Entries tagged with “tourism industry”.
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Sun 20 Jan 2013
Councillor Grant Pascoe has been rubbing his hands with glee since The Times reported the extent of the financial losses the Africa Cup of Nations (AFCON) 2013 Host Cities are suffering, when he single-handedly was responsible for Cape Town losing out on being selected as a Host City. Even Western Cape Premier Helen Zille Tweeted a link to the article, which only quotes DA politicians in the respective Host Cities, despite this being a City of Cape Town and not a provincial issue!
The Times article reflects that it is the smaller municipalities that are struggling in particular, including Nelson Mandela Bay municipality in Port Elizabeth, using R11,6 million of ratepayers’ monies to fund its hosting of the event. The city is still bearing the load of the cost of hosting the 2010 World Cup, having overspent on that event by more than R500 million. Mbombela municipality in Nelspruit is allegedly spending money it does not have on AFCON 2013, not yet having signed a memorandum of understanding with the government to obtain R31,5 million in funding for the event.
Cape Town withdrew from the bid to be a Host City initially, and ‘refused to be bullied’ into the event. When the city changed its mind about its participation, the door was closed on what was deemed to be too many demands made by City of Cape Town Councillor Grant Pascoe, Mayoral Committee member for Tourism, Events, and Marketing! This cost Cape Town the bid for Host City!
Reacting to an editorial by the Cape Times, Councillor Pascoe wrote a letter in response, which was posted on the City’s website, justifying Cape Town’s non-participation, sounding very different to his explanation of the Host City snub when it was announced last year. He wrote this week that the City is supportive of Bafana Bafana (that is not being debated!) and the growth of African football, and that ‘we would have, in principle, been more than pleased to host AFCON matches. In fact, we did everything in our power to make the hosting of matches a reality’. This contradicts the Local Organising Committee feedback about Cape Town’s failed bid at the time.
He continued: “However, as a responsible government, this administration needed to weigh the service delivery needs of all our residents with the benefits of hosting AFCON. Our mandate remains to make every cent of our ratepayers’ money count. And our commitment to caring and providing for our citizens, particularly the poor and vulnerable, remains paramount. We must always ensure that money spent by the City, is done so to drive economic growth, development and inclusion. We had entered the negotiations with AFCON in good faith and were committed to the process. But it became clear we could not accept demands which could place an unfair burden on Cape Town’s ratepayers. At the time, costs to the ratepayer for the tournament were estimated to exceed R50 million. Your editorial refers to the “enthusiastic support” Cape Town’s soccer fans displayed at last week’s friendly encounter. This event was hosted by the City as a show of support for Bafana Bafana before their participation in AFCON. It is just one indication that the City of Cape Town and its residents remain highly supportive of Bafana Bafana and AFCON. While Cape Town will not host AFCON matches, we wanted Cape Town sports enthusiasts to experience live international soccer in the run up to the tournament. Ticket sales were in excess of 37 000. The City remains committed to the hosting of high profile national, regional and international football matches. We are currently in negotiations with a range of partners to this effect”.
He also expressed a touch of Schadenfreude to a Cape Times journalist on Friday, saying that Cape Town had ‘dodged a bullet’ financially ‘by being snubbed from the tournament’, and ’sympathised’ with the Host Cities’ financial woes and poor ticket sales. ‘I think that we have dodged a bullet because the government guarantees came too late. There was no clarity on how much host cities would have to spend. I’m really sorry that the host cities are battling with money for the tournament. It is something that we were concerned about because we had to think about our service delivery obligations’, Pascoe told the journalist.
Ticket sales have been sluggish across all matches, and only the opening match yesterday between Bafana Bafana and Cape Verde resulting in a goalless draw, was sold out. The television coverage showed that not all ticket holders had arrived at the stadium, with lots of empty seating, possibly due to the torrential rain which Johannesburg experienced yesterday. Umbrellas were listed on the banned list of dangerous items! It appears that one way that the municipalities can make their money back is via beverages. Yesterday a Tweet of the beverage prices at the (AFCON 2013 renamed) National Stadium in Soweto showed a 500ml bottle of water costing an exorbitant R45!
The City of Cape Town is conveniently hiding behind the financial problems of the two smaller municipalities, which have not been reported for Durban and Johannesburg, being more comparable to Cape Town. The loss in tourism revenue at a time when Cape Town is almost devoid of tourists over the next two weeks, and the international television coverage for AFCON 2013, would have been valuable for brands Cape Town and the Western Cape and its tourism industry, and soccer fans too. It is hard to believe Councillor’s Pascoe supposed concern for ratepayers’ monies when he knows that he was part of a 10 person sightseeing tour of Turkey last year, of which no Turkish tourism benefit has been seen locally, he allows Cape Town Tourism to squander ratepayers’ monies, and he organised the loss-making Bafana Bafana vs Norway friendly at the Cape Town Stadium two weeks ago!
POSTSCRIPT 20/1: The Times reported on Friday that an estimated 1 billion television viewers will have seen the Opening Ceremony yesterday, reflecting the AFCON 2013 theme of ‘Celebrate Africa - The Beat at Africa’s Feet’. The newspaper also reported the concern about the African invader fly being an unwelcome visitor to South Africa for AFCON 2013, food (fruit especially) brought along by soccer fans from Africa potentially being contaminated with the fly. On Friday Spar took a full page advertisement in The Times to apologise ‘to all our loyal customers for any inconvenience created by the AFCON voucher/ticket redemption process’. However, it is not clear what problems the retailer is referring to.
Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com Twitter: @WhaleCottage
Wed 24 Oct 2012
In order to reassure its members about its future role, Cape Town Tourism issued a media statement late yesterday afternoon, the content of which will make the tourism industry even more confused.
At the AGM of Cape Town Tourism on Thursday, preceded by an e-mail sent to members the day before, it was announced that the City of Cape Town is taking over Cape Town Tourism’s role of Destination Marketing, and that the tourism organisation would focus in future on Visitor Services and on Tourism Marketing, even though it was not clear what the difference is between Tourism Marketing and Destination Marketing.
The media statement says that Cape Town Tourism as an ‘organisation will remain a dynamic industry organisation delivering tourism destination marketing and visitor services in line with its Constitution’. On Monday we wrote that taking away the Destination Marketing function of Cape Town Tourism is in breach of Cape Town Tourism’s Constitution.
While the City of Cape Town’s Executive Director of Tourism, Events, and Marketing (TEAM), Anton Groenewald, had been clear that Cape Town Tourism will only handle ‘Tourism Marketing’ with Visitor Services, Cape Town Tourism CEO Mariette du Toit-Helmbold is quoted in the Cape Town Tourism media statement as referring to ‘tourism destination marketing‘, a term not used by the City of Cape Town in its presentation at the AGM. Interesting too is the reference to the Constitution, which may make the City’s move, even if the ex-Cape Town Tourism Chairman Ian Bartes signed the Service Level Agreement with the City, agreeing to it shedding its role, unconstitutional in itself - we question whether the Constitution allows Bartes to sign such an agreement without Board approval, as intimated at the AGM.
Interesting is that Mrs Helmbold praises her own organisation, as if to plead to the City for a rethink: ‘Cape Town Tourism was the best vehicle to deliver tourism destination marketing and visitor services for Cape Town’, but it would appear that the City of Cape Town does not agree, a number of media reports agreeing with our interpretation that the events at the AGM were in fact a vote of no confidence in Cape Town Tourism’s ability to market Cape Town!
The media statement changes tack, and contradicts its earlier paragraph about its future role, and explains that Cape Town Tourism will perform a support role to the new Places Marketing division in the City’s new TEAM directorate, headed by Mr Groenewald: “The City of Cape Town introduced their new Tourism, Events and Marketing (incorporating Arts & Culture and Strategic Assets) Directorate to the industry at the Cape Town Tourism AGM. The function of the new directorate includes Place Marketing – a department that will, in future, take care of destination marketing at large for the city. Cape Town Tourism will focus on tourism marketing, whilst supporting the directorate with Place Marketing programmes”.
The media statement defines the future role of Cape Town Tourism as representing Cape Town at international exhibitions, hosting local and international media, digital marketing (i.e. lots more Tweeting!), and any further tourism marketing requirements of the City of Cape Town, for which it would have to pay extra!
History has shown that Cape Town Tourism cannot but accept the City’s directive, otherwise it will be bled dry by the City of Cape Town, as happened to the previous Cape Town Tourism section 21 company in 2004. Mrs Helmbold confirmed her organisation’s acceptance of the new directive: “ We are encouraged by the City’s commitment to conclude a three year visitor services and tourism marketing agreement with Cape Town Tourism before June 2013. We are committed to work with the City of Cape Town to co-design our future partnership with the City and agree on Cape Town Tourism’s role and responsibility within the broader Place Marketing agenda of the City. Tourism, the third largest contributor to the global economy, after the automobile and banking sectors, is a sector that really matters. As the world prepares to witness one billion arrivals by the end of 2012, we will never lose sight of the fact that tourism makes a significant contribution to shaping Cape Town’s future and a better life for its citizens. The partnership between tourism and local government must realise growth and opportunities for the tourism industry and those that work in and provide services to the sector.”
Mrs Helmbold also acknowledged that her organisation had not delivered on tourism growth, as we have pointed out on numerous occasions: “Cape Town Tourism is ready to work with the City on a new destination marketing model for Cape Town. We remain single-minded in our belief that we can help to turn the tide on shrinking demand and seasonality and will continue rolling out cutting edge visitor and tourism destination marketing programmes. Some elements will have to be delayed or reimagined in lieu of our reduced funding and ever changing trends. We will cut our cloth according to our available resources, but we will stay future-minded, never compromising innovation, creativity and excellence. We will improve the balance between “bricks and mortar” and digital visitor service delivery, and focus a lot more on marketing in partnership with the tourism industry and business at large.”
The rest of the long media statement was an encapsulation of information presented at the AGM, but did not explain the muddled definitions of ‘Destination Marketing‘ and ‘Tourism Marketing’, nor why Mrs Helmbold has given her organisation the new mandate of ‘tourism destination marketing’. One hopes that Cape Town Tourism and the City of Cape Town will clarify their exact roles and relationship, and will get on with the much-needed job of marketing Cape Town as a world class tourist destination!
Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com Twitter: @WhaleCottage
Mon 16 Apr 2012
A concern about the future marketing of the tourism industry in the Western Cape, given the closure of Cape Town Routes Unlimited and its incorporation within Wesgro, and the departure of its CEO Calvyn Gilfellan on 31 March, motivated me to call Wesgro and request an appointment with its CEO Nils Flaatten. Despite the busy and short week prior to Easter, he made time for the interview on 5 April.
The hurdles put in my way to meet Mr Flaatten were considerable, and demonstrated the personality of the organisation and told me more about the company than the time I spent with Mr Flaatten. It also demonstrated how far removed Wesgro, the Western Cape Trade promotion and Investment agency, is from the Tourism industry, if ‘customer service’ is anything to go by. When I called to set up the interview, Mr Flaatten’s secretary insisted that I follow ‘protocol’ and e-mail her the meeting request, and tell her who I am. I had done this telephonically, and it became a power struggle, with constant interruptions from her, before she accepted my meeting request telephonically. She indicated that it would take a considerable time to get an appointment date, which she would e-mail me! A Tweet to express my dismay about this lack of approachability by our province’s new tourism head, combined with an e-mail to Alan Winde, Western Cape Minister of Economic Development, Finance and Tourism, led to a call directly from Mr Flaatten, offering a meeting for a few days later at 11h30, or so I heard. Mr Flaatten called at 7h45 on that day, asking where I was, having expected me at 7h30! As a late night blogger and guest house owner I would never have accepted such a time slot, which seemed very ‘Johannesburg’ to me! Mr Flaatten said he would be out of town for two weeks, and could only reschedule a meeting thereafter. Yet his secretary called later in the morning, and offered me a midday meeting, which I accepted with gratitude. For the first time, she offered parking, and took all the relevant details telephonically. I arrived at the building half an hour early, wanting to make sure that I arrived on time, but I was not allowed into the building as Wesgro had not alerted the parking garage staff at the boom! They refused to let me in, and traffic problems were caused with other garage users wanting to enter. I had to call Wesgro to ask them to let me in. However, all the staff were in a meeting, and Mr Flaatten’s secretary could not be contacted. I was told that I would be called back. No such call came, and I had to call again after 20 minutes of being trapped at the boom, and having been threatened by the parking staff that the traffic department would be called if I did not move my car! I was given a bay number by the Wesgro switchboard and relayed this to the boom operator, but it was refused because it had not been sent to them on the prescribed form! Needless to say, this incompetent stakeholder-unfriendly introduction to Wesgro twice in one week made my heart sink, and realise how much smarter and visitor-friendly the Western Cape tourism industry is.
I was shocked when I saw the reception area in which I had to wait for Mr Flaatten, which doubled up as an office, with two ugly red chairs. Mr Flaatten’s office did not look much better, the same style ugly red chairs serving as visitor chairs with a rather nice blue desk, but the blue not matching Wesgro’s corporate blue, the functional office having no warmth or professionalism. Mr Flaatten seemed professional but distant, not giving one the feeling that one could ever have a collegial relationship with him in his new role as provincial tourism head. He has headed up Wesgro for the last two years. I was surprised when he asked me to tell me who I am, not what the interview was about, and he made it appear that he knew nothing about me at all! I at least had Googled his name, and had found out that he went to school in Stellenbosch, served in the South African Navy, and had worked in investment banks in the United Kingdom and Hong Kong.
I told him that other than its name, and having only a broad idea of what Wesgro does, I knew nothing more, and that I wanted to know what its role will be in taking over the duties of Cape Town Routes Unlimited. Wesgro is governed by the Wesgro Act, and has three duties according to the Act:
* to attract and retain foreign investment in the Western Cape
* to grow exports
* to increasingly attract business to the city and the province
Wesgro is funded by both the City of Cape Town (R10 million) and the Western Cape government (R18,4 million), the R25 million which Cape Town Routes Unlimited received from the Western Cape government being added to give a total of R53 million, larger than the budget of Cape Town Tourism. The organisation services the province, ultimately reporting to Minister Winde. It also works with the City of Cape Town’s Mayoral Committee member Belinda Walker, doing strategy planning. The organisation’s operations include:
* hosting inward trade missions, at which they try to ‘matchmake’ the visiting delegation members with local businesses via ‘speed dating’
* outward missions travel overseas, promoting trade with the Western Cape, benefiting from sponsorships for flights and other travel costs from the Department of Trade and Industry.
Any Western Cape business is seen to be a ‘member’ of Wesgro, although one does not take out or pay for a membership. The organisation also looks to stimulate the setting up and development of ‘SMME’s’ (small businesses), including entrepreneurs, emerging entrepreneurs, and start-up businesses. They also look to grow sectors of Western Cape businesses, and a number of such sector development agencies have been developed, for IT, Craft and Design, etc. Geographically, Wesgro is concentrating on the ‘West African Trade Corridor’, which includes Nigeria, Cote d’Ivoire, Ghana, Cameroon, Namibia, Angola, and the Democratic Republic of Congo. “The Headquarter for African business should be Cape Town”, Mr Flaatten said. He shared that a trip to Accra the week before had seen distribution agreements signed with 20 companies represented in the trade delegation. It was at this point that Mr Flaatten justified his organisation’s take-over of Cape Town Routes Unlimited, saying that Wesgro already has links to the chambers of commerce and influential players in these West African countries, so in the same way they can engage with the leading tourism players in these countries to attract more West African tourists to Cape Town and the Western Cape. He added that the Northern Hemisphere countries of the UK, the USA, Europe and Japan would only show a 1,5 % growth, labelling them as ‘concentration risk’. Currently most of the Western Cape exports go to the UK, to the Netherlands, and to Germany, in that order. Mr Flaatten also said that 73% of South Africa’s foreign direct investment in Africa comes from Cape Town businesses, mainly being in the financial services, real estate, and hospitality sectors. He added that by 2030 there would be more middle income earners in Africa than in India. He also emphasised the potential of the BRICS countries. Further high growth high income countries are Saudi Arabia, Singapore, Argentina, and the United Arab Emirates. Inward missions coming to Cape Town are from the USA, the United Kingdom, Germany and France, and they offer marketing services, sales support, and call centre services.
Mr Flaatten gave his views of our tourism industry by saying that it has a number of outspoken characters in it, implying that this would be something he would have to get used to! Wesgro has taken over the 25 Cape Town Routes Unlimited staff, who were in the same building, and will be assimilated into his team, retaining the benefits, and terms and conditions at which they were employed originally. Wesgro will ‘capitalise on the Cape Town Routes Unlimited’ marketing knowledge, Mr Flaatten said, but I was concerned that he could not tell me the name of the most senior marketing executive (we think it is Debbie Damant, not known to most) that he has ‘inherited’, especially given that the marketing of Cape Town Routes Unlimited had been strongly driven by its then CEO Calvyn Gilfellan. The Board of Cape Town Routes Unlimited, now led by ACSA’s Deon Cloete due to the move of its previous Chairman Peter Bacon to Mauritius, will oversee the activities that are in the Cape Town Routes Unlimited Annual Performance Plan, until the organisation with its Board is dissolved when the Western Cape Tourism Act of 2004 is repealed. Similarly, the Wesgro Act must be amended, to allow it to additionally manage destination marketing for the Western Cape.
Mr Flaatten requested the industry to give him a month, so that he can get to know his new staff, and what the capacity requirements are, not wanting to be irresponsible in becoming unnecessarily large. First he must stabilise the staff situation, and then they must focus on planning for the following financial year. They have already hosted a workshop with 100 regional and local tourism bureaus, seeing them as ’subject matter experts’, and not wishing to duplicate their work, he said. He will also engage with industry representative bodies such as FEDHASA Cape, SATSA, etc, but I left him with a reminder that the tourism industry consists of a large number of small businesses, many not belonging to the big tourism associations, and that their voices should be heard too. Listening to the tourism industry will be the biggest challenge for him currently, Mr Flaatten said. He realises that the ‘Cape Town & Western Cape’ brand is a problem ‘which will not be easy to fix’.
The Board of Directors of Wesgro raises interesting questions. Board members Cape Town Tourism CEO Mariette Du Toit-Helmbold, its Board Vice-Chairman and CEO of the Cape Town Partnership, Bulelwa Ngewana, and Board member Guy Lundy, CEO of Accelerate Cape Town and Wesgro Vice Chairman, may prevent duplication of marketing activity between Wesgro and Cape Town Tourism, but ideally should remain independent tourism bodies, so that the industry benefits from the best of both bodies. Ravi Naidoo, organiser of the Design Indaba, is well-known and highly regarded. Interesting too is that Alderman Belinda Walker is on the Board, but does not deal with Tourism matters in the City of Cape Town, which could lead to duplication of tourism management within the City. One could be concerned about two Boards of Directors managing the duties of Wesgro, until Cape Town Routes Unlimited is closed down legally, and about the incestuous duplication of Board members of Wesgro and Cape Town Tourism.
For an organisation that had a number of months warning of taking over Cape Town Routes Unlimited, and that had taken over its operations four days prior to my visit, I was concerned about the general lack of marketing insight, terminology (other than the branding issue), and discussion that I heard from Mr Flaatten during our lengthy interview. He did not mention Cape Town Tourism, and how Wesgro will avoid duplication of marketing activities with the city tourism marketing body. The Wesgro website only shows an amended logo, in that the new duty is incorporated in its descriptor underneath it: ‘The Western Cape Destination Marketing, Investment and Trade Promotion Agency’, and contains a block of information to state that it has taken over the duties of Cape Town Routes Unlimited, with a link to the now defunct tourism body’s website! I was concerned about the very business-like Wesgro culture, which does not appear ‘customer friendly’ nor service-orientated in simple requests of setting up a meeting and honouring a parking arrangement, which does not auger well for our tourism industry. The offices are functional but unattractive, not matching the tourism industry image. I was concerned that Mr Flaaten did not seem to know anything about Minister Winde’s EDP, which I thought would reside in Wesgro, and would eventually become the home of most Western Cape industry development bodies, the products and services of which Wesgro appears to market. Mr Flaatten was very responsive in providing the Cape Town Routes Unlimited Annual Performance Plan which they will be working to achieve. The 27 page Plan lists the mission as marketing the Western Cape as a desirable leisure, business and events tourism destination, and its main goal is to ‘position Cape Town and the Western Cape as a premier leisure, events and business tourism destination in Africa’. However, none of the defined goals are measurable. The budget breakdown is disconcerting, with about 50% going to staff salaries, and only 24% going to marketing expenditure. Much of the performance is measured in terms of the number of meetings held, the number of convention bids presented, and the only tourism related measurement targets are the number of international arrivals (1,6 million) and domestic arrivals (3,2 million) for the current financial year, Cape Town Routes Unlimited only expecting to generate 5% of each kind of tourist through its marketing efforts, which begs the question as to why it existed in the first instance!
We will give Wesgro the month that has been requested, and await the way forward for the marketing of the Western Cape with trepidation.
POSTSCRIPT 18/4: In a media release sent out by Wesgro a week ago (but not to contacts on the Cape Town Routes Unlimited media list!), Nils Flaatten said that he would continue to report to the Wesgro Board of Directors, and to the Cape Town Routes Unlimited Board on a quarterly basis about ‘expenditure and performance against predetermined objects’. “Flaatten assured tourism industry stakeholder (sic) that there would be no ‘disruption to the delivery of the tourism destination function in our province’”, the media release added. It also stated that Cape Town Routes Unlimited and Wesgro will continue to occupy their respective offices in their current building, and that the telephone and e-mail details of the Cape Town Routes Unlimited staff ‘will remain in operation until further notice’.
This Tourism Week asked some critical questions about Wesgro’s new role in handling the Tourism marketing responsibility for the Western Cape in its newsletter on 13 April.
Wesgro, Waldorf Arcade, 80 St George’s Mall, Cape Town. Tel (021) 487-8600. www.wesgro.co.za Twitter: @Wesgro
Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com Twitter:@WhaleCottage
Mon 2 Apr 2012
Surprisingly few Capetonians attended the Cape Town International Jazz Festival this past weekend, and one gets the feeling that the organisers tend to market the event to non-Capetonians, which may be a very good thing for tourism. It is disappointing that the Jazz Festival is not expanded, both in terms of the size of the venues, as well as the number of days over which it is hosted, the event of the past weekend clearly not being long enough, the Weekend Argus reporting that the tickets had sold out two months prior to the event.
It is estimated that 34000 jazz fans attended the Festival, some being from overseas, including other parts of Africa, and many from other parts of South Africa, judging by the large number of non-Cape Town number-plated cars driving in the city centre. Traffic was hectic near the Cape Town International Convention Centre on Friday afternoon, long before the start of the performances, and organisers were quoted as saying that the Centre’s capacity, limited at 17000, would necessitate a large venue in future. Festival Operations Manager Billy Domingo said that they could have printed a million more tickets, and would have sold them all! One wonders why the organisers do not stretch the Festival over more days, to benefit the hospitality industry, its effect being low key for accommodation establishments in Camps Bay, for example. Guests from Germany staying at Whale Cottage Camps Bay had read about the Jazz Festival in their guide book, and were most disappointed that they were unable to book tickets on arrival in Cape Town.
Last year the Cape Town International Jazz Festival generated just short of R500 million for the Western Cape economy, and created 2700 jobs. Attendance has more than doubled over the 13 year history of the Jazz Festival.
It is embarrassing to read the media statements by Michael Bagraim, President of the Cape Town Chamber of Commerce, who described March as a ’second Christmas for Cape Town, and I believe it is getting bigger year on year’. If we compare our Whale Cottage Camps Bay occupancy for February (89%) and March (74%), it is clear that Mr Bagraim’s descriptor should apply to February and not March. The March occupancy is on a par with that of March 2010, well up on the poor 60% last year, but still far below the 2007 - 2009 period of 94% plus. The Cape Town Carnival had a minimal hospitality benefit, and the Argus Cycle Tour had fewer out-of-town participants, with few Camps Bay guest houses fully booked for that weekend. Only one of our Whale Cottage Camps Bay rooms was taken by guests attending the International Jazz Festival. Mr Bagraim seems to be poorly briefed for media statements, most being irresponsible, and embarrassing for our tourism industry in hitting such false notes!
In hosting ‘Black Diamond’ guests from Johannesburg for the International Jazz Festival, who had not pre-booked but had called from the airport for a room, the cultural differences across two spectrums of South Africa were evident. At breakfast, for example, which we allowed them to eat as late as at midday, they expressed their disappointment that we serve a standard Continental and English breakfast. They were expecting gravy and baked beans with their eggs. They shared the room with a third visitor, not booked, and were surprised that they had to pay for him too. SA Tourism may have to embark on an educational campaign, to explain to accommodation establishments the breakfast and other expectations of the ‘New Horizon’s Families’, as they call this market segment, while accommodation establishment do’s and don’ts should be communicated to prospective domestic tourists too.
What was noticeable is how many events were scheduled for this past weekend, including the Cape Town International Jazz Festival, the Toffie Pop Festival, rugby matches, Franschhoek Summer Wines, and a massive Kfm KDay concert at Val de Vie. One wonders why all these events were hosted on the same weekend, instead of being stretched out over the whole month of March.
Given that the Cape Town International Jazz Festival is based in Cape Town, one would like to encourage the organisers to market the festival to locals too, and for them to keep an allocation of tickets for tourists who happen to be in the city at the time of the Festival, to allow them to experience this top event. We would love to see the Cape Town International Jazz Festival to run over a long weekend in future, such as the one coming up at the end of April.
POSTSCRIPT 2/4: The Times asked today if headline act Lauren Hill, who was a last minute stand in for Jill Scott, could be ‘over the hill?’, receiving negative publicity, half the audience at her Klippies concert walking out due to poor sound and ‘erratic vocals’. ESP Afrika Jazz Festival Organiser Rashid Lombard blamed Hill’s management for wanting to manage the sound themselves.
POSTSCRIPT 8/4: The Times reported that the Cape Town International Jazz Festival is not expected ‘to break even financially’, despite its record attendance. The cost of hosting the Festival is R35 million, with R7 million coming from the Department of Arts and Culture. The newspaper also quotes Rashid Lombard as saying that the planned expansion of the Cape Town International Convention Centre will double the size of the Festival, and to reach 470000 by 2018, a commendable if not daunting target! Lombard hopes to see the Jazz Festival can be structured like the New Orleans Jazz and Heritage Festival, ‘for which all hotels, restaurants and the host city, and all structures of government, get together and contribute the event’s success’.
Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com Twitter:@WhaleCottage
Mon 28 Nov 2011
Reports about the status of the tourism industry in Cape Town and the Western Cape in the last few days are enough to confuse anyone, as the view on how the industry is doing this summer, two months into the season, appear contradictory, some saying that it is better, and others saying that it is the worst ever!
Reports about a FEDHASA Cape media review held last week contradict each other. The Cape Argus, using the headline ‘Hotels catch the scent of recovery’, reported that a ‘fair’ season is expected this summer. It stated that the industry had come through a ‘pretty bad year’. Gotravel24 had a more realistic headline ‘Worst year yet for Cape Town tourism’, quoting FEDHASA Cape Chairman Dirk Elzinga admitting for the first time that the past year has been ‘one of the worst the Cape Town tourism industry has ever seen’. When we wrote about the tourism crisis in winter, which was subsequently picked up by the Cape Argus, Elzinga did not seem perturbed, and said that Cape Town was just experiencing its annual seasonal dip!
In its review FEDHASA Cape indicated that average revenue per available room decreased by 10% this year, due to the ‘double dip recession’ in Europe as well as the 20% increase in accommodation rooms for the World Cup. The past winter was particularly tough, with four hotels and 10 restaurants that were FEDHASA Cape members closing their doors (many more non-FEDHASA restaurants closed their doors too). Elzinga is hopeful of a recovery, based on average revenue per available room increasing by 5 % in October, relative to the same month a year ago. Occupancy was estimated to reach 60 - 80 % this summer, Elzinga said, and events such as the J&B Met, the Two Oceans Marathon, and Cape Town International Jazz Festival would attract more local tourists, the type of tourist Elzinga said Cape Town tourism businesses should encourage. However, Eye Witness News’ report on the FEDHASA Cape meeting was that ‘70-80 percent hotel occupancy (could not be referred) ‘as a standard anymore’. Elzinga sees positive spin-off from Cape Town being named the World Design Capital 2014, and a provisional New7Wonders of Nature. We have written before that none of the accolades that were heaped upon Cape Town so far this year have led to any significant increase in tourism to Cape Town, probably because tourism from the United Kingdom has all but dried up.
FEDHASA Cape also used the opportunity to share results of a 30-week pricing survey conducted not only for Cape Town hotels, but also for hotels in Barcelona, Melbourne, Vancouver, Boston, Nice, Hong Kong and Munich, chosen to be comparable to Cape Town in that they are not capital cities, and attract convention business. The survey was instituted due to feedback levelled against the local accommodation industry for its high prices, which FEDHASA Cape wished to dispute. Predictably it did so, stating that ‘….the Mother City is not out of line with its peers around the world’. No hard statistics, such as average hotel prices, are provided from the survey. The FEDHASA Cape survey had found that Cape Town’s price and room offering is wider than that of the comparative cities, with the exception of Barcelona. Five star hotel rates generally are on a par with the comparative international hotels. Room rates for 4-star hotels were up to 20 % lower than the international hotels, the report states. We too have checked Cape Town rates at the top-end hotels, and conducted three telephonic surveys, in May, August and November this year, finding a wide range of 5-star hotel rates, and that rates had been lowered in the harsh winter months.
Moneyweb also reported on the hotel pricing survey of FEDHASA Cape, writing that the finding about Cape Town’s hotel prices being on a par with those in other international cities was a ‘surprising result’. The description about the worst winter is far more explicit, as being ‘one of the most dismal in recent memory”! Elzinga is quoted as saying that Cape Town is ‘not cheaper, but also not more expensive. People think that prices in Africa should be lower than in Munich or Singapore. But luxury costs the same; it doesn’t matter where you are’. An interesting observation by FEDHASA Cape was that those hotels that did not drop rates recovered more quickly than those hotels that cut rates. Our Whale Cottage hotel surveys demonstrated that all hotels decreased rates in winter, contradicting FEDHASA Cape’s observation! What Elzinga did not appear to consider was that given the lower operational costs of running an accommodation establishment in Cape Town relative to the comparative cities, on labour costs alone, combined with the 20 % increase in accommodation supply since last year, accommodation prices should have decreased, based on the law of supply and demand. A further negative impact on rates should be the cost of long haul air travel and airport taxes to Cape Town. Therefore there can be no justification for Cape Town’s hotel prices to be the same as those of its international counterparts.
FEDHASA Cape sees a positive impact of direct flights to Cape Town by Air France and Swiss-based Edelweiss, but which could be countered by the cancellation of Malaysian Airlines flights to Cape Town next year. Elzinga has called for more marketing by Cape Town Tourism and Cape Town Routes Unlimited in India and China, given the problems with the USA and European economies.
At Whale Cottage we have compared Occupancy over the past five years, and we have seen a steady decline over this period, halving over the five year period. Occupancy at Whale Cottage Camps Bay this month will be the second best this year after the record 88% in February, and an improvement on last November, but is far below the 88 - 96% occupancy experienced in November between 2007 -2009.
FEDHASA Cape only predicts a recovery for the Cape Town accommodation industry in 2013, with occupancy and room rates returning to a ‘normal level’. The European and USA economies are in such disarray that one wonders how any tourism body can make any prediction about the future of tourism, especially given FEDHASA Cape’s poor interpretation of the industry in winter! FEDHASA Cape also indicates that bookings are increasingly last-minute, which makes it even more difficult to predict future tourism performance. We urge FEDHASA Cape to be conservative in its estimates, and to not create hopes about the season for the industry, which led to disastrous results when Grant Thornton did the same about the soccer World Cup last year.
The Protea Hospitality Group has seen similar cause for optimism, its Danny Bryer, Director of Sales, Marketing and Revenue, writing a letter to the editor of Southern African Tourism Update that it saw occupancy increase by 3-4% in August and September. Against the background of the unstable USA and European economies, Bryer says that it is hard to make predictions for the hospitality industry, especially with the heavy discounting taking place (contradicting Elzinga too). Bryer pleads for an end to discounting, even though his hotel group probably is the one to slash rates most severely, quoting day by day rates, and generally is at the bottom end of the rates scale in the comparative hotel rate surveys we have conducted: “Continued discounting devalues every hotel in South Africa, as the battle is fought on price rather than value”. Bryer says the proof of this is that the average daily rate has decreased and the costs are increasing, meaning a declining profit. This can only be turned around with an increase in rates, he argues. He deplores that developers, investors and owners added on new rooms, the accommodation oversupply resulting in hotel closures and local companies taking over the management of international hotel groups. Bryer warned against reducing one’s offering to justify a lower price. Offering value for money is vital. He also warned that 3, 4 and 5 star hotels are marketing their rooms at similar price points, which he believes to be ‘foolhardy and unnecessary‘. The Protea Hospitality Group is focusing on offering value-added packages for the domestic market this summer.
Bryer was also quoted in Business Report, saying that their December bookings are up on a year ago, that 5-star guests are travelling again, but that ‘inbound business to South Africa is still quite tight and long haul flights are losing out to short haul’. The South African Tourism Services Association (SATSA) CEO Michael Tatalias predicts a better ‘holiday’ season than last year, but says that the rates charged will be more realistic than in the past.
Western Cape Provincial Minister of Tourism Alan Winde warned that he will present a ‘bare-bones’ 2012 budget in March, and about ‘emptier’ provincial government coffers and budget cuts, which could impact on its funding of tourism too, reported the Cape Argus last week. Winde said that the local economy had to be ‘buffered against current shocks in traditional markets’, and urged exporters in the province to find ‘high-growth emerging markets’. The European growth outlook is poor too, the fourth quarter prediction being one of slipping back into recession, reports Business Report.
What is certain is that it is impossible to predict the summer season until Easter, given the continued economic woes of our tourism source markets, the UK market being sorely missed, and the forecast of Europe slipping back into recession. Bookings for the summer ahead for Whale Cottage Camps Bay look good until 10 January. Domestic tourism will be the major source market for the medium term, until the global economy recovers.
Chris von Ulmenstein, Whale Cottage Portoflio: www.whalecottage.com Twitter:@WhaleCottage
Mon 29 Aug 2011
It took Cape Town Tourism two days to formulate a response to our blogpost “So who the ‘bloody hell’ is Cape Town Tourism’s Australian strategy consultant?”. The fact that they have responded to our questions regarding the six-month appointment of Australian ’strategy consultant’ Ian Macfarlane, and dedicated a detailed reply on their website, and ‘advertised’ it on Twitter, shows that our blogpost has hit a sensitive spot!
The Cape Town Tourism reply (see the full response below) was to point out ‘inaccuracies’ in our blogpost, and to ‘contextualise the reasons for the appointment of Strategetic’, they wrote. In summary:
* The Request for Proposal for ‘Strategic Support to Cape Town Tourism for the development and implementation of a Cape Town Marketing and Brand Campaign‘ was announced on its website and on ‘Trade World’ (a digital procurement company, it would appear), and sent to consultants on its database, they write. Three proposals (the two other consultancy names not revealed) were short-listed. The bid by Strategetic Consultants was accepted on the basis of meeting the Request for Proposal the best, they had the ‘most appropriate global destination and brand campaign experience’, and the cost was the most competitive, they write.
* Ian Macfarlane is knowledgeable about Cape Town, having lived and worked in the city for 18 years, they write. However, the information about Macfarlane’s studies and appointments do not add up, as there is only a 12 year gap between his completed MBA and Tourism New Zealand starting date. Also, no Cape Town employers are mentioned for the 1987 - 1998 period, but in our research we found his ‘Bios’ stating that he had worked at Engen (GM of Lubricants Division) and Young & Rubicam Cape Town, neither of these jobs making him an expert about Cape Town, or the tourism marketing of Cape Town. He has not lived nor worked in Cape Town for 13 years, a vastly different city now!
* Specific ‘inaccuracies’ in our blogpost are stated as being:
1. the value of the ‘So where the bloody hell are you?’ campaign, its success (or lack of), and its banning is disputed. Our information was based on Wikipedia, known to be a reliable source of information, quoting reports by the BBC and Australian media about this particular campaign. However, should it have contained inaccurate information, reflecting so badly on Ian Macfarlane and Tourism Australia, they would have had the right to request Wikipedia to correct this information - four years or more since the termination of the campaign this has not been done!
2. The effect of the exchange rate on tourism arrivals, or lack of, is justified through a tourism publication - it goes against the grain of experience of every South African ‘exporter’, which includes our tourism industry!
3. The www.strategetic.co web address for Ian Macfarlane on his Strategetic Consultants’ business card may be a ‘legitimate address’, as Cape Town Tourism claims, but it does not open to the website of Strategetic Consultants. One wonders why Macfarlane would have such a nonsensical website address on his business card. It takes one to a page with a heading “Welcome to your new Web Hosting Account”, but requests a password and log-in details! The consultancy’s web address is www.strategetic.com.au, and one wonders why it is not on the business card correctly!
The last sentence of the last paragraph of the Cape Town Tourism response is a farce: ‘We are more than happy to answer questions to the best of our ability in furthering our commitment to transparency and accountability and we always appreciate constructive input’. It took Mariette Du Toit-Helmbold, CEO of Cape Town Tourism, four days to reply to our five questions, which are contained in our blogpost about Ian Macfarlane. Subsequent questions relating to the appointment have been ignored, despite three reminders! Last night, Mrs Helmbold finally responded, writing that she will only respond to our questions on the Cape Town Tourism website, and not by e-mail: “To the extent that your questions raise new issues which require a response on our website, we will update our website for the benefit of all our members and to ensure that facts are accurately presented. We will address any further queries from you in the same way”. The City of Cape Town Mayoral Committee member for Tourism, Grant Pascoe, has not replied to our e-mail, Tweet, and phone call either. The detailed Cape Town Tourism response follows below:
“Clarity on the appointment of International Tourism Consultant
Published: August 25 2011 By: Cape Town Tourism
In response to the Whale Cottage Blog post dated August 23, 2011, entitled “So who the ‘bloody hell’ is Cape Town Tourism’s new Australian strategy consultant?”, Cape Town Tourism would like to point out a number of inaccuracies in the blog post and contextualise the reasons for the appointment of Strategetic.
The Cape Town Tourism Board approved the appointment of Strategetic in July 2011 for a six month period (until the end of December, 2011) after a Request for Proposals (RFP) was released in June 2011 for “Strategic Support to Cape Town Tourism for the development and implementation of a Cape Town Marketing and Brand Campaign.”
In line with Cape Town Tourism’s procurement policy, the value of the contract did not necessitate a public tender process, but rather a public request for quotations. For the sake of transparency, Cape Town Tourism published an RFP on Cape Town Tourism’s website, on Trade World, and circulated the RFP to consultants on Cape Town Tourism’s database.
Three proposals that met the key criteria with quotations were short-listed and evaluated by the Cape Town Tourism Board. The Board was satisfied that due process was followed, that Strategetic’s proposal best addressed the RFP criteria and that they presented the most appropriate global destination marketing and brand campaign experience - a specific requirement for Cape Town Tourism in light of the need to grow demand in global markets. The business model and fee structure proposed was the most competitive and allows for a risk-share scenario, which ensures greater accountability and will allow for the generation of additional income.
The lead consultant put forward by Strategetic was Ian Macfarlane who has extensive global tourism marketing experience complemented by a good local knowledge and understanding of Cape Town and South Africa, having lived in Cape Town for 18 years and worked in various corporate senior management positions whilst based in the city. To be relevant in the international arena in which Cape Town competes, access to international best practice and expertise, coupled with local knowledge, is very important.
Macfarlane’s verified qualifications and experience include:
- B. Com., UNISA 1980 - 1984
- MBA, UCT, GSB, 1985 - 1986
- M. Phil (applied environmental ethics). U. Stellenbosch) (1996 - 1997)
- Adjunct Professor: Victoria University Melbourne, Tourism and Hospitality Research Centre
- Previous Board Member Ehrenberg-Bass Marketing Institute, University of South Australia, Adelaide (2007 - 2010)
- Previous Board member Tourism Research Council New Zealand
- GM Marketing Tourism New Zealand (1998 – December 2003)
- CEO Gold Coast Tourism, Queensland. Australia (2004)
- Director Marketing, Tourism Australia, Sydney (2005 – 2007)
- Strategetic Consultants (2007 to date)
Macfarlane has also consulted on a number of tourism projects, including:
- Brand and marketing strategy for Abu Dhabi (Abu Dhabi Tourism Authority)
- Product and experiences development for Alpine regions for Victoria
- Adelaide: Brand strategy (City of Adelaide)
- Sydney: Tourism brand and strategy development (Tourism New South Wales)
- Evaluation of the impact of major events on city brand equity (CRC for Sustainable Tourism)
- Brand strategy for Sydney Olympic Park (Sydney Olympic Park authority)
It is noteworthy that the entire marketing strategy and subsequent execution of 100% Pure New Zealand was Macfarlane’s work. The campaign is often quoted as the most successful tourism campaign ever, and resulted in market share and visitor increases for its entire duration. It still is being executed some 13 years post-launch, which is testament to its solid strategic foundations.
Regarding the inaccuracies presented in the blog, the following warrant a response:
- The blog’s remark that the campaign cost was $180 million is incorrect. This was possibly confused either with the gross operating budget for Tourism Australia, after overhead deductions) or the unsubstantiated political spin, of the time. The budget for the So Where the Bloody Hell Are You campaign was $18m in year 1 (2006) and $10m in year two (2007).
- The campaign was not banned in the UK and was flighted there for about 12 months.
- Research on the campaign, undertaken by highly credible companies, show that the campaign was positioned perfectly on-brand and had good audience responsiveness.
- Given that the campaign was developed largely to achieve publicity for Australia as a top tourist destination, it substantively achieved its goals. In fact, it is still recalled even after Tourism Australia has run a further three campaigns.
- With reference the suggestion in the blog of visitor declines to Australia as a direct result of the campaign, it must be pointed out that, given the multi-dimensional array of factors affecting arrivals, the suggestion that the campaign alone dampened visitor arrivals is incorrect and without substantiation.
- Since it was a global campaign, and was used in all markets, the arrivals (which were not one of the defined measures of the campaign) actually increased during and after the campaign (Tourism Research Australia, IVS Annual Reports – 2007 and 2008).
- With regards to Macfarlane’s proposition that the exchange rate has little to no bearing on tourism arrivals, research on this matter has been conducted by both Strategetic and also by Tourism Research Australia, who published a report substantiating this; Factors Affecting Inbound Tourism; Tourism Research Australia, (June 2011 - ISBN: 798-9218121-43-9). We will be hosting a seminar dealing with, amongst other things, this topic later this year, for those who are interested.
- .co is a legitimate address; this can be verified by Melbourne IT (either in Australia or US).
In terms of research, it is true that much money is being wasted by tourism organisations undertaking spurious research; obtaining precise measures to support ‘researched based marketing decisions’. Much of this research is wasteful as it is predicated on product decision-making models. Criticisms of these approaches have been uncovered and substantiated by many esteemed academics. Cape Town Tourism does believe in research, but preference must be given to customer-centric research rather than purely academic research. Macfarlane has extensive experience in the field of research having graduated with a Distinction in Marketing Research (MBA 85/86) and having worked with many research agencies designing research projects and executing them throughout the world.
The fact that Macfarlane has worked extensively with global media companies is an asset to Cape Town’s tourism establishment.
Macfarlane remains contracted to Cape Town Tourism and as an independent consultant, as agreed in his contract schedule, he is able to travel between projects and clients. He returns to Cape Town on September 5, 2011.
The industry entrusts the strategic leadership of Cape Town Tourism to an industry elected Board who has the fiduciary duty to ensure compliance, good governance and the appointment of a management team with the ability to implement and manage the organisation’s operational plans and activities. Cape Town Tourism welcomes the right of any member to know more about our procedures and motivations behind our appointments, strategies and activities. We are more than happy to answer questions to the best of our ability in furthering our commitment to transparency and accountability and we always appreciate constructive input”.
Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com Twitter: @WhaleCottage
Thu 16 Jun 2011
We have been very happy to have you as our Minister of Tourism, especially when your portfolio became a dedicated one. Since May, however, I sense that our tourism authorities in cities, SA Tourism, and your department are seeing the development of a crisis in our tourism industry, but that nothing is being done about it. I remember a song Jeremy Taylor once sang about the Ministers that ‘minis’ - I feel that you and your department are ‘minis-ing’, not playing open book with us, and that you are deserting us in our time of need. Here is why:
1. You appointed tourism consultancy Grant Thornton, who created fantastic forecasts of how many tourists would come to South Africa for the World Cup. The recession hit the world in 2008, and at no stage did Grant Thornton revise its forecast for the event attendance. On the basis of their projections, Cape Town alone saw the addition of 9 new hotels and 1500 beds, not to talk about the numbers of apartments that were hastily vacated and renovated, for letting purposes. We all painted and polished our guest houses, yet the soccer fans that came to stay were just like all our other tourists in the end. Home and flat owners, taken by Seeff’s campaign with Gary Bailey as a spokesperson, sat with empty accommodation when they cancelled leases with their existing tenants to make a quick buck.
2. You allowed us to be ripped off by MATCH, a FIFA affiliate hospitality company, who milked us with unheard-of commissions of 30%, with your blessing! And then they cancelled the largest part of the booked stock, on their own favourable cancellation terms, just eight weeks or less prior to 11 June 2010.
3. You sent the Mickey Mouse team from Disney to quickly spruce up our service excellence, at a cost to taxpayers of R9 million or so, a waste of time for all that attended. Our nation is one known for Ubuntu, and we were recognised for it as one of our success factors - we did not need Disney to teach us that!
4. But it is the current post-World Cup crisis, which Cape Town Tourism confidently tells us a year down the line was predictable, given the 2000 Sydney Olympic Games example, that is getting to all of us. The Bureau of Economic Research survey results released earlier this week shows us that confidence in the Accommodation sector is at its lowest ever, at 25 % (even estate agents are more confident at 41%, and they are not having a great time!). There has been no growth in confidence since 2007, even though we knew that the World Cup was coming in 2010.
As the most senior official driving tourism in our country, we would have expected that you would guide and lead us, that you would tell us what drastic steps your department and SA Tourism are taking to help us to get international tourists to our country, and local ones to our cities and provinces. All we hear from you is how successful South Africa has been, and how the World Cup has contributed to this success. For the first time you have acknowledged that things are not going so well, and that “growth in the tourism sector is expected to slow down towards the end of 2011“, reports Eye Witness News about your address to FEDHASA Cape earlier this week. You are reported to have said at that same meeting that ‘visitor number (sic) still look good following the country’s successful hosting of the soccer showpiece. The minister replied by stating some establishments invested too much in catering for an influx of tourists prior to the tournament”! Sir, with respect, it was your consultants that guided us on visitor numbers. Now the proverbial has hit the fan, and there will be none of us left in this industry if you are saying that it will get even worse towards the end of this year!
5. I feel for you, being reliant on those on the ground to feed back to you how bad things really are, and that you are misinformed and misled by some. I cringed when I read that FEDHASA Cape Chairman Dirk Elzinga put the poor booking situation down to the usual Cape winter seasonality, demonstrating that he is not a hotelier, and does not have a clue about the hospitality industry, having headed up the Cape Town International Convention Centre previously. I was depressed by Cape Town Tourism’s long-winded acknowledgement that something mustbe done about changing how Cape Town is marketed, as if we have months and years to do so. Cape Town Routes Unlimited has been the most proactive in talking to our industry via the media, in asking us to slash our rates, but clearly they do not know that we charge rates of up to 50 % less in winter, and have done so for the past 15 years or more. Many ofus have not increased our summer rates since 2007, yet costs are rising continuously.
6. Your own consultants Grant Thornton are saying that not enough local and international marketing is being done, especially in the newly opened markets of China, India, Brazil, Mexico and Argentina. I like that you have addressed the ’silo’ mentality of the tourism industry, as reported in the Cape Argus, and even see this at our local level. Cape Town Tourism and Cape Town Routes Unlimited are operating independently, and without apparent collaboration. High airfares are one of the reasons for the poor tourism performance - please help us to get SAA to price flights realistically, so that we can get the tourists to our country. Help us to get direct flights to Cape Town, instead of via Johannesburg. It is interesting that you identified that the power of tourism is in the hands of a small number of powerful operators. Share the tourism pie with all of us. Please open the doors, and create dialogue between the different sectors that feed and sustain the tourism industry. I was shocked to hear that the Board of Directors of Cape Town Routes Unlimited is now hand-picked by provincial Minister of Tourism Alan Winde- what happened to getting privatesector input, via nominated Board candidates? All we are getting is the same perpetuation of provincial-friendly players and their thinking, and most Board members that were newly elected in April are unknown to us!
We are receiving no guidance from your Department, SA Tourism and our local tourism authorities about how we keep our businesses afloat, and how we prevent a bloodbath of restaurant, hotel and guest house closures in the next few months, which has already started. It does not help to hear that your CEO of SA Tourism, Ms Thandiwe January-McLean, has just resigned, and will leave at the end of August, in a time that we need SA Tourism desperately.
Sir, we need your help. Help us with negotiating extensions of bond repayments at the banks; help us by not allowing the Reserve Bank to increase interest rates; help us with better tax breaks; help us by getting electricity increases suspended; help us with loan facilities to help us survive and to continue to offer employment to our staff; help us with an urgent campaign to encourage locals to travel - it has been talked about but we are not seeing its impact; help us by pushing PR internationally, to not allow South Africa, and the Cape in particular, to lose visibility when New Zealand hosts the Rugby World Cup in September and October; and lastly, be honest with us - do not give us false hope by telling us how fantastic our industry is right now. We are bleeding Sir, and we need your help!
POSTSCRIPT 16/6: Business Report today quotes the Minister as saying: “Although tourism had continued to grow since the World Cup ended last July, the industry was slowing down worldwide.” He is also quoted as saying that international tourism growth to South Africa will continue but that we must “be more competitive than our opposition”. He added: “Our prices and products must remain competitive, and unnecessary cost drivers must be identified.” He would not be issuing price guidelines, and he confirmed that the traditional source markets remain Europe, the UK and the USA, due to their longer holiday period, but recognises the longer-term value of the Asian market. He urged that visa applications for tourists be made easier, and even become electronic. The Minister’s Department of Tourism is to set up a conventions bureau, to spread the business ‘beyond the three main cities’, and he indicated that benefits could flow from the expiry this year of the current system of granting air traffic rights to fly into South Africa.
POSTSCRIPT 17/6: Southern African Tourism Update reports that the Minister is to have also said at the FEDHASA Cape AGM that local tourism authorities should not market internationally, as SA Tourism is doing so already, and that they should focus on local marketing instead. He quoted the example of KZN Tourism, which has a marketing office in Gauteng. Was he addressing Cape Town Tourism and Cape Town Routes Unlimited?
Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com Twitter:@WhaleCottage
Wed 15 Jun 2011
I missed the Cape Town Tourism member presentation by Mary Tebje, Cape Town Tourism’s Trade and Press representative in London, in Cape Town in April, and was alerted to it by Commenters to our blogpost about Cape Town Tourism’s depressing forecast for the tourism industry for the next three years.
The reality is that the UK market, the largest source market for Cape Town, is severely depressed, and this is already making itself felt in extremely poor forward bookings from that country. The high unemployment, increased air passenger duty, fuel price increases, a VAT increase, and an unheard of inflation rate at 4,5 % have created ‘a pessimism not seen since the 1940’s’, Ms Tebje said. This has led to the ’staycation’, with the British being forced to holiday at home.
The Cape Town Tourism summary of Ms Tebje’s talk is thin, but the bottom-line is that Ms Tebje recommended that tourist packages should be put together for the UK market, and should certainly include cultural experiences. Guests would want to book a number of activities in all-inclusive packages, so that they did not have to worry about extras to pay for whilst on holiday. This requires a collaborative approach between accommodation providers and tour guides. In a discussion at the meeting, the ‘township tour and gum-boot dancing routine’ were felt to not be a worthy representation of Cape Town’s culture.
Miss Tebje profiled the typical UK traveller as being the ‘over 50s market’, a booming one, which has money, and is largely interested in cultural experiences. Day trips are popular, and should include food and wine. “Teach them to braai”, she recommended, as the UK visitors love to bring home their newly acquired culinary skills, and to talk about their cuisine experiences. In 2010, 450000 tourists visited Cape Town from the UK, and a quarter of these came to visit friends and family. Yet Ms Tebje painted a contradictory picture of the UK visitor, saying that they spend three hours per day in the sun, and an hour and a half in the bar, according to a survey undertaken by TripAdvisor! “In fact, we are so busy boozing and bathing that Brits often neglect cultural pursuits, rating the worst in Europe for museum visits and other cultural activities”, she said. Ms Tebje said that the UK tourists are looking for more adventure from their holidays these days, and therefore they are now travelling to Borneo and Bolivia.
Ms Tebje said that Cape Town was competing with destinations such as Orlando and Spain too, and that the Cape Town accommodation prices were not inexpensive. Added to this was the feedback that Ms Tebje had received from tour operators selling the Cape in the UK, feeding back to her the negative effect of the strong Rand, the high cost of flights to our country, shorter booking lead times, poor perception of value for money, and price sensitivity.
The Cape tourism industry will have to look for tourists from Germany and particularly South Africa, to survive the poor coming summer season. It won’t include too many visitors from the UK!
Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com Twitter: @WhaleCottage
Sat 11 Jun 2011
Today the World Cup 2010 started a year ago. While many may remember the wonderful 30-day period nostalgically, the hard reality of this largest world event is attracting criticism in its impact on the hospitality and tourism industry, which has reached its lowest low, something other mega-event cities have experienced before. The event was commemorated yesterday with the launch of a new coffee table book ‘CapeAbility: Stories and Successes from the 2010 FIFA World Cup’.
The infrastructure benefits of the World Cup cannot be denied : Cape Town has a renewed station building, a world-class airport, and far improved access into and from the city on its N1 and N2 highways. It has a beautiful Cape Town Stadium, which has become a tourist icon for the city in itself. It has a most wonderful Green Point Park, which was developed next to the Stadium, as well as a general upliftment of the Green Point and Mouille Point area. It led to the roll-out of the recently completed and far improved public transport MyCiti service. It added more international hotel brands to the city’s five-star hotel portfolio. It created an Ubuntu amongst Capetonians and the city’s visitors, on its festive flag-decorated Fan Walks. It positioned Cape Town, and South Africa with it, as a safer country than had been perceived before.
But the downside appears to outweigh the benefits a year down the line: there is no operator for the Cape Town Stadium since SAIL Stade de France reneged on its contract with the City of Cape Town. Cape Town ratepayers will have to carry the cost of operating the Stadium, not making ends meet with the few events that have been hosted in the venue since July last year. The tourism industry suffered poor pre- and post-event bookings last year, and was led to believe that it would benefit from a tourism boom that would last for years to come. The industry was conned by MATCH, the FIFA accommodation booking agency, with massive cancellations just days before the start of the Wold Cup. Surprisingly, the industry is experiencing its worst ever year, and even more surprisingly, Cape Town Tourism told its members yesterday that it was to have been expected, given the Sydney experience - a 5-year slump after the 2000 Olympic Games, largely because the city tourism authorities assumed that no marketing was required after the widely publicised event. Cape Town appears to have made the same mistake, an error which is compounded by the poor UK economy, the largest tourism source market for the city, the strong Rand, and high airfares.
Not unsurprisingly, tourism consultants Grant Thornton, who badly overestimated the World Cup tourism numbers, praised the R40 billion national capital expenditure on the World Cup, the consultancy’s Gillian Saunders saying it was money “well spent, with some areas still to be leveraged”, reports the Cape Times. She states that the infrastructure benefit had ’significant legacy value leading to a better quality of life and provided long-term valuable assets’. She admitted that the slow recovery from the global recession was responsible for the lack of the tourism boom which had been predicted. Yet she said that “a large number of tourism businesses would not have survived the economic slump if it weren’t for the event”. She reminded the industry that R3,6 billion revenue had been generated and that just more than 100000 tourists had visited the Western Cape, and just more than double this number visited Gauteng.
Cape Town Tourism has blamed SA Tourism for focusing too much on wildlife and the natural beauty of the country, and too little on its cities, in its marketing of the country. The World Cup had created a greater city focus, but this has not been sustained by SA Tourism in its post-World Cup marketing, Cape Town Tourism says. To strengthen brand Cape Town, Cape Town Tourism proposes that the “city’s urban identity, innovative outlook, entrepreneurial spirit, academic excellence and pioneering medical and science sectors must be added to the brand palette in order for it to effectively compete in the domestic and global market”, in addition to its leisure tourism positioning, it is reported in BizCommunity.com.
The Cape Argus yesterday ’shouted’ in a headline:”Post-World Cup tourism boom ‘non-existent’”, stating that the benefits have been the international performers who held concerts in the Stadium, the city’s improved infrastructure, and the survival of a number of tourism businesses. It quotes Cape Town Tourism as saying that Cape Town is in a ‘brand vacuum’. The annual operating cost of the Stadium is quoted as being R57 million. Two concerts have been booked, and a further two are in the pipeline, according to the city’s new head of Tourism, Grant Pascoe. Talks with Western Province rugby continue, he said. He added that the city is receiving more event applications than it did prior to the World Cup. Developing the Fan Walk into a 24/7 facility is also being considered. The oversupply of hotel accommodation can be attributed to nine new hotels with 1500 rooms in total, which were built for the World Cup, says Dirk Elzinga, Chairman of FEDHASA Cape. He naively states that many hotels have already received repeat World Cup business, and that the ‘extremely low occupancies’ of some hotels ‘was normal for the off-season’!
Launched by Premier Helen Zille and Mayor Patricia de Lille, the ‘CapeAbility’ book documents the ‘planning, delivery and effect’ of the World Cup on the Western Cape, says BizCommunity.com. The book “makes every effort to extract honest lessons to understand the hosting of such mega-events better. It is designed therefore not as a memento of the event, but a review of what worked, what didn’t and what could be done better and become a guide to hosting future events”. “The book is meant to play a marketing role and points out that it is crucial that opportunities, such as the World Cup, are converted into more than just short-term profits for a small tourism and events sector, but into huge brand building opportunities for a country”.
Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com Twitter: @WhaleCottage
Wed 4 May 2011
Over the fifteen years of operating the Whale Cottage Portfolio, we have regularly offered hospitality and tourism students the opportunity to do their training at one or more of our Whale Cottages. Our most recent experience was with students of the Tourism and Business Institute of Southern Africa, and we wish to share our experience with this unprofessional Institute, as a warning.
In March we received an e-mail from Zakiyya Murtuza-Peerun, who signs her e-mails as Operations Director of the Tourism and Business Institute of Southern Africa, based in Mowbray in Cape Town. I had never heard of this Institute. She requested that some of her students be placed with us for training in “housekeeping/accommodation”, and we agreed to take two students for Whale Cottage Camps Bay, as well as a third for Whale Cottage Hermanus, in the optimistic hope that April would be a busy month, given the public holidays and long weekends. I received a reply from Ms Murtuza-Peerun, stating that she would get back to me with the names of the students allocated to us. I did not hear from her again.
Two aspects were different to our experience with other training institutions - we were able to interview potential students in the past, so that we could accept or reject the students prior to them starting with Whale Cottage. To this end, we would receive CV’s of the student candidates. This did not happen. The internship period was odd, in that it started on 11 April, and was to end on 8 May, a very short four week period, not long enough at all for any significant training. From May onwards the hospitality industry goes into winter mode, with barely any guests, and therefore there would be little practical training possible from this time onward - it was surprising that a Tourism training intsitute did not know this!
I was surprised to receive calls from two students on 10 April, the day before their start date, informing me of their arrival on the following day. We had no CV’s, nor did we have any guidelines from the Institute as to what its training expectations were of us. The students started at Whale Cottage Camps Bay the next day, and arrived professionally dressed, student T looked smart in a waistcoat and tie, but blew this when he chewed gum at work. We had a meeting with them, read through an overview of what the students were to learn in respect of Housekeeping, and the practical conditions of work were discussed. Student T was requested to be moved to Hermanus, as there would not be enough work for two students in Camps Bay. I called Ms Murtuza-Peerun, to express my dissatisfaction with the unprofessional start of the relationship with her Institute, and she said that she had been ill, and blamed her staff for not having informed us about the students’ arrival.
Student R impressed immediately, and although she was only 17 years old, she initially appeared mature. Student T chewed a new piece of gum, and had to be reprimanded for doing so again. I stayed in e-mail contact with Ms Murtuza-Peerun, and documented all the problems that we experienced with the students. Student T agreed to go to Hermanus, but delayed his departure by one day, as his parents did not have money to give him for his meals, so we took care of this for him. On arrival in Hermanus, he expressed his dissatisfaction to his mother that he had been accommodated in a staff room, and that he was not accommodated in the private home of our manager, which had not been promised to him. Student T became hard work and took valuable time of my managers in Camps Bay and in Hermanus, as he was unable to make a bed, not even understanding the concept of a fitted sheet. He did not know how to wash dishes! Both students were first years, having had about 10 weeks of academic training at the Institute, which had included a few days of practical training in bed-making under severe time constraints at the Institute’s “private 5 star guesthouse in Sunset Beach”, we were told by the students, but there was no evidence of this training having had any beneficial effect on the students, on Student T in particular.
Four days after the start of the students we were called by a staff member of the Institute, saying that they were placing the students elsewhere, as the parents had complained to the Institute about the work that had to be done by the students. We were not consulted, nor asked for input before the decision was made by the Institute. Student R begged us to keep her on, but the Institute decided otherwise. Being a guest house and not a hotel, our interns are expected to be proficient in all aspects of guest house operation. I called Ms Murtuza-Peerun, and she sounded surprised about the call that we had received. She was in Durban, and said that she had not been consulted by her colleagues about the decision. She also told me that she would fire her Housekeeping lecturer, who already was on a final warning, for the poor bedmaking training of the students. Our managers spent valuable time in sorting out the students’ problems. Student T was called on numerous occasions while he was helping our Hermanus manager to prepare breakfast, and he had to be asked to switch off his cellphone. The Institute appeared to have no understanding of the time pressure on accommodation establishments between 8h00 - 11h00! The five days that the students had spent at Whale Cottage were a complete waste of our time, and disrupted our operation. It was our evaluation that the students were immature, that student T had no social skills and was a complete introvert, one barely being able to understand him when he spoke (yet he had good matric results, we were told!), and that he would never make it in the hospitality industry. Both students had been moddle-coddled by their parents, and had never helped at home in making beds and working in the kitchen. The Institute had not taught them about dealing with the public, or about working for a business. Ms Murtuza-Peerun did indicate that both students’ mothers were the interfering and protective kind, Student R’s mother having called the Institute at the beginning of the academic year, for example, to enquire about the most suitable colour and type of paper she should buy to cover her daughter’s books!
Our experience with the Tourism and Business Institute of Southern Africa has made us decide to not take on any interns again, despite wanting to give back to the industry. In general, we have found many students to not be serious about their studies and practical training (our best student ever completed her hospitality qualification, to move into teaching, as she could not accept the working hours of the hospitality industry!). We blame the tourism training institutes for not screening students on the basis of their suitability for the demands of the hospitality and tourism industry, accepting any student whose parents are willing to pay the often exorbitant study fees.
I wrote to Ms Murtuza-Peerun to express my disappointment with her poor organisation of the student placements, and the unprofessional removal of the students by her Institute, and stated that I would warn our colleagues in the industry. In checking out the Institute’s website, unfortunately only after the placements, I noted with interest that almost all the members of the Board of Governors of the Institute have a law qualification, and only one in tourism/hospitality. The Institute has three directors, and its CEO is Rahman Murtuza, the father of the Operations Director! Mr Murtuza’s previous background is stated as having been with Sun International. It did not surprise me that Ms Murtuza-Peerun threatened “whatever action necessary” if I wrote about our experience with her Institute. What was surprising was to learn that only seventeen first years had enrolled for the hotel management course, meaning that less than half would finish at the end of the course, hardly an important supply of future trained staff for an hospitality industry desperately requiring trained manpower! It was also shocking to read on the Institute’s website that the students can in future be placed in jobs in Australia, Mauritius and Dubai - the Department of Tourism, Western Cape Department of Education, FEDHASA, Theta (now renamed CATHSSETA, the T and H standing for Tourism and Hospitality), and UCT’s Graduate School of Business all endorse the Institute, and would be aghast if they knew that their training efforts and association would be wasted on students ultimately leaving the country, when our own industry needs them so desperately!
Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com Twitter:@WhaleCottage