Tourism performance: why is tourism industry being misled?

Increasingly the tourism industry is seeing information that informs it about its successful performance, but this information does not tie in with actual business experience.

Yesterday on Twitter Guy Lundy, CEO of Accelerate Cape Town and Board member of Cape Town Tourism, created a PR gaffe (accommodation establishments make up a substantial proportion of Cape Town tourism members) by writing disparagingly:  ‘So if the airport & Table Mountain had a record December, why are the hotels crying? Because people want bargains & they’re too expensive’. When challenged on his statement, Lundy quoted the record 813000 arrivals at Cape Town International in December, and its best ever year in 2011, and the record Table Mountain Aerial Cableway 142000 ticket sales from mid-December – mid-January, attributing this success as follows: Positive legacy of 2010 World Cup; increased profile & awareness’. Few tourism businesses would agree with Lundy about the tourism benefit of the 2010 World Cup.

The Tourism Business Council of South Africa also described its 4th quarter Tourism Business Index of 87 as a ‘marked improvement in business performance for the last quarter of 2011’, correct relative to last year’s 3rd quarter (70), 2nd quarter (74,5), and 1st quarter (79) Index measurements.  What the Tourism Business Council media release neglected to point out is that the 4th quarter Index of 2011 is below that of the 4th quarter of 2010, which was at at 89.  The improved performance was attributed to the COP17 Climate Change Conference and the better than expected festive season.

The Tourism Business Index is sponsored by FNB, and compiled by Grant Thornton, the tourism consultancy that got the 2010 World Cup tourism estimates so badly wrong. Pieter de Bruin, Head of Industry Sales at FNB, said that the results showed that there are ‘different cycles in business, such is the importance of South Africa being an events destination and having a healthy domestic tourism market. We trust that this may be the first sign of the industry making a turn into positive territory’. Tourism Business Council CEO Mmatšatši Marobe commented: “When we launched the TBI (Tourism Business Index) project in 2010, one of the key objectives was to develop a business tool which would produce relevant information that will assist us to map out a clear picture of general ‘health’ our (sic) industry.  At this point the index is showing positive signs of progress; however it also highlights the important role that the domestic and regional markets can play in boosting tourism trade”.  The Tourism Business Index is a national measure of current and future performance of the tourism and travel industry, and sub-sectors within the sector. A score of 100 is the norm, reflecting that the tourism industry is still operating below par.  The industry has predicted an Index of 82 for the first quarter of 2012.

Durban bragged about its excellent performance over the past two years, claiming to have ‘outperformed other major SA cities’, reports The Mercury, due to the COP 17 Conference, achieving near 100 % occupancy for about a month, and the excellent local visitor numbers over the December school holidays, with hotel occupancy of around 80%, according to the local FEDHASA branch.

FEDHASA Cape Chairman Dirk Elzinga would not admit to a tourism crisis last winter, blaming the poor hospitality performance on the Cape scapegoat of Seasonality.  Eventually he had to admit that it was the worst season ever. Elzinga has deplored the cancellation of direct flights to Cape Town by Malaysia Airlines and Etihad Airways, stating that Cape Town’s tourism fortune is reliant on ‘direct access’.

Once again we would like to encourage the tourism authorities to be honest and realistic in reporting tourism successes, and to be correct in defining the summer season being from October, which showed poor performance with November too, and runs until April. The Cape is currently experiencing a ten-day dip, and yesterday’s J&B Met was the poorest ever for the hospitality industry.  Very encouraging is the almost fully-booked February, due to the Mining Conference taking place in Cape Town, as well as Valentine’s Day, with a welcome increase in British tourists too.

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

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