1. SA Tourism 2014/15 Annual Report Presentation Select Committee on Trade and International Relations 27 January 2016

2. Slide no. 1 © South African Tourism 2015 Contents Executive Summary Strategic Overview Governance and Organisational Structures Auditor General’s Report Situational Analysis South African Tourism Market Portfolio 2014/15 Audited Performance Information Governance Information Human Resource Management Audited Statement of Financial Performance for 2014/15 Conclusion

3. Slide no. 2 © South African Tourism 2015 Executive Summary - Global Difficult trading conditions globally. Global challenges in the economy. Outbound tourism, whilst good, is largely short-haul. Global insecurity causing nervousness amongst travellers. Delays in visa issuance impacting some markets such as China, India and Africa. Reduction in length of stay. New immigration regulations and health scares adversely affected our performance.

4. Slide no. 3 © South African Tourism 2015 Executive Summary – South Africa Sluggish South African economic growth impacting on GDP growth. Job losses and unemployment rate continue to increase. Though no Ebola cases were reported in South Africa, our country has felt the impact.

5. Slide no. 4 © South African Tourism 2015 Executive Summary – South African Tourism Late arrival of statistics from Stats SA and their change in methodology impacted on South African Tourism. Continued challenge of currency exposure leading to regular review of SA Tourism’s operating model overseas in response to rising costs: -Hubs -Virtual offices -Global Marketing Agencies SA Tourism has achieved 6 of the 11 set targets. Whilst we did not meet all of our targets we achieved growth in foreign arrivals and revenue. Domestic tourism performance remains a challenge for SA Tourism.

6. Strategic Overview Slide no. 5

7. Vision and Mission Vision For South Africa to be one of the most preferred tourist destinations in the world and to maximise the economic potential of the tourism industry for our country and its people. Mission To develop and implement a world-class tourism marketing strategy for SA. In pursuance of this, SA Tourism will: Implement domestic, regional and international marketing strategies informed by research; Implement a business events strategy; Implement and maintain a recognisable, credible and globally benchmarked system of quality assurance; Facilitate strategic alignment of Provinces and industry in support of global marketing of tourism; Continuously align efforts to support tourism growth; Ensure the efficient utilisation of resources to deliver the tourism strategy. Slide no. 6 Page 24 of the Annual Report

8. Slide no. 7 © South African Tourism 2015 Legislative Mandate of SA Tourism The South African Tourism Board is a Schedule 3A Public Entity (PFMA) established in terms of the Tourism Act (Act no. 72 of 1993) and continues to exist in terms of the Tourism Act (Act no. 3 of 2014). Functions of the South African Tourism Board: Market South Africa as a domestic and international tourist destination; Market South African products and facilities internationally and domestically; Develop and implement a marketing strategy for tourism that promotes the objectives of the Act and the NTSS. Advise the Minister on any other matter relating to tourism marketing; With the approval of the Minister, establish a National Convention Bureau to market South Africa as business tourism destination. Provide oversight for the management of the Tourism Grading Council. Page 24 of Annual Report

9. Slide no. 8 SA Tourism’s Mandate set out in the Tourism Act makes it clear that it needs to make choices that will benefit all South Africans Sustainable GDP Growth Sustainable job creation Redistribution and transformation The mandate of the Tourism Sector is... … through six key objectives … by acting in a focused way to Understand the market Choose the attractive segments Market the Destination Facilitate the removal of identified obstacles Monitor and learn from tourist experience Facilitate the product platform Increase in tourist volume Increase in tourist spend Increase length of stay Improve geographic spread Improve seasonality patterns Promote transformation

10. Governance and Organisational Structures Slide no. 9

11. Minister of Tourism South African Tourism Board NDT DG SA Tourism Management Global Manager: Stakeholder/ Global Trade QAO Slide no. 10 Governance Structure Minister of Tourism National Department of Tourism

12. Minister of Tourism Regional Director: Europe South African Tourism Board NDT DG Chief Executive Officer Global Manager: Stakeholder/ Global Trade Chief Financial Officer South African Tourism Board Chief Marketing Officer Chief Quality Assurance Officer Chief Operating Officer QAO Chief Convention Bureau Officer Slide no. 11 Company Secretary Manager Office of the CEO Internal Auditor Organisational Structure Minister of Tourism

13. Auditor General’s Report Slide no. 12

14. Slide no. 13 © South African Tourism 2015 Auditor-General’s Report SA Tourism received its 14th unqualified audit report in 2014/15. SA Tourism was one of 11 government entities who received a clean audit award from the Auditor General. The Auditor General certified that the financial statements were free from material misstatements and no findings were raised regarding procurement and contract. Auditor-General provided the following outcomes on the performance of our organisation: Page 30 – 31 of the Annual Report

15. Situational Analysis Slide no. 14

16. Slide no. 15 © South African Tourism 2015 Global Tourism Performance in 2014 2014 saw Travel & Tourism GDP (direct) performing better in the modest global economy growing from 3.4% in 2013 to 3.5% in 2014. This was against the global GDP of 2.4% from the 2.3% in 2013. The economic performance of travel & tourism was weaker than expected due to a few factors: Ukraine-Russia conflict, Ebola in West Africa, political instability in Thailand and the increase in instability in Syria and Libya. Despite the growth in spending, it was weaker than expected in line with the macroeconomic performance. The exchange rates were volatile and the US dollar appreciated against major currencies. Global tourism expenditure reached an estimated US$ 1.197 billion in 2014, which is a 3.4% growth. Note: 1 A valid comparison with global tourism arrivals cannot be made. Global performance is on tourist arrivals and SA performance cited here is on foreign arrivals. 2 The markets listed are only those that are within the 5 th portfolio.

17. Slide no. 16 © South African Tourism 2015 Global Tourism Performance in 2014 According to the UNWTO Report, international tourist arrivals (overnight visitors) grew by 4.7% in 2014, reaching 1.138 billion arrivals worldwide. It is estimated that international tourist arrivals will reach 1.6 billion by 2020 – at an annual growth rate of between 4% and 4.5%. The growth was mainly driven by developed markets where arrivals grew by 5.6% compared to 3.6% growth from emerging markets. Strongest growth was recorded in the Americas (+7%) followed by Asia and the Pacific (+5%), Europe (+4%), Middle East (+4%) and Africa (+2%). Note: 1 A valid comparison with global tourism arrivals cannot be made. Global performance is on tourist arrivals and SA performance cited here is on foreign arrivals. 2 The markets listed are only those that are within the 5 th portfolio.

18. Slide no. 17 © South African Tourism 2015 Regional Tourism Performance in 2014 Regional Africa accounted for 76% of total tourist arrivals in 2014 with the Africa-land markets making up the majority of this total. Tourist arrivals from land markets grew by 8.8% while the Africa-air markets declined by -4.1% in this period. SA Tourism portfolio accounted for 97% of the total tourist arrivals to South Africa, with core, investment, tactical and watch-list markets growing at 8%, 6.1%, 4.6% and 7.7% respectively.

19. Slide no. 18 © South African Tourism 2015 While Foreign Arrivals grew by 3.7% in 2014, the target was not achieved. Africa-air and Europe were the only regions that exceeded the target Arrivals (Thousands) Foreign Arrivals to South Africa by Region, 2013 vs 2014 2014 Target 16 033 947439 16912 091 766 643 921714 045 1 692 570 Note: Cells shaded green indicate where the target was exceeded

20. 19 © South African Tourism 2015 AFRICA 7,257,720 arrivals 8.1% up from 2013 Central & South America 65,118 arrivals 16.4% down from 2013 North America 369,801 arrivals 4.0% up from 2013 Europe 1,365,472 arrivals 6.8% up from 2013 Asia 269,634 arrivals 16.0% down from 2013 Australasia 132,080 arrivals 3.2% up from 2013 Middle East 52,604 arrivals 0.1% up from 2013 Indian Ocean Islands 22,094 arrivals 9.6% up from 2013 Note: *A tourist arrival is defined as a non-resident who stays for more than 24 hours but less than one year in the country and excludes “workers” and “contract workers”. As of 2014, Statistics SA is no longer able to provide statistics on Transit Tourists and therefore a new baseline is now created. Source: Statssa Tourism & Migration release December 2014, SAT analysis 9 549 236 arrivals 6.6% up from 2013 GRAND TOTAL Tourist arrivals to South Africa in 2014 grew by 6.6% over 2013 to reach 9 549 236. All regions grew with the exception of Central & South America and Asia

21. South African Tourism Market Portfolio Slide no. 20

22. Slide no. 21 5 th Market Portfolio - 01/04/2014 – 30/03/2017 AfricaAMERICASASIA & AUSTRALASIAEUROPE & the UK CORE MARKETSAngola South Africa Kenya & Tanzania Mozambique UK INVESTMENT MARKETS Botswana DRC Ghana Lesotho Uganda Zimbabwe CanadaSouth Korea Russia TACTICAL MARKETS Namibia UAE Zambia SingaporeSwitzerland WATCH-LIST MARKETS Ethiopia Malawi Swaziland ArgentinaNew ZealandAustria Belgium Denmark Finland Norway Spain Sweden Turkey STRATEGIC IMPORTANCE Egypt, Israel, Morocco, Saudi Arabia, Tunisia, Malaysia USAChina France India Australia Germany Netherlands UK Japan Brazil Italy Nigeria Page 36 - 37 of the Annual Report Slide no. 21

23. Slide no. 22 Hub Approach AMERICAS North AmericaLatin America USA (Office)Brazil (GMA) Canada West AfricaEast Africa Nigeria (Office - Hub) Kenya (Virtual) GhanaTanzania Ethiopia Central Africa SADC Angola (Virtual)Botswana Mozambique Zimbabwe Zambia Lesotho AFRICA Asia Pacific China - (Office - Hub) Japan South Korea ASIA & AUSTRALIASIA INDIA India - Office ASIA AIRLINK HUB Malaysia Singapore UAE ASIA AIRLINK HUB Australia (Office) - Hub New Zealand EUROPE Northern Europe The Netherlands – Office - Hub Belgium Central Europe Germany Southern Europe France (Office – Hub) Italy UK AFRICA - HEAD OFFICE HEAD OFFICE - WATCHLIST DRC INTERNATIONAL - HEAD OFFICE Finland Norway Spain Turkey Malawi Swaziland Egypt & Morocco Israel & Saudi Tunisia Priority Missions Switzerland Austria Sweden Denmark Russia

24. Audited Performance Information 2014/15 Slide no. 23

25. Performance Information by Programme Slide no. 24

26. Slide no. 25 Strategic Objectives Performance Indicator Actual Achieveme nt 2013/2014: Planned Target: 2014/2015 Actual Achievement: 2014/2015 Deviation from Planned Target to Actual Achievemen t: 2014/2015 Comment on Deviations Increase foreign visitor arrivals coming to South Africa Number of foreign visitor arrivals 14 860 21616 033 94715 403 266-3.9% There was growth from most regions with the exception of Africa-air markets and Asia & Australasia. The slower growth recorded (relative to the target) can be attributed to global macroeconomic conditions which impacted the spending by tourists on travel. Destinations perceived to be cheaper would be chosen in such instances. Number of buyers that South African Tourism will host at Meetings Africa and Indaba during the financial year Not a target in 2013/14 427451+5.6%Exceeded target by 5.6% due to an increased focus on the correct trade to showcase South Africa at Indaba, also the target set for Buyers participation at Meetings Africa was achieved. 2014/15 Audited Performance Information Page 38 - 39 of the Annual Report

27. Slide no. 26 2014/15 Audited Performance Information Strategic Objectives Performance Indicator Actual Achievement 2013/2014 Planned Target 2014/2015 Actual Achievement 2014/2015 Deviation from Planned target to Actual Achievement for 2014/2015 Comment on Deviations Increase domestic tourism in South Africa Number of domestic travellers 12.0 million 12.9 million 12.0 million -7% Target not achieved. Annual GDP of 1.3% in 2014 was the lowest rate of GDP since 2008/9. This poor economic performance coupled with an increase in CPI impacted consumer confidence. There is still a poor culture among South Africans for taking holidays and as a result the retail sector benefited more than the travel sector. Number of total domestic trips Not a target in 2013/14 25.9 million 28.0 million+8.1%Target exceeded. Although the poor economic performance was recorded, some regular travellers have increased the frequency of travel mainly for Visiting Friends and Relatives. Page 38-39 of the Annual Report

28. Slide no. 27 2014/15 Audited Performance Information Strategic Objectives Performance Indicator Actual Achievement 2013/2014 Planned Target 2014/2015 Actual Achievement 2014/2015 Deviation from Planned target to Actual Achievement for 2014/2015 Comment on Deviations Increase domestic tourism in South Africa Number of trips during which “holiday” will be the primary objective Not a target in 2013/14 3.07 million 2.776 million -9.5% Target not achieved. Annual GDP of 1.3% in 2014 was the lowest rate of GDP since 2008/9. This poor economic performance coupled with an increase in CPI impacted consumer confidence. There is still a poor culture among South Africans for taking holidays and as a result the retail sector benefited more than the travel sector. Number of reports which must include data on seasonality Not a target in 2013/14 1 1-Target achieved Page 38-39 of the Annual Report

29. Slide no. 28 2014/15 Audited Performance Information Strategic Objectives Performance Indicator Actual Achievement 2013/2014 Planned Target 2014/2015 Actual Achievement 2014/2015 Deviation from Planned target to Actual Achievement for 2014/2015 Comment on Deviations Increase tourism trended revenue contribution to the economy Amount of revenue (Foreign and domestic) R90 billion (Jan – Sep 2013) R128.0 billion 119.18 billion -6.9% Global spending on travel & tourism grew by 3.4% but it was weaker than expected in line with the global macroeconomic performance. Furthermore, the exchange rates were rather volatile in the year and the US dollar appreciated against major currencies. Decreases in average spend as well as arrivals across most markets was a factor in not meeting the revenue target. Increase SA brand awareness Brand awareness percentage 79% 80% -Target achieved Page 38-39 of the Annual Report

30. Slide no. 29 Strategic Objectives Performance Indicator Actual Achievement 2013/2014 Planned Target 2014/2015 Actual Achievement 2014/2015 Deviation from Planned target to Actual Achievement for 2014/2015 Comment on Deviations Provide quality assurance for tourism products Number of graded accommodation establishment members 5 587 7 088 5 369-24.3%Target was not achieved as the value proposition of grading did not improve given that the basket of benefits has not been fully implemented during the year under review. 2014/15 Audited Performance Information Page 38-39 of the Annual Report

31. Slide no. 30 Strategic ObjectivesPerformance Indicator Actual Achievement 2013/2014 Planned Target 2014/2015 Actual Achievement 2014/2015 Deviation from Planned target to Actual Achievement for 2014/2015 Comment on Deviations Increase business events Number of international Business Events delegates in South Africa 94 89358 50069 955+19.6% Target exceeded due to improved research by SANCB as well as the collaborative bidding efforts with the cities and Provincial Convention Bureaus. Number of bids supported Not a target in 2013/14 4552+15.5%Exceeded target by 15.5% due to extensive research conducted on upcoming business events and meetings where decisions of Associations are expected to be made regarding meetings. 2014/15 Audited Performance Information Page 38-39 of the Annual Report

32. Strategy to Overcome Areas of Underperformance Slide no. 31

33. Slide no. 32 © South African Tourism 2015 Strategies to Overcome Areas of Underperformance Key Performance Indicator Number of foreign visitor arrivals South African Tourism is currently formulating its integrated Marketing and Growth Strategy and will continue to implement its Hub Strategy for better market penetration and increase in arrivals. From 2015/16 onwards, South African Tourism will be reporting on number of tourists instead of foreign visitor arrivals as the return on investment is calculated based on tourists. Amount of revenue Number of domestic travellers Additional budget has been allocated to domestic tourism over the MTEF period from 2015/16. New strategies and tactics will be implemented in order to create awareness, to cultivate a culture of travel and to increase the frequency of travel. Number of trips during which “holiday” will be the primary objective Number of graded establishments South African Tourism will accelerate the implementation of the TGCSA Strategy that was approved in August 2014. It is envisaged full implementation of the Basket of Benefits will improve the value proposition thus stimulating the uptake by existing and new establishments. Page 39 of the Annual Report

34. Performance Information by Activity Slide no. 33

35. Slide no. 34 © South African Tourism 2015 Key Initiatives: Global Fully integrated marketing channels, considered globally implemented locally. Global partners – o National Geographic – 458 million households; 172 Countries; 38 Languages (Dutch, English, Chinese, French, German, Italian, Spanish). o CNN Global distribution – 484 million households, hotel rooms & airports worldwide. #MeetSouthAfrica campaign rolled out across most Core Markets. Numerous global awards won for excellent destination marketing execution. Page 41 – 51 of the Annual Report

36. Slide no. 35 © South African Tourism 2015 Key Initiatives: Global Successful Joint Marketing Agreements (JMAs) to facilitate fulfilment of ob jectives. The ‘Heartfelt Connections’ campaign has worked well to address the decline in awareness and positivity. Participation in international trade shows to improve market access for South African tourism products. Use of integrated marketing approach – traditional and digital marketing. Page 41 – 51 of the Annual Report

37. Slide no. 36 © South African Tourism 2015 Key Initiatives: Africa SA Tourism exhibited in a number of travel shows to build brand awareness, create market access and to increase strategic support for our events. These include: -Swahili Tanzania -Magical Kenya -BITUR in Angola -AKWAABA in Nigeria SA Tourism partnered with Association of Travel Agencies and Tour Operators in Nigeria, Kenya, Ghana, Angola and Tanzania to increase tourism growth from those regions. Page 41 - 51 of the Annual Report

38. Slide no. 37 © South African Tourism 2015 Key Initiatives: Africa Trade and media from different markets were hosted throughout the year to showcase leisure and business experiences leveraging on: Vodacom Durban July, Standard Bank Joy of Jazz, the Cape Town Jazz Festival, Indaba and Meetings Africa. SA Tourism also partnered DSTV lifestyle channels such as Africa Magic, Africa Magic Entertainment, VUZU, Mzansi Magic, MTV Base and Africa Magic World. A partnership with Intercape and Flight Connect was entered into for the distribution of brochures that profiled 52 getaway itineraries in South Africa on board the busses and flights. More than 7 000 travellers from Mozambique and Botswana were reached through this initiative. Page 41 - 51 of the Annual Report

39. Slide no. 38 © South African Tourism 2015 Key Initiatives: Domestic Domestic tourism is a high priority market with a long term objective aimed at encouraging a culture of travel among South Africans. Integrated “Sho’t Left” campaign has gained traction to encourage South African travellers to take short breaks. Sho’t Left website, a portal for better engagement with our trade partners. Trade engagements have encouraged packaging of affordable tailored experience packages featured on the Sho’t Left Deals Page. Secured Provincial and industry buy-in and alignment in implementing the Domestic campaign and SA Specialist programme. Various Joint Marketing Agreements were signed with airlines, associations, travel agents, product and on-line agents to fulfil objectives. Page 41 - 51 of the Annual Report

40. Tourism Grading Council of South Africa (TGCSA) Slide no. 39

41. Slide no. 40 © South African Tourism 2015 Tourism Grading Council of South Africa (TGCSA) The focus of TGCSA is to implement a recognisable and credible globally bench- marked system of quality assurance for tourism experiences which can be relied upon. TGCSA developed a strategy aimed at achieving the following: o Engagement with partners to deliver quality visitor experience that reaffirms brand promise. o Increasing value for graded establishments through the introduction of the Basket of Benefits. o Partner with NDT for SMME support. o Integration of online reviews in the grading system. Page 51 - 52 of the Annual Report

42. Slide no. 41 © South African Tourism 2015 Key Initiatives: TGCSA The Basket of Benefits was launched in September 2014. It is a comprehensive offering to graded establishments that provides various value-added benefits tailor-made to their specific needs. Power of One Country-wide Roadshows are conducted annually as part of the Stakeholder Management Plan to build strong relationships with business and the provincial and local tourism authorities. Page 51 – 52 of the Annual Report

43. Slide no. 42 © South African Tourism 2015 Key Initiatives: TGCSA The grading categories were expanded in July 2014 from nine to eleven to include the Game Lodge and Game/Nature categories. In 2014 the Universal Accessibility (UA) minimum entry requirements and grading criteria were revised to consider mobility, communication and visual impairment. Review of the TGCSA business model to increase the base of graded establishments as well as renewals. 2016 TGCSA will be reviewing the Grading Criteria for all Categories 2016 will see TGCSA including Online User Generated Guest Reviews into the grading process to encapsulate service into the process. Page 51 – 52 of the Annual Report

44. South African National Convention Bureau (SANCB) Slide no. 43

45. Slide no. 44 © South African Tourism 2015 South African National Convention Bureau (SANCB) SANCB focuses its efforts on attracting events in economic sectors that have been identified by the government as priorities for future development. Hosting major events in these sectors can contribute significantly in accelerating macro-economic benefits for the country. Page 52 of the Annual Report

46. Slide no. 45 © South African Tourism 2015 Market Priorities: Key Industries/Sectors – Provinces Mining and agriculture are major sectors across provinces; while manufacturing industries are mainly located in Eastern Cape, KwaZulu-Natal and Free State, the financial services sector is mainly concentrated in Gauteng Western Cape  Key Industries: Finance, printing and publishing, real estate, ICT, oil and gas, retail, engineering, R&D 4, clothing and textile, agriculture, ship building / ports, tourism and medical 1 4 Gauteng  Key Industries: Financial and business services, logistics and communications, mining, agriculture (food processing and beverages), medical 1, automotive 2 manufacturing, R&D 3 and telecommunications and technology 1 North West  Key Industries: Mining (mainly Platinum), tourism (game reserve, nature reserve, etc.) and agriculture 2 Northern Cape  Key Industries: Mining (mainly Diamonds, Iron-ore), tourism, game- farming, astronomy and agriculture 3 Limpopo  Key Industries: Mining, tourism (game reserves), agriculture and hunting industry / game farming 9 Mpumalanga  Key Industries: Mining (Coal), agriculture (citrus fruit production, agri-processing and sheep farming), tourism (eco-tourism), game farms and manufacturing 8 Free State  Key Industries: Mining (Gold, Coal and Diamond), agriculture, petrochemicals and manufacturing (high-tech industries) 7 KwaZulu-Natal  Key Industries: Mining (Aluminum, Steam Coal, Minerals), manufacturing (petro-chemicals, automotive), tourism, ports, leather industry and agriculture, real estate, medical 1 6 Eastern Cape  Key Industries: Automotive manufacturing, finance, real estate, agriculture (sheep farming and fishing), wholesale and retail trade, tourism, ports 5 and hotels and restaurants 5 1 9 2 3 4 7 5 6 8 South Africa – Key Industries/Sectors by Provinces

47. Slide no. 46 © South African Tourism 2015 Key initiatives: SANCB 52 event bids were submitted with a potential to attract 119 477 business delegates to South Africa over the next 5 years, an estimated economic impact of R1.6 billion, and a total of 230 estimated conference. 177 business events were secured around the country for the next 5 years, which will attract 253 128 delegates, creating 753 event days and generating an estimated R3.5 billion for the economy. Five tradeshow platforms were created for the industry which generated 75 leads with a combined estimated economic impact of R490 million, a potential to attract 53 795 delegates and generate 451 event days. Page 52 of the Annual Report

48. Slide no. 47 © South African Tourism 2015 Key initiatives: SANCB Meetings Africa was attended by 178 international hosted buyers, 38 African Association Buyers, 270 exhibitors, 199 media and 1556 local corporate buyers and visitors. SANCB launched 30 delegate boosting activations and 30 local on-site events in more than 20 cities around the world to promote South Africa as a host country and to encourage return visits to the country. South Africa improved its global International Congress and Convention Association (ICCA) Ranking position from 37 th to 34 th. South Africa maintained its top position as a convention destination in Africa and the Middle East. Page 52 of the Annual Report

49. Slide no. 48 © South African Tourism 2015 Impact of our Initiatives Initiative/ProjectTarget Market/AudienceResults/Outcomes #Meet South Africa Campaign Rolled out across Core Markets Through research results to date - Online Media: Impressions – 28 825 363 Views – 14 297 749 Clicks – 152 736 Indaba 2014Global Delegates – 10 738 (7% increase) Product – 1198 (decrease) Buyers – 3503 (increase) Meetings – 19 399 (decrease) Lilizela Awards 2014Global Entries - 1226 (8% decrease) Votes – 7480 (increase) Entries dropped in 2014 but votes increased significantly Sho’t Left CampaignDomestic Impressions – 18 413 578 Clicks – 292 862 Offers – 21 000 25% Return Ratio International Trade shows (Leisure) Private visitors Trade Convention Associations About 281 095 delegates About 18 500 exhibiting companies 92 SA Tourism Pavilion Exhibitors

50. Slide no. 49 © South African Tourism 2015 Impact of our Initiatives Initiative/ProjectTarget Market/AudienceResults/Outcomes Meetings Africa (MA) 2015Business Events Industry: Meetings, Incentives, Conference and Exhibitions (MICE) 178 International hosted buyers (6% increase from 2014) 41 Association Buyers (32% increase from 2014) 199 Media (20% increase from 2014) 50 Students for Future Leaders Forum (19% increase from 2014) 270 exhibitors (3% increase from 2014) 1556 Visitors and Corporate Buyers (31% increase from 2014) IMEX Frankfurt 2015, Germany Meetings held generated 25 qualified leads Total value of combined leads: R170 702 000 Estimated Number of Delegates: 44 500 Number of Conference Day: 137 IBTM CHINA 2015 Meetings held generated 9 hot leads Total value of combined leads: R134 million Estimated Number of Delegates: 5953 Number of Conference Day: 138

51. Governance Information Slide no. 50

52. Slide no. 51 © South African Tourism 2015 South African Tourism Board The Board, appointed by the Minister, consisted of nine Non-Executive Directors and included a representative for the National Department of Tourism. The Board Members fulfil their roles, duties and functions with due regard to the fiduciary responsibilities bestowed on them in line with the Tourism Act and King III Report on Corporate Governance. The Board meets quarterly or more frequently if circumstance require it. The Members provide oversight to the executive management by ensuring that all material matters are subject to Board approval. The Board meetings were well attended. A Board effectiveness evaluation is conducted by the Board on an annual basis. In the period under review the Non-Executive Directors serving on the South African Tourism Board were not remunerated for their service. Page 60 – 81 of the Annual Report

53. Slide no. 52 © South African Tourism 2015 Report from the Audit and Risk Committee In line with the PFMA and King III Report on Corporate Governance Recommendations, the Internal Audit Unit provides the Audit and Risk Committee and Management with the assurance that the internal controls are appropriate and effective. A formal risk assessment was conducted during the period under review and the top ten strategic risks affecting the business were identified. There were no matters reported that indicated any material deficiencies in the systems of internal control or any deviations thereof. In line with the statutory requirements and Audit Standards, the independence of the Internal Audit Unit has been assessed. Page 82 of the Annual Report

54. Human Resource Management Slide no. 53

55. Slide no. 54 © South African Tourism 2015 Human Resource Information The Board approved structure has 202 positions vs the current headcount of 171 positions. SA Tourism works towards maintaining a vacancy rate of below 7%. SA Tourism is well within its Employment Equity (EE) targets based on the employees at Head Office and country managers abroad. The international offices are not bound by the EE targets and operate under their respective labour laws. Page 89 – 90 of the Annual Report

56. Slide no. 55 © South African Tourism 2015 SAT Employment Equity Statistics LEVELS FEMALE AFRICANCOLOUREDINDIANWHITE CURRENTTARGETCURRENTTARGETCURRENTTARGETCURRENTTARGET Top Management11000110 Senior Management33011111 Professional Qualified1413225264 Skilled1917442134 Semi-skilled108120102 Unskilled00000000 Total4742798611 LEVELS MALE AFRICANCOLOUREDINDIANWHITE CURRENTTARGETCURRENTTARGETCURRENTTARGETCURRENTTARGET Top Management11000011 Senior Management00000011 Professional Qualified1112221274 Skilled1510120232 Semi-skilled65011101 Unskilled00000000 Total33283525129

57. Slide no. 56 © South African Tourism 2015 SAT Employment Equity Statistics LEVELS DISABLED STAFF MALEFEMALE CURRENTTARGETCURRENTTARGET Top Management11 Senior Management Professional Qualified Skilled Semi-skilled Unskilled Total11

58. Audited Statement of Financial Performance for 2014/15 Slide no. 57

59. Slide no. 58 © South African Tourism 2015 Revenue SA Tourism recognised total revenue of R 991.6 million during the 2014/15 financial year. This amount comprises of R 880 million government grants received from NDT and R 111.6 million received from TOMSA. This was a R 14 million increase from previous financial year. Page 94 – 135 of the Annual Report

60. Slide no. 59 © South African Tourism 2015 Other Income The sundry income balance of 56% mainly consists of income received from exhibition shows such as Indaba and Meetings Africa. The net impact of foreign currency movement was an unrealised forex gain which equated to 25% of total Other Income. ( Unrealised forex gain: non-cash gain due to translation of foreign currency denoted financial records in country offices.) Interest received increased by R 10.5 million due to upfront grant allocations. IP*= Investment Property Page 94 – 135 of the Annual Report

61. Slide no. 60 © South African Tourism 2015 Operating Expenses 77% of SA Tourism’s expenses were attributable to marketing. 16% of total operating expenses relate to employee costs. Page 94 – 135 of the Annual Report

62. Slide no. 61 © South African Tourism 2015 Key Highlights The Amsterdam residential property was correctly converted to an Investment Property as at 31 March 2015. After 25 years SA Tourism finally terminated the lease contract in London resulting in significant savings. Leased assets’ net book value as at 31 March 2015 declined from R 9.2 million to R 741 000 in the current year. Allowances for bad debts decrease due to the change of the “legal debtor system”. Page 94 – 135 of the Annual Report

63. Slide no. 62 © South African Tourism 2015 Key Highlights Provisions declined mainly due to the reversal of unused provisions relating to labour dispute cases which have now been assessed as contingent by SA Tourism’s legal department. Income received in advance decreased by more than R 20 million as a result once-off additional allocation by NDT which was received in the previous year. Accumulated Surplus increased due to surplus realised in 2014/15 and amounts recognised directly in equity e.g. reversal of unused provisions. Page 94 – 135 of the Annual Report

64. Slide no. 63 © South African Tourism 2015 Impact On Bottom Line The format of the Statement of Financial Performance was changed, in line with the Generally Recognised Accounting Practice 1 requirement i.e. user usefulness, to separately show material non-cash item after Operating Surplus or deficit. SA Tourism shows operating deficit/ surplus before Gain on foreign exchange AND Fair value adjustment of Investment Property i.e. ( non-operating activities which have a material impact on the bottom line.) Page 94 – 135 of the Annual Report

65. Slide no. 64 © South African Tourism 2015 Revenue and Expenditure Name of the Objective2014/15 ENE EstimateAdjustmentApprovedAudited Expenditure in RandBudget ( R’000) Actual ( R’000) Major Objectives1 042 23852 8501 095 0881 108 017 1 Administration111 160- 108 188 2 Increase foreign visitor arrivals coming to South Africa 299 61124 925324 536286 835 3 Increase domestic tourism in South Africa 43 672- 38 017 4 Increase tourism trended revenue contribution to the economy 299 61124 925324 536286 835 5 Marketing Increase South Africa brand awareness 201 200 - 273 455 6 Provide quality assurance for tourism products 41 1713 000 44 17148 352 7 Increase business events 45 813 - 66 335 Total1 042 23852 8501 095 0881 108 017 Page 94 – 135 of the Annual Report

66. Conclusion Slide no. 65

67. Slide no. 66 © South African Tourism 2015 Conclusion The sluggish South African economic growth is still impacting on South Africa, increasing job losses in various industries. The tourism sector is still recovering from the effects of the Immigration Regulations. Global security and health concerns remain topical and continue to influence travellers in their decision-making.

68. Slide no. 67 © South African Tourism 2015 Conclusion Whilst SA Tourism did not meet all set targets we achieved growth in foreign arrivals and revenue. Domestic travellers remained flat compared to the previous year. The organisation is embarking on strategies to improve on areas where we did not achieve our targets. In 2015/16, SA Tourism will continue to intensify its engagement with trade as part of the implementation of the domestic tourism campaign.

69. Slide no. 68 © South African Tourism 2015 Conclusion We have developed a comprehensive Stakeholder Management Plan to improve collaboration and strengthen relationships with strategic stakeholders, trade, media and government. SA Tourism and the Board are already hard at work implementing recommendations of the Ministerial Review Panel on SA Tourism. Thank you to the SA Tourism staff, Board, NDT, the Ministry and the Portfolio and Select Committees for their support.

70. Thank You Slide no. 69