One could see it coming! The marketing of Cape Town and the Western Cape province has been a problem for the last number of years, in that the province and the city were run by the Democratic Alliance and ANC parties, respectively. That is, until last year, when the Democratic Alliance won the city and the provincial elections. The new MEC for Economic Affairs, Finance and Tourism, Alan Winde, vowed from the word go that he would address the strained relationship between Cape Town Tourism and Cape Town Routes Unlimited, as far as each body’s marketing of Cape Town in particular, but also of the Western Cape province, is concerned. Now the relationship is about to become more, rather than less, strained!
One needs to go back in history to paint a picture of continuous turmoil in the tourism industry. Initially Cape Town Tourism was marketing Cape Town, and the Western Cape Tourism Board marketed the province, a harmonious relationship existing between the two tourism bodies, one funded by the City of Cape Town, and the other by the province. As the political parties changed, new Ministers of Tourism at provincial level tried to reinvent the wheel, and the biggest change of all was the establishment of the Destination Marketing Organisation (DMO), taking over the old Western Cape Tourism Board, as well as the marketing role for Cape Town from Cape Town Tourism, about seven years ago. Cape Town Tourism only retained its role as Tourism Information agency.
Numerous complaints from the tourism industry about the lack of marketing visibility of Cape Town, the “gateway” to the rest of the Western Cape, were aired, and the new DMO, which became known as Cape Town Routes Unlimited, was blamed for not knowing what it was doing. Political differences between the province and the City of Cape Town, as well as the lack of Cape Town Routes Unlimited’s marketing performance, led the City to withdraw its 50 % contribution to the running of Cape Town Routes Unlimited two years ago, leaving that body vulnerable in terms of its funding, and crippling it in terms of its marketing role. The City signed an agreement with Cape Town Tourism, whereby it allocated its previous Cape Town Routes Unlimited funds to Cape Town Tourism, with the responsibility for the agency to market Cape Town in addition to its tourism information role. Due to its funding cuts, Cape Town Routes Unlimited was forced to cut its marketing projects dramatically, and to focus mainly on marketing the province.
However, Cape Town Routes Unlimited did not leave the marketing of Cape Town out of its marketing strategy, and once again the industry complained about the duplication in the marketing of Cape Town by both bodies, something that the new DMO had been created to avoid. When Winde, and his counterpart in the City of Cape Town, Felicity Purchase, met last year, the two marketing partners agreed that they would encourage co-operation and that they would avoid duplication where possible. Winde confirmed that there would be no consolidation of the two bodies. The industry was told that a strategy of co-existence between the two bodies would be presented to it, but no such strategy has been forthcoming in the past year. Cape Town Tourism was forced to appoint a Cape Town Routes Unlimited director on its Board (this is not reciprocated on the Cape Town Routes Unlimited board), to ensure that the two bodies were aligned.
This week the Minister changed his mind, and made the shock announcement that he is “pushing for the speedy implementation of a new efficient destination marketing model so that the region may benefit from the current window of opportunity created by the Soccer World Cup”, reports Southern African Tourism Update. Now this sounds like a ludicrous statement as a start - another DMO in the making, when we have one already? Did we not just host the most amazing World Cup without integration of the two bodies? What window of opportunity is the Minister referring to? Why did he not get his act together, and create a united body before the World Cup, when it was needed most? Accommodation in Cape Town and the Western Cape was not well booked for the World Cup, and the city did not have a single soccer team setting up a base camp in it.
Reading the Southern African Tourism Update article, and having been closely involved with the setting up of the DMO whilst I was Deputy Chairman of Cape Town Tourism, it sounded like deja vu. The Minister wants to set up a new DMO, with a new “trading name”, responsible for the “marketing of the province, regions and cities within the Western Cape - as well as single tourism brand for the destination.” This is exactly what Cape Town Routes Unlimited is meant to be, currently having the schizophrenic brand name “Cape Town and Western Cape”, all of which was criticised by the industry when it was launched about 5 years ago!
The new DMO would be solely funded by the Western Cape province, according to the Minister, and all municipalities in the province must contribute to the DMO, including the City of Cape Town, endangering the marketing role which has been allocated to Cape Town Tourism. Members of Cape Town voted by overwhelming majority to support the acceptance by Cape Town Tourism of the marketing of Cape Town at its AGM two years ago. Municipalities must present their marketing plans to the new DMO, it is proposed, and define how they will support the marketing activities of the DMO. The Minister also wants to move the head office of the DMO from Burg Street to the V&A Waterfront, in a building to be called “Tourism HQ”, to be “more visible and accessible to tourists”! Now this is something I do not understand, given that Cape Town Tourism is responsible for tourism information and accommodation bookings, via its network of tourism bureaus around the Cape Town metropole, including Somerset West and Strand. The first problem one saw was when Cape Town Routes Unlimited set up a “Gateway” tourism bureau at the V&A Waterfront, taking the “ownership” of it away from Cape Town Tourism, even though it is staffed by and carries the branding of Cape Town Tourism!
The municipalities were presented the new model by the Minister last week, and they have been given two months to table their response. It is interesting to see how the new Cape Whale Coast DMO will deal with this news of the Minister, as it set itself up as a marketing agency for the coastal area stretching from Rooi Els to Gansbaai and including Hermanus. This DMO is already making the fatal error of encouraging the members of the local tourism bureaus to become members of the DMO, in addition to being members of the bureaus.
Winde motivated his new strategy on the basis of “absolute duplication of national, provincial, and municipal marketing resulting in taxpayers’ money being spent three times in the same place”. He stated that the Cape Town Tourism and Cape Town Routes Unlimited marketing of the city and the province caused confusion, and that the city and province did not have a clearly defined marketing strategy.
Not surprisingly Cape Town Tourism is not happy with the Minister’s announcement, and its Board announced last Friday that it will oppose the Minister’s move. CEO Mariette du Toit-Helmbold’s words were carefully chosen when she wrote: “Cape Town Tourism has noted the proposal and embarked on a comprehensive negotiation process with the City of Cape Town and the office of the MEC. The Board of Cape Town Tourism has indicated that it is not in agreement with the proposal in its current format.”
She continued by stating the support of the City of Cape Town for the marketing role of Cape Town Tourism in marketing the city, exactly what the Minister proposes to change. She wrote: “Cape Town Tourism is committed to protecting the interests of tourism in Cape Town and finding a workable solution that will most effectively realise the tourism opportunities in the city, whilst eliminating duplication and confusion. Cape Town Tourism has received reassurance from the City of Cape Town that we are and will remain the City’s tourism promotional and marketing body and that Cape Town Tourism’s structure will not change.”
It is disturbing to see that the same tourism marketing issues are being addressed again, and that tourism history is repeating itself, a waste of taxpayers’ funds in itself. It appears that every new provincial Minister of Tourism in the Western Cape sees it as his role to redesign the tourism bodies and their role, much like new Marketing and Brand Managers like to change their marketing strategies and advertising campaigns (and ad agencies at times too), just to make their mark.
This is likely to become another long drawn-out battle between the City and Province about the marketing of our precious brand “Cape Town”!
POSTSCRIPT 26/7: Cape Town Tourism has sent out another e-mail to its members, reiterating its view about the Minister’s proposal, and has made the document available, inviting comment and input from its members: “I informed you of the proposed centralised model for tourism marketing that was put forward by the MEC for Tourism and Economic Development, Minister Alan Winde. Cape Town Tourism has indicated to the office of the MEC and the City of Cape Town that the proposed model for a single, provincially centralised tourism destination marketing structure and brand for Cape Town and the Western Cape is patently misguided. If implemented, it will have negative consequences for tourism in Cape Town” , wrote Cape Town Tourism CEO today.
Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com
Cape Town Tourism issued a media release “A Mid-Way 2010 FIFA World Cup Report from Cape Town Tourism” on Friday, which has (frighteningly) been picked up by news agencies and reported upon immediately.
My problem with surveys conducted by companies that do not have the faintest idea of market research is that the answers received will only be as good or as bad as the questions asked. I knew immediately that the results would be used for publicity purposes when I received a survey participation request as an accommodation establishment from Cape Town Tourism two weeks ago.
The first questionnaire was embarrassingly bad, with poor grammar, poor time scales provided as answer options, leading questions asked, and a 5-day timeline referred to when they meant 7 days! I wrote to Cape Town Tourism CEO Mariette du Toit-Helmbold immediately, telling her that it would be irresponsible if the results were to be used for PR purposes. I offered my help, having been a market researcher for 20 years, and was sent the second accommodation survey for input a week later. I had to correct almost every question, and hoped that it would be used as it had been corrected. But no, many questions were altered, new ones introduced relative to the draft questionnaire, making comparison between week 1 and week 2 impossible, more grammatical errors were made in that my corrections were “corrected” nonsensically, so much so that I wrote to Du Toit-Helmbold again, withdrawing my offer to assist in future, in not wanting to be associated with such unprofessional work and by implication condone its irresponsible use for publicity purposes.
And so two days after the last “survey” went out, the results of the two weeks’ “surveys” were neatly packaged and presented as a valid “survey” and findings presented as the gospel in a press release for all the world to read!
The first problem is that the sample size is not specified - i.e. the number of respondents relative to the universe of accommodation establishments. Second, the “survey” only would reflect Cape Town Tourism members, and not all accommodation establishments in Cape Town (in Camps Bay, for example, most guest houses do not belong to Cape Town Tourism) - this is not mentioned in the press release, which is irresponsible in itself. Third, the geographic definition that was used in the press release was the “Cape Town Metropole” - in my definition that would be the inner city of Cape Town, but in the definition of the City of Cape Town, it would be the municipal area of the whole area of Cape Town (e.g. Southern Suburbs, Atlantic Seaboard, Northern Suburbs, and even Somerset West and Strand). Incorporating all of these areas of greater Cape Town would certainly skew the findings - whilst the press release referred to such areas as Green Point and City Bowl, the suburb of the respondents was not asked in the questionnaires, which makes one wonder how they got to this information!
And so if one were to waste one’s time in evaluating the results of the accommodation “survey”, the finding of a 40 % average occupancy would reflect the geographic bias in the “survey” design, as low occupancy of guest houses in Somerset West or Durbanville would reduce the higher occupancies in the city and Atlantic Seaboard areas on average. The press release reports an average occupancy of 71 % for the City Bowl, Waterfront and Green Point areas. Once again, this finding is questioned as the geographic question was not asked, and the respondents were anonymous! Where the press release states that the “survey” found that business had improved in the second week of the World Cup, our experience in Camps Bay is the opposite, it having become very quiet since the departure of the England fans last Monday. The majority of the 25000 Dutch fans (unfortunately for Cape Town) camped at the Berg River Resort in Paarl.
Even worse is the predictions that are made by the writer of the release, sent out by the Cape Town Tourism’s PR company Rabbit in a Hat Communications, the authors of the “survey” questionnaire. It finds that the average length of stay is only 3 - 4 days (we would disagree), and predicts that the “length of stay in Cape Town will increase as the tournament progresses. Cape Town hosts a Quarter Final on Saturday, 3 July and the Semi Final on Tuesday, 6 July 2010 and expects visitor numbers will peak during these times”. Anyone observing the movement of soccer fans will know that this is a dangerous prediction to make, and that soccer fans follow their teams, not cities! The teams playing the Round of 16 in Cape Town tomorrow are Portugal and Spain, and Germany faces Argentina in the Quarter Final on Saturday, but no additional bookings have been received from their fans. The teams for the Semi Final are not yet known, and therefore bookings are not being made for these dates yet. However, it may be impossible to still buy tickets for these last three Cape Town matches, as they were the first to be ’sold out’, according to media reports.
More reliable information is contained in the press release as far as other tourism World Cup indicators are concerned:
* Cape Town International airport reports that its number of international arrivals is up by 44 %, the busiest day to date being 20 June, when 25 000 passengers were “processed”. Bookings for flights to South Africa were being made while England was playing Slovenia last Wednesday, the release says.
* Luxury coach company Springbok Atlas reports fully booked coaches, with two trips per day per coach on average
* Car rental companies “are reporting mixed results, many saying that figures have been disappointing but that business increases around match days”, say the press release.
* The 18 branch offices of Cape Town Tourism report a 16 % increase in “international visitors” and a 3 % decline in “domestic visitors”, compared to the same period as last year. One wonders how this is recorded, as the country of origin has never been seen to be recorded when visiting such a branch.
* The V&A Waterfront reports that its tenants are enjoying trading as in the summer season, with 150 000 - 160 000 persons per day (not all tenants would agree).
* The Table Mountain Aerial Cableway Company reports increased business of 50 % higher than in 2009
* The Cape Quarter reports good results for its restaurants, and less so for the retail tenants
* Tour operator business has increased by 20 % (this comes from another Cape Town Tourism “survey”, so the result should be treated with caution, as the sample size was not revealed)
* Restaurants must be trading very poorly, as their business levels compared to 2009 are not reported
* Probably the most valuable measurement of success of the World Cup to date is the media coverage for Cape Town. Cape Town Tourism reports that it has hosted 205 international journalists since January until 10 June, mainly focusing on the readiness of the city to host the World Cup. Since 11 June 85 international journalists were hosted on sightseeing tours of the city, and information was provided to 93 media channels. The Media Centre at the Cape Town Stadium, as well as at the Fan Park at the Grand Parade, is staffed by Cape Town Tourism, and the brochures and information packs provided to the media are commendable.
(An irony is that FIFA President Sepp Blatter wanted a new stadium in Cape Town for media purposes, because Table Mountain could not be seen from the old Green Point Stadium. The few meters that the Stadium had to be moved meant a spectacularly beautiful new building for the city, which in fact is the backdrop for much international media reporting, taking away from the beautiful landmarks Cape Town has. The new Stadium therefore is an important landmark in its own right, a surprise outcome).
* VIP visitors to Cape Town have been an accolade for the city (not reported upon by Cape Town Tourism), and the stay in Cape Town last week by Princes William and Harry, London Mayor Boris Johnson and David Beckham have already been documented on this blog. Now Bill Clinton is visiting the city, staying at one of the Penthouses of the One&Only Hotel in the Waterfront. Prince Harry has also returned to Cape Town after last week’s match, and was seen having lunch at the Grand on the Beach on Thursday.
* One should not forget how good Cape Town is looking, and the World Cup has done the city proud in its upgraded and largely smooth-flowing N1 and N2 highways, its beautiful new airport building and recently renovated train station, its modern buses, upgrade of Green Point, upgrade of the Grand Parade, the great walkability of the Fan Mile, the greening of Green Point, and upgrade of the Metropolitan Golf Club, new modern street lighting around Green Point, the lit-up Table Mountain - all combining to make Cape Town feel like a world-class city, even to its residents!
* If media reports are to be believed, Cape Town has been approached to host the Olympic Games in 2020 - what an amazing compliment for the city.
To fill the tourism gaps in Cape Town (having been left out of much of the action in only having eight matches played at the Cape Town Stadium, and no teams based in the city), Cape Town Tourism has embarked on a “Come to Cape Town” marketing campaign, to attract Johannesburg-based soccer fans to come to Cape Town in-between matches. Airline partners are offering flights at R 700 one-way, while accommodation establishments are offering their rooms at R 500 per person.
* Cape Town Tourism’s funder, the City of Cape Town, simultaneously reported on the status of Cape Town, but this was not incorporated in the Cape Town Tourism press release. Mansoor Mohamed, the Executive Director of Economic and Social Development and Tourism of the City, indicated that informal traders were doing well, more expensive hotels were experiencing low occupancy (20 - 40 %), and that restaurants “are also doing better than expected trade, with some even beating their actual Christmas figures”, reports South Africa.info. We disagree with the restaurant finding, having experienced empty restaurants, and observing soccer fans mainly ordering beer and very little food when they sit in pubs and restaurants. Mohamed has admitted that his observations are based on “initial surveys”, and stated that the economic impact of the World Cup will be established by means of comprehensive research at the end of the tournament. “The World Cup is the single most important event for South Africa and the African continent in recent time. It is positively changing the world’s perceptions about Africa” Mohamed said.
* A very low-key but most high profile event taking place in Cape Town until today (not reported upon by Cape Town Tourism in their media release) is the Fortune, TIME and CNN Global Forum. About 140 heads of global and local companies such a Royal Dutch Shell, China Mobile, Deutsche Bank, The Coca Cola Company, DuPont, Rio Tinto Group, McKinsey & Company, Trilogy, Merck Vaccines, Kissinger Associates, Inc, De Beers Group, Richemont SA, One&Only, Naspers Limited, De Beers Group, SEACOM Limited, ABSA Group Limited, Standard Bank Group, Symantec, First Rand Limited, Sanlam Limited, Pioneer Foods, Investec Asset Management, and Daimler, paying $5000 each to attend, will meet influential persons from TIME magazine’s top 100 list, reports the Weekend Argus. Bill Clinton, Ex-President FW de Klerk, Minister in the Presidency Trevor Manuel, Minister of Trade & Industry Rob Davies, Francois Pienaar, and World Cup Local Organising Committee Danny Jordaan and others will be addressing the Forum, while President Zuma will be addressing the delegates via satellite from the G20 summit in Canada. High level journalists and news anchors from Time, Fortune, CNN, and CBS News will also attend the Forum at the Cape Town International Convention Centre. Delegates are staying at the Mount Nelson Hotel and the Cullinan Hotel.
There can be no doubt that Cape Town is busier than it would have been in any other June. The reality is that May was the worst month ever experienced, the World Cup having created a vacuum of bookings. One hopes the same is not true for the rest of July. It is disturbing to see the low number of bookings made for Christmas and New Year, traditionally the most popular period in Cape Town, and a period that would have been booked up by now already. If Whale Cottage Camps Bay is anything to go by, it is going to be a lean summer, despite the World Cup hype - the British travellers are the largest source of bookings for Cape Town, and they are under severe financial pressure with the new Conservative/Lib-Dem government having imposed stringent financial measures in their budget earlier this week, including an increase in VAT of 2,5 percentage points to 20%. Many countries in Europe are also facing tight economic measures imposed by their governments (e.g. Greece, Italy, Spain) and even Germany is affected by Europe’s economic woes.
An interesting issue is the effect of the World Cup on travel aspirations to South Africa of Americans. The American soccer fans were the largest ticket-buying nation of all, beating England and Germany, and were the first to book, more than a year ago.
Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com