 bn was spent on air travel through ASATA affiliated travel agencies, TMCs and ITCs. Spend on air travel represents 60% of the total travel spend through ASATA affiliated travel agencies, TMCs and ITCs. In terms of number of bookings processed, more than 8,7 million flight segments were booked during 2017 by these agencies 4,6 million domestic flight segments versus 4,2 million international segments. In 2017, domestic air travel accounted for 52% of all flight segments booked and international bookings for 48%. However, in terms of value, at R6,8bn domestic air travel only accounted for 29% of turnover, compared to 71% for international bookings (R16,9bn). Share of Bookings 100% 48% 80% 60% 40% 52% 20% 71% 29% As can be expected this differential is due to the lower average price per domestic segment sold (at R1 483 per segment) compared to the average price per international segment of R4 062. flights flights TOTAL Number of Flight Segments Million 4.6 Value of Flight Bookings Billion Average Spend per Segment R6.8 R1 483 4.2 R19.9 R4 062 8.7 R23.7 R2 713 0.0% flights flights Number of Flight Segments sold Flights Number of Flight Segments sold 52.3% Value of Flight Bookings sold Flights Value of Flight Bookings sold 28.6% 47.7% 71. Air Travel Bookings and Turnover by Market In terms of number of air travel bookings, corporate demand far exceeded leisure demand (76% of all bookings versus 2). Similarly, corporate bookings accounted for 77% of air travel turnover versus 23% from the leisure market. 60% 50% 40% 42% 53% 3 Although domestic corporate travel accounts for 42% of all flight segments booked, they only generate 2 of total air travel turnover. 30% 20% 10% 2 5% 10% 18% 1 The most lucrative market is international corporate travel accounting for 3 of flight segments booked but 53% of air travel turnover. 0% Corporate Leisure Turnover Corporate Bookings Leisure Corporate Leisure Corporate Leisure Turnover Bookings 23.9% 5.0% 53.1% 18.0% 42.2% 10.0% 34.0% 13.8% leisure travel is the smallest contributor to both number of flight segments booked (10%) and total air travel turnover (5%). In 2017, international leisure travel accounted for 1 of flight segment bookings but 18% of total air travel turnover.

15 Booking Channels for Air Travel In 2017, 85% of the value all ASATA affiliated travel agent air bookings were processed through a Global Distribution System (GDS). Th e to t a l va l u e o f t h i s t u r n ove r i s approximately R20 bn (70% of total GDS revenue in 2017). 10% Of the value of all air bookings were booked through another online site (intermediary) and were booked directly w i t h a i r l i n e s, b y p a s s i n g a G D S o r intermediary booking site. GDS Online Direct 85% GDS 10% Online Direct 85. 10.3% 4.3% Air Travel Destinations Ranked in order of the number of segments sold the top 3 domestic destinations sold by ASATA affiliated agencies are: 1. Johannesburg 2. Cape Town 3. Durban The three cities are South Africa's primary economic hubs and are important corporate and leisure destinations. Proportionately, for every flight sold to Johannesburg, 0,9 are sold to Cape Town and 0,6 to Durban. Air Travel Destinations ly, the top 6 destinations sold by ASATA affiliated agencies are (excluding Johannesburg): 1. London 2. Dubai 3. Mauritius 4. Phuket 5. Nairobi 6. Paris Seasonality of and Air Travel Bookings Monthly data on the number of air travel segments booked and total value of air sales was collected from ASATA affiliated travel agents for 2017. Analysis of this data indicates that booking demand for both domestic and international flights is influenced by South Africa's holiday periods - with a significant reduction in the number of air travel bookings (and total sales) in December, January, April and somewhat in July. Demand for domestic flights in December is half that experienced during the peak months of March, May to June and August through to November. Demand for the more lucrative international flights is greater than domestic flights during these holiday months. Overall, demand for international flights is less seasonal than that of domestic flights. Seasonality of Air Travel Bookings 12% London and Dubai are both destination and hub locations, with a high frequency of daily flights from at least 2 different South African airports. Mauritius and Phuket are both popular leisure destinations for South African travellers. In terms of continents, cumulatively European destinations attract the most number of flights sold, followed by African destinations, the Middle East and then Asia. 10% 8% 6% 2% 0% Jan-17 Feb-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Number of bookings Total Value of sales Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Number of bookings 6.8% 8.7% 9. 6.7% 9.5% 9.1% 8. 9.3% 9.3% 9.5% 9.0% 4. Total Value of sales 6.3% 8.8% 9.8% 6.7% 9.0% 8.5% 7.8% 8.8% 9.6% 10.0% 10.0% 4.6%

16 Seasonality of Air Travel Bookings 12% 10% 8% 6% Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Number of bookings 7.5% 8.6% 9.3% 7.3% 9. 8.9% 8.1% 9.0% 8.9% 8.8% 8. 5.9% Total Value of sales 7.1% 8. 9.5% 7.6% 9.6% 8.9% 8.0% 9.0% 9.0% 8.8% 8.5% 5.5% 2% 0% Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Number of bookings Total Value of sales Seasonality of Corporate and Leisure Air Travel Bookings Corporate international flight bookings peaked during the months of March and May in 2017. Above average demand was also recorded in June and August to November. Corporate domestic flight bookings follow a similar pattern to international bookings, but with peak demand in October and November 2017 and a deeper trough in the December/ January and April holiday periods. 12% 10% 8% Seasonality of Corporate Air Travel Bookings Demand for international leisure flight bookings was not as seasonal as international corporate or domestic leisure travel. Although a relatively small market, this more consistent demand makes international leisure travel a more stable source of revenue for travel agents. 6% 2% 0% Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 leisure demand peaked prior to the primary holiday periods, viz in September to November leading up to the December/ January holiday period and in February and March leading up to the April holiday period. Jan-17 6.3% 7.1% Feb-17 8.8% 8. Mar-17 Apr-17 May-17 9.8% 6.7% 9.0% 9. 7.6% 9.7% Jun-17 8.6% 9.0% Jul-17 Aug-17 Sep-17 7.7% 8.8% 9.6% 8.0% 9.0% 9.1% Oct-17 10.1% 8.9% Nov-17 10.0% 8.5% Dec-17 4.5% 5. Seasonality of Leisure Air Travel Bookings 12% 10% 8% Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 6% 6. 8.7% 9.9% 6.8% 8.7% 8. 7.9% 8.7% 9. 9.8% 10.2% 5.0% 7.3% 8.6% 9.8% 7.6% 9. 8.6% 8.2% 9.1% 8.0% 8.6% 8. 5.8% 2% 0% Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17

17 Top Selling Airlines In 2017, South African Airways (SAA) was the top selling domestic airline by ASATA affiliated travel agencies. SAA received the top rank in terms of both number of segments sold and total value of sales. BA Comair is the second most popular airline sold by ASATA affiliated agencies on domestic routes, followed by SA Airlink and Kulula (which occupy 3rd and 4th position respectively for number of segments sold and vice versa for value of sales). The number of flight sales for SAA were considerably more than that of the other airlines. In 2017, for every segment sold on SAA flights, approximately 0.4 segments were sold on BA Comair. South African Airways BA Comair SA Airlink Kulula Mango SA Express Rank Segments Sold Rank Sale Value 1 1 2 2 3 3 4 4 5 5 6 6 Top Selling Airlines In 2017, South African Airways was also the top selling airline for international flights in terms of number of segments sold and total value of sales from ASATA affiliated agencies. But Emirates the second highest selling international airline, also had a significant share of the market. For every segment sold on an SAA flight, 0,9 segments were sold on Emirates by ASATA affiliated agencies. British Airways, including BA Comair for regional flights, was the third highest selling airline. As can be expected, the highest selling international airlines are those that have the greatest variety of destinations (direct or via a central hub), frequency of flights and number of airports utilised. The lower the number of variations offered by an airline, the lower the total number and value of sales. South African Airways Emirates British Airways Qatar Lufthansa Air France Rank Segments Sold Rank Sale Value 1 1 2 2 3 3 4 4 5 6 6 5

18 LAND ARRANGEMENTS Accommodation Bookings The total value of accommodation and venue bookings processed by ASATA affiliated members in 2017 was close to R9 bn. Spend on accommodation and venues represents 22% of the total travel spend through ASATA affiliated travel agencies, TMCs and ITCs. In terms of number of roomnights sold, approximately 4,2 million roomnights were booked via ASATA affiliated travel agents in 2017 3,6 million roomnights in the domestic market versus around 600 000 international roomnights. Thus in 2017, 85% of all roomnight bookings processed were for domestic accommodation (within South Africa) and only 15% were for international destinations. The average spend on accommodation and venues per roomnight sold was approximately R2 050 in 2017. Note that this average spend is inclusive all costs (accommodation, venues, meals, etc) and should not be confused with average spend per roomnight for accommodation only. Roomnights Total Average spend per roomnight sold: Roomnights 15% Roomnights 85% Number of Annual Roomnights Millions 3.6 0.6 4.2 R2 050 Roomnights 15% Roomnights 85% Seasonality of Accommodation Roomnight Bookings As with air travel, in 2017 accommodation bookings via ASATA affiliated travel agents was influenced by holiday periods, with a reduced (below average) number of bookings in the South African holiday months of December, January, April and somewhat in July. Furthermore, expect for the month of December, demand for international accommodation experienced less peaks and t ro u g h s w h e n co m p a re d to d e m a n d for d o m e stic accommodation. 12% 10% 8% 6% 2% 0% Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Bookings for domestic roomnights peaked in September, October and November 2017 and reached lows during December, January and April. Jan-17 5.8% 7.6% Feb-17 7.9% 8.6% Mar-17 8. 9.3% Apr-17 6.2% 7. May-17 8.9% 9.2% Jun-17 9.1% 9.1% Jul-17 8. 8.2% Aug-17 9.1% 9.2% Sep-17 10.9% 8.6% Oct-17 10.2% 9.1% Nov-17 9.2% 8.8% Dec-17 5.9% 4.9% Seasonality of Corporate and Leisure Roomnight Bookings Whether corporate or leisure, demand for domestic and international accommodation each follow the same broad pattern of peaks and troughs, with periods of low demand coinciding with South Africa's holiday months of December, January and April. bookings, whether for corporate or leisure purposes, had more pronounced seasonality than international bookings. In fact, both corporate and leisure domestic bookings only really peaked in September and October 2017. It can be concluded that corporate bookings, with short lead times, were for travel during the last working months of the calendar year, whilst leisure bookings were likely to have been for travel during the December/ January holiday period. Seasonality of Corporate Roomnight Bookings 12% 10% 8% 6% 2% 0% Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 By comparison, international leisure roomnight bookings peaked in February and March 2017, whilst international corporate bookings remained fairly constant throughout the year, with an extreme low in December 2017. Jan-17 5.8% 7. Feb-17 7.9% 8.2% Mar-17 8.3% 9.2% Apr-17 6.2% 7.5% May-17 8.9% 9.3% Jun-17 9.1% 9.3% Jul-17 8.3% 8.1% Aug-17 9.2% 9.3% Sep-17 10.9% 8.8% Oct-17 10.2% 9.2% Nov-17 9.3% 9.0% Dec-17 5.9% 4.7%

19 Seasonality of Leisure Roomnight Bookings 12% 10% 8% 6% Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 6.9% 8.7% 9.1% 5.9% 8.7% 8.8% 8.8% 9.0% 10. 9.7% 8.3% 5.8% 8. 10.2% 9.8% 7.1% 8.7% 8.1% 8.5% 8.9% 8.0% 8.5% 7.9% 5.8% 2% 0% Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Seasonality of & Roomnight & Air Travel Bookings Demand for international roomnights, whether for corporate or leisure purposes, largely tracks demand for international flights. Implying that international flights and accommodation are typically booked simultaneously. However, domestic roomnight demand is more seasonal than domestic air bookings, although the peaks and troughs follow the same pattern. The peak in domestic accommodation bookings in September and October 2017 could be influenced by venue/ conference bookings. 12% Roomnights Roomnights 11% 10% Air Travel Air Travel 9% 8% 7% 6% 5% Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 6.8% 8.7% 9. 6.7% 9.5% 9.1% 8. 9.3% 9.3% 9.5% 9.0% 4. Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 5.8% 7.9% 8. 6.2% 8.9% 9.1% 8. 9.1% 10.9% 10.2% 9.2% 5.9% 7.5% 8.6% 9.3% 7.3% 9. 8.9% 8.1% 9.0% 8.9% 8.8% 8. 5.9% 7.6% 8.6% 9.3% 7. 9.2% 9.1% 8. 9.2% 8.6% 9.1% 8.8% 4.9% Accommodation Booking Channels In 2017, just over half of all accommodation roomnight bookings (53%) sold by ASATA affiliated agencies were processed through a Global Distribution System (GDS). However, in terms of value, only 47% of accommodation and venue sales were processed through a GDS. Booking Channel by Number of Roomnights 31% of all roomnight bookings (and 3 of the total value) were booked via an online site (intermediary); and 16% of roomnights (and 19% of value) were booked directly with the accommodation provider. 53% GDS 31% Online Compared to airline bookings, which are largely processed via a GDS (85% of all bookings), the role of intermediaries and hotel groups in bringing room inventory and deals for the travel sector is evident. Bypassing the GDS system for accommodation bookings implies the continued importance of direct relationships between travel agents, supplies of hotel accommodation and accommodation aggregators or intermediaries. GDS Online Direct 16% Direct 53. 30.8% 15.8% 3 Online GDS 47.. 47% GDS Online Direct 33.6% 19.0% 19% Direct

20 Accommodation Brands Receiving a similar number of mentions, the top 3 domestic accommodation brands sold by ASATA affiliated agencies in 2017 are: 1. Protea/ Marriott Group; 2. City Lodge Group; and 3. Tsogo Sun Hotels. However, in terms of first, second and third choice of brand, Tsogo Sun Hotels is the overall preferred brand receiving 65% of all first choice mentions. The Protea/ Marriott group is the second preferred brand choice, followed closely by the City Lodge Group as the third most preferred brand. All of these accommodation groups are "home-grown" companies that offer a range of products across the country, in all key destinations and covering a range of different brands and standards from 2/3-star to 4- and in some cases even 5-star properties. Car Rental Bookings The total value of car rental bookings processed by ASATA affiliated members in 2017 was just over R2 bn. Spend on car rental represents 5% of the total travel spend through ASATA affiliated travel agencies, TMCs and ITCs. The average spend per car rental booking was approximately R1 300 in 2017. In terms of number of annual bookings processed by ASATA affiliated travel agents in 2017, the top car rental brands were: Seasonality of Car Rental Bookings In 2017, demand for car rental booked via ASATA affiliated travel agencies peaked during the months of August through to November. Whilst, as with all other services purchased from the travel sector, periods of lower demand coincided with South Africa's holiday months (December, January and April/ May). Corporate and leisure car rental booking demand followed a similar pattern, with leisure demand having slightly reduced peaks and troughs when compared to corporate demand. In general, demand for car rental followed a similar seasonality pattern to accommodation bookings. Protea Group City Lodge Group Tsogo Sun Hotels 20% Accommodation Brands ly, preferred accommodation brands sold by South African travel agents, TMCs and ITCs in 2017 were: 1. Hilton, followed closely by 2. Marriott (including Protea); 3. Holiday Inn; and 4. Radisson As can be expected there is a far wider range of international accommodation brands utilised than in the domestic market. 1. Avis; 2. Europcar; and 3. Bidvest. Overall, in 2017 Avis was the travel agent's preferred choice of car rental brand, followed by Europcar and then Bidvest. Avis Europcar Bidvest 12% 10% Hotel Group Car Rental Brand 8% 6% 2% 1st Choice 15% 65% 1st Choice 67% 2 9% 2nd Choice 49% 33% 18% 2nd Choice 33% 52% 16% 3rd Choice 35% 56% 9% 3rd Choice 1 16% 70% 0% Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 5. 8.2% 8.9% 6.7% 7.5% 9.0% 8.1% 10.5% 10.5% 10.2% 9.6% 5.

21 Seasonality of Corporate and Leisure Car Rental Bookings 12% 10% 8% 6% Corporate Leisure Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 5.3% 8.1% 8.9% 6.7% 7.5% 9.0% 8.1% 10.6% 10.6% 10.3% 9.6% 5.3% 6.2% 8.5% 9.1% 7.1% 7.9% 8.5% 8.1% 9.8% 9.7% 9.7% 9.0% 6.2% 2% 0% Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Corporate Leisure Tour Packages The total value of tour packages sold by ASATA affiliated members in 2017 was approximately R2,7 bn. Spend on tour packages represents 7% of the total travel spend through ASATA affiliated travel agencies, TMCs and ITCs. In general, selling tour packages is not a focus area for many travel agencies, especially TMCs, and thus data presented hereunder is skewed towards those groups that focus on the domestic leisure market and those which have in-house tour operating capabilities. Furthermore, based on the responses received it appears as if the agencies that responded to the questionnaire do not necessarily only sell packaged tours prepared by tour operators/wholesalers but have also sold "packages" offered by accommodation aggregators. In terms of the total number of tour packages sold, the top tour operator brands utilised by ASATA affiliated agencies are (as reported): = Flight Centre Holidays; = MSC; = Global Accommodation; = Beachcomber. In 2017, the destinations with the highest demand for tour packages included (as reported): = Cape Town = Johannesburg = Namibia = Mauritius = United Kingdom = Thailand and Phuket = United States

22 EMPLOYMENT IN THE TRAVEL SECTOR Close to 9 000 people are directly employed in the travel sector, which is an average of 5 per outlet (including ITCs which are generally owner-operated). Of these employees more than 8 300 are with ASATA affiliated groups, ITCs, TMCs or travel agencies. These 9 000 employees represent approximately one third of all employees in the travel reservations and bookings sector of the broader tourism industry in South Africa as defined and calculated by Statistics South Africa (latest data being provisional for 2016). 100% 28% 90% 80% 70% 49% Board Members Executive Management 3% 2% 60% 50% 40% Senior Management Middle Management 15% 30% 20% 10% 0% 3% 2% 15% Travel Consultants Other Emplloyees 49% 28% Executive Management Middle Management Board Members Senior Management Travel Consultants Other Emplloyees Of these nearly 9 000 travel sector employees, almost half (49%) are employed as travel consultants (without management responsibility). 5% of all employees in the sector are in executive management or part of the board of directors and 19% of all positions are in senior or middle management roles. Some 28% of employees are in other roles. This includes administration, finance and support roles for the businesses as well as elementary occupations. Of the 8 300 employees in ASATA affiliated organisations, approximately: = 220 are in board positions = 150 are in executive management = 360 are in senior management positions = 1 220 are in middle management positions = 4 030 are travel consultants = 340 are in other positions (support roles such as administration, finance and elementary occupations.

23 Racial and Gender Profile of Employees in the Travel Sector Travel Sector Employees by Gender 73% Female 27% Male 6 Black 36% White Female 72.5% Black 64.1% Male 27.5% White 35.9% The travel sector continues to be dominated by female employees (73% of all employees or around 6 600 people in 2017). In 2017, only just over a quarter (27%) of all employees in the travel sector were male. Although not yet representative of the racial demographics of the country, in 2017 nearly two thirds of all employees in the travel sector were black (black African, coloured or Indian) and 36% were white. To be truly representative of the racial demographics of the South African population, then around 92% of all employees in the sector should be black (Black African, Coloured, Indian) and only 8% should be white. Travel Sector Employees by Gender and Race The travel sector has historically been viewed as a white, female dominated industry. But by 2017, the sector's profile had changed to one that is black but still female dominated. In 2017, Black females represented 45% of all employees in the travel sector and white females a further 27%. In 2017, white males only accounted for 8% of all employees in the travel sector and black males for 19%. For every white female in the sector, there were 1,64 black females and for every white male there were 2,25 black males. Racial and Gender Profile of Board Members 45% Black Female 27% White Female 19% Black Male 30% 29% 8% White Male 2 Black Female 45.1% White Female 27.5% Black Male 19.0% 18% White Male 8.5% The racial and gender profile of employees in the travel sector varies by position or role, with a higher proportion of black and black female employees at travel consultant and "other employees" levels. Black Male Black Female White Male White Female Black Male 17.6% The representation of white males and females is proportionately higher in management roles. The dominance of female employees in the sector is evident through all employment levels, but is less noticeable at board level. Black Female White Male White Female 23.9% 28.9% 29.6%

24 Racial and Gender Profile of Executive Management Racial and Gender Profile of Senior Management 41% 43% 15% 19% 31% 27% 1 11% Black Male Black Female White Male White Female Black Male Black Female White Male White Female Black Male 13.7% Black Male 11.0% Black Female 30.5% Black Female 27.0% White Male 14.7% White Male 18.6% White Female 41.1% White Female 43.5% Racial and Gender Profile of Middle Management Racial and Gender Profile of Travel Consultants 30% 30% 7% 4 11% 38% 20% 12% Black Male Black Female White Male White Female Black Male Black Female White Male White Female Black Male Black Female White Male White Female 12.2% Black Male 19.7% 38. Black Female 41.1% 10.7% White Male 6.7% 38.6% White Female 29.6%

25 TRENDS AND THREATS FOR THE TRAVEL SECTOR Operators in the South African travel sector identified the following strengths, trends / opportunities, weaknesses and threats facing the industry as a whole. Overall, the major initiator of change in the sector is centred around technology, which is driving improved efficiencies and service levels but is also leading to more choice for consumers outside of traditional buying channels. These technological changes and changing competitive landscape are also a threat to fees as revenue models adapt and evolve. In these turbulent times, it is likely that only those companies that can adapt to these rapid technological advances and new threats are likely to survive/thrive, making the benefits offered by successful franchisors/groups more attractive to small/ independent operators. Strengths = Improved levels of professionalism across the industry = Technology and brand support allowing for increased time with clients = Brand benefits = Bulk sales and discounts achieved through brands/ affiliations/ group benefits = ITC model = Good growth opportunities for ITCs = Independence and flexibility of the ITC model = Increased variety of products = Greater variety of wholesalers and packages leading to more competition and better pricing = Diversity of product offerings = Social Media = Access to new marketing channels through social media = Technology driving improved efficiencies = Corporates are embracing the use of technology/ tools to drive cost savings and improve policy compliance = Using technology for efficient and effective online booking and expense management = Technology improving speed of processing = Improved access to and reliability of data Weaknesses = Increased competition from suppliers = Airlines, tour operators, hotels, etc marketing directly to the public/ corporates and bypassing agencies = Online booking and OTAs = Increased number of customers booking online directly with suppliers or via OTAs, bypassing agencies = Customers "shopping around" online for prices = Technology = Reduction in number of jobs due to automation/ online bookings = Inexperienced ITCs/ agencies = ITCs who lack knowledge and training

26 = Unregulated agents/ ITCs tarnishing the industry = Small companies winning large bids and causing reputational damage to the industry = New Distribution Capability (NDC) = Implemented by airlines threatening income stream from GDS rebates = Commissions and service fees = Marking up prices and cutting service fees = Aggressive undercutting of service fees charged = Service fee structure not related to effort/ cost of travel = Decreasing commissions and margin erosion Opportunities = Exchange Rate = Strengthening of the South African Rand leads to increased demand for travel = Emerging market = Increasing demand for travel and travel services from emerging market in South Africa = Niche/ specialist tourism experiences = Increasing demand for niched products and services which allows for differentiation Threats = Exchange rate fluctuations = Weak South African Rand and currency volatility leads to decreased/ inconsistent demand for travel. = Political and economic instability = Impacting on consumer confidence and willingness/ ability to travel = Global instability and security issues = Impacting on consumer confidence and willingness to travel = Broad-Based Black Economic Empowerment = Government contracts limited to large corporates with good B-BBEE ratings = Public Sector redtape = Travel policies, payment terms, etc make trading difficult

27 GLOBAL OUTLOOK FOR THE TRAVEL SECTOR Technology in the Travel Sector As identified by South African operators, the travel sector is vulnerable to numerous political, economic and most importantly technological changes and advancements. Looking forward to the next few years, innovation will inevitably spark change and advancements in the travel sector such that industry players will need to be nimble, alert and courageous to weather the storm. Following on from Uber and Airbnb, we can expect more technologically driven disruptors for the travel sector which are likely to completely change industry dynamics. The travel sector needs to be at the forefront of these advances in order to embrace and adapt to these changes. Extensive capital investment in innovation will be required, further supporting the need for large corporates to lead from the front and provide the necessary investments. This will continue to strengthen the role and importance of large corporates in the sector and further drive branded/ unbranded franchise and ITC models. A number of known technologies are already influencing the future of travel, including: Artificial Intelligence (AI) = With AI travel websites will deliver more personalized results for clients and planners. = Machine learning will assist with big-data m a n a g e m e n t s u c h a s i d e n t i f y i n g n e w opportunities for savings. = AI is likely to provide "behind the scenes" support for the travel sector, freeing up time for personalised service Voice Technology = Digital assistants will allow consumers to have conversational exchanges for travel planning, booking, etc. = As travel is complex it will make it difficult for voice technology to infiltrate the sector, but rapid advancement in this technology are anticipated. = Voice technology is predicted too be more relevant to corporate than leisure travellers, as leisure travellers typically require more personalised service. Internet of Things (IoT) = IoT includes the connection of devices, sensors and machines to create a comprehensive dialogue and feedback mechanism. = IoT will lead to improved service levels and experience for travellers as their particular needs and requirements are understood across the travel value chain and experiences are personalised to meet these. = However, cybersecurity issues remain a challenge for implementation. Blockchain = Blockchain, the technology behind cryptocurrencies, is being used to solve travel problems such as streamlined online distribution systems. = Blockchain will require the travel sector to relook at their business model but many believe the impact might not be revolutionary. However, even with the extensive drive and emphasis on technology, it is predicted that the human touch in travel will not be lost. The future of the travel experience will be a seamless blend of people and technology. The need for improved and personalised service levels, better experiences and real connections will continue to drive the importance of people in the travel chain. Technology will drive automation and free up people to provide the much needed human and personalised touch. Sources: Deloitte 2018 Hospitality and Tourism Outlook, Grant Thornton Innovation and Change in the Hotel Industry 0217, various web articles