Whale Cottage Portfolio Blog

The Board of Cape Town Tourism has diplomatically told the MEC for Finance, Economic Development and Tourism, Alan Winde, that it is not happy to turn back the clock, and support his proposal for a centralised provincial tourism marketing agency, in that this would impact on the running of Cape Town Tourism, and of the marketing of brand ‘Cape Town’.

Last month MEC Winde announced his plan to consolidate Cape Town Tourism and Cape Town Routes Unlimited into one centralised provincial body, and to market one centralised Cape Town/Western Cape brand, which created an outcry, and resulted in a carefully worded statement from Cape Town Tourism (read our blog post).

In a recent meeting between the Chairpersons of Cape Town Tourism and Cape Town Routes Unlimited, and of MEC Alan Winde for the province and Alderman Felicity Purchase for the City of Cape Town, the way forward was discussed between the two parties.  It was agreed that an apolitical body was needed which would not change every time a new politician was elected at provincial or City level.   They also agreed to appoint an independent Change Manager to lead the process of negotiation between the two parties.  Both parties importantly agreed that Structure must follow Strategy.

Given the consultative nature of the process, Cape Town Tourism called a meeting of its members, to inform them of the MEC’s plan, to present to its members its counter-plan, and to hear the industry speak.  It was disappointing to see so few, and so few heavy-weight, members attend.

Mariette du Toit-Helmbold, CEO of Cape Town Tourism, provided background to the process of tourism unification, it not being the first attempt to unite the two tourism bodies.   In 2002 the provincial government and the City decided to unify the marketing of Cape Town, by taking this role away from Cape Town Tourism (Sheryl Ozinsky was the CEO of Cape Town Tourism at the time), through the creation of a Destination Marketing Organisation (DMO), named Cape Town Routes Unlimited.  The role of Cape Town Tourism was to unite seven local tourism bureaus, stretching as far as Somerset West, into one Visitor Information network, with unified Cape Town Tourism branding.  Cape Town Tourism was re-created, with a new Board of Directors and a new Constitution, created as an apolitical industry association, a body for members run by a Board elected by its members, and reasonably independent of the City of Cape Town’s funding, in that it focused on the generation of own-income.

A review organised by the City of Cape Town Mayoral Committee member Simon Grindrod in 2007, and a report full of negatives about Cape Town Routes Unlimited, led the City to withdraw its funding of Cape Town Routes Unlimited, having been a 50 % funder of the body, and gave the body the required one year notice.    In 2008 Cape Town Tourism was appointed to market Cape Town, and it was allocated the monies that would have gone to Cape Town Routes Unlimited, after Cape Town Tourism had asked its members’ support in taking on this role - the industry was unanimous in expressing its support.  This led to a city and a provincial marketing body, each marketing Cape Town, and with overlap in marketing the province as well.

MEC Winde is proposing that tourism marketing for Cape Town and the Western Cape be centralised into Cape Town Routes Unlimited, but that this body change its name.  It would be the primary body marketing Cape Town, and would be largely funded by the City of Cape Town.   This, Cape Town Tourism’s Board believes, is turning back the clock, as Cape Town Routes Unlimited is exactly such a body established six years ago, and has failed dismally.  The MEC wants a single destination marketing organisation, a single marketing strategy, and a single brand (currently it is the mouthful of ‘Cape Town and Western Cape’).   Further, the MEC has proposed that Cape Town Tourism market Cape Town domestically, while the province market it internationally.  Major events should be marketed by the province, and smaller localised events should be marketed by each affected or organising tourism body.  Cape Town Tourism stated that it felt that the MEC’s proposal contained too much emphasis on structure, even though he himself has stated that Strategy should drive Structure, especially given that the MEC has specifically suggested that the Board of the new body be appointed by the Premier and the Mayor, once again politicising tourism marketing.

Cape Town Tourism stated that the implications for Cape Town Tourism of the MEC’s proposal would be as follows:

1.  All marketing policies would come from provincial level

2.   A joint Cape Town/Western Cape brand is not feasible, Cape Town Tourism correctly stating that “Western Cape” is not a brand but a ‘collection of brands’.

3.   Strategy, structures and policies will once again be approved by politicians, given the proposed structure.  The body should be apolitical, and tourism must be protected against political changes.

4.   The province is proposing to only fund the establishment of the new DMO, and is expecting the City of Cape Town to fund all marketing costs, reducing the marketing budget dramatically and adding more administrative costs, reducing the monies available for marketing.

In its carefully worded response to the MEC, the Board of Cape Town Tourism stated that it was important that the marketing of world cities such as Cape Town should be driven by international best practice.  It does not support the establishment of a single DMO, but rather would like to see distinct roles and responsibilities for the two parties.  It was emphasised that Cape Town Tourism does not want to take over the marketing of the province (although many a Cape Town Tourism member would like to see this happen!).

Cape Town Tourism stated that its counter-proposal to the MEC was as follows:

*   create a joint integrated tourism marketing network

*   brands must be managed at local and regional level

*   Cape Town is the key tourism brand in the province, with its own unique identity, and cannot be straight-jacketed into a provincial marketing programme.

*   International best practice shows that successful city marketing is city-driven tourism, based on public/private partnerships.

*   The lifetime value of Cape Town’s ‘customers’ must be harnessed, via Customer Relationship Marketing.

*   Duplication of marketing activity and expenditure must be eliminated.

*   Cape Town Tourism should take over responsibility for the Convention Bureau and Events, two functions sitting with the province, and dominant sources of tourism income.

*   Cape Town Tourism should be the hub of tourism stakeholders, including the citizens of Cape Town.

In concluding the discussions at the Cape Town Tourism member meeting, the members were given an opportunity to state their views.  The tremendous success of Cape Town Tourism in marketing Cape Town and in dealing with the world’s media based in Cape Town during the World Cup demonstrates how successful the body is, and that it should not be re-engineered if it is working so well, the members were told.   Given that both bodies are spending taxpayers’ monies, it is expedient that such money not be wasted by creating a new structure.

POSTSCRIPT 24/8: An e-mail sent to Cape Town Tourism members during the course of today includes the following: “In a new development, the MEC has given his assurance that no decision will be taken on the issue of tourism structures before a tourism strategy for the Province has been agreed, in consultation with key city and regional stakeholders. Cape Town Tourism fully supports this move and will be taking part in the strategic planning process”

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

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

During a sport-intensive week and the death of Michael Jackson, a very important announcement by Cape Town Tourism, as well as a “Joint statement: City of Cape Town and Western Cape Provincial Government”, about the execution of a joint ‘Strategic Destination Marketing Plan’ by Cape Town Tourism and Cape Town Routes Unlimited, did not receive the attention it deserved from the tourism industry.

Designed to eliminate the duplication of marketing activity between the two tourism marketing bodies, a meeting was set up to focus on the growth of visitors to Cape Town and the Western Cape, and to ensure that tourism withstands political changes.

Cape Town Tourism’s mandate to market Cape Town has been extended by another year, Cape Town Tourism’s Mariette du Toit-Helmbold announced in her statement.

The statement released by the City and the Province was the following:

Joint Statement: City of Cape Town and Western Cape Provincial Government

The City of Cape Town and the Provincial Government of the Western Cape met on Monday, 22 June and agreed to jointly develop a sustainable solution to market Cape Town and the Western Cape as a globally competitive tourism destination. The discussions were hosted by the Western Cape Minister for Finance, Economic Development and Tourism, Mr Alan Winde and the City’s Mayoral Committee Member for Economic Development and Tourism, Alderman Felicity Purchase.

Also present at the meeting were the Chairpersons and Chief Executive Officers of Cape Town Routes Unlimited (CTRU) and Cape Town Tourism (CTT). Winde said: “The opportunity to find a lasting solution to manage tourism for destination Cape Town and the Western Cape has never been better. There is a need for all spheres of government to work together so that an environment can be created for business and residents to work in partnership with us. We have given the mandate to the officials to jointly develop a lasting solution for tourism marketing. It is important that the solution is able to withstand changes in political leadership and ensures no duplication.”

Ald Purchase added: “The Fifa 2010 World Cup is around the corner and we should not allow this opportunity to be missed. The City will, in the meantime, continue to use CTT to provide Destination Marketing and Visitor Services…”.

The timeframe for developing a sustainable model will be nine months and the key focus will be on how to best increase the number of visitors to Cape Town and the Western Cape.

Ald Purchase further said: “Both the City and Province agreed that it is important to be open minded about the outcome…Ultimately, we would like to see government provide an enabling environment for the tourism sector to grow and create more jobs in the economy. It is therefore important for the proposed solution to provide business and other key stakeholders with an opportunity to contribute resources and participate in the decision making”.

During the meeting both the City of Cape Town and the Provincial Government of the Western Cape agreed that the Constitution would provide the guiding foundation for the appropriate solution. Both parties also acknowledged that the proposed solution would inform possible legislative changes that are required for tourism to grow.

Whale Cottage Portfolio: www.whalecottage.com