Select Committee on Foreign Affairs Minutes of Evidence


Written evidence submitted by VisitBritain

1.  VISITBRITAIN

  1.1  VisitBritian is pleased to submit a memorandum to the Committee as part of the inquiry into South Africa.

  1.2  VisitBritain was launched in April 2003 and is formed out of the merger of the British Tourist Authority and the English Tourism Council. VisitBritain is a Non-Departmental Public Body, sponsored by the Department for Culture, Media and Sport, and is accountable to the UK Parliament, the Scottish Parliament and the National Assembly for Wales. VisitBritain has two principal roles; to promote Britain as a tourist destination overseas, and to promote England as a tourist destination within Britain to the domestic market. VisitBritain has offices and marketing teams based in 27 countries throughout the world; our office in South Africa is in Johannesburg.

2.  THE SOUTH AFRICAN TRAVEL MARKET TO BRITAIN

  2.1  South Africa continues to be the dominant force politically and economically in sub-Saharan Africa and is still playing a leading role in the new African Union after providing the inaugural Presidency.

  2.2  The country's economy is the strongest in Africa although growth at 1.5% (year on year, quarter 1 2003) fell well short of the 3.4% target. Steady progress had been made as a result of the government's careful economic management, which also sought to achieve an inflation target of between 3-6% by the end of 2002. Inflation was almost halved to 7.7% in the six months to May 2003, paving the way for interest rate cuts of 2,5% to 14.5% by July with a further 1% cut in September. The Rand has continued to strengthen in 2003, steadying below 12 to the pound by August. The Rand's weakness had inevitably affected South Africans' purchasing power in Britain, but only in 2002 did it reverse the steady growth in South Africans' travel to and expenditure in Britain, which had persisted despite FMD and 9/11 in 2001.

3.  TRAVEL AND TOURISM TRENDS

  3.1  The trend for South Africans to travel outside of South Africa in ever increasing numbers was resumed (after a drop in 2001 due largely to political unrest in the region) in 2002 when 5.8 million South African residents travelled outside South Africa compared with 3.7 million in 2001.

  3.2  In recent years, Europe has lost market share to North America, Asia and Middle East as new destinations have established themselves in the emerging new South Africa. There are now 16 National Tourist Offices in South Africa compared to nine in 1992. Britain's main competitors are the USA, Australia, Germany and France.

4.  THE TRAVEL MARKET TO BRITAIN

  4.1  According to Statistics South Africa, Britain accounts for 39% of all overseas departures (ie those outside Africa) by South Africans in 2002, and 78% of their departures to Europe. This makes Britain by far the most popular long-haul destination for South Africans, followed by the USA, Australia, Germany and France. Our market share has been challenged in recent years as new destinations have come on stream, but Britain has so far maintained its lead.

  4.2  Domestic travel remains a powerful competitor, despite the strengthening of the Rand against Sterling, the Euro and the US dollar, as development of the domestic product continues and marketing effort is maintained.

  4.3  Just under one-half of South African visitors to Britain come from the province of Gauteng, the hub of the South African economy. A significant part of the population lives in Gauteng and this is also where the travel trade is most heavily concentrated. The Cape Town and Port Elizabeth areas account for just under one-third of traffic and the Durban area about 16%.

  4.4  In 2002, 276,000 South Africans visited Britain, spending £198 million. Average spend per visit only dropped 2.5% to £713.60 in spite of the much weakened Rand. Source: International Passenger Survey, Office for National Statistics (IPS) 2002.

  4.5  For many young South Africans, a working holiday to Britain is now seen as an essential part of the growing-up process. This trend is creating a new Visiting Friends and Relatives (VFR) market as their friends and relatives—often themselves first-time visitors—go to Britain to visit them. The number of South Africans taking working holidays in Britain is likely to increase from September 2003 as regulations for applicants are relaxed, increasing the potential for resulting VFR traffic.

  4.6  Business travel by South Africans to Britain is strong, as Britain remains a major trading partner. This segment accounted for 20% of South African visits to Britain in 2002 and 29% of their expenditure.

  4.7  South Africans' average length of stay has grown from 14.4 days in 2000 to 18.5 days in 2002, 10 days longer than world average, as has the incidence of Visiting Friends and Relatives (VFR) as a means of making a holiday affordable.

  4.8  South Africans' average spend per stay of £713.60 in 2002 was substantially (45%) greater than world average of £489.50, but was £23 down on 2001 due to the weak Rand. (In Rand terms, average spend by South Africans was up by 23%). The Rand recovery and stability in 2003 (25% up year on year in August 03) should more than make good the sterling deficit of 02, but VisitBritain will need to maintain its emphasis on Britain's affordability. This is an opportunity for focusing on good value products, particularly out of London which will further enhance the regional spread of South Africans' visits.

  4.9  The South African is also adventurous and travels around Britain more than the average overseas visitor. Scotland and Wales have both become popular destinations for South Africans in recent years. 9% visited Scotland (8% nights) and 3% visited Wales (1% nights) in 2002.

  4.10  The South African market to Britain has proved highly resilient, with a steady increase in spend per visit to Britain in Rand terms since 1998. The market is also resilient in times of crisis, one of only two VisitBritain markets to show visits growth in 2001despite the globally-publicised outbreak of Foot and Mouth Disease in the UK and the effects on international travel of the events of 11 September. With the aftermath of war in Iraq and terrorist threats a persistent reality, this resilience offers VisitBritain a relatively low risk scenario in South Africa. This, coupled with the stronger, stable Rand will provide VisitBritain with an opportunity to use Customer Relationship Management, focusing on a good value message, to rekindle the interest of "frustrated" visitors lost to the exchange rate in 2002.

5.  LATEST FIGURES (INTERNATIONAL PASSENGER SURVEY: 2002)


South Africa
19971998 199920002001 2002


Visits (000)
262 284300304 319276
Nights (000)4,5424,587 4,9714,3815,482 5,100
Spend £ million202 216257215 237198


6.  EXAMPLES OF MARKETING ACTIVITY UNDERTAKEN IN SOUTH AFRICA

  6.1  January, June, October 2003

Destination Britain—Beginners TRAVEL AGENT TRAINING

Inside Britain—Advanced TRAVEL AGENT TRAINING

  VisitBritain organises six training sessions annually for tour operator and retail travel agency staff from all areas of South Africa. The sessions are implemented to address a shortfall in destination awareness training within the industry. Our primary aim is to increase the agents' knowledge of Britain's tourist product, boost their confidence in selling Britain and ultimately, increase their sales of British products. Training modules feature subjects ranging from transportation to and within Britain, detailed product presentations on London, Scotland, Wales and regions of England, advice for working holidays visa applicants and the importance and value of business travel. All training sessions involve partner presentations by eg. airlines, car hire operators and other tourism related services and public diplomacy partners. In 2002 almost 250 agents attended the sessions. The benefits to Britain, identified by independent research conducted by A C Nielsen, are that on average, each consultant attending the courses generated an additional 28 clients to Britain, with a total spend of £5 million.

  6.2  July 2003

Robbie Williams Promotion—Radio/Internet Campaign

Partners: EMI, 5FM (national youth radio station), Virgin Atlantic Airways

  Visitbritain planned and executed a national radio competition with 5FM (1.5 million listeners 14-30 years old) for two winners to see Robbie Williams at one of his Knebworth Park concerts in the UK. VisitBritain acted as the catalyst to drive the competition to the benefit of both tourism and non-tourism partners within South Africa. The benefit to tourism partners is still yet to be fully realised, but our airline partner Virgin Atlantic Airways' objectives was to increase its share of sales of economy tickets locally in South Africa. The target audience of listeners at 5FM fit ideally with their objectives. EMI, the local music distributors of Robbie Williams material throughout South Africa paid for flighting competition advertisements and provided tickets for the concert, as well as consolation prizes for runners up. They also used the competition to drive sales of the Robbie Williams "Escapology" album, which did in fact improve its chart (sales) position during this period of awareness. 5FM also promoted visitbritain.com as the competition entry mechanism. Over 5,000 entries were received during the three days of the competition and substantially increased VisitBritain's youth database.

  6.3  Ongoing Activity 2003

Public Diplomacy Promotions

Partners: British High Commission

VISA PACKS

  VisitBritain: With the co-operation of the British High Commission, a VisitBritain information pack is distributed to all successful applicants for Working Holiday Visas, currently being issued at a rate of 15,000 per annum. The pack encourages the young South Africans to visit Scotland, Wales and the regions of England while they are in Britain and to invite their friends and relatives in South Africa to visit them in Britain during their stay.

7.  COLLABORATION WITH THE BRITISH HIGH COMMISSION

  VisitBritian and our predecessor body, the British Tourist Authority, have enjoyed and continue to enjoy good working links with the British High Commission, the Consuls-General and the other UK public diplomacy partners in South Africa. We would like to place on record our particular appreciation of the current HM High Commissioner, Ann Grant. The High Commissioner is widely regarded in South Africa as a "breath of fresh air", and her style, exceptional political contacts and pro-active networking have proved to be exceptionally useful for furthering VisitBritain's (and BTA's) marketing opportunities.

VisitBritain

September 2003





 
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