It was depressing to read the article”The Business Case for Tourism and a strong brand for Cape Town” by Cape Town Tourism CEO Mariette du Toit-Helmbold, and published on the Cape Town Tourism Blog. Oddly it has not been sent to its members. The most disturbing prediction it contains is that the R14 billion Cape Town tourism industry, which employs just short of 300000 staff, will only recover in 2014, in getting back to the 2007 level, the last good year for tourism in Cape Town. What is disappointing is that Mrs Helmbold does not provide any guidelines to her Cape Town Tourism members as to how businesses should survive the next three years of poor business, nor does she spell out what she and her organisation are doing to market Cape Town more visibly!
To set the scene, Mrs Helmbold writes that international arrivals to Cape Town as well as domestic arrivals have stagnated due to the ‘Global Financial Crisis’, as she calls it, and she estimates a total loss of R 1,5 billion for the Cape Town tourism industry between 2008 – 2014, with zero job creation as a result. Unlike other provinces, Cape Town and the Western Cape has little Africa-business, with more than 80 % of its business coming from Europe (including the UK, one assumes) and the USA. Cape Town is a small fish in a massive global tourism pond, with our city’s market share being 0,2 % of world tourism. She blames SA Tourism by implication for doing too much marketing of wildlife, and too little of the cities in our country :”…many national campaigns are of a tactical nature, which do not necessarily build knowledge and esteem values of our cities”. The marketing of Cape Town, which is the responsibility of Cape Town Tourism, does “not allow for Cape Town to be compellingly and relevantly portrayed to potential visitors”. This sounds odd, as Mrs Helmbold is pointing at her own organisation, but she does not explain what constraints there are to marketing the city. She also states that Cape Town’s attributes of being “iconic, complex and multi-faceted” are not evident to tourists.
The rest of the five page document becomes a long and theoretical ramble about how Cape Town should be positioned and at whom it should be aimed: in summary, the marketing of Cape Town no longer should be focused on leisure tourism alone, by highlighting the beauty of Cape Town, but it should incorporate business, investment, academia, and the creative sectors too. All of this appears to have been written to justify to its funders, the City of Cape Town, that unnamed ‘partnerships’ (probably the writers of the document, given its theoretical nature and unusual style for Mrs Helmbold’s writing) are “waiting in the wings for public sector endorsement of Cape Town Tourism’s new 2011/2012 marketing strategy and for the brand execution plan”.
Sydney is used as an example, in how the 2000 Olympic Games caused a five-year tourism slump to that city, mainly because they stopped marketing themselves, thinking that they had world exposure. The key learning points for Cape Town Tourism are that cities do not market themselves, they need to be marketed; investment in infrastructure and hosting events create growth and ‘livability’, but may not be relevant to tourists: “lack of marketing induces invisibility and irrelevance, which in itself reduces demand”.
The conclusion of the article seems far too obvious, and one must question why Cape Town Tourism, custodians of brand Cape Town, have not been able to identify the poor tourism and resultant poor industry performance trends, and have not acted proactively to address these problems. Mrs Helmbold concludes: “If we do not act decisively now our industry and the economic well being of our city and people are at great risk. If we don’t proactively engage in a new marketing and branding strategy we run the risk of being positioned nonetheless by our competitors, our critics and the media, and most likely to our disadvantage”. The last sentence does not make sense in its wording, nor can one understand why Cape Town Tourism has not changed its marketing strategy to date, having been responsible for the city’s marketing for the past three years already.
As we have pointed out on this Blog, the recent TripAdvisor accolade of Cape Town being ranked in first place as its Travellers’ Choice Top Destination, has seen no tourism benefit at all, and this is echoed by Ms Helmbold: “Although we are considered as one of the new cities to watch for 2020 and continue to rake in travel accolades, it is no guarantee for success or economic growth”.
One must question whether Cape Town Tourism is capable of driving such an important campaign, influencing the revenue of almost all the city’s businesses, all directly or indirectly influenced by tourism, and of its population, dependent on jobs. Cape Town Tourism’s Marketing Manager until recently was Lianne Burton, a journalist, and not a marketer. Her departure from the organisation has been kept low-key. Ms Burton has not been replaced to date. Mrs Helmbold and her PR Manager Skye Grove are very active on Twitter, but this is rarely about tourism, and far more about their social life. We must question why their time during working hours is not focused on their work and the marketing challenges of our city ! A further concern is the information that we have received that the highly respected PR company that Cape Town Tourism had appointed in Germany, KPRN, no longer does the PR for Cape Town. There appears to be no visible benefit to tourism in Cape Town of the appointment by Cape Town Tourism of PR agencies in Holland, Germany and the UK.
We wrote to Mrs Helmbold, and asked her some questionsaboutthemarketing of Cape Town. The first question related to the replacement of Ms Burton. It appears that Ms Burton left some time ago, but is assisting Cape Town Tourism in a “consultative role” until the end of this month. A new Executive Manager: Marketing should start on 1 July, she wrote. Of concern is that Cape Town Tourism also does not appear to have an eMarketing Manager, with a job advertisement posted on Careers24 yesterday, and requiring the person to start on 1 July, not giving anyone time to work out their notice! We asked about the international PR companies that had been appointed, but Mrs Helmbold was only detailed in respect of the non-renewal of the contract with Kleber Public Relations Network, which has worked with SA Tourism for years. The company has been replaced by Akomasa Creative Connection in Germany. Mrs Helmbold did not provide information about the success of the PR campaigns overseas, other than to say that information about it has been presented at workshops, which not all Cape Town Tourism members can attend. One hopes that Cape Town Tourism can justify its international spend by sending members a detailed report of their international activities to obtain exposure for Cape Town.
In reply to our question:”What is Cape Town Tourism doing to prevent a bloodbath of restaurant, hotel and other accommodation closures due to poor forward bookings?”, Mrs Helmbold was generalist and vague, and she does not appear to understand that a solution must be found NOW, and not in months to come! This was her disappointing response:
“As I explained in the Paper done on the Business Case for Tourism, the global financial crisis and the subsequent consumer behavioural change has had a significant adverse effect on the tourism industry; demand has diminished, visitor spends have steadied and costs have increased. Our over-reliance on traditional source markets, worse hit by the GFC, places us at further risk. There is not a quick-fix for this problem and no one could anticipate the extend (sic) of the impact of the GFC, of which we are really only now experiencing the magnitude of the impact. This is of course exaggerated by seasonality and as I said before our over-reliance on international leisure visitors from mainly Europe and the US.
Investing in a strong, multi-dimensional brand is critical. We are pursuing private partners for a few significant brand platforms like international TV productions (BBC, National Geographic), events and campaigns, focusing on our unique strengths as a destination i.e. food and wine. We are focusing our efforts and resources on the “dream” and “conversion” part of the customer journey – assuming that the choice to come to Cape Town is not an obvious one and expensive to get here. We have to reinforce the awareness created during the World Cup, but move to conversion with good value for money offers. From an eMarketing perspective we are adding bookabilitytoourweb-platforms by July this year, starting with accommodation and then introducing it for tours and activities as soon as the new module is built. Through the new marketing alliance with Joburg and Durban we should be able to leverage some of SAT’s marketing spend, this will be a key focus for us in the next 4 months.
Whilst we continue our investment and reinforce our presence in traditional international leisure markets, we are investing in domestic tourism, using mainly some key events as draw-cards and working with the business sector to start changing negative perceptions around our business brand. Both the domestic and business markets are complex issues and will take a long-term approach to turn the tide against seasonality.
We are hosting a series of product workshops within the next few months on value, price, packaging and marketing alignment aimed to assist the industry to become more competitive and mitigate some of the risks faced within these tough economic times.
We will all have to work very hard together, under a powerful and united destination brand, to change the current trends and grow tourism into a more sustainable, year-round industry with a more healthy balance between international leisure, business and domestic tourism.
We are making a few significant changes to our marketing strategy and as soon as the plan is finalised and partners confirmed we will share it with the industry.”
We call for a heavyweight Marketing professional to be appointed, to drive Cape Town Tourism’s marketing of Cape Town. Ms Helmboldhasbeen running “Brand Cape Town” workshops for the past three years, and she is still asking workshops what Cape Town stands for. Surely by now she and her team should have decided on a unique positioning for Cape Town that would be universally applicable in communication with all the sectors it wishes to attract to Cape Town. Ms Helmbold’s article sounds like a city marketing organisation that is overwhelmed by the problems its tourism industry is facing, and that does not know the way forward – a very scary situation indeed!
POSTSCRIPT 10/6: The only response from Cape Town Tourism is this sarcastic Tweet from its PR Manager Skye Grove: @ons le, sit, loop, rol rond op twitter.. tsk tsk.. mar (sic) ek belowe ek sal more bietjie werk.. @
POSTSCRIPT 10/6: Yesterday Cape Town Routes Unlimited CEO Calvyn Gilfellan was reported on Eye Witness News to have urged ‘hotels and industry suppliers to reduce their rates to make travel more affordable for locals’. He said “I think the industry must really wake up and make themselves more affordable if they want to remain competitive in a very cut-throat industry”.
POSTSCRIPT 12/6: A business tourism event with a difference was the hosting of the global Playboy editors’ conference, which took place at the Mount Nelson Hotel earlier this week, reports the Weekend Argus . The group of fifty met for three days.
POSTSCRIPT 13/6: The Bureau of Economic Research sent its results for the confidence in the Services industry today. Of the service sectors surveyed, Accommodation has by far the lowest Business Confidence Index at only 25% (the next lowest is Real Estate at 41%). Accommodation bookings are expected to decrease by 56% in the second quarter of 2011, relative to 2010, which was out of the ordinary for bookings due to the World Cup. For the third quarter of this year, bookings are expected to be down by 23 %. Trend information supplied showed that the last period of growth for the Accommodation industry was the fourth quarter of 2007.
POSTSCRIPT 13/6: The provincial Minister of Tourism, Alan Winde, has announced that his plans to consolidate a number of marketing agencies for Western Cape businesses into an Economic Development Agency are back on track, and the Agency is expected to be launched in November, reports the Cape Argus today. Perhaps this is the agency that can do the business marketing of Cape Town. However, Cape Town Tourism is no longer on the Minister’s list of agencies which he wants to consolidate, his plans to do so originally causing a huge outcry. The agencies to be consolidated include Wesgro, Cape Town Routes Unlimited, the Cape Craft and Design Institute, the Cape Film Commission, Calling the Cape, the Cape Town Boatbuilding and Technology Initiative, the Cape Music Industry Commission, the Cape Town Fashion Council, and ten others.
POSTSCRIPT 14/6: One company that is benefiting from the tourism slump is the Protea Hospitality Group, which is leasing and buying hotels that have ‘over-extended themselves and are now struggling to survive due to the current slump in the local hotel industry’, reports Southern African Tourism Update. Protea’s CEO Arthur Gillis predicts that ‘many of South Africa’s 80 hotel brands will disappear’. Gillissaid that he doubted whether there will be a tourism boom ‘unless it gets more bums on airline seats’. He suggests that SAA should fly routes in the interest of tourism, whether profitable or not.
POSTSCRIPT 14/6: Gillian Saunders of tourism consultancy Grant Thornton said about the tourism industry recently: “It’s really tough out there”. She blamed this on the recession, the strong Rand, increased costs such as electricity and labour, and an oversupply of accommodation, reported the Cape Times. City Lodge Hotels CEO Clifford Ross said: “It’s probably the worst I have known for 32 years”. He added that no one “expected the drop-off after the World Cup to be so severe. There will be casualties in the market. Quite a few (hotels) are teetering on the brink”.
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