Tourism Seasonality in the Cape: it’s getting worse!

Every year Cape Town Tourism and Cape Town Routes Unlimited, both bodies tasked to market Cape Town, tell the tourism industry that Seasonality is a problem unique to the Western Cape, and that they have planned events for the quieter months and scheduled more advertising, to address the problem which swallows up in the winter months the income generated in the summer months.

To evaluate Seasonality for our Whale Cottages, we went back to our Occupancy information as far back as 2007, and found interesting trends:

*   Occupancy for Whale Cottage Camps Bay was at 72 % on average in 2007, 70 % in 2008, and dropped every year, to 63 % in 2009, 56% in 2010 and 41% this year to date.

*   During the period May – August, the Cape winter season, Whale Cottage Camps Bay Occupancy declined year on year, from 54 % in 2007, to 45% in 2009 and 2010, to 28% this year, an almost 50 % decline in Occupancy between 2007 and 2011!  Despite an average Occupancy of 70 % over the World Cup, from 11 June – 11 July last year, the World Cup had no effect on 2010 Winter Occupancy, as the good June and July performance was negated by a sharp decline in Occupancy before (19 % in May, being the lowest Occupancy ever in the five year period) and after (36% in August last year, vastly down compared to previous years) the 2010 Soccer World Cup.

*   Every individual month has seen a decline in Occupancy for Whale Cottage Camps Bay over the past five years, February 2011 showing the least decline in Occupancy (88% in 2011, our best month by far this year, compared to 97% in 2007), and September 2011 showing the most drastic Occupancy decline (28% in 2011, compared to 60 % in 2007).

*  These trends apply to Whale Cottage Hermanus and Whale Cottage Franschhoek too, both towns having seen Occupancy in 2007 (on average around 50%) halve this year for the period January – September.

*   Hermanus recovers from Seasonality more quickly in winter, due to the arrival of the Southern Right whales from May.  However, in the last two winters the average Occupancy was around 10% (despite the World Cup, which made no impact on business to this town), compared to 40 %  on average in 2007).

*   Franschhoek shows a similar Seasonality decline, but is at a far lower level in winter, dropping by half from 16 % in 2007, to 7%  this winter.  The World Cup made no impact on business.  The village has seen a decline in the number and size of weddings, and despite an increased activity in hosting events, which fill up the guest houses for the two days of the event, the remaining 28 days remain close to empty!   The trend is for a vastly reduced Occupancy, from 41 % on average in 2007, to 13% on average this year, for the period January – September.  September has been the month with the most drastic decline in Occupancy in the past five years, but Occupancy declined consistently year on year in each of the months.

*   The Occupancy trends reflect the changed tourism pattern, with more international tourists staying in Cape Town, and not travelling to inland towns to stay over, doing a day trip to Hermanus and Franschhoek at best.  Cape Town Routes Unlimited is responsible for marketing the Western Cape, and it appears to have failed in its work, if our figures are taken as a benchmark.  It shocked me to hear that Cape Town Routes Unlimited has lost both its Marketing Executives David Frandsen and Itumeleng Pooe, and that all marketing is now handled by the CEO Calvyn Gilfellan.  Cape Town Tourism’s Marketing Manager Velma Corcoran has only been in the job for a month, and has not made her mark in any way.  She has no tourism marketing experience specifically, and no marketing experience generally.

Not having a firm statistic as to the contribution of UK tourists to our Whale Cottage business, we checked our country of origin statistics over the past years.  This source market has represented as much as 53 % (November 2007) of our bookings over the past five years, but the average has been at around 33%.  It is this percentage of bookings which we will miss this summer, as bookings from the UK are extremely rare, due to the economic woes of the United Kingdom.  German bookings for Camps Bay have represented as much as 24 % (December 2007), but have seen a steady decline over the past five years, averaging at about 10 – 15 %. Our forward bookings show a strong increase in German bookings for this summer. Not surprising is that the proportion of South African bookings has climbed steadily, as we have lost international business, and this may also be due to our Whale Cottages still charging affordable 2007 rates, and discounting rates by close to half in the winter months.

A Carte Blanche programme on Sunday highlighted the tourism crisis.  Portfolio of Places CEO Liz Westby-Nunn spoke about 52 of her client establishments having closed down in the past year.  She has been in business for about 25 years, and business is so bad that she has consolidated her three Portfolio Guides into one, and has dropped her advertising rate by about 50%, just to hold on to her clients.  Mrs Westby-Nunn has been a feisty business person, who took 20 % advertising rate increases year on year in the past.  Clive Bennett, Managing Director of the One&Only Cape Town, said that “We aren’t seeing growth we should be seeing, and you couple that with the surplus number of beds, sadly there are going to be closures”. Bennett added that the recession had hit South Africa post-World Cup. Shamwari’s Tom Jager said that business for them has seen ‘a big drop’.  SA Tourism’s Chief Marketing Officer Roshene Singh said she would look at the impact of the tourism industry’s poor performance on jobs at the end of this year.  SATSA President Heather Guiterrez was controversial in stating that blaming the recession is a convenient excuse:  “There is 4% tourism growth within tourism worldwide, and we’re not seeing it in South Africa. In fact, we are seeing a huge decline of tourism into South Africa”.  She blames the lack of post-World Cup marketing for the current status.  ‘South Africa went dead. People don’t go to a country that goes dead’, she said.  SA Tourism defended its work, stating that April had seen a 7,5 % increase on the year before.  Ms Guiterrez said that SA Tourism does not have enough marketing money to market South Africa on international TV, and this was confirmed by Ms Singh, stating that their marketing budget is minuscule relative to their main competitors.  Mrs Westby-Nunn was critical of the official arrival statistics, stating that the 8 million figure should be closer to 1 million. The tourism players interviewed said that the impact of the decline in tourism is its effect on job creation, the target of 250000 having been set, and would not be achievable.  Both Bennet and Protea Hotels CEO Arthus Gillis called for more flexibility in the airlines, allowing charter flights, and making SAA the tourism loss leader, to bring as many tourists to the country as possible.  Gillis says his business is predominantly focusing on domestic tourists, being their ‘saviour’.

We received the following response to our latest WhaleTales newsletter from Herbert Henrich, a fellow guest house owner in Franschhoek, and he hits the nail on the head in confirming the poor state of the guest house industry: “Thank you for your most comprehensive ‘Tales’ and the detailed information contained therein. For one, like me, sitting on the hospitality industry outer parameters, your reports provide much insight in what would remain obscure otherwise. Our business suffers. The reasons are probably a) global recession and b) lack of exciting promotion of South Africa as a special tourist destination. The most remote parts of the world are being offered to potential  tourists on TV almost daily. Very little – if anything – from the RSA. But promotion alone will not re-instate what once was a flourishing industry. There will still be the economic millstone around the consumers’ neck. Hence, business will shrink and establishments will close down, bringing about further lack of income and loss of jobs. Our operational cost go up, however, irrespective of the business slowing down. Municipal rates, levies, electricity, taxes – you name it, will be collected whether there is income or not. I would suggest that it is time that the government will consider easing up on us somewhat. Why do we still have to pay inflated rates for business premises which bring no business? Is it not time the government supports those who do not close down in order not to increase the number of job-less ? Those who actually subsidize the government rather than the other way around ? I think the hospitality industry, which has no alternative replacement business option , should make a united appeal to provincial and national government departments to reduce their every increasing fiscal demands and allow some time to regroup and allow the business to come back to some sort of reasonable level”.

We once again call on Cape Town Tourism and Cape Town Routes Unlimited to involve our industry in utilizing our information as a predictor of tourism activity for the season ahead, and to focus on the domestic market, in getting them to Cape Town.  Our tourists are not on Twitter and Facebook, in our experience, and need good old-fashioned advertising and articles in newspapers and magazines to attract them to our beautiful Cape.

Chris von Ulmenstein, Whale Cottage Portfolio:  www.whalecottage.com Twitter: @WhaleCottage

10 replies on “Tourism Seasonality in the Cape: it’s getting worse!”

  1. Rose says:

    These are interesting stats that you show and for which we need to be grateful that you have taken the effort to do the exercise.

    I watched the Carte Blanche programme as hospitality decor is my field of trade. Again I am grateful that this tourism slump is continually being highlighted for the general public’s awareness, and hopefully to urge the relevant bodies into action in terms of marketing our region and country.

    One wishes you could have a magic wand, wave it and find an instant solution. But life wants something different from us. These are my thoughts on it:

    Regretably the content of the Carte Blanche program and other publicity, is typically weighted more towards the ‘problem/challenge’ at the expense of possible solutions. Suggested solutions only being skimmed over. I always have the attitude -‘don’t come to me with a problem. Make it a challenge with a solution.’
    I would have liked to see the program content weighted something like 60% problem and 40% solutions. We have a deep well of brain power to draw from in our country’s tourism industry leaders – out of that surely a more collaborative body can be formed to motivate and spearhead the marketing campaign. Particularly since it seems that there is a reluctance from the parties that have been officially charged with this mission. Is it not time for the tourism collective to rise & take charge with fresher marketing initiatives? I have no idea if this is happening, but from what I read I am not left with that impression.Perhaps I am missing something.
    A start has been made, now the momentum has to increase.

    Having said all of this, I have to commend you on all your efforts made working towards a solution. Particularly with your blog publication. We need to clone you as an agent of change.Then put all around a table and a solution will arise.

  2. Dear Rose

    You are so sweet, making me laugh and blush!

    The tourism authorities don’t like hearing the reality from people like me, and that is why Cape Town Tourism is trying to silence me, instead of embracing the tourism experience that we have, and allow me to sit and brainstorm with them. They think they know all the answers, especially given that they bring in international consultants.

    We must meet for coffee please.

    Chris

  3. MAKE SOUTH AFRICA THE GREENEST DESTINATION

    Lets stop promoting the big five. At Toursim Indaba most exhibitions seem to be safari related… of it seems that way. I recently spoke at Getaway Conference and most of the speakers presented a very bleak message. A Google exercise showed Mandela Square as the most often searched keyword. So lets promote shopping, Jozi’s amazing new vibe, the Karoo, Colonial KZN, winelands, mountains, Bohemian Kalk Bay, trendy Camps Bay, adventure

    I firmaly believe that will good management and little effort we could make South Africa the greenest destination in the world. Clearly standardised green criteria for certification, realistically priced audits and workshops on green operations.

    Since we launched our Greenstuff link 3 years ago, hits have increased by 5000%. Says something! Our workshops are growing ever more popular and readily accepted. We recently collaborted with Eskom to guide the hosts for the COP17 delegates on going green. Eskom presented on their incredible incentive schemes and we presented on how to choose carbon auditors carefully, energy, water and waste management and green operations and procurement. Did something similar at breakaway workshop at Tourism Indaba. Very well received. In early November we run another workshop in collaboration with Eskom and would love to see you there. Its free. Invite anyone. All are welcome. Just email me at info@hotelstuff.co.za.

    Work with me on this. We can do it. I have spent 30 years trying to green hospitaltiy in South Afria (15 as contracts manager for major hotel chain) and it is happenening. We don’t sell anything. Our sole revenue is via our directory. At Hostex proved I could furnish a complete mock hotel with only eco products and at Decorex we won Best Overall Stand (and we weren’t even competing!…. we were there simply to educate)

    i met you at a Slow Food lunch a while back and look forward to your newsletters with glee!

    Go well,
    Lorraine Jenks
    Hotelstuff/Greenstuff

  4. Dear Lorraine

    Great to hear from you – it was the Slow Food lunch in Elgin, if I remember correctly.

    I would love to hear more about what you do, and would love to have a coffee with you.

    Chris

  5. Rose says:

    Maybe the three of us need to get together for coffee sometime – three birds with one stone so to speak.

  6. Nick Jones says:

    Wake up Soith Africa, otherwise your tourism industry will disappear. Start to get a grip on your poliicians, otherwise you will end up as a basket case, like Kenya is rapidly becoming. (I do speak from an experience as a visitor since 1972).

    At present I’m watching a progamme on Channel 4 (UK), showing the blatant corruption amongst many of your ruling elite, both local & national. This corruption must be stamped out for the sake of all you wonderful people.

    Apologies for my rant, but I do worry greatly about your wonderful country. “Go Bokke”

  7. Thank you Nick, always interesting to hear your UK perspective.

    All of a sudden Cape Town is buzzing, with the sudden arrival of summer (and some tourists) making everyone happy, positive and friendly. The service levels I received at TELKOM, Vodacom, the Apple store, Nu Metro, Pick ‘n Pay V&A, and Willoughby’s today was better than experienced in months – a fabulous Cape Town day!

    Who were the politicians featured Nick?

    Chris

  8. Nick Jones says:

    Hi Chris,

    The programme was about the corruption in the townships around Jo’burg & aimed at the patronage provided for the ANC members. As usual, it’s the poor who suffer whilst the rich get richer.
    We’ll be enjoying some of that wonderful Cape sunshine in just 157 days! 🙂

  9. Yes! Strength in numbers! Yes please to coffee, Chris, Rose and me. I’m housebound in Lakeside with a new hip; got home last night. Would it be humanly possible for you to to get here? I have so much to share and such a wonderful success story to tell and bursting with ideas and solutions. I fear I may forget to check this blog – so please email me on info@hotelstuff.co.za or phone 082 900 0929.
    (It was Elgin and we had yummy deboned oxtail and the venue was Lemon-something?)

  10. Thanks Lorraine, and I hope you can hip hop soon again!

    I hope Rose sees this – I’ll try her on Twitter too.

    Chris

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