South African Business 2016 edition

OVERVIEW Tourism The

OVERVIEW Tourism The South African tourism industry is on an upward trend, despite setbacks and controversies such as onerous amendments to visa regulations. According to the latest figures from the Department of Tourism, international tourist arrivals grew by 4.7% in 2014, reaching a record 1 138-million arrivals, according to the UNWTO World Tourism Barometer. Despite global economic challenges, international tourism results were well above expectations, with an additional 51-million international tourists travelling the world in 2014. Africa attracted 1.3-million additional arrivals (+2.3%), reaching a new record of 56-million, driven by Sub-Saharan destinations (+3.3%). Results in the Middle East turned in 2014 after two years of negative growth (4.4% at 50.3-million). Outbound tourism grew by 4.3% in 2014 over 2013. Over the past four years Germany and the USA remained the top two source markets in the world. In 2014, Russia was the only market in the top 10 to have declined from previous year (down 17%). Among the ten most important source markets in the world, Russia and China continue to be the only emerging markets. China, which became the largest outbound revenue market in 2012 with an expenditure of US5-billion, saw an increase in expenditure of 27% in 2014. Russia, the 5th largest outbound mar- ket, reported 14% growth even with their challenged economy in recession. Tourist arrivals to South Africa grew by 6.6% (587 671) in 2014 to reach 9 549 236 tourists. This performance is above the global average which saw a 4.7% increase in tourist arrivals. In the last 10 years, South Africa’s Brand Equity improved significantly across most portfolio markets. The improvement within core markets was more significant, compared to investment and watch-list markets. Amongst the core markets, South Africa witnessed a healthy improvement in its brand presence across all the overseas mar- SOUTH AFRICAN BUSINESS 2016 112

kets, except Australia. In Africa, South Africa’s brand equity improved considerably during 2008–2014, with relatively more improvement observed in Nigeria, as compared to Kenya. Out of all the 16 markets tracked, South Africa’s conversion curve has improved in 13 markets (with nine markets showing a considerable improvement and four moderate improvement). Among the two African markets, the improvement in conversion curve was more significant in Nigeria than Kenya. Overall, South Africa performed well in 2014, with 9.5-million tourist arrivals, an increase of 6.6% over 2013. OVERVIEW Compared to other destinations, South Africa is ranked 33 in terms of tourist arrivals in 2014 and is down from its previous rank of 30. In Africa, South Africa is the 3rd most visited country, after Morocco and Egypt. From a brand building perspective, South Africa maintained its performance on many parameters of the Conversion Curve, though the performance of ‘Consideration’ and ‘Recently Visited’ attributes marginally declined. Analysing South Africa’s performance relative to our competitors, South Africa’s performance on all parameters remained almost similar to 2013, while key competitors Australia and Thailand are still ahead of South Africa on most parameters. From a closure ratio perspective, all competitors witnessed a worsening performance between 2013 and 2014 with the exception of Thailand. Heritage plays a vital role in South African tourism. Generally heritage resources or sites in South Africa serve both conservation and tourism purposes. The 8 UNESCO Proclaimed World Heritage Sites (WHS) in South Africa are most popular because of their Outstanding Universal Values These World Heritage Sites are: Robben Island Museum, Cradle of Humankind, Mapungubwe Cultural Landscape, iSimangaliso Wetland Park, uKhahlamba Drakensberg (newly named Maloti Drakensberg Transfrontier Park WHS), Richtersveld WHS, Cape Floral Kingdom WHS and Vredefort Dome WHS. In addition, sites such as the Nelson Mandela Museum, Mandela House (Soweto), Hector Petersen Memorial (Soweto), Apartheid Museum, Freedom Park, Voortrekker Monument, Constitution Hill, District Six Museum, Bo- Kaap Museum and many others are popular tourist attractions. All these sites are open to public access and commercialisation through tourism activities as well as enterprise development. There are a number of opportunities to further develop the full potential of tourism in heritage sites. Responsible and sustainable tourism is crucial in this context. The Department of Arts and Culture is responsible for the promotion of Heritage Month, including Heritage Day, in South Africa. Globally halaal tourism is a growth industry and South Africa is well placed to benefit from this trend. The South African tourism industry is very well segmented. Large hotel groups such as Tsogo Sun, Sun International, Protea Hotels and City Lodge Hotels run several brands across market segments. The distribution channel is dominated by four major groups, each of which runs several companies in different parts of the value chain. According to Wesgro, the Western Cape’s investment promotion agency, the biggest groups are: • Imperial Holdings: companies include Europcar and Tempest Car Hire, Springbok Atlas and Grosvenor Tours 113 SOUTH AFRICAN BUSINESS 2016