Category Archives: World Cup 2010

World Cup anniversary: South Africa was ‘ripped off’!

It is interesting that a review of the advantages and disadvantages of South Africa hosting the World Cup, which started on 11 June last year, and particularly the downside of this world event, is only emerging now.

Yesterday we wrote about the tourism slump that has been caused by the World Cup. In yesterday’s Weekend Argus, a very critical article was published, summarising the book to be published in September and to be entitled “South Africa’s World Cup: A Legacy for Whom?”, written by Eddie Cottle, ‘regional policy and campaign officer for the Building and Wood Workers International, a global trade union federation’.

Cottle is given a prominent space in the paper, and in summary he argues that “…the promises made about the benefits of hosting the soccer World Cup were nothing but ‘bald lies'”!  His introduction is complimentary and gentle, praising the benefits of the event, in there being few technical hitches and little crime. The negatives far outweigh the event, he writes, and he says that South Africa fell for the ‘sales pitch’ of the positives of a mega-event, despite “…the volumes of academic studies on the negative impact of mega-sporting events such as the World Cup”.  He says that the promises made about the financial benefit that was the drawcard for South Africa hosting the event, with its resultant contribution to the GDP, tax revenues and job creation, which was promised by the government, FIFA, the local organising committee and tourism consultancy Grant Thornton,  were “…bald lies, wrapped up in the haze of developmental spin. There was no serious study of the opportunity cost of the investment to be made by the government; the impact on the environment; nor the contribution of the event towards the country’s debt position or the social costs of hosting the event.”  He adds that the official economic report was kept secret, and not open to public scrutiny, because of the flaws it contains.

Grant Thornton made many projection errors, not just in overestimating the number of international visitors to the country for the event, but also in the expected expenditure of tourists while in the country, which was only 16 % of the estimated R55 billion. 

The cost to the government for hosting the event was initially estimated in 2003 to be a ‘mere’ R2,3 billion, but given an estimate of R7,2 billion tax revenue, the event was packaged as generating profit.  In reality, the event cost R39 billion. This figure may not reflect the final cost tally.  The Reserve Bank estimated the cost to the state on capital formation to have been just under R130 billion, creating a deficit of R 63 billion.  What is causing a large income hole is that FIFA took R25 billion profit made by the event out of the country without paying any tax! It was the largest profit that FIFA has ever made out of a World Cup, Cottle states.

South Africa was also misled by projections of the employment benefits of the World Cup, 695000 jobs to have been created, of which just less than half were estimated to be retained after the World Cup.  This scenario proved to be incorrect, in that employment decreased by 5 % in the second quarter of 2010.  The losses of jobs in the construction sector was even higher, at 7 %.  Cottle says that as only a handful of construction companies, including Aveng, Murray & Roberts, WBHO, Group Five and Basil Read, built the insfrstastructure for the World Cup, their quotes were higher than required, a ‘grand theft’, he says.   

South Africans were caught up in the spirit of the World Cup, and went on a spending spree using their credit cards, which they are feeling the after-effects of now, partly as locals were led to believe that things would be better financially as a result of the World Cup.  Informal traders were moved out of their normal trading locations, on the basis of FIFA’s rules of a non-trade zone around stadia, impacting on the incomes of such traders.

Cottle concludes: “Indeed, a considerable negative impact has been left through higher levels of both public and individual indebtedness, the high opportunity costs associated with the event, the displacement of local spending and the reinforcing of already high social inequalities in income among and within cities.”  He states that the government’s decision to not bid for the 2020 Olympic Games ‘surely is a wise decision’!   

POSTSCRIPT 14/6: Southern African Tourism Update  reports today that the Department of Sport and Recreation will request the government to re-consider the Olympic Games bid for Durban for 2020, before the bid deadline of September.

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

World Cup anniversary: focus on ‘CapeAbility’- infrastructure benefit, tourism loss!

Today the World Cup 2010 started a year ago.  While many may remember the wonderful 30-day period nostalgically, the hard reality of this largest world event is attracting criticism in its impact on the hospitality and tourism industry, which has reached its lowest low, something other mega-event cities have experienced before.  The event was commemorated yesterday with the launch of a new coffee table book ‘CapeAbility: Stories and Successes from the 2010 FIFA World Cup’.

The infrastructure benefits of the World Cup cannot be denied : Cape Town has a renewed station building, a world-class airport, and far improved access into and from the city on its N1 and N2 highways. It has a beautiful Cape Town Stadium, which has become a tourist icon for the city in itself.  It has a most wonderful Green Point Park, which was developed next to the Stadium, as well as a general upliftment of the Green Point and Mouille Point area.  It led to the roll-out of the recently completed and far improved public transport MyCiti service.  It added more international hotel brands to the city’s five-star hotel portfolio.  It created an Ubuntu amongst Capetonians and the city’s visitors, on its festive flag-decorated Fan Walks.  It positioned Cape Town, and South Africa with it, as a safer country than had been perceived before.

But the downside appears to outweigh the benefits a year down the line: there is no operator for the Cape Town Stadium since SAIL Stade de France reneged on its contract with the City of Cape Town.  Cape Town ratepayers will have to carry the cost of operating the Stadium, not making ends meet with the few events that have been hosted in the venue since July last year.   The tourism industry suffered poor pre- and post-event bookings last year, and  was led to believe that it would benefit from a tourism boom that would last for years to come.   The industry was conned by MATCH, the FIFA accommodation booking agency, with massive cancellations just days before the start of the Wold Cup.  Surprisingly, the industry is experiencing its worst ever year, and even more surprisingly, Cape Town Tourism told its members yesterday that it was to have been expected, given the Sydney experience – a 5-year slump after the 2000 Olympic Games, largely because the city tourism authorities assumed that no marketing was required after the widely publicised event.  Cape Town appears to have made the same mistake, an error which is compounded by the poor UK economy, the largest tourism source market for the city, the strong Rand, and high airfares.

Not unsurprisingly, tourism consultants Grant Thornton, who badly overestimated the World Cup tourism numbers, praised the R40 billion national capital expenditure on the World Cup, the consultancy’s Gillian Saunders saying it was money “well spent, with some areas still to be leveraged”, reports the Cape Times. She states that the infrastructure benefit had ‘significant legacy value leading to a better quality of life and provided long-term valuable assets’.  She admitted that the slow recovery from the global recession was responsible for the lack of the tourism boom which had been predicted.  Yet she said that “a large number of tourism businesses would not have survived the economic slump if it weren’t for the event”.  She reminded the industry that R3,6 billion revenue had been generated and that just more than 100000 tourists had visited the Western Cape, and just more than double this number visited Gauteng.

Cape Town Tourism has blamed SA Tourism for focusing too much on wildlife and the natural beauty of the country, and too little on its cities, in its marketing of the country.  The World Cup had created a greater city focus, but this has not been sustained by SA Tourism in its post-World Cup marketing, Cape Town Tourism says.  To strengthen brand Cape Town, Cape Town Tourism proposes that the “city’s urban identity, innovative outlook, entrepreneurial spirit, academic excellence and pioneering medical and science sectors must be added to the brand palette in order for it to effectively compete in the domestic and global market”, in addition to its leisure tourism positioning, it is reported in BizCommunity.com.

The Cape Argus yesterday ‘shouted’ in a headline:”Post-World Cup tourism boom ‘non-existent'”, stating that the benefits have been the international performers who held concerts in the Stadium, the city’s improved infrastructure, and the survival of a number of tourism businesses.  It quotes Cape Town Tourism as saying that Cape Town is in a ‘brand vacuum’.  The annual operating cost of the Stadium is quoted as being R57 million.  Two concerts have been booked, and a further two are in the pipeline, according to the city’s new head of Tourism, Grant Pascoe.   Talks with Western Province rugby continue, he said.   He added that the city is receiving more event applications than it did prior to the World Cup. Developing the Fan Walk into a 24/7 facility is also being considered.  The oversupply of hotel accommodation can be attributed to nine new hotels with 1500 rooms in total, which were built for the World Cup, says Dirk Elzinga, Chairman of FEDHASA Cape.  He naively states that many hotels have already received repeat World Cup business, and that the ‘extremely low occupancies’ of some hotels ‘was normal for the off-season’!

Launched by Premier Helen Zille and Mayor Patricia de Lille, the ‘CapeAbility’ book documents the ‘planning, delivery and effect’ of the World Cup on the Western Cape, says BizCommunity.com.   The book “makes every effort to extract honest lessons to understand the hosting of such mega-events better.  It is designed therefore not as a memento of the event, but a review of what worked, what didn’t and what could be done better and become a guide to hosting future events”.   “The book is meant to play a marketing role and points out that it is crucial that opportunities, such as the World Cup, are converted into more than just short-term profits for a small tourism and events sector, but into huge brand building opportunities for a country”. 

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

“Tourist torrent” expected for the festive season? Not in the Cape!

One wonders where the tourism authorities get some of their information from!  While a The Times journalist may have enjoyed the alliteration in his headline on 7 December (“All set for a tourist torrent”), he may in fact have vastly exaggerated the implications of the results from a World Cup survey as to tourism to South Africa over the “season”/”festive season”.  This contradicts what most tourism players are experiencing, in what is set to possibly become one of the worst summer seasons ever, with poorer accommodation bookings than in previous years for coastal suburbs/towns such as Camps Bay, Hermanus and Plettenberg Bay, and even worse in inland towns.

The journalist was reporting on the presentation of the SA Tourism and Department of Tourism study on the effect of the World Cup, a survey which had been conducted in June and July amongst World Cup visitors, as well as guests flying out of Cape Town International, OR Thambo, and ten other airports in Namibia, Zimbabwe and Lesotho.  As a market researcher in a previous career, I shudder at the thought of the research methodology (unspecified in the S A Tourism release) which may have been used – in Cape Town eight departing guests were interviewed at the close of the Cape Town semi-final at the airport, on which basis a local daily proclaimed the Cape’s success in hosting the tournament in our city!   Both Cape Town Tourism and Cape Town Routes Unlimited used dubious questionnaire formulation in surveys conducted amongst local tourism players during the World Cup.

SA Tourism’s Chief Marketing Officer Roshene Singh is a respected marketer, and I had the pleasure of meeting her a few months ago.   But the quote attributed to her in the article seems unbelievable: “We believe we’re going to have a bumper season (note her word, which the sub-headline in the article changed to ‘festive season’!) because people who are regular visitors in June and July deferred their holidays because of the influx of soccer fans then, so we expect them to now visit.”   Given the seasonal nature of tourism in the Western Cape, with May, June and July being the worst three months for the tourism industry in the Western Cape, our region will definitely not be expecting a “tourist torrent” in the next three weeks/three months, if we are to rely on these ‘displaced’ holidaymakers!

The rest of  The Times report  reflects the findings of the World Cup survey, which showed that 310000 foreign soccer fans had visited South Africa for the World Cup, said Minister of Tourism Marthinus van Schalkwyk, and that 90% would consider visiting again.  Key findings are as follows:

*   The economy benefited by R3,6 billion (the cost of generating this income was not mentioned!)

*   59 % of visitors travelled to South Africa for the first time due to the soccer event

*   220000 soccer visitors visited Gauteng, 108384 the Western Cape, and 83819 KwaZulu-Natal

*   the largest number of World Cup visitors came from the USA (30175), followed by Mocambique (a surprise second place at 24483), Britain (22802), Swaziland (19593), Brazil (14815) and Australia (12210).

*   68%  rated South Africa as an “extremely good” host, and 29 % rated it as a “good host”, an excellent scorecard.

*  Just over half of the soccer fans who had been to other World Cup events, said South Africa was a better host country – a surprisingly low figure, given all the publicity one saw and the highest ever FIFA rating – 33% rated it on a par with previous host countries, and 16 % rated it worse.

The bizarre (and dangerous) projection by our tourism marketing authority, based on very indirect information obtained from a survey conducted six months ago, in a period since which South Africa’s post-World Cup image has taken some serious knocks, and in which period the Rand has remained too strong to make South Africa an affordable tourist destination from the United Kingdom, Europe and the USA, is irresponsible, in our opinion, and does not reflect the reality of bookings by the accommodation industry.  The reference to the bumper season must have been made during the presentation of the survey results to journalists by Singh, as the official media release of SA Tourism does not refer to this projection at all!

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

South Africa positioned as world’s leading adventure destination

In the wake of the World Cup, which exposed South Africa to 1,26 billion TV viewers around the world, South Africa will be marketed by S A Tourism as the world’s leading adventure destination, said the Chief Marketing Officer of S A Tourism, Roshene Singh, at a presentation to tourism leaders at the Harbour Bridge Hotel in Cape Town yesterday.

The country’s R 800 million marketing budget will be focused on a number of different international and domestic marketing campaigns, which began prior to the World Cup, and are one year programmes designed for different target markets, to continue the positive momentum created by the World Cup to improve the country’s global competitiveness.   Those travellers that did not visit South Africa in June and July will be encouraged to feel that they missed out, and will be enticed to visit our country, given the country’s top infrastructure, great experiences and welcoming people.   Existing advertising campaigns with CNN, BBC World, SkyNews, EUROsport, Global Cinema, Conde Nast Traveller, Vogue, Vanity Fair and the Financial Times, combined with cinema advertising, social media marketing (including a Blog and Twitter), online media, Public Relations and websites, will continue in the next year, creating a reach of 1,4 billion consumers.  South Africa’s 130 embassies around the world can play a far greater role in marketing the country, it was said.

Domestically, the focus is on Sho’t left, which kick-started the ‘Fly the Flag’ and ‘Welcome’ campaigns, as well as a ‘Thank You’ campaign to thank South Africans for being proud hosts.  From next month, being Tourism Month, attractive travel packages will be rolled out for the next six months, to encourage South Africans to travel in their own country, supported by advertising on etv and all SABC TV stations.  Travelling will be built into the storyline of ‘Rhythm City’, an etv soapie, an outdoor billboard campaign, Twitter and Facebook communication, a mobi site on mobiles, and sponsorship of the travel sections of You, Huisgenoot and Drum are further means of boosting domestic tourism. Tollgate promotions, shopping mall promotions, and joint promotions with Thompson Holidays, Computicket, Flight Centre and Kulula, amongst others, have been planned.  Domestic tourism is the ‘bread and butter” of the tourism industry, said Singh.

Next month a new advertising campaign breaks, consisting of four commercials, following four couples who visited South Africa during the World Cup, each of the four couples having enjoyed 20 experiences in 10 days.  An Indian couple goes shark diving, bungie-jumping, motorcycling and enjoys good food. An American couple raves about the wonderful people they met here, the sunset safari they enjoyed, and the beauty of the country, saying that they will come back.  A British couple jumps down a “foefie slide”, goes shark-diving and kayaking, sees a rhino close-up, and expresses surprise about the many different parts of the country.  A Nigerian couple watches African dancing, has dinner in an aquarium, with sharks watching them, plays golf, enjoys wellness spoiling, and they say that their visit has made them fall in love with each other all over again.

To focus on the Adventure positioning of South Africa, the “Adventurers Wanted’ campaign with National Geographic seeks an “Adventure Ambassador” in Australia, France, Germany, Italy, Netherlands, the United Kingdom, and the USA.  Collectively, they will form an “Adventure Tribe”, and will enjoy an ‘adventure of a lifetime in South Africa’, which will be filmed by the magazine.

Asked when the boring, unexciting “It’s Possible” payoff line for South Africa will be replaced, it was promising to hear Singh indicate that the International Marketing Council is focusing on changing its positioning for South Africa, to “inspiring new and different ways”, which means that S A Tourism will adapt its payoff line to be aligned with that of the country.

Social media marketing will become a stronger focus, especially via Facebook.  Expedia, Tripadvisor and WAYN.com are websites on which South Africa will be featured.  All communication will reflect the “warm, friendly, welcoming, exciting, amazing, awesome, ubuntu, people, place, culture destination by deploying authentic WOM (word of mouth) ambassadors”.  The major message of communication campaigns will be “triumphant, excited, passionate and celebratory”.  It will say “We did it! Thanks for coming, see you again soon.  We made 450 000 new friends …. and you have made 48 million new friends”.

Country specific campaigns planned  by S A Tourism are as follows:

*   Africa:  A “Thank You” campaign in Botswana, Angola, Democratic Republic of Congo, Mozambique, Nigeria, Ghana and Kenya, President Zuma thanking fellow Africans for their support in making this the best World Cup ever and for showcasing the best of South Africa, via newspaper and radio advertising.

*   Germany:   Promotional and sponsorship campaigns, around celebrities sharing their travel tips and experiences of South Africa

*   Italy:   Italian travellers share their South African experiences on blogs, billboards, ads, etc, focusing on food, design and adventure.

*   France:   focus on adventure and nature, via a mix of above and below the line media

*   Netherlands:   Blog competitions, and treasure hunt promotion

*   India:   “Super Six” promotion, plays on the country’s cricket interest and our Big Six.  Multi-media focus.

*   China:   Travel fairs, photography promotion, social media.

*   United Kingdom:   “1001 things you did not know about South Africa” promotion with Lonely Planet, advertorials in Times and Conde Nast media groups’ publications, travel offers sent to 1,8 million Travelzoo subscribers, a travel road show to sustain the momentum by motivating agents to sell South Africa, a partnership with Emirates in an advertising campaign, and many more activities for this market.

*  USA:   Direct mail to Conde Nast database, promotion with National Geographic, and advertising campaign, inviting Americans to “go places you’ve never gone before, take the journey”.

*   Brazil:   Media invited to South Africa, to experience the country.  The SABC has been invited by Brazil to assist with the broadcast of the 2014 World Cup.

The visuals shown for the marketing campaigns have a strong focus on wildlife, the giraffe featuring most strongly to communicate this strength of South Africa.  Disappointingly, little of Cape Town is shown, Table Mountain, Blouberg and Boulders’ Beach being the most featured Cape Town images, and Cape Town was most prominent in the Chinese and Japanese communication programmes.

The Olympic Bid for 2020 is on S A Tourism’s agenda, said new S A Tourism CEO Thandiwe January-McLean, who took over the helm six months ago, having previously been the South African Ambassador to Portugal.  Dirk Elzinga, new Chairman of FEDHASA Cape, reminded SA Tourism that Cape Town has added on 25 % more hotel rooms in the past year, and that the city needs help in improving occupancy via events and conferences, which receive little focus from the marketing body, he felt.

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