In line with the PFMA and Treasury Regulations, SA Tourism needs to submit to the Minister, upon approval by its EXCO and Board, a high-level Business Plan and Budget for its next financial year (2009/10) and an updated high-level Strategic Plan for the organization for the next 5 years (2009/10 – 2013/14)
To consider for approval:
Objective 1 and 2: Achieve total arrivals & spend targets to SA
Objective 1 and 2: Achieve total arrivals spend targets to SA (cont.)
Objective 1 and 2: Notes on targets
Objective 3
South Africa to be a most preferred Tourism Brand by 2014:
Meaning we should be a top 3 destination on the consideration list of any tourist planning to travel long-haul from any of our core markets, but preferably NUMBER 1!
Objective 4
SA Tourism to be the Best Tourism Organization by 2010:
As decided by the Annual Tourism Awards Committee of the World Tourism Organization, and as attested to by the most credible award committees in our chosen core markets
Annual Measures:
Internal: Clean Audit reports, staff retention of 85%, increase ranking as best company to work for by 5 positions per annum, training budget spent
External: In market awards for marketing, destination and national tourism boards
During February 2007, South African Tourism’s Board approved, based on the recommendation from SA Tourism’s EXCO, 6 strategies that will be implemented to achieve the 4 identified objectives and targets for SA Tourism during the 2008/9 – 2010/11 financial years.
Following careful consideration of these 6 strategies at the recent Exco-Manco Lekgotla, management is of the opinion that these 6 strategies should be retained as previously indicated to achieve SA Tourism’s 4 major objectives and targets during the period 2008/9 -10 and after annual review until 2013/14.
These strategies will be reviewed annually at the Board’s February meeting.
Strategy 1: Share our company’s vision with key stakeholders and influencers
Strategy 3 : Grow & nurture our staff in order to realize our operational goals
Strategy 4 : Improve brand traction in markets to increase positive awareness
Strategy 4 : Improve brand traction in markets to increase positive awareness
Strategy 5 : Develop or fine-tune internal systems and communication for better results (to obtain operational excellence)
Strategy 5 : Develop or fine-tune internal systems and communication for better results (to obtain operational excellence)
Strategy 6 : Increase value extraction in SA of all tourists
Strategy 6 : Increase value extraction in SA of all tourists
Review of data
SA Tourism reviews its performance on a quarterly level. It publishes quarterly reports on all measures of its objectives. These are available on www.southafrica.net/research
SA Tourism reviews its marketing investment every three years where it takes a ‘fresh eyes’ view of all the travel markets in the world and makes data-driven decisions on where our best investment prospects are against our mandate
The success of this investment is measured against the targets we set in a rolling three-year cycle
SA Tourism set brand targets for the first time last year. These are also over a three-year period and reviews with the portfolio review in a three-year cycle
Provide CPIX-related remuneration adjustments annually on 1 July every year:
2008: 7,0% (average 2008/9 CPIX as per RMB Financial Markets Research 28/11/07)
2010: 5,8% (no average 2010/11 forecast available from SARB; best estimate)
2011: 5,6% (no average 2011/12 forecast available from SARB; best estimate)
2012: 5,3% (no average 2012/13 forecast available from SARB; best estimate)
2013: 5,7% (no average 2013/14 forecast available from SARB; best estimate)
Budget for exchange rates as indicated on the next slide
Exchange rates used for budgeting
Treasury’s guideline on overheads is that it shouldn’t exceed 10% of the total budget of the organisation.
As SA Tourism is a marketing organization, its overheads consists of the following:
Sundry operating cost of non-marketing employees in all business units (Office of CEO Business Unit incl CEO, COO, Mgr Admin, Internal Audit, Legal and IT, Human Resources Business Unit, Research, Finance Business Unit and TECSA).
Premises and infrastructure cost of all business units (“net premises and equipment”)
Sundry operating cost of all non-marketing business units (Office of CEO Business Unit (incl CEO, COO, Mgr Admin, Internal Audit, Legal and IT), Human Resources Business Unit, Finance Business Unit and TECSA)
3. On the assumption that there will be no changes to SA Tourism overheads for the remainder of the financial year, actual SA Tourism overheads for the 2007/8 financial year has been calculated on the next page.
allocations, as confirmed by the Minster in January 2008;
1.1.2 Government’s expected prioritization of infrastructure investment over the next 5 years,
which will result in reduced allocations to other ASGISA priorities such as Tourism;
1.1.3 Treasury’s guideline that total overheads shouldn’t exceed 10% of total budget,
SA Tourism cannot request for the appointment of any additional marketing staff members to the SA Tourism
organizational structure (as previously approved by the Board, except for the absolutely essential appointment of
a Marketing Communications Manager in India (for which SA Tourism requests Board-approval).
2. Skill set of staff members
Given the introduction of the EPM Project Management system in SA Tourism effective 2008/9, no new marketing
staff member will be appointed unless he/she has at least 1 year project management experience.
3. Time allocation/management of marketing staff members
In terms of SA Tourism’s Board-approved market prioritization, marketing staff members will continue to spend the
following proportion of total available time on the different types of markets:
Core markets: 60%
Investment markets: 20%
Tactical markets: 15%
Watch-list markets: 5%
Systems
No change is foreseen at this stage to SA Tourism’s 2 primary
systems (Oracle and EPM Project Management) although SA
Tourism has been experiencing immense problems with support and
maintenance on its Oracle Financial system (high staff turnover of
skilled Oracle staff at companies). SA Tourism will continue to
monitor this situation and consider appropriate action only if it
materially jeopardizes procurement and monthly management
accounts.
Infrastructure
3.1 United Kingdom
SA Tourism needs new office space in London and will find alternative accommodation if DFA can’t accommodate SA Tourism in the High Commission on Trafalgar square. An appropriate settlement, currently unbudgeted and which needs to be funded through an applicable reallocation at the time, will need to be negotiated with the landlord at an appropriate time in future (25 years lease expiring in 2014).
3.2 France
SA Tourism is currently occupying a residential apartment in Paris and needs to move to proper office space by 30 September 2008 (subject to the landlord’s approval).
3.3 India
The cost of office space in India has drastically increased over the last 3 years. As SA Tourism, needs bigger office space, it needs to find alternative office space in Mumbai by 1 February 2009.
3.4 Other overseas offices
No other changes are foreseen to office space over the next 5 years.
4. Business Units
No changes are necessary iro SAT’s current 17 business units:
Office of the CEO/COO (including Legal, Internal Audit & Admin)
Human Resources
Africa Portfolio (including Domestic Marketing)
Asia Portfolio
Europe Portfolio
Americas Portfolio (including UK)
Events
Business Tourism
Central Marketing (including Global Brand, Channel & Agency Management)
E-Business
Research
PR & Comms
Product & Itinerary
Finance
TECSA
TGCSA
Business Systems (previously known as IT)
South African Tourism has not been granted a CPIX increase following the last MTEF
Process, resulting in total overheads to exceed the 10% guideline set by Treasury
(please note that this is not compulsory).
We however believe that the non-allocation of a CPIX adjustment to SAT’s latest
MTEF allocation justifies the excess. Situation will however be closely monitored and
SAT will endeavor to get this adjustment at the next MTEF event.
