Germany Product Deck

1. Germany Product Deck

2. Overview How many potential tourist are out there? How many visitors do we get? How do they plan their trip? Where do they stay? How long do they stay? Which provinces do they visit? What do they do when in SA? What experiences do they want to have? What do they say after they leave SA? What does SAT do to encourage travel? ? What are the product guidelines?

3. Overview How many potential tourist are out there? How many visitors do we get? How do they plan their trip? Where do they stay? How long do they stay? Which provinces do they visit? What do they do when in SA? What experiences do they want to have? What do they say after they leave SA? What does SAT do to encourage travel? ? What are the product guidelines?

4. Consumers: Target SegmentsDefining the Relevant Market 82.4 million(100% of total) Total German population1 Adult population over the age of 14 years 64.1 million(78% of total) Who have travelled abroad in the last 5 years 21.4 million (26 % of total) With the exclusions based on the sampling plan 14.6 million(18% of total) People who meet new income floor requirements 12.8 million(14% of total) Senior Explorers667 K NSSA 1043 K Wanderlusters 1088 K Family Travellers 1078K Senior Explorers667 K NSSA 1043 K Wanderlusters 1088 K Our target market comprises of about 14% of the population, which equates to around 12.8 million German travellers Total Number of People in Our Market = 12.8 million 100% Positive Segments = 3,877k30% Focus Segments = 2,798k Source: 1CIA; Deepening Consumer Insights, 2006

5. But there are Two Core Segments in our international leisure focus The other segment categories are pursued on a tactical or opportunistic basis only. The ‘Next Stop South Africa’ (NSSA) segment The NSSA segment represents our traditional market. They are wealthier experienced international travellers, usually between the ages of 40 and 60 whose children (if any) have left home. They typically look for natural beauty and authentic cultural experiences. They prefer independent or small group travel, and look for luxury and comfort as part of their experience. Safety is a key consideration when choosing a new destination. Safari is a big draw-card when travelling to Africa. The ‘Wanderluster’ Segment The “Wanderluster” segment is made up of younger singles or couples between the ages of 25 and 40 and generally do not have children. They are young urban professionals earning higher incomes, and they already have considerable travel experience. Their desired experience centres on nature, culture and adventure with a strong liking for “urban vibe”. While also concerned with issues of safety and comfort, these consumers are driven more by the emotional appeal of a destination compared to the more practical NSSAs. They are generally more positive about South Africa in every market than any other segment but they also want to travel the world.

6. For Germans, travel is all about gathering life experiences that broaden their horizons and allows them to relax, far from their stressful lives • What Travel Means to Germans? • Gathering Life Experience • Broadening of Horizons • Breaking-Free • Bragging Rights • Travel allows Germans to gather life experiences • They cherish experiences that are unique and want things that are different from their daily routine • Germans begin to better appreciate the life and luxuries they have, once they have travelled and seen satisfaction of the locals in poorer countries • Germans believe travelling broadens their horizons • Germans who interact a lot with people from different culture, who have varied mentalities, usually develop greater tolerance towards other people • It gives them a new way of thinking and a new perspective towards life • Travel is seen as a way to escape from the stress of the work place, rules and regulations of Germany, and daily routines • Germans seek destinations that have beautiful landscape and where the environment is different from Germany, where they way of life is not as fast paced as in Germany • Travelling gives Germans the right to ‘Brag’ among friends, relatives, and family • The places they have been to are seen as badges on their sleeves • Travelling adds another dimension to their individuality, which they believe makes one more interesting as a person Source: Grail Research Analysis of focus group discussions in Germany

7. German travellers seek adventure, and enjoy planning and customizing their trips, to ensure that they experience the authentic local culture • What Travel Experience is for Germans? • Immersing in the Local Culture • Pushing the Boundaries • Seeking Variety • Individualizing Trip • Germans travel to get authentic, life enriching, unique experiences • To experience the local culture and mentality of the people, Germans travel off the beaten track • Travelling in local buses and exploring the flea markets is an integral part of their travel, along with trying local cuisines at local restaurants • Travel for Germans is about pushing their boundaries • Germans are willing to go slightly outside their comfort zone/usual lives to experience something different, unexpected, or challenging • However, they avoid dangerous or life-threatening situations, when seeking adventure • Travel for Germans is about doing a varied set of activities • It includes gathering multiple unique experiences, and doing things they like • Germans like travelling to destinations that offer variety of landscape, animals, and activities • Germans want to plan their trip. They want to decide what activities they do, what they experience, and how they do it • Customization of the offering is key for them. They feel packaged tours are designed with a focus on tourist attractions and this will not allow them to interact with locals and have an authentic experience Source: Grail Research Analysis of focus group discussions in Germany

8. Movies, travel brochures, magazines, and word of mouth inspire Germans to travel, who then research destinations and seek value for money options • Travel Planning Process – Selection of a destination • Inspiration • It all starts with inspiration for Germans. They always have a list of ‘Dream Destinations’ in their mind and shortlist countries to visit from this list • The ‘Dream Destinations’ or the ‘Inspiration List’ is built through inputs from various sources of inspiration such as word of mouth, movies, travel brochures, and magazines • Consideration • Once Germans have shortlisted their dream destinations, they extensively research them • They refer to multiple sources for information, such as reviews on the internet from past travellers, online travel agencies, and travel agents • Selection • Germans weigh the perceived value they will get for the money they will spend to visit different destinations, before finalizing the one that they travel to • They are willing to visit destinations that are not at the top of their list of dream destinations , if they get a ‘good offer’ • They are open to multiple booking channels such as online, travel agents, and self-build holidays Source: Grail Research Analysis of focus group discussions in Germany

9. Germans perceive South Africa as offering a limited variety of options; however, those who visit the country are delighted and take home a positive image • Germans’ Perceptions about South Africa Low Awareness Positively Surprised with the Variety on Offer Positive Experience Sharing • Germans have a low awareness about South Africa • They primarily associate South Africa with safari, wine, and Cape Town, lacking awareness about the variety the country has to offer • Germans who travel to South Africa are positively surprised by the variety on offer, especially the wildlife and the landscape • Germans who have not visited South Africa get intrigued and excited about the country when they are made aware of it, through channels such as word of mouth from past South Africa travellers • South Africa is perceived as an expensive destination by Germans. In addition, given their low awareness about the country, Germans believe that it is low value for money – as it is not an authentic African experience and has limited things to offer • Germans feel that their personal safety and security will be at risk in South Africa, and the African continent as a whole. This includes but is not limited to political instability and violence • Germans who have travelled to South Africa carry home positive memories from their trip • Sharing the travel experience and photographs post trips is a part of German society. German travellers to South Africa also do this, spreading a positive image about the country, through word of mouth Source: Grail Research Analysis of focus group discussions in Germany

10. Variety of landscape, animals, and activities that South Africa offers attracts German tourists, along with friendly people, good service, and warm weather  • Travel to South Africa – Drivers Variety • South Africa’s variety in terms of its offering of different landscape, animals, and activities, attracts German tourists  Pleasant Weather • South Africa has sunny winters and warm summers. Germans want to escape the cold and dark winters of Germany and South Africa provides a perfect getaway to them  Friendly People • Germans want to explore a country’s culture and meet the locals. The open and friendly nature of South African thus attracts Germans to the country  Good Service • South African restaurants and hotels provide excellent service, when compared to Germany, making it an attractive option for Germans  Direct Flights • South Africa is well connected to Europe and Germany through direct flights, operated by reputed airlines  Overlap in time zone • South Africa has a time-zone overlap with Germany. Therefore travellers do not suffer from a jet lag while travelling to South Africa  Source: Grail Research Analysis of focus group discussions in Germany

11. Low awareness about South Africa’s offerings and its perception as a non-authentic African experience, disincline Germans from travelling to South Africa  • Travel to South Africa – Barriers Lack of Awareness • Germans are not aware about South Africa, and its varied set of offerings • Many believe South Africa has little variety to offer and hence, refrain from visiting the country  Non-Authentic Africa • Germans travel to African countries, to experience the true African culture • However, South Africa comes across as too European in culture, and is perceived as a non-authentic African experience  Security Concerns • Germans are concerned about the safety and security situation in South Africa • Germans perceive South Africa as an unsafe country, and have negative perceptions about the security in the country • Inability to move around freely, to experience the local culture and mentality of the people, also makes visiting South Africa an unappealing choice for Germans  Expensive • Germans perceive South Africa as an expensive travel destination • They believe it is expensive to travel to South Africa, and expensive to spend time in the country as well • Germans rate South Africa as a poor value-for-money travel destination, since they believe the value they get for the amount they end up paying is less than what they can get elsewhere, such as Australia  Source: Grail Research Analysis of focus group discussions in Germany

12. South AfricaCustomer Conversion — Total South Africa Conversion Curve across waves — Total Closure Ratio (1 in 2.0) Do they know us? (1 in 1.8) (1 in 2.1) (1 in 2.3) (1 in 1.9) Do they like us? Do they collect information about us? Do they come? Nov-11 (n=1,006) 69% 36% 28% 15% 8% 17% 9% Feb-12 (n=1,000) 70% 39% 28% 14% 9% 15% 8% Nov-12 (n=1,002) 68% 34% 29% 14% 9% 15% 7% Feb-13 (n=1,004) 68% 37% 29% 15% 9% 15% 6% Nov-13 (n=1,000) 70% 37% 31% 17% 11% 17% 9% Closure Ratio: Ratio of % of people who have visited the destination in last 18 months to % of people who have gathered the information about the destination in last 18 months Customer Conversion (Based on Q9, Q29, Q14, Q17, Q15, Q16a and 16b): Based on those that have traveled internationally in the last 5 years; Respondents to likeability limited to quota; Likeability/Positivity, Plan to Gather Information in Next 18 Months, and Plan to Visit in Next 18 Months based on ratings of 6 or 7 on a 7-point scale. Note: For all the questions the percentages are based on total respondents not the awareness base for the destination

13. Overview How many potential tourist are out there? How many visitors do we get? How do they plan their trip? Where do they stay? How long do they stay? Which provinces do they visit? What do they do when in SA? What experiences do they want to have? What do they say after they leave SA? What does SAT do to encourage travel? ? What are the product guidelines?

14. Tourist arrivals to South Africa for January to September 2013 grew by 4.4% over 2012 to reach 7,044,339. All regions showed positive growth. Europe • 1,012,595 arrivals • 5.9% up from 2012 North America • 308,175 arrivals • 4.3% up from 2012 Middle East • 42,011 arrivals • 2.5% up from 2012 Asia • 321,631 arrivals • 9.9% up from 2012 Central & South America • 93,843 arrivals • 6.6% up from 2012 Australasia • 108,125 arrivals • 3.1% up from 2012 AFRICA • 5,125,523 arrivals • 3.8% up from 2012 Indian Ocean Islands GRAND TOTAL • 16,927 arrivals • 10.6% up from 2012 • 7,044,339arrivals • 4.4% up from 2012 Note : Tourist Arrivals figures shown above for Jan. - Sep 2013 Source: Table A Tourist Arrivals Jan. - Sep 2013

15. There was 5.9% increase in tourist arrivals from Europe in this period was mainly contributed by Germany with 24,819 more tourists compared to same period in 2012. UK had slowest growth but still remains the biggest contributor. Tourist arrivals to South Africa from Europe, Jan. - Sep. 2013 Tourist Arrivals Source: Table A Tourist Arrivals Jan. - Sep. 2013

16. There are clear peaks in March and November. Arrivals from Germany January to December, 2009 to 2013 Source: StatsSA, Tourism & Migration release

17. The majority of German tourists travel to SA for holiday, with a growing number coming for business Germany Arrivals by ‘Purpose of Visit’ Number of arrivals (Thousands) Note: Blank data indicates sample size lower than 20. Source: SAT Departure Survey Combined Dataset, 2003 – 2010

18. 8 German tourists that travel to South Africa book for themselves independently. Germany Arrivals by ‘Package’ Number of arrivals (Thousands) Source: SAT Departure Survey Combined Dataset, 2003 – 2010

19. TFDS (excl. capex) from Germany grew by 14% from 2009 to 2012, and by 38% compared to 2011. TFDS (excl. Capex) to South Africa , 2009 - 2012 2012 Average expenditure in SA – R13,800 Average Prepaid Expenditure – R21,300 ZAR (Mn) Source: SAT Departure Survey 2003 -2010

20. Overview How many potential tourist are out there? How many visitors do we get? How do they plan their trip? Where do they stay? How long do they stay? Which provinces do they visit? What do they do when in SA? What experiences do they want to have? What do they say after they leave SA? What does SAT do to encourage travel? ? What are the product guidelines?

21. How did they become aware of SA as a leisure tourism destination?

22. South AfricaSources of Awareness How Did You First Become Aware of South Africa as a Leisure Travel Destination TM Based on respondents who were aware of South Africa as a leisure travel destination (n=703) Sources of Awareness (Q33a/b): How did you FIRST become aware of South Africa as a leisure destination? (Select all that apply). Please rank the order in which each of these sources contributed to you FIRST becoming aware of South Africa as a leisure destination. (Please select one response per column) Note: Few answer options were added/modified in Feb-12 wave; for these options there is no data in the past waves.

23. Where do they look for travel information on SA?

24. South AfricaInformation Sources Sources of Travel Information (based on those who have sought leisure travel information on South Africa in the past 18 months) (Q16c/d): Which of the following was the FIRST source of information that you used when you began seeking leisure travel information about these countries? (Choose one). What other sources have you used to obtain leisure travel information in the past 18 months? (Select all that apply) Note: Few answer options were added/modified in Feb-12 wave; for these options there is no data in the past waves. Based on respondents who have sought leisure travel information on South Africa in the past 18 months (n=173; 17% of all respondents)

25. Overview How many potential tourist are out there? How many visitors do we get? How do they plan their trip? Where do they stay? How long do they stay? Which provinces do they visit? What do they do when in SA? What experiences do they want to have? What do they say after they leave SA? What does SAT do to encourage travel? ? What are the product guidelines?

26. Germans generally stay in all types of accommodation, opting for value for money, 3 – 5 star accommodation. Bednights spent in South Africa by accommodation type, 2009 and 2012 Number of arrivals (Thousands) Source: SAT Departure Survey Combined Dataset, 2003 – 2010

27. Overview How many potential tourist are out there? How many visitors do we get? How do they plan their trip? Where do they stay? How long do they stay? Which provinces do they visit? What do they do when in SA? What experiences do they want to have? What do they say after they leave SA? What does SAT do to encourage travel? ? What are the product guidelines?

28. % The average length of stay for Germany tourists has decrease to 17 nights and the most common length of stay to 10 days. Length of Stay by Year, 2009–2012 Average Length of Stay Most Common Length of Stay Nights Nights

29. Most Germans stay longer in SA when they are here on holiday or visiting friends and relatives. Average Length of Stay by Purpose of Travel, 2009 - 2012 Length of Stay Note: Blank data indicates sample size lower than 20. Source: SAT Departure Survey Combined Dataset, 2003 – 2010

30. Overview How many potential tourist are out there? How many visitors do we get? How do they plan their trip? Where do they stay? How long do they stay? Which provinces do they visit? What do they do when in SA? What experiences do they want to have? What do they say after they leave SA? What does SAT do to encourage travel? ? What are the product guidelines?

31. 0 The Gauteng and Western Cape were the most visited provinces… Percentage of visitors travelling to each province Less than 10% 10%–30% 30%–50% 50%–70% Over 70% Percentage of GermanVisitors Travelling to Each Province 2011 2012 Limpopo Limpopo Gauteng Gauteng 4% 3% 36% 32% Mpumalanga Mpumalanga 14% 15% North West North West 2% 3% KwaZulu Natal KwaZulu Natal Free State Free State 1% 2% 14% 22% Northern Cape Northern Cape 2% 3% Eastern Cape Eastern Cape 17% 21% Western Cape Western Cape 61% 73%

32. 0 …and most Germans spend nights in Western Cape and Gauteng Percentage of Total Nights Per Province by GermanVisitors 2012 2011 Limpopo Limpopo Gauteng Gauteng 2% 2% 18% 13% Mpumalanga Mpumalanga 6% 5% North West North West 1% 2% KwaZulu Natal KwaZulu Natal Free State Free State 1% 0% Northern Cape Northern Cape 6% 7% 1% 1% Eastern Cape Eastern Cape 10% 10% Western Cape Western Cape Percentage of Nights Per Province by Visitors (2010–2011) 56% 60% 0%–5% 5%–10% 10%–15% 15%–25% Over 25%

33. Overview How many potential tourist are out there? How many visitors do we get? How do they plan their trip? Where do they stay? How long do they stay? Which provinces do they visit? What do they do when in SA? What experiences do they want to have? What do they say after they leave SA? What does SAT do to encourage travel? ? What are the product guidelines?

34. % Outside of nightlife and shopping, the Germans enjoy visiting natural attractions, wildlife and the beach Activities undertaken while in South Africa, 2012 Number of arrivals

35. Overview How many potential tourist are out there? How many visitors do we get? How do they plan their trip? Where do they stay? How long do they stay? Which provinces do they visit? What do they do when in SA? What experiences do they want to have? What do they say after they leave SA? What does SAT do to encourage travel? ? What are the product guidelines?

36. South African TravelReasons for Visiting South Africa for Leisure Reasons for Visiting South Africa (based on those who have visited South Africa for leisure in the past 5 years) Based on those who have visited South Africa for leisure in the past 5 years (n=185; 19% of all respondents) Reasons for Visiting South Africa (Q35a): Why did you choose to visit South Africa as a destination for leisure purposes? (Select all that apply) Note: Few answer options were added/modified in Feb-12 wave; for these options there is no data in the past waves.

37. South African TravelEncourages Future Visitation Encourage Visitation to South Africa (based on those who have not visited South Africa for leisure in the past 5 years and do not intend to in the future) Based on those who have not visited South Africa in the past 5 years and do not intend to in the future Encourage Visitation (Q40): What, if anything, would encourage you to visit South Africa for leisure purposes in the future? (Select all that apply) * Have not been in the last five years

38. Overview How many potential tourist are out there? How many visitors do we get? How do they plan their trip? Where do they stay? How long do they stay? Which provinces do they visit? What do they do when in SA? What experiences do they want to have? What do they say after they leave SA? What does SAT do to encourage travel? ? What are the product guidelines?

39. South African TravelMost Memorable Aspects of Leisure Visit to South Africa Memorable Aspects of Visit to South Africa (based on those who visited South Africa for leisure in the past 5 years) Based on those who visited South Africa for leisure purposes in the past 5 years Memorable Aspects (Q38): What was the most memorable or enjoyable aspect of your leisure visit(s) to South Africa for leisure purposes? (Select all that apply) Note: Few answer options were added/modified in Feb-12 wave; for these options there is no data in the past waves.

40. South African TravelUnpleasant Aspects of Leisure Visit to South Africa Unpleasant Aspects of Visit to South Africa (based on those who visited South Africa for leisure in the past 5 years) Based on those who visited South Africa as a tourist in the past 5 years Unpleasant Aspects (Q39): What, if anything, was unpleasant during your leisure visit(s) to South Africa for leisure purposes? (Select all that apply) Note: Few answer options were added/modified in Feb-12 wave; for these options there is no data in the past waves.

41. Overview How many potential tourist are out there? How many visitors do we get? How do they plan their trip? Where do they stay? How long do they stay? Which provinces do they visit? What do they do when in SA? What experiences do they want to have? What do they say after they leave SA? What does SAT do to encourage travel? ? What are the product guidelines?

42. Marketing Communication of South Africa and Australia (based on aided advertising brand recall) AwarenessMarketing Communication South Africa Australia Based on aided advertising brand recall Marketing Communication (Q10a): When did you last see any marketing communication for the following international destinations for leisure purposes? Note: This question is added in Feb-13 wave; there is no data in the past waves

43. Overview How many potential tourist are out there? How many visitors do we get? How do they plan their trip? Where do they stay? How long do they stay? Which provinces do they visit? What do they do when in SA? What experiences do they want to have? What do they say after they leave SA? What does SAT do to encourage travel? ? What are the product guidelines?

44. Typical day when on a leisure trip to SA On holiday German tourists would want to get up early so they can see as much as they can (08h00) • -Its only at the end of the trip that they would need a few days at the end of their holiday to relax • -They would go straight to breakfast (they are not likely to gym in the morning on holiday) • They would rather spend their time seeing the destination  • Breakfast • Continental breakfast is good (with teas / freshly brewed coffees [no instant coffee] / juices) • Ham /bacon and eggs • Breakfast is quick in Germany • In SA they like to have a more leisurely breakfast but not for 2 hours – but slightly more relaxed than home (about 40 mins) • they are generally happy with SA breakfasts • similar to the range in Germany when booked in to a hotel Mornings

45. Typical day when on a leisure trip to SA • -Lunch is around12h00 - 13h00 • -They prefer a Quick lunch or sometimes even a sandwich to go especially when they are on tour • - they are very happy to try the local beer • -They are very curious • - if they are on a self drive tour – then they will not drink alcohol during lunch time Afternoons

46. Typical day when on a leisure trip to SA • -Dinner will be their biggest meal (19h00) • -Dinner is enjoyed at leisurely pace • - They prefer to go to a restaurant (not hotel) • -They would prefer an area where they can walk from place to place • -They want to experience meals that are typically SA eg • Springbok • Game • Ostrich • Baboetie • Indian food – Durban • At dinner, they would drink more • Beer • Wine • SA beer and wine Evenings

47. Typical day when on a leisure trip to SA • NSSA – would go for nice dinner – in a more relaxed atmosphere • WL – might go clubbing afterwards – they would ask at the reception / travel guides / internet (good idea if hotels could recommend the in places to go out and are also able to book for them) • WL - If they are not going clubbing – they would be back at 11pm -12pm. At dinner they would take their time and have an after dinner drink. • NSSA’s would be back at 11pm – they would go for drinks and dinner Evenings

48. Typical day when on a leisure trip to SA • -Germans like to do “people watching” they like to see people walk by – “that’s typical German” • -Always on time • -They want to know a lot • The guide that is used must – must know alot about the country as German tourist will ask lots of questions • NSSA – they would prefer that the guide is German speaking • For WL English is OK - but German is preferred  • When communicating with Germans in Germany – they would prefer German over English • -They are very curious on holiday: they want to know how people live; they would like to talk to staff in hotels (as soon as the staff talk to them they get curious and the barrier is broken) • -They want to experience “typical” SA things / a unique SA experience D E L I G H T T H E M ?

49. Typical day when on a leisure trip to SA • -Its all about the explanation that they are given for e.g. if they are given a “traditional beer "to drink – explain when this is typically drunk and link a story with it • On a game drive, of they have a local ranger – that will be something special – because for them its a real SA experience • Things that would delight German tourists: • -Give them a SA cocktail menu to take home (so they can make SA cocktails at home) • - Tell them typical SA stories / myths / legends – give them a copy to go home with • -Give them typical SA recipes – so they can take the SA experience home with them. • -Make it easy for them to find restaurants / places to go out – have a knowledgeable front desk – provide them with transport if need be • - Apply environmental conscious business practices e.g. separate waste & encourage recycling, stop engines of coaches and cars when waiting for passengers, fresh towels only on request, save power etc. D E L I G H T T H E M ?

50. THANK YOU MashotoZimba mashoto@southafrica.net (011) 895 3175