SA Tourism Organisational Performance Q1 2017/18 Review

1. PRESENTATION TO THE PORTFOLIO COMMITTEE ON TOURISMORGANISATIONAL PERFORMANCE RESULTS QUARTER 1: 2017/18 27 October 2017

2. Table of Contents • Situational Analysis (Slide 2) • Key Focus Areas for SA Tourism in 2017/18 (slides 3 to 5) • Organisational Performance against Annual Performance Plan: (Slides 6 to 23) • Programme 1 - Corporate Support • Programme 2 - Business Enablement • Programme 3 - Leisure Tourism Marketing • Programme 4 - Business Events • Programme 5 - Visitor Experience • Financial Performance (slides 24 to 29) • Human Capital Update (slides 30 to 34) • Governance Information (slides 35 to 39) • Acronyms (slide 40)

3. Situational Analysis (April to June 2017) • Gross Domestic Product (GDP) took a positive turn in this period, growing by 2.5% (quarter-on-quarter), primarily driven by 30% growth in the agricultural sector. • Unemployment continued to rise during the same period, growing to 27.7%, leaving consumers cash-strapped with limited/no income in spite of the economic growth experienced. • Spending on non-essentials such as travel continues to be under threat (as seen among VFR tourists).

4. Key Focus Areas for SA Tourism in 2017/18

5. Leisure Tourism Marketing: Key Focus Areas for 2017/18 • Drive volume and value through strategic partnerships. • Influence transformation through partnerships agreements by introducing new experiences into the itineraries and showcasing hidden gems and a variety of tourism offerings South Africa has to offer, particularly in emerging markets such the Nordics and Middle East. • During off-peak seasons and in cases of low forward bookings to South Africa, to collaborate with trade to package affordable deals to improve seasonality. • Collaborate with Provincial Tourism Authorities to immerse and educate Trade and Media about new experiences and offerings across different provinces in South Africa using hosting, fam trips and SA Specialist. • Maximise resources and global footprint, South African Tourism by leveraging on DIRCO’s infrastructure to promote tourism. • Partner with trade, media and Team South Africa (SAA, Brand South Africa, etc.) in order to ensure that South Africa is marketed in a manner that enhances the brand and traveller experience. • Promote a unified brand by developing global tool kits, virtual training through SA Specialist, Trip Planners among other things to enable countries to customise for their markets. • Identify barriers to entry and collaborate with NDT to address barrier removal – visa processing, airlift, immigration regulations etc.

6. Business Events: Key Focus Areas for 2017/18 • Develop an aggressive and coordinated approach to developing leads for business events - executed in conjunction with the provincial and city Convention Bureaus and the broader business events industry in South Africa. • Promote and incentivise hosting of conferences and incentives in the secondary cities. • Support and capacitate provincial and city convention bureaus through regular engagements in the business events coordinating forum. • Address geographic spread through the pre and post Meetings Africa and Indaba tours conducted to immerse international, regional and domestic buyers and media into smaller towns and alternative products.

7. Grading Council: Key Focus Areas for 2017/18 • Understand needs around quality assurance in light of a pervasive traveller review landscape and allow consumer needs and insights to drive expansion while considering global best practice. • Improvement of reputation through regular trade engagements and consumer campaigns. • Focus and emphasis on the eradication of the illegal use of stars to drive trade and consumer confidence. • Partnering with members to drive their profitability by growing and sustaining their quality of business, i.e.. our value. • Leverage access and participation to SA Tourism platforms as well as information and market data for our members. • Position the TGSCA brand as a holistic assessment of quality and service offering by graded establishments using Tourism Analytics Programme (TAP).

8. Organisational Performance Overview by Programme

9. 2017/18 Organisational Performance Results – Quarter 1

10. 2017/18 Organisational Performance Results – Quarter 1

11. 2017/18 Organisational Performance Results – Quarter 1

12. 2016/17 Organisational Performance Results – Quarter 1

13. 2016/17 Organisational Performance Results – Quarter 1

14. 2016/17 Organisational Performance Results – Quarter 1

15. 2017/18 Organisational Performance Results – Quarter 1

16. 2017/18 Organisational Performance Results – Quarter 1

17. 2017/18 Organisational Performance Results – Quarter 1

18. 2017/18 Organisational Performance Results – Quarter 1

19. 2017/18 Organisational Performance Results – Quarter 1

20. 2017/18 Organisational Performance Results – Quarter 1

21. 2017/18 Organisational Performance Results – Quarter 1

22. 2017/18 Organisational Performance Results – Quarter 1

23. 2017/18 Organisational Performance Results – Quarter 1

24. 2017/18 Organisational Performance Results – Quarter 1

25. Finance

26. Budgeted and Actual Revenue Review as at 30 June 2017

27. Budget and Expenditure Review as at 30 June 2017 Included in programme 4: Leisure Tourism Marketing is investment in domestic marketing with annual budget of R 138 629 200; YTD Budget: R 23 087 800; YTD Actual: R 22 500 000 i.e. 97% of planned year to date budget.

28. Budgetand Expenditure Review as at 30 June 2017

29. Graphical Representation of Expenditure: Goods and Services

30. Breakdown of Expenditure: Goods and Services

31. Human Capital

32. Workforce Profile SA Tourism’s Workforce Profile at the end of June 2017 was as reflected below, against an approved headcount of 202. SA Tourism has achieved a vacancy rate of 15.8% due to the organisational redesign process (Project Ignite). Internships and contract employees were used to ensure business continuity. Recruitment for vacancies commenced in June 2017.

33. Employment Equity Update *1 intern not included in the table above

34. Organisational Review Project Update Outcomes of the Ministerial Review in relation to Organisational Structure and HR Development Build and enhance EXCO and leadership team capabilities to carry out their roles and duties as per their KPAs Conduct a review of the role, performance and capabilities of the HR function Create a culture of engagement and empowerment within and across all levels and units of the organisation • Introducing ways for middle management to engage in strategic discussions • Effective Delegations of Authority to devolve decision making to management • Change management process to shift organisational culture • Staff satisfaction surveys and implementation of recommendations Key Priorities Review and redesign the organisation structure taking into account the funding and resource constraints including currency risks and losses Skills Audit to understand the skills gaps

35. Summary of the Key Activities Completed as at end of Q1 May 2016 May-July 2016 January 2017 August- December 2016 Below is a summary of the key activities completed in the project initiation and assessment phases Initiation & kick off Current state Design Implementation planning Change management, programme management Project imitation Conduct current state assessment Develop the high level design Develop the detailed design Plan for implementation Phase 1 Phase 2 Phase 3 Phase 4 • Define scope • Develop project plan and management approach • Align leadership team to drive the case for change • Conduct change readiness survey • Define data requirements • Data collection • Desktop analysis of documents • Conduct interviews with the relevant stakeholders • Understand current business process mapping of the functions • Develop a change management strategy and plan • Develop tailored design principles • Develop organisational process landscape • Define operating model • Develop a proposed optimal high level structure • Design a detailed organisational micro structure based on the agreed high level design • Review and develop job profiles in line with proposed structure • Define head count implications and costs • Develop leadership competency frameworks • Develop people migration plan • Develop an IT strategy to align processes • Develop an Implementation plan. • Placement and recruitment • Conduct skills audit • Develop training plans • Project closure and reporting

36. Human Capital Update • SA Tourism conducted a Staff Satisfaction Survey in 2017 to evaluate the impact of the interventions from the previous survey (2013) and also to set a baseline for SA Tourism. • Due to the uncertainty during the organisational review, the positive impact of the interventions was not realised. • To address key issues raised in the survey, a Human Capital Strategy was put in place and the implementation has begun to deliver on the following: - revamping the performance management system to align the business objectives with the team and individual objectives; - introducing a talent management framework that will enable SA Tourism to identify key positions and key talent and in turn implement meaningful engagement plans; - a review of reward philosophy that will also include reward and recognition to improve staff engagement and retention, and enable talent attraction; and - learning and development strategy with a focus on employee development and line manager and leadership capability building.

37. Governance

38. Board Meeting Attendance Q1 2017/18

39. Board Meeting Attendance Q1 2017/18

40. Board Remuneration and Travel Costs for Q1 2017/18

41. Abbreviations and Acronyms • CAGR Compound Annual Growth Rate • DDC Deal Driven Campaign • MICE Meetings, Incentives, Conferencing and Exhibitions • EAP Economically Active Population (People from 15-64 years of age who are either employed or unemployed and seeking employment) • TDDS Total Domestic Direct Spend. The average spend comprises of amounts spent on Transport, Food, Shopping (personal), Accommodation and Leisure. • TGCSA Tourism Grading Council of South Africa • TOMSA Tourism Marketing South Africa • TTFDS Total Tourist Foreign Direct Spend • UNWTO United Nations World Travel Organisation • VFR Visiting Friends and Relatives

42. Thank You Slide no. 41