Presentation to Portfolio Committee
Oxford Economic Model
and
Market Investment Framework
2017–2021
18 August 2017
Slide no. 1
Contents
• SA Tourism’s Goal for the Next Five Years (slide 3)
• Approach for Developing the Marketing Investment Framework (slide 4)
• Consultation Process (slide 5)
• Stakeholder Feedback (slides 6 – 8)
• Developing the Market Investment Framework (slides 9 – 29)
• Operating Strategy: The Hub and Spoke Model (slides 30 )
• Strategy Framework for Engagement with the Provinces(slides 31)
Slide no. 2
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© South African Tourism
ZAR ~109Bn (TTFDS based on 2016 ) ZAR ~9.7Bn (holiday Revenue based on 2016)
…by international tourists, who, on a day spends
ZAR 850 and stays 9.2 nights in SAin 2016
AllInternational Tourists
To meet the goal aspirations, South Africa should reach
~14.0 million international tourist arrivals…
…by domestic holiday tourists, who, on a day spends
ZAR 530 and stays 5.1 nights on a trip
Domestic Holiday Tourists
Boosting the domestic holiday travel will allow South Africa to reach
~3.6 million holiday trips…
ZAR ~118Bn by 2021(TTFDS + Holiday Revenue)
SA TOURISM’s GOAL FOR THE NEXT FIVE YEARS
TOTAL TOURIST Revenue1
Note: 1Based on the spend in 2016, and not adjusted for inflation or currency fluctuations;Source: Departure Survey 2016; MIF, SA Tourism Domestic Survey
Total tourism revenue from the two markets (i.e., international and domestic) is expected to reach ZAR 142Bn by 2021
ZAR ~142Bn by 2021(TTFDS + TTDS based on 2016)
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Our approach to develop the marketing investment framework is laid out below:
Gathered inputs from stakeholders to develop hypotheses and identify the guiding principles that would help define the framework for the strategic thrust
Drafted preliminary framework, taking cognisance of the key objectives of the thrust
Discussed and review the Marketing Investment Framework with the relevant stakeholders and gathered their inputs and refine them
Finalised the framework in accordance with the inputs shared by the stakeholders, and in mutual discussion with the SA Tourism business teams
Got final sign-off on the Marketing Investment Framework and portfolio selection from the relevant stakeholders
Final Sign-off on the Framework
Finalise the Framework
Discuss Frameworkwith Relevant Stakeholders
Draft Framework for Investment Choices
Gather Inputs from Relevant
Stakeholders
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Conversations with the stakeholders have provided the following inputs to
be considered when developing the investment framework
The opinion of stakeholders across the South Africa’s tourism ecosystem was gathered to
determine the guiding principles to develop the investment framework
Synergy in Efforts
Clarity in Role
Simplicity
Pragmatic Approach
Measurability of Impact
Agility
Guiding Principles
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All the entities operating in South Africa’s tourism ecosystem need to have a unified focus on the destination’s tourism positioning, with synergised efforts and simplified processes
Over the years, the addition of various elements to the existing processes for defining portfolios has resulted in making the processes complex and cumbersome; therefore, MIF has define (redefine) clear and standard guidelines
Simplicity
Synergies needed must be achieved among different entities operating in the tourism ecosystem
New MIF needed to relate to industry’s footprint in the market.
Synergy in Efforts
Clarity in Role
Share the mandate of SA Tourism in the tourism value chain and its role in contributing to the economy of the country.
Key Guiding Principles
Gu
idin
g P
rin
cip
les
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Additionally, the efforts towards meeting the goal should be practical and allow for agility, and
the impact should be assessed to establish effectiveness
Agility
The evolving internal and external parameters, which impact the South African tourism ecosystem, have been addressed, to tap into the potential of emerging opportunities and or quick wins
It is imperative that the efforts to spur the South African tourism industry should not only follow a scientific approach but also factor in the realities of the operating environment, which is what the MIF delivers
Pragmatic Approach
Gu
idin
g P
rin
cip
les
The impact of various efforts that SA Tourism is making to enhance tourism growth in South Africa were assessed. There is a clear set of indicators to establish the ROI across various aspects of the tourism value chain, which will allow monitoring of different entities’ effectiveness.
Measurability of Impact
Key Guiding Principles
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Formulate an optimal investment plan
Define a robust portfolio to target opportunities
Thrust 1 : Developing the Market Investment Framework
OPTIMISING MARKETING INVESTMENTSDevelop and implement an investment strategy that allows SA Tourism to focus on prioritised markets
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To achieve the goal of 5 in 5 SA Tourism needed to develop a marketing investment strategy that will help the organisation focus on prioritised Markets and Segments
To achieve the goal of adding five million tourists to the existing baseload, in the next five years, SA
Tourism needs to develop a marketing investment strategy that will help the organisation focus on
prioritised markets and segments
Design a robust and replicable portfolio review approach for SA Tourism, taking into consideration
each market’s attractiveness and the
overall targets
Reassess Key Source Markets
Develop an agile, intuitive excel-based model to help SA Tourism distribute its marketing budget across
identified key markets
Develop Marketing Investment Model
Develop and test various market scenarios to
formulate an optimal investment plan and performance review
schedule based on the current allocated financial
resources
Inform Investment Strategy
Build an agile model that will enable SA Tourism to
assess their performance in the future and adjust their
strategy accordingly
Prepare for Future Scenarios
1 2 3 4
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Developing the Marketing Investment Framework SA Tourism’s is guided by the philosophy of bringing together the targets, market selection and available resources, to establish optimal marketing investments
Why?Purpose/ Mandate
What?Targets
Where?Markets
How?Investment
Gain clarity on the role of SA Tourism to inform the investment and
partnership strategies
Optimal Investment Distribution
Establish annualised targets in line with market performance and investment by leveraging information from an Oxford Econometric model
Prioritise markets for marketing investment based on performance and outlook, South Africa’s ability to win in the market, return on past investments
and SA Tourism’s mandate
Optimise marketing investment distribution to ensure high return on
investments by mapping targets across the prioritised markets and identifying
synergies across entities operating in the tourism ecosystem
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Key steps in developing the Marketing Investment Framework
Targets
Investments
Determine growth to be achieved across different markets - TDM
Allocate budgetacross the prioritised markets by leveraging baseline
growth, setting activated
growth, and applying the
relative cost of acquisition
Outcome: Relative ‘cost of acquisition’ of tourists across
all markets
MarketsLevel 0:
Eliminate markets based on data
availability
Level 2: Rank markets on outbound
attractiveness
Level 1: Rank markets on macroeconomic
strength/stability
Market Attractiveness
Rank markets on South Africa’s ability to win
Ability to Win
Outcome: Priority order
of Markets
Assess arrivals (by specific purpose) from the existing
portfolio markets
Determine marketing spend (for the purpose) across the specific portfolio markets
Outcome: Growth rates to assess nominal growth
across all source markets
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SA Tourism leverages the Tourism Decision Metrics (TDM) developed by Oxford Economics.
The model forecast Global Tourism Demand for 190 countries.
It currently estimates that the WORLD will reach 1,553Mn arrivals by 2021
From the Global tourism demand it calculate a share of each destination country based on historic and future performance. For SA it estimates a share of 12.7Mn arrivals by 2021.
Global Tourism Demand (190 Markets)
For each origin market:
Real GDP
Consumer Spending
Exchange rates
Unemployment
Destination Market Share Calculation
For each potential destination:
Prices
Consumer price Index,
Exchange rate,
Interest rates
Destination competitiveness Index
Regulatory frame work
Environment & Infrastructure
Human, cultural and natural resources
Targets
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Market prioritisation exercise ranks countries on their relative attractiveness as a source market and South Africa’s ability to operate and perform in that market
Marketing Investment Framework: Markets
Targets
Investments Outcome: Relative ‘cost of acquisition’ of tourists across all
markets
Assess arrivals (by specific purpose) from the existing
portfolio markets
Determine marketing spend (for the purpose) across the specific portfolio markets
Baseline vs. Activated Growth:Determine growth achieved with/without
marketing investment across different markets
Outcome: Growth rates to assess nominal growth
across all source markets
MarketsLevel 0:
Eliminate markets based on data
availability
Level 2: Rank markets on outbound
attractiveness
Level 1: Rank markets on macroeconomic
strength/stability
Market Attractiveness
Rank markets on South Africa’s ability to win
Ability to Win
Outcome: Priority order
of Markets
Allocate budgetacross the prioritised markets by leveraging baseline
growth, setting activated
growth, and applying the
relative cost of acquisition
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As the framework is driven by several data points, data availability is a key criterion to remove countries from further analysis
For market prioritisation, the framework considers all the countries in the world (214 countries), and shortlists markets based on their data availability across mandatory indicators, which can be selected from the following:
As the first step, the prioritisation framework filters out countries with no data availability for select essential indicators that demonstrate the macro-economic state of the market
Markets: Attractiveness – Level 0
Indicator Name
GDP PPP per Capita
Currency Exchange Rate
Education Index
Urban Population
Political Stability Index
209
188
214
201
184
Data Availability (By Country)
Mandatory Indicator for Next Level Selection
In the current selection scenario, for a source market, if data is not
available for any of the selected indicator that market will be filtered out from the next level
analysis
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Owing to data unavailability, lack of information consistency and redundancy, few indicators are not considered for Level 1 analysis of the market attractiveness framework
Markets: Attractiveness – Level 1 IndicatorsLevel 1
Political
Eco
no
mic
Cost of Living Index
Inflation Rate Annual Disposable Income
Inequality in Income Currency Exchange Rate GINI Index
GDP PPP (Per Capita)
GDP PPP (Total)
Unemployment Percentage
GNP (Total) GNP (Per Capita) Income Quartiles
Urban Population Urban Population (% Growth)
Population (15-64 Years) Human Development Index Youth Literacy Rate1
Education Index
Literacy Rate
Total Population
Soci
al
Technology
Others No. of International Flights 1 No. of Metro Cities 1Proximity to South Africa
Internet Penetration Mobile Phone Subscription 1 Mobile Device Penetration 1
Political Stability Index
Note: 1Excluded based on low data availability
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Driven by the principle of simplicity : Indicators are further shortlisted using correlation analysis, removing redundant indicators reflecting similar trends
Markets: Attractiveness – Level 1 Indicators (Correlation)
Political: Political Stability Index
Inflation Rate
Unemployment Percentage
Currency Exchange Rate
Annual Disposable IncomeEco
no
mic
GINI Index
Cost of Living Index
GDP PPP (Per Capita)*
GDP PPP (Total)
Education Index
Urban Population
Urban Population (% Growth)
Inequality in Income
Soci
al
Population (15-64 Years)
Total Population
Human Development Index
Literacy Rate
Technology: Internet Penetration
Others: Proximity to South Africa
Indicators are excluded on the basis of correlation between them. The indicators with correlation value of more than ±0.5 are excluded (subject to their relevance)
* Indicator is used as a composite score of the current value, historic growth rate and future growth rate
Political Stability Index
1.00 GDP PPP per Capita
0.58 1.00 Inflation Rate
-0.28 -0.15 1.00 Unemployment
-0.04 -0.13 -0.01 1.00 Inequality in Income
-0.19 -0.34 0.03 0.08 1.00 Currency Exchange Rate
-0.08 -0.11 0.09 -0.14 -0.01 1.00 Annual Disposable Income
0.05 0.12 -0.05 -0.13 0.15 -0.05 1.00 GDP PPP Total
-0.01 0.15 -0.02 -0.11 0.03 -0.01 0.92 1.00 GINI Index
-0.20 -0.23 0.04 0.06 0.87 0.01 0.12 0.06 1.00 Cost of Living Index
0.20 0.57 0.03 -0.11 -0.26 0.05 0.12 0.20 -0.22 1.00 Education Index
0.63 0.62 -0.10 -0.02 -0.29 -0.08 0.14 0.17 -0.25 0.63 1.00 Urban Population
-0.15 0.01 0.02 -0.12 0.03 0.03 0.67 0.90 0.09 0.14 0.04 1.00 Urban Population Growth
-0.56 -0.43 0.12 -0.17 0.25 0.14 0.01 -0.08 0.25 -0.36 -0.81 0.02 1.00 Total Population
-0.18 -0.05 0.02 -0.12 0.00 0.03 0.52 0.79 0.07 0.08 -0.05 0.96 0.08 1.00 Population 15-64 Years
-0.17 -0.04 0.02 -0.12 0.00 0.03 0.52 0.80 0.07 0.08 -0.03 0.96 0.07 1.00 1.00 Human Development Index
0.66 0.73 -0.15 -0.02 -0.32 -0.10 0.16 0.19 -0.28 0.67 0.95 0.07 -0.82 -0.01 0.00 1.00 Literacy rate
0.50 0.43 -0.09 0.12 -0.02 -0.03 -0.03 0.10 -0.02 0.45 0.83 0.04 -0.72 -0.02 0.00 0.82 1.00 Internet Penetration
0.635 0.76 -0.13 -0.03 -0.35 -0.10 0.14 0.18 -0.29 0.60 0.84 0.05 -0.68 -0.03 -0.02 0.91 0.65 1.00
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Total Outbound TripsPercentage of
Long Haul Trips
Relative weights of the different indicators are calculated by regressing them against dependent variables that demonstrate the anticipated impact from the level of analysis
Markets: Attractiveness – Level 1 Indicators (Regression)
Level 1Africa Land Markets Overseas Markets
Political: Political Stability Index
Inflation Rate
Inequality in Income
Eco
no
mic
GDP PPP (Per Capita)
Urban Population
Urban Population (% Growth)
Unemployment Percentage
Soci
al
Technology: Internet Penetration
Others: Proximity to South Africa
Dependent Variable
Education Index
Currency Exchange Rate
Africa Air Markets
The weights are calculated by taking proportion of the coefficients of each variable in the regression equation
The weights are further readjusted to ensure that each variable is given relevant weight
5%
6%
6%
5%
5%
13%
9%
13%
6%
7%
25%
12%
17%
18%
6%
6%
11%
5%
5%
10%
5%
5%
10%
12%
3%
5%
5%
6%
15%
22%
8%
5%
10%
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Similar to Level 1, a few indicators are not considered for Level 2 analysis due to data unavailability or redundancy
Markets: Attractiveness – Level 2 Indicators
Level 2
Glo
bal
Tra
vel I
nd
ex
No. of International Tickets Sold (Air/ Water/ Road) 1
Total Domestic Trips Passport IndexTotal Outbound Trips
Short Haul vs Long Haul Trips % Leisure Outbound TripsOutbound Air Passenger Carried
% Business Outbound Trips
Tourist Outbound Expenditure
Sou
th A
fric
a Tr
ave
l In
dex
‡
Holiday Arrivals (% of Total) MICE Arrivals (% of Total) Length of StayAverage Spend in South Africa
No. of Expatriates Travelling to South Africa*
Average Spend by Purpose
No. of International Packages Sold 1
*Total Arrivals to South Africa are estimated based on country of residence and not nationality (and includes information on expatriates travelling). This data is considered as a key component to estimate weights, and its impact has been accommodated while prioritising markets
‡The geographic positioning of a country has an impact on the outbound nature of the source markets; thus, to ensure relevance of outbound attractiveness of South Africa’s source markets, travel behaviour related to South Africa has been considered
Note: 1Excluded based on low data availability
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For Level 2 analysis, a few redundant indicators are removed from the assessment by
leveraging correlation analysis to streamline the list of indicators
Markets: Attractiveness – Level 2 Indicators (Correlation)
Level 2
Total Domestic Trips
Tourist Outbound Expenditure
Short Haul vs Long Haul Trips
Total Outbound Trips*
% Business Outbound Trips
% Leisure Outbound Trips
Outbound Air Passenger Carried
Holiday Arrivals (% of Total)
MICE Arrivals (% of Total)
Average Spend in South Africa
Length of Stay
Glo
bal
Tra
vel I
nd
ex
Sou
th A
fric
a Tr
avel
Ind
ex
Passport Index
Indicators are excluded on the basis of correlation between them. The indicators with correlation value of more than ±0.5 are excluded (subject to their relevance)
* Indicator is used as a composite score of the current value, historic growth rate and future growth rate
Total Outbound Trips
1.00 Total Domestic Trips
0.40 1.00 Passport Index
-0.03 -0.26 1.00 Tourist Outbound Expenditure
0.20 -0.08 0.25 1.00 Short Haul vs Long Haul Trips
- - 0.03 0.16 1.00 % Business Outbound Trips
-0.02 0.24 -0.36 -0.11 0.06 1.00 % Leisure Outbound Trips
0.02 -0.24 0.36 0.11 -0.06 -1.00 1.00 Outbound Air Passenger Carried
0.13 0.58 -0.02 -0.10 -0.10 0.18 -0.18 1.00 Holiday Arrivals (% of Total)
0.21 0.07 0.38 0.25 0.02 -0.16 0.16 0.13 1.00 MICE Arrivals (% of Total)
0.18 -0.03 -0.10 -0.04 -0.09 0.14 -0.14 0.13 -0.01 1.00 Average Spend in South Africa
- - -0.27 0.33 - 0.32 -0.33 0.66 - - 1.00 Length of Stay
0.06 -0.05 0.05 0.05 -0.12 0.00 0.00 0.11 0.22 0.06 - 1.00
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Global and South Africa-specific travel trends and behaviour are likely to impact ‘South Africa’s Market Share’ in the outbound market; hence, it is leveraged as the dependent variable
Markets: Attractiveness – Level 2 Indicators (Regression)
Level 2Africa Land Markets Overseas MarketsAfrica Air Markets
Total Domestic Trips
Tourist Outbound Expenditure
Short Haul vs Long Haul Trips
Total Outbound Trips
Holiday Arrivals (% of Total)
MICE Arrivals (% of Total)
Average Spend in South Africa
% Business Outbound Trips
Length of Stay
Glo
bal
Tra
vel I
nd
ex
Sou
th A
fric
a Tr
avel
Ind
ex
Passport Index
9%
20%
16%
8%
12%
5%
5%
12%
5%
8%
22%
9%
19%
6%
-
6%
9%
7%
17%
5%
21%
23%
15%
21%
-
5%
3%
3%
6%
3%
Market Share: Arrivals to South Africa by Total TripsDependent Variable
The weights are calculated by taking proportion of the coefficients of each variable in the regression equation
The weights are further readjusted to ensure that each variable is given relevant weight
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Level 1 (Macroeconomic View) and Level 2 indicators (Tourism View) have a different magnitude of impact on tourist arrivals to South Africa. Therefore, the scores from these two analyses are appropriately cumulated to calculate the overall attractiveness of a market
To consider the expected difference in impact of the two parameters, both scores are provided a weighted percentage that reflects their impact on arrivals to South Africa
To calculate this ratio, the final scores of Level 1 and Level 2 are regressed against South Africa’s market share of arrivals, where coefficients from the regression output determine the weights for level 1 and 2 scores
The framework calculates the overall attractiveness score of source markets by combining scores from Level 1 and Level 2 analysis, after applying relevant weights
Markets: Attractiveness – Combined Score
Combined Score
Level 1 Score
Level 2 Score
Independent Variables
South Africa’s Market Share of Arrivals
Dependent Variable
Regression Analysis
Level 1 Weights: 20%
Level 2 Weights: 80%
Weights1
Level 1 Score
Level 2 Score
Market Attractiveness
Score
Note: 1The weights have been calculated based on the relative contribution of each Level of analyses on the outcome of Level 2 across the different sets of markets, i.e., Africa Land, Africa Air and Overseas
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Ability to Win Analysis
Ability to win analysis evaluates markets based on South Africa’s ability to operate and
perform in these markets
Markets: Attractiveness – Ability to Win
Relationship
Better political relations and welcoming visa/travel policies act as an advantage for a destination market, increasing the number of tourists from different source markets
Infrastructure
Existing diplomatic and tourism specific operational centres in source markets provide an additional advantage of ease of operation
MarketFavourability
Source markets with supporting business policies are easy to enter and conduct marketing operations
OperationalConnectivity
Better air connectivity and proximity between source and destination market provide additional advantages of reduced travel time and ease of travel, thereby improving travel
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Qualitative indicators in the ability to win analysis are quantified on appropriate scales to conduct a relative assessment
Markets: Attractiveness – Ability to Win Indicators
Visa Regulations by South Africa
Current Partner NetworkPolitical Scenario South Africa’s Presence
Ability to Win
Trading Across Border Index
Enforcing Contracts Index
Starting a Business Index
Resolving Insolvency Index
Proximity to South AfricaAirports with Direct Flight
Perception as Leisure DestinationBrand Recall Rating as Affordable Destination
Rating as Leisure DestinationRating on Willingness to Visit Likelihood to Recommend
Relationship and Infrastructure
Market Favourability
Operational Connectivity
South Africa’sBrand Perception 1
Other Language Constraints
Note: 1Excluded based on low data availability on all markets
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Indicators determining South Africa’s ability to operate and perform in these markets are
likely to influence the ‘Arrivals to South Africa’ from the source market; thus, arrivals is
leveraged as the dependent variable to determine the relative weights
Markets: Attractiveness – Ability to Win Indicators (Regression)
Ability to Win
Re
lati
on
ship
an
d
Infr
astr
uct
ure Visa Regulations by South
Africa
Current Partner Network‡
South Africa’s Presence
Political Scenario
Mar
ket
Favo
ura
bili
ty
Trading Across Border Index
Enforcing Contracts Index
Resolving Insolvency Index
Starting a Business Index
Others: Language Constraints
Airports with Direct Flight
Proximity to South Africa
Op
erat
ion
al
Co
nn
ect
ivit
y
‡ Leveraged ‘Tourism Competitiveness Score’ as a proxy to ‘Current Partner Network’, as state of tourism economy in a market is a good reflection of trade in the market, and can determine the possibility of having good partnerships
Africa Land Markets Overseas MarketsAfrica Air Markets
Tourist Arrivals to South Africa
17%
5%
5%
17%
6%
5%
5%
5%
10%
10%
15%
6%
17%
5%
5%
5%
5%
9%
15%
21%
6%
6%
9%
6%
7%
18%
6%
6%
6%
10%
21%
6%
5%
Dependent Variable
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The framework calculates cost of tourist acquisition in each market, and factors in targets to be achieved and priority order of markets to distribute the marketing budget
Marketing Investment Framework: Investments
Priority Order of Markets
MarketsLevel 0:
Eliminate markets based on data
availability
Level 2: Rank markets on outbound
attractiveness
Level 1: Rank markets on macroeconomic
strength/stability
Rank markets on South Africa’s ability to win
Outcome: Priority order
of Markets
Market Attractiveness
Ability to Win
TargetsBaseline vs. Activated Growth:
Determine growth achieved with/withoutmarketing investment across different markets
Outcome: Growth rates to assess nominal growth
across all source markets
Investments
Allocate budgetacross the prioritised markets by leveraging baseline
growth, setting activated
growth, and applying the
relative cost of acquisition
Outcome: Relative ‘cost of acquisition’ of tourists across
all markets
Assess arrivals (by specific purpose) from the existing
portfolio markets
Determine marketing spend (for the purpose) across the specific portfolio markets
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Budgets are allocated across the markets, in reducing order of attractiveness, to conduct in-market activity and achieve the desired growth
Opportunities that are attractive but cannot be invested in due to resource unavailability, have been categorised as ‘strategic’ markets
Remaining markets, which are not included in either the core set or the strategic set, will be dealt with minimum support
Classification of Markets across the Three Tiers: Investment Set
As SA Tourism has limited resources, it needs to prioritise the markets that should qualify in
its investment set, i.e., which can be nurtured through in-market marketing. Other
attractive opportunities need to be kept in the purview for future actions
Similarly, markets in the tiers of ‘Other Arrivals’ (i.e., VFR) and ‘Overall Arrivals’ are also classified as core and strategic
Strategic Markets
Rest of the World
Core MarketsBudgets exhaust here
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Twenty nine (29) ‘core’ markets have been shortlisted, for dedicated
in-market marketing investments, of which:
Twenty two (22) markets predominantly contribute to holiday
and MICE arrivals
Five (5) markets predominantly contribute to VFR
Two (2) markets have the highest share of traders/resellers
The allocated budget for SAT could only afford to service a total of 29 countries. These
markets were categorised across the three tiers of the role pyramid, leading to a varied set
of responsibility within each tier.
Marketing Investment Framework: Core Markets
Core Markets (in order of priority)
Note: The categorisation across the three tiers is based on the prominent purpose of visit. For the “Holiday + MICE” tier, all Holiday and MICE arrivals have been considered, in addition to the other visits related to business, which are not classified as business resale purposes. “Other tourism arrivals” are primarily based on VFR and personal shopping. “Overall arrivals” primarily comprise business resale
India Denmark Belgium Portugal Sweden
Kenya Ireland Nigeria Namibia DRC
Netherlands Brazil Canada China Italy Tanzania
USA Australia Germany UK France Switzerland
Malawi Zambia
Other TourismArrivals (such as VFR)
Overall Arrivals (such as resellers and traders)
Holiday and MICEArrivals
Lesotho Swaziland Zimbabwe
Botswana Mozambique
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Certain markets, ranked high in the investment framework, are not selected as ‘Core’ markets based on
value/volume contribution or available budgets. These markets are inspected for potential and ability to
collaborate, and are selected to form the ‘Strategic’ set
Based on the MIF the ROI provided sufficient ground for Treasury to allocate budget to
cover the additional 14 Strategic markets .
Marketing Investment Framework: ‘Core + Strategic’ Selection
3+1in Americas
3+4
in Asia Pacific
11+5
in Europe
12+4
in Africa+ #
Darker shade represents ‘Core’ markets
Lighter shade represents ‘Strategic’ markets
Additive numbers in grey represent ‘strategic’ markets
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HUB-AND-SPOKE OPERATING STRATEGY FOR INTERNATIONAL MARKETS
OPERATING STRATEGY: The Hub and Spoke Model
SA Tourism will configure itself in a ‘Hub-and-Spoke’ manner, to ensure effective marketing initiatives, support to the value chain partners and effective delegation of authority and responsibility
represents hub in the region
South America
North America
Central Africa
Western Africa
Eastern Africa
Africa Land South East Asia
China
Australasia
Northern Europe
Southern Europe
United Kingdom
Central Europe
Malaysia
China
JapanIndia
Singapore
Canada
United States
BrazilArgentina
Tanzania
Botswana
Lesotho
MalawiMozambique
Namibia
Swaziland
ZambiaZimbabwe
Angola
Kenya Ethiopia
UgandaNigeria
Ghana
DRC
Portugal
Italy
France
Spain
United Kingdom
Ireland
GermanySwitzerland
NetherlandsBelgium
Finland
Norway Denmark
Sweden
Austria
UAE
Turkey
AustraliaNew Zealand
South Africa*
*Domestic market as well as markets in
South America, Central and Eastern Africa, and
Africa Land will be operated from South
Africa.
There will be some markets such as those in South America that will be managed virtually via third-party marketing agencies, in a prudent manner
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The SA Tourism strategy is underpinned by the 5-in-5 National Tourism Target which is jointly owned by SAT and the PTAs. This drives strategic alignment, proportionate resource allocation and coordination of marketing activity.
Strategy Framework for Engagement with the Provinces
SA T
ouri
sm
5-in-5 National Tourism
Target Drives Resource
AllocationSource Markets Distribution Markets
India
Australia
Netherlands
United Kingdom
Germany
United States
China
Africa
Other DIRCO
Eastern Cape
Western Cape
Northern Cape
Gauteng
North West
Limpopo
Mpumalanga
Free State
KwaZulu-Natal
Success Factors:
• Making 5-in-5 come alive and
relevant in the provinces. APPs and
Strategies need to link up
• SAT and PTA become jointly
accountable for the targets
• Effort, resources and funding
deployed according to targets eg
hostings, APPs etc
• Elevate targets into provincial
performance (Premier + SOP)
• Grading targets included
PTA CVP:
• Strategy formulation and market
execution
• Global and local market support and
alignment
• Ownership of local activities and
activations + local capacity and
tourist activities
Current
10m
+
5m
in
5yrs
- 4% of global target
(eg)
- Key source markets
32
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