Tour operators say South African accommodation has become too expensive for their UK clients, and they have called on local accommodation suppliers to relook their prices for 2011, reports South African Tourism Update.
Portfolio of Places representative in the UK, James Westrip of Africa Collection, says that the “good-value-for-money perception” of South Africa has gone in the past year. This changed perception about tourism prices, coupled with tough economic times in the UK and the strong Rand “…is proving problematic for us all”, he said. He feels that “SA is pricing itself out of the market”. Portfolio of Places has experienced its worst year ever in its more than 20-year existence, we have been told.
Another operator said that it is no longer feasible for local establishments to increase their rates by 10 % annually, in excess of the inflation rate. These increases effect the value for money perception of South Africa, says Louise de Waal of Baobab Travel. She stated that budget accommodation options often are questionable as far as quality goes, and therefore cannot be booked. Tourvest Inbound’s Martin Wiest says that high pricing makes our country less competitive globally.
&Beyond’s Gary Lotter acknowledges that not all accommodation establishments have increased their prices above the inflation rate, or at all, but it is the strong Rand that is the root of the problem. He also said that if establishments were to drop their rates, they could receive more business, although this is not guaranteed.
Westrip also complained about establishments charging their direct clients better rates than they do tour operators, even though their clients may be a once-off and tour operators usually are loyal to establishments and book them regularly. De Waal queried the wisdom of last minute rate reductions, and called for early-bird discounts instead.
It is interesting to read that tour operators cry wolf about high rates when it is the operators that are exceptionally greedy in their commission demands. Africa Collection takes 20 % commission on bookings it gives Portfolio of Places clients, on top of close to the entry level R20000 annual advertising costs for the Bed and Breakfast Collection advertisers. While the standard commission rate is 10 %, tour operators tend to do business with establishments if they can get commissions of 20 % or more, leading their business to go to hotels rather than guest houses and B&B’s, which would be far more affordable for tourists.
It may well therefore be the tour operators that are the cause of the loss-of-value-for-money image that they are complaining about!
A survey on the Southern African Travel News website shows that the majority of respondents indicated that they have frozen their rates.
Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com Twitter: @WhaleCottage
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Comments from tour operators such as “budget accommodation options often are questionable as far as quality goes, and therefore cannot be booked” actually reflects the fact that such operators cannot expect to earn the same commissions from the lower priced establishments such as ours because of the lower rates charged. With the Tourism Grading Council having established very stringent criteria for establishments graded at 3 star- which they categorise as “affordable” -visitors and tour operators will find plenty of good quality accommodation at budget rates.
We have been visiting SA for many years & have been regular users of the Portfolio collection.
Overall the B&B owners have been regularly increasing their prices year by year. This, combined with he effect of the strong Rand, has indeed priced them out of the market for many Brits.
We’ve now switched to Kenya as our preferred winter destination. The people are just as friendly, their prices even more so!!!