Airlines from Germany, Switzerland, and Austria will soon be flying directly to and from Cape Town, some expanding the number of flights per week, and some first time entrants, boosting tourism from these and other European countries during our summer months, according to Tourism Update. Continue reading →
* London’s first underground farm Growing Underground has been created in a disused bunker from World War II, below the Northern Line at Clapham, reports The Daily Telegraph. The Farm will soon supply herbs to London restaurants, all grown without any impact on the environment.
* More capacity has been added to flights traveling to Cape Town in Continue reading →
* Norwegian Air is planning to introduce low-cost flights between Gatwick and Cape Town. The airline has recently introduced low-cost flights Los Angeles, New York, and Fort Lauderdale from Gatwick.
* Edelweiss and Lufthansa airlines have announced that they will increase capacity to their flights to Cape Town. From October Lufthansa will be putting larger A340-600 aircraft on the route, adding 30% more capacity. Similarly Edelweiss will add 30% more capacity between Cape Town and Zürich from December to March, by flying three times a week.
* Restaurant Mosaic at The Orient has received an Award of Excellence in the Wine Spectator Restaurant Wine List Awards, one of only three recipients of the Award in Africa. The minimum requirement is to stock 400 wines – Restaurant Mosaic stocks 40000 ‘fine and rare wines‘. (received via e-mail from Restaurant Mosaic at The Orient). Rust en Vrede and five hundred are the other two recipients of the Award, Chantel Dartnall has informed.
* The International Air Transport Association (IATA) has downgraded its growth projection for airline passengers to 5% for the rest of 2013, but does expect a stronger growth in 2014.
* The City of Cape Town staff strike has come to a speedy end.
* The Fish & Chip Company’s short-lived advertising campaign with President Zuma as its subject, on which R500000 was spent on media placement before it was withdrawn, generated R20 million in PR coverage in ten days, winning the Metropolitan Republic a Gold Loerie for PR Communication Campaign. Die Antwoord’s video for its song ‘Fatty Boom Boom’ was a surprise Gold winner in the TV and Cinema 90 second+ category.
* Swiss airline Edelweiss, which belongs to Lufthansa, returns to Cape Town from October for the third year, serving the Zurich – Cape Town route, a popular way for German, British and Italian tourists in particular to fly directly to Cape Town.
* South Africa’s ‘maverick’ winemakers receive praise from wine-searcher.com!
Doing research about Turkish Airlines’ direct flights to Cape Town, the subject of a recent trip to Turkey by a 10-person Cape Town Tourism and City of Cape Town delegation, we found that many direct flights are exorbitantly priced, and that Turkish Airlines is one of the more expensive flights to Cape Town from Europe! One wonders why the City delegation did not visit all the cities in Europe that offer direct flights to Cape Town, or those offering more reasonably priced flights.
The dates chosen for the cost comparison of the airlines flying direct to Cape Town from Europe was departure on 1 November and return on 8 November, with the lowest airfare reflected below:
Air France (Paris) R 7775
KLM (Amsterdam) R 8085
SAA (London via Johannesburg) R 11457
Virgin Atlantic (London) R 11542
BA (London) R 12002
Turkish Airlines (Istanbul) R 13545
Edelweiss (Zurich) R 16489
Lufthansa (Munich) R 27453
Lufthansa (Frankfurt) R 27630
Given that a maximum of 4800 tourists could arrive in Cape Town on four weekly flights from Istanbul per month, at exorbitant flight prices, the justification by Cape Town Tourism CEO Mariette du Toit-Helmbold for her team’s recent trip to Turkey does not make sense. Writing that Turkish Airlines (but not knowing their correct name) is introducing four direct flights from Istanbul to Cape Town per week, she said that her visit was to ‘promote bilateral trade and tourism’. Other goals were to ‘showcase Cape Town’s natural and urban offerings, investment opportunities, as well as the city’s creativity and our appeal as World Design Capital 2014’, she wrote. Trade promotion is not the mandate of Cape Town Tourism, nor is it that of the City of Cape Town and its newly formed Tourism, Events and Marketing (TEAM) Directorate! Marketing World Design Capital 2014 is not the mandate of Cape Town Tourism either! She continued her justification:
“During the nine-day trip a twin city agreement will be signed between Cape Town and Izmir. The City of Cape Town has been officially invited by the mayors of both Istanbul and Izmir for bilateral meetings on trade and tourism promotion. The trip includes pre-organised business meetings and experiences, as well as a dinner event for key stakeholders, including tourism boards and destination marketing organisations, embassies and consulates, as well as Turkish Air (sic) and key media. Just as Cape Town is the gateway to Sub-Saharan Africa, Turkey is an access point to Europe and Asia. Turkish Air’s (sic) decision to fly direct to Cape Town from October is a great opportunity to collaborate in growing arrivals from both new and established markets. This trip is the perfect opportunity to showcase Cape Town as both a leisure and business tourism destination and to build new partnerships. Turkey has a vast creative economy which includes everything from food to fashion, architecture, retail, jewellery and art. It is a beautiful country that relies heavily on its natural assets, and so it is fitting that we sign a twinning agreement with a city which is in many ways quite like our own. We hope to collaborate on increased responsible tourism and leveraging our creativity, and we go with the aim of increasing tourism and trade between our two regions. This group expedition is the first trip jointly undertaken by tourism, business and city officials, illustrating how serious Cape Town is about positioning the city as an urban destination open for commerce in all areas of business”.
Interesting is that since the return of the delegation to Cape Town almost a month ago, the City of Cape Town and Cape Town Tourism have not issued a media statement nor a report about the wasteful Turkey trip, to share with the ratepayers of Cape Town and the members of Cape Town Tourism exactly what they have learnt, what they achieved, and how many tourists we can expect from Turkey! Only one ‘business’ person was a member of the delegation, Peter Ayub, who owns the cookery school Sense of Taste in Istanbul and in Cape Town! His role appeared to be to find the best places for the delegation to eat at. At the AGM on Thursday, Alderman Patricia de Lille dedicated two sentences in her speech to the Turkey trip: “Recently, I have had the privilege of leading a City delegation, including representatives of Cape Town Tourism to Turkey. During this visit it was again evident that Turkey and related markets hold enormous potential for increasing tourist arrivals into Cape Town”. No further detail was provided, and the ‘related markets’ were not defined. City of Cape Town Executive Director for Tourism, Events and Marketing Anton Groenewald also referred to the trip in his speech at the AGM, echoing a similar message, the Mayor’s speech probably written by his directorate!
SA Tourism, Wesgro, and Cape Town Tourism have never defined Turkey as a target market for tourism to our city or country! The potential tourism numbers seem far too low to have justified the time and financial cost of the delegation’s visit. The delegation obviously did not do a good enough job of informing Turkish Airlines about our city, its website profile of Cape Town stating that ‘Cape Town is one of the cities that will host the 2010 FIFA World Cup’! Provincial Tourism Minister Alan Winde recently agreed that the smarter marketing of Cape Town would have been to invite the Turkish tour operators and media to Cape Town!
Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com Twitter: @WhaleCottage
SAA has been in the news in the past few days for all the wrong reasons, eight of its eleven Board members having resigned in what must signal the lack of confidence in the management of the airline and its future. As our tourism industry is strongly reliant on SAA to bring tourists to the country, and to Cape Town specifically, the SAA situation is of vital importance to all tourism players.
Cheryl Carolus, Chairman of the SAA Board, is one of the Directors who resigned, with Bonang Mohale, Russell Loubser, Louis Rabbets, Jabulani Ndhlovu, David Lewis, Teddy Daka, and Maggie Whitehouse, but she has not motivated her decision. Russell Loubser has been vocal, saying that SAA, SA Express, and Mango deserve the support of the South African government, being its largest shareholder, but that they are not receiving it, reported The Citizen. Loubser called for emotional, financial, and moral support, given the economic downturn and the competitive airline industry. The operations of the company have had to be executed in accordance with the Public Finance Management Act, he said, which meant that they could not run the company as a commercial enterprise, in which they would ordinarily hire and fire staff, or change routes. ‘But a company like SAA which is totally dependent on the government requires in return the total support of the shareholder. And right now it is finding it difficult to work with the shareholder’. Issues that have been tabled for months do not get resolved, Loubser explained, particularly the burning issue of an additional R6 billion which the airline requested from the government to execute a strategic plan which had been approved by the government. He said that in the past three years since he had been a member of the SAA Board, the company had ‘never been properly capitalised’.
The resignations were precipitated by the delay in the tabling of SAA’s Annual Report by the deadline of 30 September, as the auditors had not finalised the financial statements, and the funding request not having been finalised with the Treasury, reported The Times. The funding requested is to cover fleet replacement costs, the introduction of a premium economy class, and the extension of business class cabins on long-haul flights. Yet Ms Carolus stated that the Minister is ‘lying’, as the financial statements have been completed, and withholding them is ‘illegal’, reflecting on the Board directors, reported The Times today. The Annual Report for SA Express was also delayed. Last year the financial statements for SA Express had to be withdrawn, when found to be ‘materially misstated’. Last month the Minister fired all except one Board member of SA Express, for accounting errors going back to 2008!
Earlier last week Ms Carolus had summarised the Board’s achievements as flying to new destinations, sacrificing domestic routes to the benefit of international routes, modernising and increasing the fleet, and in addressing fraud and corruption.
Minister of Public Enterprises Malusi Gigaba appointed eight new directors to caretake the Board positions, with Vuyisile Kona as the new Chairman, and Andile Mabizela, Andile Khumalo, Bonisizwe Mpondo, Dr Rajesh Naithani, Carol Roskruge, Raisibe Lepule, and Nonhlanhla Kubeka as the new Directors, representing expertise in the fields of aviation, management, state governance, and finance, and which he said would assist the government in ‘propelling the airline to greater heights‘! The Minister issued a statement, describing the resignation timing as ‘bizarre’, and condemned ‘the leakage of confidential government information’ as an ‘abuse of free speech’, without explaining what information leak he is referring to. The Minister also explained that the term of most Board members would have come to an end anyway, at the scheduled AGM on 15 October. The Minister assured staff, passengers, and suppliers that the Board resignations would not disrupt the operations of SAA.
Cape Town’s tourism industry was badly hit by SAA’s decision to close down its Cape Town – London direct flight route in mid-August, selling one of its three slots at Heathrow, and creating a Southern African hub in Johannesburg, forcing all international SAA flights to land in Johannesburg, and then connect to Cape Town on a domestic flight. This strategy is proving fatal for tourism, as we continuously receive feedback that international flights arriving simultaneously at OR Thambo airport are causing Passport Control and Baggage Collection congestion, meaning that the connecting flights are missed by international visitors, for which SAA tries to cash in on ticket change charges! This is a dreadful first tourist impression of our country!
The declining quality of SAA’s food and beverage service and poor hostess service was well-documented by German wine writer Mario Scheuermann, who flew from Frankfurt to Johannesburg, to attend CapeWine 2012 in Cape Town last week. He wrote that the wines were of sub-standard quality, and ran out two hours after take-off, that the food was dreadful (his photograph), and that the mineral water had run out before landing in Johannesburg. The party of German VIP visitors missed its connecting flights due to the congested airport facilities, and had to wait for three hours to catch a new connecting flight to Cape Town!
Despite this sounding unpatriotic, we would encourage international visitors to fly to Cape Town with any airline other than SAA, and to avoid flying into the country via Johannesburg at all costs! Direct Cape Town connections are or about to be offered by BA and Virgin from London, by Edelweiss from Zürich, by Lufthansa from Munich, by Emirates from Dubai, by Air France from Paris, by Turkish Airlines from Istanbul, and from Amsterdam by KLM. Maybe the cancellation of SAA’s Cape Town-London route is a blessing in disguise for our city, given the poor reports about the airline’s service and quality!
POSTSCRIPT 2/10: Swedish guests checking in at Whale Cottage Camps Bay today praised the ease of connection via Swiss from Copenhagen to Zürich, and then the direct flight by Edelweiss to Cape Town, for its friendly service and fantastic price of R 5500 each for the full return trip.
POSTSCRIPT 2/10: Today it was announced that the government has given SAA a ‘guarantee’ of R5 billion!
POSTSCRIPT 2/10: Southern African Tourism Update has published a letter today from a tour operator reporting on two client flight cancellations due to overbooking, handled unsympathetically by SAA staff.
POSTSCRIPT 3/10: Mario Scheuermann has shared the details of his return journey on SAA two days ago. The food quality was slightly better, there was more wine available but the quality offered still was poor. There was a problem with the cooling, so all beverages were warm, i.e. not cooled! The service was equally poor. Interesting would be to hear the evaluation of the food and wine offering by the SA Culinary Olympics team, which was on the same flight to Frankfurt!
POSTSCRIPT 7/10: The Times reports that the smaller independent airlines are furious that SAA has been given a R 5 billion lifeline by the government, saying that this is driving low-cost airlines out of business. Nine out of 11 airlines that started operating locally in the past 20 years have gone into liquidation, mainly due to an oversupply of domestic seats, ‘a legacy of the optimism of 2010’. Now 1time wants a bail-out by the government too. The small airlines are asking for a cut in the fuel levy, as well as reduced fees for ACSA, Air Traffic Navigation Services, the SA Weather Service, and the Civil Aviation Authority.
POSTSCRIPT 10/10: Southern African Tourism Update reports this evening that the new Chairman of the SAA Board is questioning why the Cape Town – London route was cancelled, and is apparently in talks with the Mayor of Cape Town Patricia de Lille to reinstate the route. One wonders why he is not talking to our Western Cape Minister of Tourism Alan Winde, the CEO of Wesgro Nils Flaatten, and/or Cape Town Tourism CEO Mariette du Toit-Helmbold! One of the three SAA slots at Heathrow have been sold, which may make the reinstatement difficult.
Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com Twitter: @WhaleCottage
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