marketing south africa in...

Marketing South Africa in Kenya

May 2012

Slide no. 2 © South African Tourism 2012

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.

SA Tourism is the tourism marketing organisation of South Africa

Understand the

market

Choose the attractive

segments

Market the

destination

Kenya 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 Kenya. 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 Kenyan market. Current information on the Kenyan market is available on our

website www.southafrica.net/research.

A key part of our business is to:

May 2012 3 | Copyright © 2012 SA Tourism

Agenda

Kenya within SA Tourism’s portfolio

Kenya Market Context

Kenya Tourism Market

Kenya Travellers

Messages, Channels and Products for the Kenyan Market


Context: Africa is Important

Inbound Tourists to South Africa

Total Tourist Arrivals to South Africa from the World (2010): 11.4 MM

CAGR (2003–2010): 3.3%

376,315 arrivals

CAGR (2003–2010):

7.8%

129,735 arrivals

CAGR (2003–2010):

18.2%

8,782,038 arrivals

CAGR (2003–2010):

10.3%

52,204 arrivals

CAGR (2003–

2010): 7.3%

1,440,590 arrivals

CAGR (2003–2010):

1.3%

289,141 arrivals

CAGR (2003–2010):

7.3%

141,903 arrivals

CAGR (2003–2010): 6.9%

23,302 arrivals

CAGR (2003–2010):

2.0%

North America

Central & South America

Africa (excl. South Africa)

Middle East

Europe

Asia

Australasia

Indian Ocean Islands

Source: Grail Research & Monitor Analysis; SAT 2010

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

Due to the World Cup

CAGR (2003–2009): 8.3%



Regional Contribution to Tourism of South Africa

Namibia

South Africa

Zimbabwe

Zambia

Mozambique

Swaziland Lesotho

Malawi

Angola

Nigeria

DRC Kenya

Middle

East

Botswana

Definition

Africa

(AFR)

75.7% of international

arrivals to South Africa

Africa Land (AFRL)

Africa Air (AFRA)

Africa Land

(AFRL)

Countries where more than

60% of arrivals to South

Africa use land-based

transport

Accounts for 73.9% of

foreign arrivals to South

Africa

Botswana (BOT)

Lesotho (LES)

Malawi (MAL)

Mozambique (MOZ)

Namibia (NAM)

Swaziland (SWA)

Zambia (ZAM)

Zimbabwe (ZIM)

Africa Air

(AFRA)

Countries where more than

60% of arrivals to South

Africa use air transport

Accounts for 1.8% of

foreign arrivals to South

Africa

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 and Middle East

Note:1Africa Land (AFRL) includes South Africa in this slide only

Source: Grail Research & Monitor Analysis; SAT 2010

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



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 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

Tactical

Markets

Lesotho

Swaziland New Zealand Ireland

Watch-list

Markets

Malawi

Namibia

Zambia

Zimbabwe

Argentina Republic of Korea

Austria

Denmark

Portugal

Spain

Switzerland

Strategic

Importance

Bahrain, Oman, Qatar,

Saudi Arabia

Strategic Air

Links/Hubs

Egypt, Ethiopia, Ghana,

Mauritius, Senegal,

Tanzania, UAE

Malaysia

Singapore

Cou

ntr

y

Ma

na

ge

r

Regio

na

l D

irecto

r S

take

ho

lder

Ma

na

ge

r

Glo

ba

l

Ch

an

nel

Ma

na

ge

r

Responsibility

Note: 1indicates business tourism hubs



Market Phase and Key Characteristics

Consumer

Product

Marketing

Overall

Strategy

Competitor

Channel

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

“Shout”: get as many as you

can Facilitate scale effects (e.g.,

packages)

Very informed, price

sensitive, focus on leisure

Specialised packages

High competition

Clear focus Specialisation; information

provider

Adapt trade and market to

select segments Understand segments and

select

Market

Symptoms

Tourism

Authority

Actions

Tourism Industry Life Cycle

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)

Tourism in African markets is still in a nascent stage

Time1

Kenya Nigeria

USA

Germany, Netherlands,

France, UK, Japan

Italy

SADC,

DRC India

South Africa

Brazil

This phase may be very long

China, Australia

Botswana

Introduction Growth Maturity

Percentage of

population

travelling for

leisure

Angola

Mozambique


Volume and Growth of Tourist Arrivals to South Africa (000’s)

Market Attractiveness – Key Indicators

Volume and Spend of Tourist Arrivals to South Africa

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

(‘0

00s)

37 31

26

43 39

31 29

47

39 33 30

64

0

10

20

30

40

50

60

70

Kenya DRC Angola

23%

Nigeria

9% 3%

2011 2010 2009

Kenya recorded a 9% growth in arrivals and a 10% increase in average spend in South Africa between 2009 and

2011

Average Spend in South Africa per Tourist (ZAR)

(Z

AR

)

21 600 19 500

8 700

14 800

18 800

15 800

9 900

12 800

22 500

14 100

10 500

13 600

0

5 000

10 000

15 000

20 000

25 000

Kenya DRC Angola

-4%

2%

Nigeria

10%

-15%

2011 2010 2009

3%


Average Spend in South Africa per Tourist (ZAR)

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

Note: 1Developed countries considered are USA, UK, Germany and France

Source: Grail Research & Monitor Analysis; SAT Departure Survey, 2003–2009

(ZA

R)

13 100

11 600 11 000 11 300

12 900 13 800

8 500

11 200

22 200

19 300

8 700

14 700

0

5 000

10 000

15 000

20 000

25 000

30 000

DRC Angola

8,200

10,100

14,300

17,100

+4% -4%

+9% +9%

Nigeria Kenya

2009 2006 2003

Four countries

Global

All African countries

Average Total

Spend (in 2009)

Developed countries1

UPDATE AND USD


Total Spend in South Africa (ZAR)


Total Spend in South Africa

Note: 1Developed countries considered are USA, UK, Germany and France

Source: Grail Research & Monitor Analysis; SAT Departure Survey, 2003–2009

221

164

50

278

390

185214

330

587

416

729

179

0

500

1 000

+17%

Nigeria

+1%

+42%

+18%

Kenya DRC Angola

2003 2006 2009

(M

n)

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

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

UPDATE AND USD


Agenda




Kenya Travellers


12 | Copyright © 2012 South African Tourism

Economic

Largest East African Economy

Kenya is the largest economy in East Africa and is expected to reach a GDP of USD23 billion by 2013

Source: IMF; OECD; Kenyan Government Websites and Speeches; Various News Articles; Kenya Bureau of Statistics; Grail Research & Monitor Analysis

23.0

20.7

18.818.718.3

20.119.7

17.2

15.4

+4%

+7%

2012E 2010E 2011E 2013E 2005 2009 2008 2006 2007

Kenyan Economy Overview Gross Domestic Product, Current Prices (200)

Bill

ion U

SD

Current

Revenue Side

Ranked 84th globally in terms of GDP size in 2009

Population of 38 million (2009), 10th largest in Africa (represents 12% of broad East African population)

Hub of the East African market with most organisations setting up headquarters in the capital, Nairobi

GDP of $18 billion (2009), largest in East Africa (represents 44% of East African Community GDP)

15.4 17.2 19.7 20.1 18.3 18.7 18.8 20.7 23


Economic

Robust Economic Growth

However, due to a dip in 2008, caused by post election violence, drought and the global financial crisis, Kenya has

been growing a little slower than the Sub-Saharan African average, but faster than other developing regions

Real GDP Growth Rates1

6.5%6.3%

5.8%

4.1%

2.4%

1.3%

6.9%

6.3%6.0%

2013E 2012E 2011E 2010E 2009 2008 2007 2006 2005

Real G

DP

% C

hange

Forecasts

Post election violence,

drought, high food and fuel

prices and the global

financial crisis

GDP

(Bn USD) 15.4 17.2 19.7 20.1 18.3 18.7 18.8 20.7 23.0

Note: 1Gross Domestic Product Growth Rates at Constant Prices (2000)

Source: IMF; OECD; Kenyan Government Websites and Speeches; Various News Articles; Grail Research & Monitor Analysis

2.4%

6.4%

6.6%

7.8%

8.4%

8.9%

9.3%

11.0%

11.1%

11.7%

12.2%

12.7%

Italy

Uganda

Brazil

UAE

DRC

China

Tanzania

Nigeria

India

Russia

Angola

Kenya

GDP Growth Rates, 2005-13E


Economic

Highly Diversified Economy

Agriculture and services are the key drivers of the economy, although Kenya’s economy is generally diversified;

the continued growth of all sectors will contribute to sustained economic growth

Source: African Statistical Yearbook; Monitor Analysis

14%

14%

10%11%

11% 11%

6%

4%

5%

3%

Agriculture

13%

Finance, insurance,

real estate etc.

Manufacturing 12%

3%

Other services

Transport and

communication

11%

11%

Public administration

and defense

27%

Other

31%

Construction

Wholesale, retail,

restaurants, hotels

2001 2008

2%

GDP Composition by Sector

Bill

ion U

SD

Sector Performance Overview

Manufacturing

and

Construction

Output is expected to normalise in 2010, benefitting from more stable power provision and increased credit supply to the private sector

Construction will continue to lead economic recovery, stemming also from high public investment in infrastructure

Agriculture

Above average rainfall is expected in most parts of the country

Good harvests will reduce pressure on domestic food prices

Government investment in irrigation will also increase food supply

Services

Transport, communications, tourism and domestic trade are key drivers of the economy – Tourism arrivals show a positive trend – Aggressive market diversification by

government


Economic

Stable Economic Fundamentals

5.0%5.0%5.0%

4.1%

9.3%

4.3%

6.0%

9.9%

16.2%

2013E 2012E 2011E 2010E 2009 2008 2007 2006 2005

%

Average Annual Consumer Price Inflation,

2009 - 2013E

45.6%

52.1%

2008 2000

-6%

Solid fundamentals such as relatively low and stable, controlled inflation and moderate efforts to decrease

government debt augment this view

Government Debt as Percent of GDP – Kenya,

2000 vs. 2008

% o

f G

DP

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


Population

Modest Population Growth

The population is growing at a healthy rate of 2% p.a. and this is expected to continue until 2015

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

38373735353433

36

2006 2005

+2%

2012E 2011E 2010E 2009E

+2%

2008 2007

Total Population, 2000 – 2012E

Mill

ions

World Population Ranking, 2010

China

India

United States

Indonesia

Brazil

Pakistan

Nigeria

South Africa

Kenya

#1

#2

#3

#4

#5

#6

#7

#25

#33

#33 in world and #7 in Sub

Saharan Africa for

population size


Overview of Population Concentration Dynamics

Population

Population Concentration

The majority of the economically active population is concentrated in Nairobi, augmenting its position as a

potential hub for the East African Region

Source: Kenyan Bureau of Statistics; Princeton University Programme in Urbanisation and Migration; Grail Research & Monitor Analysis

541

Average Nakuru

1,603

(4%)

Kiambu

1,623

(4%)

Bungoma

1,631

(4%)

Kakmega

1,661

(4%)

Nairobi

3,138

(8%)

‘000s

Split of Kenyan Population by City, 2009

This is the average

of the remaining 42

towns and cities in

Kenya

The urbanisation rate in Kenya was 32%

in 2009, with an urban annual growth rate

of 4%

Most of the rural to urban migration is to

Nairobi and Mombasa

Nairobi is the financial / economic capital

of Kenya with the highest concentration

of the population and the most

economically active portion of the

population

Mombasa ranks 16th in terms of

population size and accounts for 2% of

the total Kenyan population

Mombasa is, however, the tourist capital

of Kenya and also houses a number of

retirees and senior government officials


Population

Increasing Workforce

A significant portion of this population is below the age of 30 but a large number of youth will emerge into the work

force in the near future

Source: United States Census Bureau; Grail Research & Monitor Analysis

53.5%

19.4%

11.3%

7.3%

8.4%

52.5%

18.9%

12.4%

7.4%

8.8%

51.0%

17.6%

14.1%

7.8%

9.5%

0-19

20-29

50+

40-49

30-39

2015

2010

2005

Kenya’s Demographic Distribution by Age, (Percentage of Total Population) 2000 / 2010E / 2015E

Economically Active

Labour Force – the 0-19

group is transitioning to

economically active

groups


Population

Growing Disposable Income

Population growth, coupled with economic growth, has resulted in increased disposable income levels

Note: 1The USD value of household income was obtained by applying the 2010 Ksh / USD exchange rate to the 2010 Ksh value of household income and

then applying the y-o-y growth rate of the Ksh values to the USD value

Source: Euromonitor; MasterCard Worldwide Index of Consumer Confidence; Grail Research & Monitor Analysis

2.0

1.61.5

1.4

1.3

1.21.1

2015E 2010 2009 2008 2007 2006 2005

Thousand U

SD

Household Disposable Income1 (per household; 2005 – 2015E)

CAGR: 4%


Population

Split of Income Across the Population

Unlike most African countries, Kenya has a significant and growing middle class, although 53% of household

income is still held by the richest 20% of the population

Source: World Bank; Grail Research & Monitor Analysis

Household Income Breakdown by Population, 2006

Perc

ent of T

ota

l C

ountr

y I

ncom

e / C

onsum

ption

8.8%

13.3%

20.3%

53.0%

4.7%

Lowest 20% Fourth 20% Third 20% Second 20% Highest 20%

“James Shikwati, a Kenyan

economist, estimates that of Kenya’s

population of approximately 37

million, about four million are in

the middle class, making between

$2,500 and $40,000 a year”

– New York Times, Feb 2011

“The proliferation of apartments in

Nairobi and other urban areas is a

clear indicator that Kenya has a

thriving middle class, squeezed

between the upper class and the

lower class who earn their living

through such activities as farming”

– XN Ikai, Standard Mobile Columnist


Technology

Exponential Mobile Penetration Growth

The emergence of a large young population combined with a lack of alternative communication infrastructure has

led to a rapid increase in ICT penetration over the last decade

Source: United Nations Statistical Database; Grail Research & Monitor Analysis

49%

42%

30%

20%

13%

7%

5%4%

2%0%

2000 2001 2009 2004 2006 2008 2003 2007 2002 2005

%

Mobile Cellular Subscription Penetration

(2000 – 2009)

10%

9%

8%8%

3%3%3%

1%1%

0%

2002 2001 2000 2009 2008 2007 2006 2005 2004 2003

Internet Users as a Percentage of Total

Population (2000 – 2009)

The growth in the number of

mobile subscriptions can be

attributed to multiple SIM

ownership and an increased

number of service providers

offering attractive promotions

Internet users jumped due

to mobile phone data

services through 3G

networks, most of which is

activity on social networking

sites mainly by young

people

%


Technology

Shifting Mobile Landscape

Data usage is expected to rise and with a few key players spearheading this growth

Source: GSM World; WCIS - Subscription Forecast 2009-14; Grail Research & Monitor Analysis

Mobile Operator Market Share, 2010 Mobile Technology, 2010 vs. 2014F

11%

Safaricom

Zain Kenya

Orange Kenya

Essar Telecom Kenya

2009

77%

7%

5%

GSM

CDMA

W-CDMA

2014F

37%

0%

63%

2010

73%

4%

24%

~Safaricom dominates the market accounting

for 77% of market share

Kenya expected to have phenomenal growth in

W-CDMA supporting high data rate

transmission for internet access and other

services


Kenyan Facebook Demographics, 2011

Technology

High Use of Internet and Social Media

Whilst Google is the most widely accessed website in Kenya, Facebook is commonly used to connect with people,

and share news, opinions and pictures; Facebook is dominated by the younger population, most of whom are

male

Source: Alexa.com; Socialbakers.com; Techposite; Grail Research & Monitor Analysis

Male

62%

Female

38%

25-34

36%

18-24

43%

13-17

6%

45+

5%

35-44

9%

Top Websites in Kenya, 2010

1 Google.co.ke

2 Google.com

3 Facebook.com

4 Yahoo.com

5 YouTube.com

Kenya boasts over 1.055 million users on Facebook

– Represents 2.63% of the total population and

26.41% of the online population.

Male

Female

25-34

13-17

18-24

45+

35-44

By S

ex

B

y A

ge


Technology

Fundamental Shift in Information Access

ICT Usage Patterns

Revenue Side

Mobile Money Options1

Mobile Internet

Increasing Internet Access (78 licensed ISPs, over

1,000 Cyber Cafes / Telephone Bureaus)

Increasing computer ownership

Increasing use of smart phones (GPRS- or UMTS-

enabled) as they become more affordable

Universal Mobile telecommunications System (UMTS)

is one of the 3G mobile-telecoms technologies

increasingly being adopted

Across all generations, mobile phones are being used in new and exciting ways – Instant updates from social networking sites – Enquiries about market commodity prices – Ordering new supplies, restocking – Paying utility and hospital bills, receiving wages,

etc.

Implications for Tourism

Revenue Side

Increased ability for travel agents to offer packages of

flights, hotels, transfers and car hire at cheaper rates

Travellers can share travel experiences through social

networking websites as Kenya has one of the fastest

growing rates of increase in Facebook usage

Information regarding destinations is more readily

available online along with easier online booking

making consumers more likely to make purchases

Increased convenience for consumers as airlines, bus

companies and the country’s rail company are

converging their bookings and check-ins using mobile

and other handheld communication devices

Increased choice of payment methods for travellers

through the internet as well as the four mobile money

payment options that exist in Kenya

Note: 1M-PESA by Safaricom, Zap by Zain, yuCash by Essar and Orange Money (Iko Pesa) by Telkom Kenya

Source: ‘Kenya at the Tipping Point?’, Poverty Reduction and Economic Management Unit Africa Region, Dec 2010; ‘Consumer Lifestyle: Kenya,’

Euromonitor, Sept 2010; ‘Travel and Tourism: Kenya,’ Euromonitor, Jul 2010; Grail Research & Monitor Analysis

The increase in ICT penetration has fundamentally changed the landscape by significantly increasing the options

to access information and improving potential payment methods


Technology

Payment Environment

Kenya is still a “cash-based economy” although banking usage is growing and credit is becoming more widely

used

Source: Central Bank of Kenya Statistics; Daily Nation, 2010; Expert Interview; Grail Research & Monitor Analysis

82% Unbanked

Banked 18%

Payment Industry in Kenya

Acquisition of credit cards

Usage

Credit card usage hit a record high in 2010 accounting for 8.11% of plastic card transactions in the economy in 2010Q3

However cash remains, the main method of payment due to a strong aversion for debt and inadequate point of sale network

Mobile banking has spurred growth in the banked population over 150% since 2006

Credit is relatively easy to access with few documents required

Limit on cards is set at gross monthly income Credit Cards are offered by the six largest banks as

well as some of the smaller upcoming banks

~80% of Kenyans are still unbanked

Kenyans with Access to

Banks, 2009

Tourism Highlight

CFC Stanbic launched a Msafiri credit card in partnership with KQ

The card offers points and other advantages – Benefits include VIP lounge access, upgrades

and travel insurance The card was initially restricted to frequent flyers but

is now open to all customers and can be used at any point of sale

60%

Credit Card

Holder

Non Credit

Card Holder

40%

Credit Card Penetration for

the Banked


Agenda




Kenya Travellers



Travel – Destinations

International Tourism ‘0

00 T

rips

Uganda, Tanzania, India and

South Africa are emerging as

more popular destinations

– Uganda and Tanzania are

seeing significant growth

due to similarities in culture

and language as well as ease

of access both by air and

road, although most

consumers travel there by

road

The U.S and the U.K (and

Europe in general, except for

Germany) are becoming less

popular destinations due to

difficulties in accessing visas,

long flight times and the fact that

Kenyans are starting to take

pride in Africa and want to

discover more of Africa

Top International Destinations1 for Kenyan Travellers, 2006–2010E

Despite a decline in overall international travel from Kenya, Uganda, Tanzania, India and South Africa are

becoming more popular destinations

-0.6%

2010E

1,630

852

(52%)

200

(12%)

176

(11%)

133

(8%)

121

(7%)

69

(4%) 51

(3%)

29

(2%)

2008

1,114

682

(61%)

54

(5%)

85

(8%)

32

(3%)

128

(11%)

47

(3%)

166

(10%)

38

(2%)

293

(18%)

114

(7%)

38

(2%)

22

(1%)

22

(2%)

27

(2%)

2006

1,648

929

(56%)

84

(8%)

Other

Uganda

Germany

Tanzania

UK

USA

India

South Africa

Note: Euromonitor Departures and Arrivals figures raises validity due to inconsistency with the SA arrivals data - Wherever possible, data was validated through

primary interviews; The arrivals and departure figures from Euromonitor should be used as an indicative figure; 1Air travel accounted for 96.2% of total travel in

2006, 87.5% in 2008 and 87.4% in 2010; Figures include both business and leisure trips

Source: Grail Research & Monitor Analysis, Euromonitor

Decline due to global

financial crisis and

political upheaval


Travel – Destinations

International Destinations for Kenyans

Uganda, Tanzania and Germany are the largest international destinations for Kenyans with India and South Africa

emerging as more popular destinations

-12.3%

%

Major Destinations

Upcoming Destinations

Less Frequent Destinations

Number of trips, 2010

(‘000 trips)1

CAGR (2006–2010)

Legend

South Africa

29.1

India

51.1

Canada

19.2

Uganda

199.8

6.8%

36.7%

-19.9%

43.3%

Germany

175.6

UK

120.5

#

Total Trips from

Kenya 2010E

~1,629,700

Kenya

8.0%

Tanzania

133.2

Italy

107.3 -3.4%

1.4%

Israel

11.1 8.9%

Note: Euromonitor Departures and Arrivals figures raises validity due to inconsistency with the SA arrivals data - Wherever possible, data was validated

through primary interviews; however, the figures should only be used as an indicative figure; 1All modes of travel have been included here as most

international travel is by air with other modes accounting for very small percentages; Dubai, Egypt, China, Thailand were included in “others”, and hence a

figure for each could not be calculated

Source: Grail Research & Monitor Analysis; Euromonitor


Travel Agents Airline Offices

Trip Booking

Overview

There are ~120 IATA approved

travel agencies, 80% of which are

registered with the Kenya

Association of Travel Agents

Agencies are concentrated

primarily in Nairobi

The Nairobi – Johannesburg route

is currently serviced by Kenya

Airways and SAA

– Other airlines that fly the route

through indirect flights include

Air Malawi, Air Tanzania, British

Airways and Ethiopian Airlines

Initiatives to accommodate

increased demand have been put

in place e.g. SAA switching to

aircraft with greater seating

capacity

Travel agencies are the most important purchase channel for Kenyans accounting for 80% of ticket sales while

airline offices account for the remaining 20%

Note: 1Booking split is based on Kenya Airways current booking trends

Source: Grail Research & Monitor Analysis; Kenya Association of Travel Agents Website

Airline Ticket Booking Split1

20%

80%

Airline Office

Travel Agent

“Kenyan consumers still prefer the

personal touch of face to face

interaction which works to our

advantage”

- Kenyan Travel Agent


Example of Travel Package

Trip Booking

Travel Agent Packages

Travel Packages

Travel Agents currently offer both standard and

customised packages

– Most agencies offer standardised itineraries e.g.

two days Johannesburg - 2 days Sun City – 2

days Cape Town – 2 days Garden route

– Packages are typically inclusive of flights,

accommodation and activities

– Most agents allow some customisation of their

standard itineraries

Kenyan consumers aspire for a taste of modernity

as well as a rich cultural experience with high

levels of interaction with new people from travel

Many Kenyans are family oriented and as a result

there is high demand for affordable family packages

While they tend to budget for travel, Kenyan

consumers typically make purchases last minute

There is pressure to reduce the cost of packages

which are typically from USD1,500 to USD2,200

per person for 7-10 days

– Accommodation is typically the largest cost

item for Kenyan consumers travelling to South

Africa

Source: Grail Research & Monitor Analysis

Kenyan consumers seek travel packages to destinations with new people and rich culture, however cost remains a

barrier to travel, especially accommodation costs when travelling as a family

Cost remains a barrier e.g. this package is USD 700

pp for 5 days


Recent Initiatives

Recent Initiatives

Trip Booking

Airlines

Overview

KQ is the Kenyan national carrier and one of the

largest airlines in Africa

The airline has 15 offices in Kenya and accounts

for more than half of scheduled capacity out of

Nairobi Airport

KQ has experienced outbound traffic growth of 11%

from 2009 to 2010

The airline has a cabin factor(which shows the use

of available seats) of ~ 70% across all routes,

which is quite high

South African Airways and Kenya Airways offer the only direct flights from Nairobi to South Africa and are actively

taking steps to cater for increased demand through added capacity

Overview

SAA is the only other airline with direct flights

between Nairobi and Johannesburg

Competition is limited aside from KQ, however

Air Malawi, Air Tanzania, British Airways and

Ethiopian Airlines offer weekly indirect flights to

Johannesburg

KQ is in the process of purchasing

larger Boeing jets to support increased

passenger numbers and growth plans

– Arrival of jets has been delayed

however to 2013

Plans for growth are to establish more

intra-continental flights

– “We want to paint the continent

Red”

- Prinita Nagi, Kenya Area

Manager, Kenya Airways, 2010

SAA recently switched to Airbus A340-

300 and A340-200 airplanes with

greater seating capacity on its Nairobi

– Johannesburg route

– Capacity has increased by 582

seats per week



Overview

Trip Booking

Growth of Regional Flight Connectivity

In addition to SAA and KQ, increased activity by smaller airlines in the domestic and regional markets should

improve connectivity from East African to South Africa via Nairobi

Came to market as a low cost carrier and now competes with KQ on a number of local

routes such as Malindi, Lamu, Kitale, and Mombasa, to which it has daily flights

Flies daily within East Africa including Uganda, Tanzania and Rwanda

Plans are in place to set up operations in Ghana and Zimbabwe

– Fly 540 wants to become a pan-African airline

SafariLink is a safari airline with a network of connecting domestic scheduled services to

safari destinations in Kenya and Northern Tanzania

SafariLink provides daily scheduled flights to Masai Mara, Aboseli, Tsay West, Naivasha,

Nanyuki, Lewa Downs and Samburu

Additionally Safarilink provides private charter flights

Air Kenya flies primarily within Kenya and Tanzania

The Air Kenya fleet consists of 5 aircraft that fly to Mombasa, Masai Mara, Kilimanjaro,

Zanzibar and Dar es Salaam amongst other destinations

Source: Airline Websites ; Grail Research & Monitor Analysis


Agenda




Kenya Travellers



Kenyans Visiting South Africa

Consumers

Overview of Kenyans Visiting South Africa (1/2)

Kenyans Visiting South Africa by Gender

Kenyans Visiting South Africa by Age In 2010, the number of Kenyans visiting South Africa

increased to 29,089 from 25,581 in 2009

Married Kenyans with children under 18 years and

single, divorced and widowed Kenyans with no children

are the major groups travelling to South Africa

– In 2009, 51% of travellers were married with

children (although they mostly travelled alone),

27% were single, divorced, or widowed

Kenyans across income segments were aware of

South Africa, and were willing to visit South Africa

– Business is the key driving factor for Kenyans to

travel to South Africa, followed by sports and

holiday

In 2010, 29,089 Kenyans visited South Africa, an increase of ~13.7% from 2009; travellers are generally 30–54

years old, and are either married with children or single/divorced/widowed

33% 33% 33% 36%

67%

Female

Male

2009

64%

2008

67%

2007

67%

2006

35% 36% 38% 36%

2%1%1%2%

2009

17%

41%

4%

2008

16%

38%

6%

2007

16%

41%

6%

2006

16%

40%

8%

18-20 20–29 30–39 40–54 Over 55

Source: Grail Research & Monitor Analysis; SAT Brand Tracker Survey; SAT Arrivals Data


Consumers

Overview of Kenyans Visiting South Africa (2/2)

Frequency of Kenyans Visiting South Africa

Kenyans prefer to visit South Africa multiple times. Still there is a large number of Kenyans who are first time visitors

51%

49%

Twice or More

First Time 2009

100%

15% 14%

19%

41%

12%

Kenyans visiting South Africa are mostly repeat visitors travelling for business and VFR and they predominantly

stay in Gauteng and the Western Cape for the duration of their visit

Note: 1Average Exchange Rate 1 ZAR = 0.14501USD as of Mar 11, 2011

Source: Grail Research & Monitor Analysis; SAT Departure Survey; South African Tourism Index July to September 2010

Provinces Visited, Money Spent and Length of Stay

Most Kenyans visit the Gauteng province (around 78%

of the respondents), with Western Cape being the second most preferred destination (corresponding to 16% of the respondents)

The average spend per trip in South Africa by Kenyans has increased over the last 2 years

– The average spend increased from USD 1,1291 in 2007 to USD 1,2691 in 2009

In 2009, the average length of stay was 10 – 11 days with most travellers travelling for business (64%) and VFR (15%)

Gauteng

Western Cape

Monthly Arrivals from Kenya to South Africa

(2007–2008)

6–9 times

4–5 times

2–3 times

First Time

10 or

more times

Low seasonality: Kenyans visit South Africa throughout the year. There is not a high degree of seasonality, although peaks can be seen in December

Arr

ivals

(‘0

00)

2007 2008 2009

Average

2.07


Where to Play

Market Size

There are approximately 1.2 million potential air travellers in Kenya

Note: 1Based on data from Euromonitor International – ‘Nigeria Consumer Lifestyles, March 2010’ and weighted the percentage of population in each

income segment by the difference in GDP per capita between Nigeria Kenya and DRC; Calculation method: Household income by consumer group *

Mean household size * 2 adults per household to represent household income

Source: Euromonitor International; UN Demographic and Health Survey; IMF; CIA Factbook; Grail Research & Monitor Analysis

178

745

1,179

>$25,000 >$10,000 >$7,500 Total Population

35,265

3.3% 2.1% 0.5% % of Population

No. of P

eople

(‘0

00)

International Air Traveller Population Estimates Based on Disposable Income Levels1 – Kenya, 2008

This compares

to 1,630k

Outbound

Travellers from

Kenya in 2010


Where to Play: Kenyan Consumer Groups

Buying Process

Stages

Business –

Professional VFR

Business –

MICE Holiday

Religious /

Pilgrimage

Shopping

(Personal) Purpose of

Travel

Information

Gathering

Trip

Planning

and

Experience

Sought

Trip

Booking

Usage and

Assessment

Travel Agent Family Friends Business

Associates Internet

Personal

Experience

from Previous

Trips

TV Radio Print Outdoor

Travel Agent Word of Mouth Internet Personal

Experience Mass Media

Recommends to Others

Friends or Family Company Travel Agent Hotel or Airline

(excluding online) Online

Destination Consideration After Information Gathering

Visa Granted

Does Not Recommend to Others

Visa Denied

Shopping

(Business) Medical

Leisure Multipurpose Leveraging

Business Trip Multipurpose Driven by Personal Need

Events Shopping Nightlife Spa Restaurants &

Entertainment Arts

Theme

Parks

People,

Culture

and

History

Friends

and Family Sightseeing

Business

Activity

Destination Consideration Before Information Gathering

Pricing Consideration After Information Gathering

Consumer interviews, focused on understanding the buying process for international travel, yielded a number of

choices made by consumers at different stages within the buying process

Adventure

and

Scenery

Standard Tourist Activities Affluent Tourist Activities

Note: MICE = Meetings, Incentives, Conferencing and Exhibitions



Consumer Groups

The buying process was mapped for different consumer groups according to different variables. Income levels and

whether or not consumers had children proved to be the most significant influences on travel behaviour

Income and

Children

When analysing the data, it became clear that income and life stage (in terms of whether or not consumers

had children) were the key factors determining travel behaviours

– All consumer groups generally value travelling

– As income increased international travel became more affordable and more pure leisure travel was undertaken

– Consumers who have children do not often travel internationally with their families due to high costs

– They also travel less frequently alone and spend shorter periods away from their families


Budget Family Travellers

For lower income consumers

with children, international

travel is generally driven by

business

– They may choose to

extend the trip to engage

in leisure activities

The initial trip is used to build

awareness about destinations

and activities

They use travel agents to

book hotels and flights

Fledgling Explores

These consumers are

adventurous and perceive

travelling as an opportunity to

meet new people and

experience their culture and

lifestyle

They currently do not travel

much internationally as they

cannot afford to

They primarily travel within

Kenya or, at most, within East

Africa

They are tech savvy and use

the internet and mobile

phones to research

destinations

High Flying Explorers

Travel is very important for

these consumers and they

mostly travel for leisure

With higher incomes, these

travellers are more able to

undertake less conventional

tourist activities such as

attending events and arts

festivals



4 CONSUMER GROUPS EMERGED

Well-To-Do Family

Travellers

These are typically high

income Kenyans with children

Travel plays an important role

for these customers

– They use it to escape from

day-to-day hustle and

bustle as well as sightsee,

experience how different

people live and spend

quality time with their

children





Differences in the Buying Process

Stages Business –

Professional VFR

Business –

MICE Holiday

Religious /

Pilgrimage

Shopping

(Personal)

Purpose of

Travel

Information

Gathering

Trip

Planning

and

Experience

Sought

Trip

Booking

Usage and

Assessment

Travel Agent Family Friends Business

Associates Internet

Personal

Experience

from Previous

Trips

TV Radio Print Outdoor

Travel Agent Word of Mouth Internet Personal

Experience Mass Media

Recommends to Others

Friends or Family Company Travel Agent Hotel or Airline

(excluding online) Online

Destination Consideration After Information Gathering

Visa Granted

Does Not Recommend to Others

Visa Denied

Shopping

(Business) Medical

Leisure Multipurpose Leveraging

Business Trip Multipurpose Driven by Personal Need

Events Shopping Nightlife Spa Restaurants &

Entertainment Arts

Theme

Parks

People,

Culture

and

History

Friends

and Family Sightseeing

Business

Activity

Destination Consideration Before Information Gathering

Pricing Consideration After Information Gathering

Adventure

and

Scenery

Standard Tourist Activities Affluent Tourist Activities

Higher income consumers are more able to take trips for pure leisure purposes; across all groups word of mouth

is singularly the most important source of information

Fledgling Explorers



Legend

Well-To-Do Family Travellers



Consumer Portrait

High Flying Explorers travel frequently within East Africa and beyond; travel is both planned and spontaneous

High Flying Explorer

Meet Angela, a 30 year old Kenyan

“When I travel, I do not want to feel

like a tourist...I want to do what the

people do there”


Background

Lifestyle

Travel

behaviour

Angela is a single independent consultant

Angela started an independent consultancy firm in September

2010 after previously working for PWC

Angela works ~10-12 hours per day during the week and less

over the weekends writing proposals and managing her

operations

Angela is very adventurous with food and likes to try different

cuisine - her favourites are Ethiopian and Japanese

Travel is essential for her, she takes international trips twice a

year and travels in East Africa every three months

When she worked for PWC most of her travel was for work.

However, majority of her travel now is for leisure

She does not take packages as she thinks they do not meet

expectations, especially in terms of activities

“I enjoy travel and I travel as often as I can. Whenever I

get a little bit of time off work, I try and travel somewhere

new and different”

High Flying Explorer Quotes

“A good tourist destination is determined by how much

fun and freedom the country offers”

“Booking through travel agents is convenient and they

offer credit for up to 30 days”

“Tanzania is the best place I have been to, the people

and beaches are great, it is affordable and the weather is

pleasant”

“I value travelling within Kenya because it is so beautiful

and there is so much to see”


These consumers always look for a new and different experience in terms of people, culture, history, events,

festivals, etc., and they are also drawn to modern infrastructure and amenities


What Do High Flying Explorers Want from Travel?

“Travel is very important...I look for new and different activities, famous attractions,

culture, and festivals while travelling to any country”

– A Successful Young

Professional, living with her

husband

“When I travel, I always look for information on activities, events, cost, and ease of

travel within a country...”

– A Single Businesswoman


“While travelling I look for local culture, local food, clubs (good nightlife), good local

transport, and events and art galleries…”

– A Young Media Professional



Customer Portrait

Whilst Well-To-Do Family Travellers are also well established financially, they most often travel with their families

and, therefore, travel less frequently and with more planning around school holidays

Well-To-Do Family Traveller

Meet Fred, a 37 year old Kenyan

“Most travel is for about 4-7days as

you cannot travel for too long with

children”


Background

Lifestyle

Travel

behaviour

Fred is married with two young children, aged two and three

years

Fred is a manager at the local subsidiary of a US based

multinational company

Fred has little free time, however he is outgoing and enjoys the

outdoors

He readily immerses himself in different cultures and

environments and visited a number of “Shebeens” in

Khayelitsha while on a trip to Cape Town to experience the vibe

The role of travel in his life has changed as he now cannot

travel for too long with his young children

Fred’s family typically travels to nearby places and looks for

family packages with activities for the children

Weather is a significant determinant for his travel . He enjoys

the beach and has travelled to Mombasa, Mozambique and

Cape Town and would like to visit Zanzibar

“The internet is also useful. I recently discovered cruises

from Mombasa to Zanzibar online”

Well To Do Family Traveller Quotes

“Countries have become a brand nowadays, and

marketing the brand with uniqueness is very important”

“Travel is an escape from the day-to-day hustle and

bustle and gives an opportunity to meet different people,

learn about new cultures and visit new places”

“In general there are some really good tourist

destinations in Africa, but they are not well marketed”


…and prefer to spend quality time with their families, occasionally undertaking outdoor activities and

embracing different people and their lifestyles

Well-To-Do Family Travellers crave time away from the hustle and bustle of day-to-day life…


What Do Well-To-Do Family Travellers Want from Travel?

“If I do not travel, I will go crazy. You come back so relaxed and charged-up”

– A Successful Young

Professional, living with her

family

“... Travel makes life richer…it gives new experience, you meet new people, visit

different places…it’s like an escape from everything…”

– A Divorced Professional, living

with her daughter



Fledgling Explorers

Overview

Fledgling Explorers are mostly within their early to late twenties years, living in Nairobi, studying and working part-time

or just starting their careers

Fledgling Explorers live at home with parents or live in apartments in low to middle income areas such as Eastlands

and Umoja. They generally do not own vehicles and travel with friends or using parents vehicles (Toyota, Hyundai, etc.)

They often meet friends at restaurants such as Java House

They are adventurous and perceive travelling as an opportunity to meet new people, experience their culture and

way of life and engage in activities, which are not available in Kenya such as skiing and high speed driving

They primarily travel within Kenya or, at most, within East Africa (Tanzania and Uganda)

– The consumers are starting to learn about, and appreciate, other tourist destinations within Africa (e.g. South Africa) due

to their rich culture, history, nature, and diverse people

They are tech-savvy, using the internet and social media to gather information

Cost is the main barrier for them to travel internationally

They believe that South Africa offers great night life, rich culture, beautiful sights, new fashion, and more freedom.

However, some of them remain worried about safety in Johannesburg



The consumers are adventurous and knowledgeable, and look for more freedom, new activities, etc.…

Fledgling Explorers

What Do the Consumers Want from Travel?

“I would like to go to a place which offers a lot more freedom to do things…You

should go wild as much as you want”

– A Young Professional, living

alone in Nairobi

“Travel is essential and relaxing…Being in a different environment is good and

gives a break from daily routine”

– A Young and Single Account

Manager


“Cost is the biggest barrier, countries should offer more affordable packages to

those who cannot afford pricey packages”

– A Young Researcher and Part-

Time worker

…but cost and affordability remain key barriers for them to travel

“High prices, especially for accommodation, are the biggest hindrance to travel

internationally”

-A Married Woman, working in

travel industry



Overview and What Consumers Want from Travel

Budget Family Travellers are generally above 35 years, living and working in Nairobi

They live in two to three bedroom houses in low to middle income areas such as Eastlands and South B. They

generally drive older model Toyotas, Hyundais, etc. with one car per family

Budget Family Travellers consider travel as an important part of their life, and take at least one domestic trip every 3-4

months with their families. These holidays are pegged to school holidays

They primarily travel within Kenya or to other East African countries such as Tanzania and Uganda

– They use their holidays to enjoy outdoor activities (swimming, boating, camping, etc.), which their children enjoy and also

to visit friends and relatives

Cost and visa procedures are the main barriers for them to travel internationally

They decide travel destinations based on opinions from friends and family who have travelled there

Source: Monitor & Grail Primary Research

“If you stay in one place, the danger is that you will start to think that's

what the whole world is like. It is important to have different experiences”

– A Businessman, living

in Nairobi with family


Agenda




Kenya Travellers



Communication Message

Centre of Gravity Approach

The Centre of Gravity (CoG) is the area in which the travel behaviour of Kenyan consumers from different

consumer groups intersects. This can be used to develop messages and products that will speak to the needs of

the market Key Consumer Behaviour

Budget Family

Travellers


COG Fledgling

Explorers

Well-To-Do

Family

Travellers

Kenyans engage in both multipurpose business and pure

leisure travel Purpose of

Travel

Whilst word of mouth is the most widely used source of

information, mass media and internet continue to be key

media channels

Information

Gathering

Kenyans seek to interact with new people and cultures while in

an urban cosmopolitan environment that still feels like Africa Experience

Sought

Kenyans primarily make purchases through travel agents,

however, cost remains a significant barrier Purchase

Channel

Increase leisure component of travel to South Africa

Increase length of stay

Increase spending in South Africa on cosmopolitan leisure

activities such as dining out, exploring nightlife, events and

festivals

Increase frequency of travel to South Africa

Increase number of arrivals from Kenya and East Africa

Attract Kenyans seeking an urban cosmopolitan vibe with an

African feel and new people that they can interact with and

learn about to South Africa instead of other destinations

Key

Message,

Channels

and Product

Objectives



Communication Message

Message to Build Awareness

Once consumers are aware of South Africa’s positioning as an affordable urban cosmopolitan destination, it is

important to provide more specific details about where to go, what to do, as well as some pricing information

What Consumers Want

South Africa also needs to be portrayed as an affordable holiday destination with an abundance of places to visit and things to do

– The breadth of activities can be used to encourage greater spend, longer stays and more frequent trips to South Africa

– The most important activities to highlight are special events, cultural activities and a cosmopolitan nightlife

Kenyans want to know more about what South Africa has to offer and what pricing options are available to them

– The overwhelming majority of Kenyan travellers to South Africa currently only visit Gauteng and, to a lesser extent, the Western Cape

Widening Kenyans’ knowledge of what South Africa has to offer could encourage longer stays and/or more frequent trips

So “There’s too much to do in only one trip”


...visit the Eastern

Cape, home to many of

South Africa’s iconic

leaders...

Attend the world

renowned Durban

July...

...and party at modern

and vibrant nightclubs


Communication Messages

Key Messages

Objectives Key Elements to Be Communicated

To encourage growth in volume and value from Kenya, focus should be placed on the people and culture of South

Africa as well as urban cosmopolitan activities which retain an African feel

South Africa offers urban cosmopolitan living

South Africa has friendly people and a wealth of

diverse cultures to interact with, each with a

fascinating history

It is an inexpensive destination compared to Europe

but offers similar infrastructure and amenities

whilst being closer than Europe and remaining

truly African

South Africa offers activities for Kenyans and other

Africans, including good food from all over the

world, nightlife and a wide range of different

people

Airline tickets are significantly less expensive

compared to other destinations that offer modern

infrastructure, rich culture and history

South Africa is a short-haul daily flight from Nairobi

allowing event-driven, weekend getaways


Most Kenyans engage in both

business and leisure travel

Increase leisure component of

travel to South Africa

Increase length of stay

Purpose of

Travel

Kenyans seek an urban

cosmopolitan vibe with an African

feel. They seek a “home away from

home” with more efficiency and new

people that they can interact with

and learn about

Attract these Kenyans to South

Africa instead of other destinations

Increase spending in South Africa

on cosmopolitan leisure activities

such as dining out, exploring

nightlife, events and festivals

Increase frequency of travel

Trip Planning

and

Experience

Sought


Communication Messages

Key Messages

Kenyans desire to interact with new people and learn about new cultures, as well as experience an urban

cosmopolitan vibe, make certain destinations and activities in South Africa attractive for promotion purposes

What Kenyans Don’t Want from a Destination

What Kenyans Want from a Destination

“There are no African countries that can

compete with SA – it has so much choice.

In addition to beaches, wildlife and

landscapes (for which Kenya is a good

contender), SA has a young urban vibe and

is very cosmopolitan”

– Young Female Entrepreneur

“Key attractions for me are differences in culture…. How people live in that particular country. What do

they do, what do they eat… I want to know all those things”

– Young Kenyan Researcher

“SA has a unique African feel with culture,

urbanity, scenery and the “Europe in Africa” feel

that’s important for young upcoming

professionals in Africa”

– Young Kenyan Professional

“I think Kenya has the best wildlife in the world and I am too patriotic to even try to consider wildlife anywhere

else”

– Kenyan Consumer

Wildlife, Safaris

Urban, Cosmopolitan, Non-African Africa

People and Culture

“I feel proud as an African seeing South Africa

and knowing that it's possible to have such

organisation in Africa”

– Young Kenyan Professional



Channel

Media Overview

Kenya has a relatively diverse and liberal media landscape that has shown substantial growth in internet marketing

in recent years

Media Penetration, 2009 TV

Television is the second most popular

media channel

TV viewing is particularly prevalent in

urban areas, where most of the target

consumers live

The four most viewed TV channels are

– Citizen

– KBC

– KTN

– NTV

Radio

Radio continues to be the most

popular source of entertainment and

information

– A recent survey found that 91% of

the population had listened to the

radio in a given week

The radio industry is highly

fragmented in Kenya with a number of

English and vernacular stations

According to a survey, Citizen, KBC

Swahili, and Inooro are the most

popular radio stations for listeners

Outdoor

Billboards are not yet very popular in

Kenya

– They have the lowest recall rates

and are not as appealing to

consumers

Internet and Mobile phones

Internet and mobile penetration in

Kenya is growing rapidly

The internet is already being used as a

source of travel information

– Mobile phone penetration is a key

driver

– Social media also plays a

significant role in information

access

Newspapers and Magazines

Approximately 7.6 million people read

newspapers

Kenya has six international weeklies

and eight international dailies

– There are also five national dailies

and nine national weeklies

The Daily Nation, Citizen and The

Kenya Times are the most popular

newspapers

Magazines are not very popular in

Kenya and circulation is generally low

Landline

2% 5%

Internet

11%

Mobile

71%

TV

41%

Radio

87%

Computer

Penetr

ation level

Source: Monitor & Grail Primary Research and Analysis; AudienceScapes Website


Product Strategy

Consumer Product Requirements

The current product offering to Kenyans could be made more affordable, and broadened to include activities that

are more relevant to the Kenyan consumer, to increase growth

Source: Grail Research & Monitor Analysis; Primary Interviews

Key Implications

Provide Affordable and Flexible Packages

Activities for Kenyans, not Europeans

Promote More of South Africa

Consumers enjoy doing some personal shopping, eating out and trying different cuisines when travelling

Length of stay and average spend will also benefit from availing Kenyans add on activities that meet their broader demands

– There is a strong desire to explore different people, cultures and heritages

– Although on a tighter budget, Fledgling Explorers are adventurous and would partake in adventure add-on activities

Kenyans are generally price sensitive and consider the cost of accommodation a significant barrier to travel to South Africa

A perceived lack of affordable accommodation is a key barrier for Fledgling Explorers whilst those travelling as families are also

discouraged by the high accommodation costs

– Necessary to provide a variety of price options for travel agents, particularly for accommodation costs

Most Kenyans prefer basic packages of just return airfare and accommodation that allow them the flexibility to spend their time on

holiday as they wish

Most Kenyans want to know more about what South Africa has to offer beyond Johannesburg and Cape Town

– Over 70% of Kenyan travellers visited Gauteng with only a marginal proportion visiting any of the other provinces aside from

the Western Cape


BASIC PRODUCT OFFERING

Product Strategy

Basic Product Offering: Some Options

Basic packages must include return airfare in economy class, affordable accommodation and proximity to malls

and a variety of restaurants

Note: 1Based on the average length of stay of Kenyans visiting South Africa; 2 Prices based on normal KQ economy class (cheaper airline) and Town and City

Lodge rates


Airfare Return airfare in economy class

Transfer Basic transfers (airport > hotel > airport)

Hotel

3-4 star accommodation in a major South

African city in close proximity to malls and

restaurants with a variety of cuisine e.g.

City Lodge near Eastgate or Waterfront

Holiday Inn in Cape Town

– Kenyans seek quality however they are

price sensitive and would compare

prices to Nairobi which is not a very

expensive city to live in

Length of Stay 4 to 7 nights1

Price ~ USD 1,090 for 4 nights, ~USD 1,500 for 7

nights2

Return Airfare Transfer

Components of a Package

2-4 star accommodation, preferably in close proximity to

malls and restaurants with a variety of cuisine

Airfare Return airfare in economy class

Transfer Basic transfers (airport > hotel > airport)

Hotel

More affordable 2-3 star accommodation like

B&Bs or Town Lodge in a major South

African city with a vibrant nightlife

– Fledgling Explorers have a tighter

budget for accommodation

– These consumers are young and enjoy a

good night out

Promote cheaper low season rates at

specific times in the year e.g. December in

Gauteng

Length of Stay 4 to 7 nights1

Price ~ USD 890 for 4 nights, ~USD 1,150 for 7

nights2

Well-To-Do Family Travellers Fledgling Explorers



Product Strategy

Additional Product Offerings to Drive Purchase (1/2)

The added incentive of cultural and adventure activities will spur growth in traffic volumes from Kenya as well as

increase average spend, length of stay and create a more enriching South African experience...


ADD-ON CULTURAL ACTIVITIES

Kenyans across consumer groups wish to immerse themselves in South Africa’s

heritage, how different people live, as well as explore its political history

South Africa has a wealth of diverse people and cultures

– There is interest in activities like visits to Zulu villages in KZN or Lesedi Village

which can increase length of stay as well as get people to travel to more

destinations than Johannesburg and Cape Town

Ensure more day or overnight trips to these historical sites are offered as optional

add-on activities as opposed to an all inclusive package

– Kenyans prefer to have the flexibility of deciding how they will spend their time

As an indicative price, Bunson Travel currently sells half day trips to the apartheid

museum at USD 85 pp which is considered reasonable

ADD-ON ADVENTURE ACTIVITIES Ensure day or overnight adventure activities are promoted to Fledgling Explorers

as optional add-on activities

– These consumers are young and adventurous

– These activities create a more enriching overall experience

– A rich experience will result in positive word of mouth

These activities can be used to increase length of stay and spend

Some activities to consider are

– Paint ball shooting

– Shark cage diving off the Cape Coast

– Hot air balloon trips in Magaliesburg

– Bungee jumping at Tsitsikama, the world’s highest bungee

Fledgling Explorers

Well-To-Do Family

Travellers


Fledgling Explorers


EVENT-DRIVEN PACKAGES

Components of a Package

Product Strategy

Additional Product Offerings to Drive Purchase (2/2)

...whilst inclusion of family activities and event driven packages would create a positive lasting impression of

South Africa as well as increase frequency of travel


3 -4 star accommodation

(e.g. Holiday Inn at the V&A

waterfront)

Return Airfare

(economy class)

Basic Ticket to Special

Event (e.g. Cape Town Jazz

Festival)

Event-driven packages can be used to drive

increased frequency

In addition, it can be used to trigger travel in

Kenyans considering South Africa, but who

have not travelled to South Africa yet

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 Kenya

It is important to ensure discounts are

organised as Kenyans fear prices may be

hiked during events

– Although Kenyans travelled in large

numbers to the 2010 FIFA World Cup,

there was wide spread belief that

accommodation and other prices were

hiked during this period

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 for these theme parks

– Ratanga Junction, Gold Reef City and uShaka Marine World are notable examples

Well-To-Do Family

Travellers

Well-To-Do Family

Travellers



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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