Open letter to Minister of Tourism Marthinus van Schalkwyk

Dear Minister

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 16/6Business 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

9 replies on “Open letter to Minister of Tourism Marthinus van Schalkwyk”

  1. Nick Jones says:

    Chris,

    As you are aware, I have been visiting SA for many years. I have also experienced the incessant year on year increase in B&B prices. An average of 10% per annum comes to mind, way outstripping inflation. Whilst the market was buoyant, this greed worked OK. Now the famine has started.

    Therefore the B&B owners have the power to reduce prices to sensible & competitive levels to attract clients. Either that, or go out of business.

    Nick

  2. Thank you Nick.

    We were guilty of the 10 % plus increases too until 2007, and have kept our rates at this level ever since, both for summer (R590 – R650 per person) and the winter special of R350 per person per night.

    Our food inflation was over 10% for years, hence the increases. That is why our interest rates kept climbing, up to baout 26% at one stage. Now our inflation rate is at about 5 – 6 %, and mercifully our interest rate is at its lowest in decades.

    Chris

  3. Nick Jones says:

    Hi Chris,

    I’m aware that WTs have done as you say. Unfortunately many of your alternative B&Bs have continued to increase their prices asif they are still trading in a buoyant market.

    Apart from the airfares, the accommodation bill is the largest part of a tourists budget. Surely it’s better to have plenty of tourists paying reduced rates rather than having no tourists whatsoever.

    On the plus side, as a result of our lousy summer weather, maybe your Spring reservations will increase sharply 🙂

  4. I absolutely agree Nick – I hope that the Minister will place pressure on SAA domestically and internationally to reduce airfares.

    Chris

  5. butch rice says:

    I have also just written a letter to Marthinus van Schalkwyk. This time about wind farms on the West Coast, which are going to have a devastating effect on tourism to the area. They have already approved the erection of 55 wind turbines, each the height of a 40 storey building. The Paternoster community is fighting as hard as they can, but where is the voice of tourism authorities? I don’t get it. Bird life is going to be hammered, and the West Coast National Park will suffer……..

  6. Thanks for your passion for our tourism industry Butch.

    Have you contacted Alan Winde, our provincial Minister of Tourism? He is very approachable

    Chris

  7. butch rice says:

    Sure have. And a clear reply is yet to be forthcoming. It seems like they haven’t thought the issue through at all…….

  8. Steve Lailvaux says:

    great letter Chris! Did you get a response?
    Regards
    Steve

  9. Thank you Steve.

    No response from the Minister! Not that I would think that he is a blog reader! The Cape Argus may do something with the letter, and perhaps he will see it in that way.

    Chris

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