SOUTH AFRICA
ADVENTURE INDUSTRY S U R V E Y
2 0 1 4 REPORT
BY
DIRTY
BOOTS
Table of contents Foreword by Johan Radcliffe............................................................... 3 Adventure Tourism in South Africa................................................... 4 Activities in South Africa.................................................................... 5 Revenue generated by adventure tourism industry......................... 10 Are you expecting an increase in 2015?.............................................12 Who are your customers?.................................................................. 13 Marketing............................................................................................ 15 To Pay Commission or Not?............................................................... 17 Technology.......................................................................................... 18 Employment........................................................................................ 19 Risk, Insurance and Liability.............................................................. 20-21 Conclusion........................................................................................... 22
Charts 1) A breakdown of Operations per Activity....................................... 6 2) Adventure Operations by Area....................................................... 7 3) The top 10 Activities by Operators................................................. 8 4) The top 10 Income Generating Activities....................................... 8 5) The top 10 Participated in Activities.............................................. 9 6) Breakdown of Company Sizes........................................................ 11 7) Turnover change between 2013 to 2014........................................ 11 8) Domestic vs International tourists................................................ 14 9) International Adventure Tourists.................................................. 14 10) Marketing spend vs Company size.............................................. 16 11) Commission................................................................................... 17 12) Referral Bookings vs Commission Paid........................................ 17 13) Technology Usage......................................................................... 18 14) Technology compared to Size of Company..................................18 15) Staff compared to Size of Company............................................. 19 16) Injuries and Deaths compared to years' Operating.................... 20
Published by Dirty Boots Publishing CC Date: August 2015 Members: JB Radcliffe, E Theron Address: No 1 Conberg House 5 Dreyersdal Rd Bergvliet Cape Town South Africa Website: www.dirtyboots.co.za Contact details Tel: 021 713 1491 Email: johan@dirtyboots.co.za Email: esna@dirtyboots.co.za Editorial team Author: Johan Radcliffe Proof Reader: Margaret Cloete Design: Chantelle Thessner Photo credits: First page - Jacques Marais Table of contents - Springtide Sailing Charters Activities in SA - Skydive Parys Operations per area - Witsieshoek Mountain Lodge Chart 5 - Magoesbaskloof adventures Chart 10 - Thonga Beach Lodge Chart 15 - Classique Aviation Chart 16 - Aliwal Dive Centre Chart 17 - Fatbike Tours Conclusion - Heritage Tours This report is protected by copyright. No part of this document may be copied or distributed without permission in writing from Dirty Boots Publishing. Disclaimer Dirty Boots publishing has done its utmost to compile an accurate report on adventure tourism in South Africa; however, we cannot guarantee that this report has no errors and all the information is correct.
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adventure tourism. These, however, do not include South Africa and were based more on multiday trips. What I have been looking for, is data on adventure
Foreword
by Johan Radcliffe
activities in South Africa. This is what my company Dirty Boots specializes in - Guided adventure activities that are available to tourists and the general public.
How and why did this survey come about? As any normal business owner would do at some stage; you start researching further on your industry to obtain a better picture of where you stand and what your competitors are doing, or just generally to expand your knowledge. My quest for further knowledge came about the first time I was asked to do a presentation on adventure tourism in South Africa. Of course your first stop is Google, as they call it these days 'desktop research'. After a few hours of trying all the different search engines, using possible terms, no data came up for adventure travel or adventure activities in South Africa. Internationally the ATTA (Adventure Travel Trade Association)
So after 10 years in the adventure industry, with no reports that I know of coming from the powers that be, I decided to conduct my own survey. After hundreds of hours on the phone, this is the result of that survey. An interesting fact about adventure industry surveys is that 88% of adventure companies have never been surveyed before and just about none have been surveyed with 100% emphasis on the adventure industry. Please keep in mind that I have no previous experience in this field or any formal education regarding the collection of data and the analysing of it. I have, however, done my utmost to make this report as accurate as possible.
have compiled some great reports on 3
Adventure Tourism in Before we continue lets define Adventure Travel. The word 'Adventure' has been a buzz word for the last decade in the South African Travel Industry and has been used extensively in most companies' marketing campaigns. Basically it looks like any trip to Southern Africa is an adventure holiday. Dirty Boots defines adventure travel as any multiday tour or day trip that is offered for remuneration which includes a physical activity and a small element of risk. Internationally the definition for adventure travel is a trip that includes a physical activity, interaction with nature and a cultural experience. Using this description, 26% of all tourists are adventure travellers, which is certainly the case with most of the tourists coming to South Africa.
However, in South
Africa we still separate cultural tours and safaris, and do not incorporate these under the
South Africa Only activities such as walking safaris, Hot Air ballooning, Shark Cage Diving, Fishing, Paragliding, Horse Riding and another ninety or so activities fall under the banner of Adventure tourism. We are currently adding one or two new adventure activities every year to the list.
Number of people partaking in a d v e n t u r e activities in 2014:
This survey did not cover tourists who travel to South Africa to compete in adventure sports, or who simply arrange their own adventures while here, without the support of an adventure operator or guide. You will realise from this survey that the South
11 MILLION ADVENTURES
African adventure industry is no longer a small backyard business. We may not have the same size and revenue as the mining or agricultural industries, but we do generate enough revenue and job opportunities for Adventure Travel to be known as the 'Sleeping Giant' in the travel industry.
banner of adventure travel. 4
Activities in South Africa The following few graphs and charts are an extract from our in-house database of adventure companies in South Africa and the activities they offer, combined with the
survey results for 2014. 5
(Operators)
CHART 1 A list of activities available in South
Africa
arranged
according to the number of operators that offer these activities.
Operations per activity 6
Chart 2 A breakdown of prominent tourist regions in South Africa, according to amount of adventure operators operating in the area.
Operations per area
7
CHART 3 The top 10 activities in South Africa based on availability
Top 10 activities by No. Operators
CHART 4 This chart is generated by using the cost of an activity multiplied by the amount of participants. Some other activities might have higher volumes of participants but do not appear in the top 10 due to the lower cost of the activity.
Highest income Generating activities 8
CHART 5 A list of the activities with the biggest number of participants.
Top 10 activity participation
9
R e v e n u e generated by a d v e n t u r e tourism industry in South Africa.
4.6 BILLION S O U T H
AFRICAN
R A N D
This is a substantial portion of the total travel industry, international inbound and domestic travellers. I did not, however, have the 2014 tourism figures at the time of print to show the percentage portion. This figure does not include activities such as safaris, cultural trips and other activities that are often included in adventure tourism revenue figures these days. This figure only includes guided adventure activities as per Dirty Boots' definition of adventure.
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CHART 6 The adventure industry is broken down into company sizes, large (10 million plus), medium (5-10 million) and small (0-5 million). The small category dominates the industry currently. Nearly 50% of adventure companies' turnover is less than 1 million a year.
Company sizes
CHART 7 This is the percentage of turnover changes from 2013 to 2014, based on 76 companies that were prepared to indicate their change in turnover. Of these, 64 companies had an average increase of 17%, 6 companies showed an increase of 75% (all new companies) and 6 companies had a decrease of 24.5%.
% Turnover change 11
So we asked the question:
Are you expecting an increase in 2014? This was answered positively by 90% of the companies. So let's presume an increase of only 5%; this will then take our industry to
5 BILLION
SOUTH AFRICAN RAND IN 2015
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Who are your customers? The survey did not cover this question sufficiently as most adventure companies in South Africa are not keeping exact records of their client's demographics i.e. Records of age, sex and income, etcetera. The reason for this is that most companies are still on manual systems and this type of data collection can be very time consuming and costly.
The average age is 35 years
Male 51% Female 49% 13
CHART 8 The International segment is basically foreign tourists who partake in activities while in South Africa. The 45% would work out to about 4.9 million international clients partaking in adventures while visiting South Africa. Note: most tourists partake in more than one activity while on holiday.
Domestic vs International
CHART 9 A breakdown of where the international adventure tourists are coming from.
International Adventure Tourists
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Marketing This part of the survey basically covers what adventure companies are spending on marketing and where they are
R 472 000 000.00 was spent on marketing adventure activities in 2014
spending their money. There are not any surprises here but it would be of interest for you to compare yourself to the averages. One of the biggest growing markets in South Africa is the non-white market with 70% of companies' surveyed showing a substantial growth in this area. Let's hope this is an indication of the positive changes that have happened in
31% of all bookings come from a third party; this could be a travel agent, tour operator, hotel concierge or adventure booking agent.
South Africa over the past few decades.
Web vs Print Expenditure
261 minutes a week is spent on social media marketing. Do you attend travel shows? International: 13% Local: 30% None: 57% 56% of all adventure companies have a professionally made video of their activity. 15
CHART 10 This is a percentage of turnover spent on SA marketing compared to the size of the company. Adventure companies are spending between 7-10% of their turnover on marketing.
Marketing Spend vs Company Size
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To pay commission or not? CHART 11 & 12 This is an indication of what percentage commission companies are paying and what percentage of the 31% of third party bookings they confirm. If you would like to get a bigger portion of the referral business, you have to be prepared to pay commission.
1.3 Billion rand’s worth of adventures are booked by agents every year. Commission paid
0%
Referal Bookings vs Commission Paid
0-10%
10-20%
+20%
Companies
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Technology Here the adventure travel is far behind the accommodation, car hire and flight sectors of tourism. If the South African adventure industry wants to compete internationally they will have to pull up their socks.
The charts
will once again give you an
indication of what adventure companies are doing about implementing technology in their businesses.
Technology Usage
CHART 13 Here companies were asked three questions. Do you have a website? Do you have a live reservations system? Meaning can clients, see availability online then book and pay? Can your clients pay by credit card online?
CHART 14 Technology usage compared to the size of the company.
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Employment The following figures represent people that are directly employed by the adventure industry. Currently there are about 25
000 people
employed
by the adventure industry in South Africa. This does not include adventure venues, safaris and any third party associated to the industry. This figure can be broken down into 14
000 full-
time and 11 000 part-time staff. Also included in the above figure is Adventure Guides:
CHART 15
Average No. Staff vs size of company
Full Time: 5283 adventure guides Part-time: 5150 adventure guides 56% of the above guides are registered in some form or another. Here I would like to mention that South Africa is a leader in the field of outdoor guide training and registration. Currently, behind the scenes there is a lot of work being done to simplify and improve this process.
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Risk Invariably the nature of the adventure industry makes us a higher
CHART 16
risk factor than most other industries. This is however something
This chart indicates client injuries, guide injuries and deaths over a
that must not be ignored as it is a reality. It is your responsibility to
12 year period. Of the companies surveyed, 39% were serious client
manage that risk. Currently 14% of adventure companies in South
injuries, 11% guide injuries and 8% were deaths.
Africa operate without any insurance.
% Companies with injuries and deaths over a 12 year period.
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CHART 17 This chart shows how much liability insurance adventure companies carry compared to the size of the company. The average liability insurance is 15.5 million.
Insurance
10m +
5 - 10m
2.5 - 5m
1 - 2.5m
500K - 1m
250 - 500k
0 - 250k 0,00 mil
10,00 mil 0 - 250k
20,00 mil 250 - 500k
500K - 1m
30,00 mil 1 - 2.5m
50,00 mil
40,00 mil 2.5 - 5m
5 - 10m
60,00 mil
10m +
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Conclusion After spending many hours on the phone with all the owners and managers of the adventure operators whom I surveyed, and staring at statistics from the survey, I can with confidence say that the adventure industry in South Africa is healthy and growing. By growing I not only mean in size but stature as well. To date the industry has mostly regulated itself with promising results. Dirty Boots will support and encourage any further selfregulation, as this encourages growth in the adventure sector. On the marketing front, the adventure industry is aggressively marketing itself to the domestic market but very little money is spent on increasing the international incoming market. We certainly could give this sector a little more attention. The area that needs most attention is the creation of live online reservation systems and Risk management. Remember that all adventures involve a certain risk factor. Let's not be scared by the risk, but manage it properly. All said and done, the South African adventure industry is professional and an asset to the country as a whole.
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