FEBRUARY 2005
TAXING TOURISM

Tourism players have deplored the announcement by the Premier of the Western Cape Province that it is considering a Tourism Tax on all players in the province's leading industry.

Despite a good current season, tourism players have experienced a far more unpredictable industry which has been placed under pressure by the strong Rand and the oversupply of tourism products and services.

To address these threats, tourism players have already been accommodating in holding their prices to 2003 levels, or to increase them minimally in line with the inflation rate by around 5 %, relative to the last season. A tourism levy, as proposed by Premier Rasool, would have to be passed on to the tourist, and would place further strain on the value for money perception tourists as well as international film production companies have of the Western Cape.

Accommodation establishments are already taxed by having to pay higher rates and taxes to their municipalities compared to their residential counterparts, so such a tax would be a double blow to the accommodation industry. In addition, such establishments are also paying a heavy penalty for their water consumption, as their guests' usage of water cannot be curtailed, placing these establishments in the highest water rate category.

The announcement of the tourism levy would appear to indicate that Cape Town Routes Unlimited, the newly created tourism marketing body funded jointly by the City of Cape Town and the Western Cape province, is short of money already, only one year after its inception. It would be advisable for the Premier to seek alternative ways of covering the R 22 million contribution it is responsible for out of the total annual budget for Cape Town Routes Unlimited of R 58 million.

One of the ways would be for Cape Town Routes Unlimited to develop sponsored co-operative marketing programmes with industry players, so that marketing campaigns undertaken for the industry cost the taxpayer next to nothing. Public Relations activities may be a very cost effective means of attracting visitors to Cape Town and the province.

Another option would be for Cape Town Routes Unlimited to refocus its marketing campaign on international tourists, and not on locals. The company has been running a costly colour print advertising campaign in the Weekend Argus, advertising Cape Town and the Western Cape as a holiday destination to Capetonians, at a time when it is high season in the tourism industry, resulting in price levels that are currently out of reach for most locals, and at a time when most locals are not considering going on holiday. The advertising campaign has just been extended into cinema, once again screened in Cape Town cinemas to local audiences, which is wasteful.

The reported change in greater marketing focus from Europe to Africa by Cape Town Routes Unlimited is also cause for concern. Johannesburg has traditionally been the Gateway to Africa, and is hugely popular as a shopping tourism destination.

The tourism targets Cape Town Routes Unlimited has set itself for this year are 471 870 visitors from Africa, 1, 1 million from countries outside Africa, and 4,9 million domestic visitors.

TOURISM TOPS

The current tourism season is a good one, and all indications are that March will be almost as fully booked as has been February. In Cape Town, the Cape Town International Jazz Festival and the Argus Cycle Tour are two major events which, combined with an early Easter in March and school holidays, will ensure good occupancy levels for accommodation establishments, and good bookings for restaurants and car rental companies.

More than 6 million passengers passed through Cape Town International Airport in 2004, of which 600 000 arrived in December. International arrivals were up by 12 % for November and by 13 % for December, reports the Cape Times. Domestic arrivals in December also increased by 14 % compared to the year before. Visitors arriving at Cape Town International Airport in December 2004 were from Johannesburg (182 143), London (33 254), Durban (33 134), Port Elizabeth (12 922), Frankfurt (12 132) and Amsterdam ( 8 543).

Good news for the tourism industry is that Dertour, one of the largest German travel agent groups, will again host its annual convention (the Reise-akademie) of 700 of its travel agents in South Africa. It is the first time in Dertour's history that it has returned to a Reise-akademie destination a second time. Despite a massive decline in German tourist numbers in the last three years, due to that country's poor economic situation, Dertour is upbeat about the future interest by Germans in South Africa as a tourist destination. Travel News Now quotes Dertour VP for Marketing and Sales, Kevin Keogh, as saying that his company will focus on the "baby boomers" aged between 40 and 65 years. Beach tourism is a strong requirement, the German tourist wishing to explore the culture and wanting to relax on the beach during his/her holiday.

Despite the positive tourism figures, Ian Kleinhans of the Fairfield Group warns that tourism products are still under pressure, and his company has seen cancellations of group tours, and reductions in bookings for such tours, Restaurant prices are also receiving complaints from tour group clients. He does concede that the stronger Rand has enabled tour companies to invest in better quality coaches. Self-drive client numbers appear to have stagnated, despite an increase in accommodation supply.

A number of tourism awards reflects the quality of the local tourism products:

* Le Quartier Francais in Franschhoek has been selected as the Best Small Hotel in the world, at the Tatler Abercrombie & Kent Travel Guide Awards 2005.

* The Table Bay Hotel in the V & A Waterfront in Cape Town has been named the Best Hotel in Africa and the Middle East by Conde Nast Traveler

* 1Time, a low cost local airline, has won the Cape Town International Airport Company's Feather Award for Domestic Airline of the Year, based on its customer service. SAA won the company's Best International Airline award, while LTU was honoured with the General Manager's Award for its contribution to the Cape Town International airport experience.

* GQ has named ile de pain in Knysna; 95 Keerom, one.waterfront and Madame Zingara in Cape Town; Yum and La Cucina di Ciro in Johannesburg; Reubens and Le Quartier Francais in Franschhoek; and Lynton Hall in Pennington as South Africa's Top 10 South African Restaurants.

VALENTINE'S ROMANCE AT WHALE COTTAGE FRANSCHHOEK

Whale Cottage Franschhoek has experienced a successful February, driven largely by a successful Valentine's weekend promotion, run in conjunction with a number of magazines, with some of Franschhoek's leading restaurants, including Reubens, Le Bon Vivant, Picatta, and French Connection. Romanticists booked a Valentine's Dinner Bed & Breakfast package at Whale Cottage Franschhoek, and received a dinner voucher for a different restaurant each day.

Media response to the newest Whale Cottage, set in the heart of Franschhoek, has been overwhelmingly positive. GQ described it as a "charming little number", Business Day said that it "provides more than enough comfort without being overwhelming", Style described it as "offering a perfect romantic getaway in the most luxurious of settings", Fairlady said it offers "old-style hospitality", and Sarie has praised its crisp and fresh bed linen.

GARDEN ROUTE UNDER CONSTRUCTION

Maintenance construction work on the N2 highway between George and Knysna has commenced, and is scheduled to continue until the end of next year.

Whilst the repairs to the highway are sorely needed, they are likely to be very disruptive to traffic along one of the most scenic and popular tourist routes, with delays of up to 20 minutes to be expected at one-way traffic sections of the road. In other sections, two-way traffic in narrower lanes will slow down the pace as well.

The maintenance programme includes repairs to the Kaaimans Pass between George and Wilderness, and from March to July the pass will be completely closed for up to two hours a day, on two days per week, to allow blasting to take place on this section of the route. Signage in Knysna, Sedgefield, Wilderness and George will communicate the times and dates of the road closures.

WINE WOES AND WINS

The drought in some parts of the Western Cape has affected the wine industry, and estimates by South African Wine Industry Information and Systems show that the 2005 wine harvest is estimated at 1,2 million tons, a 9 % decrease on that of 2004, reports the Cape Argus.

The white grape harvest in the Swartland area appears to be hard hit, with a reduction of up to 20 % expected. Other wine areas with reductions are expected to be the Orange River, Worcester, Robertson and the Little Karoo. The wine areas around Cape Town are expected to have a harvest much the same as last year.

The stronger Rand, creating a weaker international demand for South African wines, combined with a lower local demand, could lead to a wine glut, resulting in lower wine prices.

Good news for the wine industry is that wine sales to the United States of America grew by 59 % in 2004. American wine consumption represents 278 million cases, and is expected to almost double in the next three years, estimates Wines of South Africa. The American market appears to value the quality and value for money offered by South African wines. Wine varieties which are most popular amongst Americans are chardonnay and merlot, followed by cabernet sauvignon and sauvignon blanc.

The off-beat movie Sideways, which has been nominated for four Oscars, and is set in the Santa Barbara, California wine region, appears to have impacted positively on pinot noir sales in America, reports AC Nielsen. In the movie the main character, a wine lover, praises "pinot", while he is scathing towards merlot. Pinot Noir wine sales have grown by 16 % in the last quarter of 2004, co-inciding with the release of the movie in the same period. In total, however, it only accounts for 1 % of all wine sales in America. Merlot is the most popular red wine varietal, and represents 12 % of USA wine sales.

Dornier wine estate on the Stellenbosch Wine Route has won the Great Wine Capitals Global Network's award for architecture. The design of the wine estate's buildings has not gone the traditional Cape Dutch route, with the owners having opted for a more industrial style with an urban feel, reports the Cape Times.

Nederburg, well-known wine estate in Paarl, has been voted Top New World Wine by leading German trade magazine Weinwirtschaft, being recognised for its quality, value and versatility, reports Business Report. Last year Nederburg won the International Wine Tourism Award for Cape Town, awarded by the Great Wine Capitals Network. Germany is the second largest wine export destination from South Africa.

The wine industry is up in arms about new regulations regarding road signage to wine estates, with no more than three wine estates being allowed to put up directional signage at intersections. Industry representative Nicolette de Kock says that the regulations have not kept up to date with the 40 - 60 new wine estates opening each year, and the industry's dependence on signage to attract the interest of wine buyers.

A new wine cultivar has been developed by the Boland winery in Paarl. Called Novelle, it is a crossing between semillon and riesling. The wine has a grassy and green pepper character.

RESTAURANTS TO DISH UP STARS!

Restaurants will be the newest sector of the tourism industry to be graded and awarded stars by the Tourism Grading Council of South Africa. Already 60 % of hotel rooms and 75 % of guest house rooms have been graded in this voluntary standards scheme.

Requirements which are expected of restaurants to qualify for grading are compliance with regulations, passing the Tourism Grading Council's hygiene audit, providing reasonable security for patrons, not unlawfully discriminating against patrons on the basis of "race, gender, citizenship, physical and mental conditions", a clear indication of the house rules for the establishment, and sound building maintenance. A mystery restaurant evaluation will also take place.

The introduction of the grading scheme for restaurants appears to have been a contentious one, with bodies such as FEDHASA, the Restaurant Association, restaurant operators, food journalists, restaurant critics and the SA Taveners' Association having provided input.

Small restaurant owners have already complained that it will be a costly affair to be graded, at R 1800 for the grading plus four hygiene audits per year at R 750 each.

PROUDLY SOUTH AFRICAN SALUTES HOMEGROWN COMPANIES

Only five of the 38 finalists for the first-ever Proudly South African Homegrown Awards are from the Western Cape, and only two were selected as winners in their categories.

MonkeyBiz was a finalist in the Bridging the Divide and Exporter of the Year categories; Streetwise was also a finalist in the Bridging the Divide category, and was the winner; Galaxy & Co Jewellers was a finalist for Retailer of the Year and was a joint winner in this category; Pinelands North Primary School was a finalist in the Service of the Year category; while the Hermanus Whale Festival was a finalist in the Marketer of the Year category.

The Homegrown Awards attracted 368 entries in 10 Awards categories, and reflect the creativity, innovation and local content of local companies, and their products and services. Project Manager of the Awards, Sheryl Ozinsky, stated that the Awards demonstrate the principles of being Proudly South African, and the commitment of local companies to local content, quality, fair labour practices, and environmental responsibility.

SOUTH AFRICA GOES TO THE OSCARS

All local eyes are on the South African film "Yesterday" at the Oscar ceremony this weekend, which has been nominated in the Best Foreign Film category, the first nomination for a South African film ever at the Academy Awards. It is the first South African film made in Zulu, and focuses on the very real issue of HIV/Aids in the new South Africa. The film was produced by Anant Simgh, while its director and writer, Darrell Roodt, has also produced Cry the Beloved Country and Sarafina.

Another local film that has done the industry proud is uCarmen eKhayelitsha, which won a Golden Bear for Best Film at the Berlin Film Festival earlier this month. Director Mark Donford-May set the Bizet opera in Khayelitsha, a Cape Town township, which was translated into and sung in Xhosa.

Despite these successes in the international arena, the local film industry has reached a low point, after a number of years of success. The strong Rand, coupled with rising prices for accommodation, catering and location venues, has attracted production teams to countries with weaker currencies, offering better value for money, including Argentina. Even Miami has become a popular film location again, from which Cape Town attracted business five years ago.

The local film industry is a vital employer, contributes R 2 billion to the economy and is a showcase for the beauty of Cape Town and its surrounding areas, and therefore it is vital that it prospers.

Construction of the film studio for the Western Cape, awarded last year by the Province of the Western Cape to Dreamworld, a consortium headed by Anant Singh, a respected film-maker, still has not commenced. It would appear that Singh is constructing a similar facility in Durban, which could compete with work for the Cape Town facility.

WhaleTales is a newsletter issued by the Whale Cottage Guest House Portfolio
and is edited by Chris von Ulmenstein. Past issues of WhaleTales can be read on the website
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