Marketing South Africa in Nigeria May 2012

SA Tourism is the tourism marketing organisation of South Africa

South African Tourism is the official tourism marketing organisation of South Africa. We market across the world focusing on three groups of travellers – international leisure travellers, the domestic and regional traveller, and business tourists who travel to South Africa for conferences and incentives.

A key part of our business is to: Understand the market

Choose the attractive segments

Market the destination

Nigeria has been identified as a core market in the SA Tourism portfolio of markets and a route to market strategy was developed in 2011 to define SA Tourism’s entry strategy into the market and define marketing strategies to grow tourism from this market. This booklet has been developed to help market South Africa in Nigeria. Detailed information on our marketing plans in each market is available from our Regional Director: Africa & Middle East (see address on the back cover). As the information in this booklet was sourced in the development of the marketing strategy, it does not include the latest data available on the Nigerian market. Current information on the Nigerian market is available on our website www.southafrica.net/research. Slide no. 2

© South African Tourism 2012

Agenda  Nigeria within SA Tourism’s portfolio  Nigeria Market Context  Nigeria Tourism Market

 Nigeria Travellers  Messages, Channels and Products for the Nigerian Market

May 2012

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Context: Africa is Important

Inbound Tourists to South Africa Africa accounts for the largest share of inbound arrivals to South Africa. It was also the fastest growing tourism market for South Africa, from 2003–2010 Total Tourist Arrivals to South Africa from the World, 2010 Total Tourist Arrivals to South Africa from the World (2010): 11.4 MM CAGR (2003–2010): 3.3% Europe  

North America  

376,315 arrivals CAGR (2003–2010): 7.8%

1,440,590 arrivals CAGR (2003–2010): 1.3%

Middle East  

Central & South America  

 

May 2012



 

289,141 arrivals CAGR (2003–2010): 7.3%

23,302 arrivals CAGR (2003–2010): 2.0%

Africa (excl. South Africa) 



Source: Grail Research & Monitor Analysis; SAT 2010



Indian Ocean Islands

129,735 arrivals CAGR (2003–2010): 18.2% Due to the World Cup CAGR (2003–2009): 8.3%

Asia

52,204 arrivals CAGR (2003– 2010): 7.3%

8,782,038 arrivals CAGR (2003–2010): 10.3% 4

 

Australasia 141,903 arrivals CAGR (2003–2010): 6.9% | Copyright © 2012 SA Tourism

Context: Africa is Important

Regional Contribution to Tourism of South Africa A few countries from Africa and the Middle East are responsible for ~76% of international arrivals to South Africa Africa and Middle East

Definition Africa Land (AFRL)  Countries where more than 60% of arrivals to South Middle East 

   

Africa use land-based



transport



Accounts for 73.9% of



Botswana (BOT) Lesotho (LES) Malawi (MAL) Mozambique (MOZ) Namibia (NAM) Swaziland (SWA) Zambia (ZAM) Zimbabwe (ZIM)

foreign arrivals to South

Nigeria DRC

Angola

Kenya

Zambia Malawi Zimbabwe

Africa Africa Air (AFRA)  Countries where more than 60% of arrivals to South Africa use air transport

Namibia Botswana

Mozambique Swaziland Lesotho





  

foreign arrivals to South Africa Africa (AFR)  75.7% of international

Note:1Africa Land (AFRL) includes South Africa in this slide only Source: Grail Research & Monitor Analysis; SAT 2010



Accounts for 1.8% of

South Africa

May 2012





 

Angola (ANG) Democratic Republic of Congo (DRC) Kenya (KEN) Nigeria (NIG) Middle East (ME) includes Bahrain, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, UAE, and Yemen Indian Ocean Islands Africa Land (AFRL) Africa Air (AFRA)

arrivals to South Africa 5

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Context: Africa is Important

Focus Markets Within Africa Below is the outcome of the fourth portfolio review process that took place during July/August 2009 and which covers the period 2011/12 to 2013/14 Africa

Global Channel Manager

Stakeholder Manager

Regional Director

Country Manager

Responsibility

Americas

Asia & Australasia

Europe

Core Markets

Angola Botswana Kenya Nigeria South Africa1

USA1

Australia1 India

France1 Germany Netherlands UK1

Investment Markets

DRC Mozambique

Brazil Canada

China (incl. Hong Kong) Japan

Belgium Italy Sweden

New Zealand

Ireland

Republic of Korea

Austria Denmark Portugal Spain Switzerland

Tactical Markets

Lesotho Swaziland

Watch-list Markets

Malawi Namibia Zambia Zimbabwe

Strategic Importance

Bahrain, Oman, Qatar, Saudi Arabia

Strategic Air Links/Hubs

Egypt, Ethiopia, Ghana, Mauritius, Senegal, Tanzania, UAE

Argentina

Malaysia Singapore

Note: 1indicates business tourism hubs May 2012

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Context: Africa is Important

Market Phase and Key Characteristics Tourism in African markets is still in a nascent stage Tourism Industry Life Cycle Introduction

Growth

Percentage of population travelling for leisure

Maturity

Italy USA

South Africa Brazil

SADC,Mozambique DRC Botswana Angola Nigeria

Kenya

Germany, Netherlands, France, UK, Japan

China, Australia India

This phase may be very long Time1

Consumer Market Symptoms

Product Competitor Channel

Tourism Authority Actions

Marketing Overall Strategy

Uninformed, price insensitive, multi-purpose Very individualised Status oriented Few One-stop-shops Unsophisticated, isolated, experience based





Combine with trade initiatives





Develop positioning



    









Seek information & opportunity; discover leisure Emergence of packages (seeking scale effects) Emerging specialisation/focus Integrate products; information/choice provider



Very informed, price sensitive, focus on leisure



Specialised packages



High competition Clear focus Specialisation; information provider

“Shout”: get as many as you can Facilitate scale effects (e.g., packages)



 



Adapt trade and market to select segments Understand segments and select

Note: 1The duration of the four phases of the life cycle may vary significantly; their graphical representation with equal distances may thus be misleading. Source: Framework based on Michael Porter: Competitive Strategy, 1980, Chapter 8 (Industry Evolution) May 2012

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Market Attractiveness – Key Indicators

Volume and Spend of Tourist Arrivals to South Africa Nigeria recorded a 23% growth in arrivals but a 4% decline in average spend in South Africa between 2009 and 2011 Volume and Growth of Tourist Arrivals to South Africa (000’s) 64

70 23%

60 3%

50 37

(‘000s)

40

39

3%

39

9% 29

33

31

31

26

30

47

43 30

20 10 0 Angola 2009

2010

DRC

Kenya

Nigeria

2011

Average Spend in South Africa per Tourist (ZAR) 25 000

(ZAR)

20 000

2% 22 500 21 600 18 800

19 500 -15%

-4%

15 800 14 100

15 000

8 700

10 000

10% 9 900 10 500

14 800

13 600 12 800

5 000 0

Angola 2009 May 2012 Source:

2010

DRC

Kenya

Nigeria

2011

Grail Research & Monitor Analysis; SAT Arrivals Survey, 2009–2011

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Market Attractiveness – Key Indicators

Average Spend in South Africa Apart from Kenya, the overall spend across all the other source markets have witnessed an increasing trend from 2003-2009 Average Spend in South Africa per Tourist (ZAR) 30 000

UPDATE AND USD

2003

2006

2009

Average Total Spend (in 2009)

25 000 +9%

22 200 +9% 19 300

(ZAR)

20 000

-4%

+4%

Four countries 17,100

15 000

14 700

13 800

13 100 12 900 11 600

Developed countries1 14,300

11 300 11 200

11 000

10 000

Global 10,100

8 500 8 700

8,200

All African countries 5 000

0 Angola

DRC

Kenya

Nigeria

Note: 1Developed countries considered are USA, UK, Germany and France Source: Grail Research & Monitor Analysis; SAT Departure Survey, 2003–2009 May 2012

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Market Attractiveness – Key Indicators

Total Spend in South Africa Total spend by travellers from DRC has increased significantly from 2003 to 2009, while in 2009, Angolan travellers spent the most compared to the other three countries Total Spend in South Africa (ZAR)

Group of Countries

Total Spend 2003–2009 (ZAR)

Four countries

9.5 Bn

Developed Countries1

280.5 Bn

African Countries

80.1 Bn

Global

467.1 Bn

1 000

2003

2006

2009

UPDATE AND USD +17%

729

(Mn)

+18%

500

+42%

416

587

390

330 278

+1% 221

214 164

185

179

50 0

Angola

DRC

Kenya

Nigeria

Note: 1Developed countries considered are USA, UK, Germany and France Source: Grail Research & Monitor Analysis; SAT Departure Survey, 2003–2009 May 2012

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Agenda  Nigeria within SA Tourism’s portfolio  Nigeria Market Context  Nigeria Tourism Market

 Nigeria Travellers  Messages, Channels and Products for the Nigerian Market

May 2012

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Population

Amplifying Population Effect Nigeria is the largest consumer market in Africa – home to one-third of Africa’s population and ranked 7th in the world’s population ranking Nigeria’s Population Size, 2005-2012E

World Population Ranking, 2010

1.9%

Population, Million

2.0% 140

2005

143

2006

146

2007

149

2008

2009

158

155

152

2010E

155 million consumers in 2010

2011E

161

#1

China

#2

India

#3

United States

#4

Indonesia

#5

Brazil

#6

Pakistan

#7

Nigeria

#8

Bangladesh

#9

Russia

#10

Japan

2012E

#7 in world and #1 in Africa for population size

Source: IMF World Economic Outlook; Grail Research & Monitor Analysis 12

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Population

Increasing Workforce Despite ageing trend, Nigeria’s population remains relatively young and economically active

Nigeria’s Demographic Distribution by Age, 2000 / 2010E / 2015E 9.9%

50+

2000

10.2%

2010

10.5%

2015

Economically Active Labour Force

7.6%

Population, % of Total

40-49

8.1% 8.5% 11.5%

30-39

12.3% 12.8%

0-19 group transitioning to economically active groups

17.1%

20-29

17.5% 17.7%

53.9% 51.9% 50.5%

Source: Euromonitor International; Grail Research & Monitor Analysis 13

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Population

Rapid Rate of Urbanisation Africa’s population is increasingly clustering in urban cities…

Households, % of Total

Household Population by Urban / Rural Locations, 1995/2000/2005/2008

65%

35%

1995

61%

39%

2000

56%

56%

55%

54%

Rural

44%

44%

45%

46%

Urban

2005

2006

2007

2008

Source: UN Database; Euromonitor International; Grail Research & Monitor Analysis 14

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Population

Concentration of Wealth …in particular, in four key commercial clusters in Nigeria; Most of the opportunities will focus in these clusters

Key Commercial Clusters in Nigeria 

Lagos 



Abuja





Anambra / Port Harcourt 



Kano



The second most populous city in Africa after Cairo, and is estimated to be the fastest growing city in Africa and the seventh fastest growing in the world Economic and financial capital of Nigeria Abuja is the capital city of Nigeria and has been growing at 20% to 30% per year Headquarters of government bodies, embassies, and international / regional organisations (OPEC, ECOWAS) Rich in natural gas, crude oil, bauxite, ceramic and has an almost 100 percent arable soil and has many other resources in terms of agro-based activities Lowest poverty rate in Nigeria

Its metropolitan population is the second largest in Nigeria after Lagos Kano has long been the economic centre of northern Nigeria

Source: Nigeria State Website; MNC Interview; Grail Research & Monitor Analysis 15

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Population

Emerging Middle Class Whilst a majority of households live below an annual disposable income of $5,000, the middle class in Nigeria is rapidly expanding # of HH, CAGR95-08

2008 (‘000)

Uppers (>$25,000)

12%

482

30,408 1% 5%

Consuming Middle Class ($10K-25K)

15%

1,536

13%

Emerging Middle Class ($5K-10K)

16%

3,992

49%

Basic Consumers ($1,750-5,000)

10%

14,822

32%

Destitute ( hotel > airport)



Basic transfers (airport > hotel > airport)



3-4 star accommodation in a major South African city in close proximity to malls and restaurants with a variety of cuisine e.g. Protea Hotel Fire & Ice at Melrose Arch or Icon Hotel in Cape Town – Hip and urban vibe – Breakfast included



3-4 star accommodation in a major South African city in traditionally favoured areas e.g. Radisson Blu in Sandton or Waterfront Holiday Inn in Cape Town – Breakfast included

Hotel

Length of Stay



4 to 7 nights



4 to 7 nights

Price



~ USD 1,100 for 4 nights, ~USD 1,600 for 7 nights



~ USD 1,200 for 4 nights, ~USD 1,750 for 7 nights

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Product Strategy

Add-on Activities (1/2) The added incentive of cultural and shopping activities will spur growth in traffic volumes from Nigeria as well as increase average spend ADD-ON CULTURAL/OUT OF TOWN ACTIVITIES 







Nigerians across consumer groups wish to explore South Africa’s political history – There is interest in activities like visits to the Apartheid Museum, Soweto Tours, Robben Island Tours and visits to Arch Bishop Tutu’s and Nelson Mandela’s house, and the Hector Pieterson Museum Ensure that these historical sites are offered as optional add-on activities as opposed to an all inclusive package Young – Nigerians prefer to have the flexibility of deciding how they will spend their time Accomplished Nigerians also like to experience the vibrant hip-hop club scenes in South Africa – A variety of clubs and cafes such as Zouk, The Bank, FTV, Taboo, Cofi, etc. Upwardly Mobile Offer add-on out of town activities to target business travellers Middle Class – 1-2 Day Trips: Cradle of Humankind, Sun City / Pilanesburg, Wine estates, Franschhoek

ADD-ON SHOPPING ACTIVITIES   

Ensure a variety of shopping activities are promoted beyond Sandton and V&A Waterfront These activities can be used to increase spend Some themed shopping tours to consider are: Young – Basic Trade Products: Oriental Plaza Accomplished – Luxury Goods Shopping: Sandton City, V&A Waterfront, Gateway Shopping – African Craft/Arts: Art Africa, Rosebank Africa Market Upwardly Mobile – Jewellery and Gemstone Shopping Middle Class – Flea Market – Wine

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Product Strategy

Add-on Activities (2/2) …whilst inclusion of family activities and event-driven packages would increase frequency of travel and volume of arrivals EVENT-DRIVEN PACKAGES Components of a Package Return Airfare (economy class)



Event-driven packages can be used to drive increased frequency



In addition, they can be used to trigger and capture repeat visitors to South Africa



A memorable event like the Cape Town Jazz Festival or the J&B Met creates a positive overall experience of South Africa that feeds into word of mouth back in Nigeria



It is important that information on events is well-communicated to the travel agents in a timely manner

3 -4 star accommodation (e.g. Holiday Inn at the V&A Waterfront) Basic Ticket to Special Event (e.g. Cape Town Jazz Festival)

ADD-ON FAMILY ACTIVITIES 





These activities will help encourage family travel thus increasing volumes and spend per trip Ensure family travellers are aware of these activities and that they can easily book day trips to encourage them to travel to South Africa and improve their overall experience of the country Families will particularly be attracted to theme parks and are comfortable paying the basic entry fees – Ratanga Junction, Gold Reef City and uShaka Marine World are notable examples

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Young Accomplished

Upwardly Mobile Middle Class

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For more information contact our Johannesburg office: South African Tourism Bojanala House 90 Protea Road Chislehurston Sandton, 2196 Private Bag X10012 Sandton 2146

Call centre: +27 83 123 6789 Email address: [email protected] Website: www.southafrica.net

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