Tag Archives: accommodation bookings

Cape ‘Tourism crisis’ denied, just a ‘cyclical slump’ says tourism marketing body!

When one reads a headline “Destination South Africa is doing well” in the Cape Times last week, one cannot help but wonder how two senior tourism personalities can attempt to tell tourism players specifically, as well as Capetonians in general, that all is well, when it is generally known that it is not, most tourism players having experienced the worst ever winter.  The summer season ahead looks gloomy, with a substantial absence of UK tourists.

Calvyn Gilfellan is the CEO of Cape Town Routes Unlimited, whose organisation is going into a strong PR offensive, issuing media releases almost daily, a welcome change in that this tourism body, marketing both Cape Town and the Western Cape, is now telling the tourism industry what it is doing.  Cape Town Routes Unlimited appears to have identified an opportunity to out-PR Cape Town Tourism, which now spends most of its communication energy on Twitter, and rarely issues media releases.  Dr ‘Nicklaus’ (actually Nikolaus) Eberl is MD of Brandovation, a branding and marketing consultant who was particularly visible during the 2010 Soccer World Cup, in guiding South Africa’s branding during this world event, having been a consultant to the 2006 World Cup in Germany too.  It is interesting that Gilfellan and Dr Eberl have got together to write a lengthy tome on how well we are doing in tourism, denying that there is a tourism crisis, but then justifying why there is a ‘current cyclical slump’!

The authors of the article deny that the Western Cape tourism is in ‘crisis’, but acknowledge that ‘our industry is currently under severe strain’! As we have written before, we ask what’s in a name.  One cannot help but think that both Cape Town Tourism and Cape Town Routes Unlimited do not want to be held responsible for a tourism industry that appears to be suffering more than in any other part of South Africa. Interesting is that the authors do not mention how poorly the Garden Route is doing, for example, which saw the auction of three hotels in Mossel Bay last week, and a letter addressed to a local newspaper confirmed the desperate conditions in this region of the Western Cape.  Having a guest house in Plettenberg Bay, which has been temporarily closed for business since January due to a lack of business, we can confirm how serious the tourism crisis is in this once-popular region of the Western Cape.

Correctly the authors state that due to global changes, tourism marketing and operations require change. But stating that the Japan earthquake, the northern Africa revolution, the terror in Norway, the London riots, and the ‘turbulence in our own society’ (not explained) influence tourism to our region is not understandable. The ‘enduring American and European debt crises’ must be the most important factor to blame, coupled with the high cost of airfares, airport taxes and the strong Rand. ‘Blaming games’ (what could they be referring to?) are ‘counter-productive’ , they write, yet the authors themselves try to justify why tourism in the Cape is doing so poorly, citing low occupancy, hotel closures, accommodation oversupply, increased operating costs, and travel being a luxury.  Seasonality is blamed as well, and has been the prime complaint of tourism players over the years.  Promises are made year after year by both Cape Town Tourism and Cape Town Routes Unlimited that this Cape-specific problem will be addressed with events and marketing campaigns during winter months.   Instead of getting better, seasonality has become even more pronounced, and reached its peak, in our experience, during the past winter, meaning that tourism players have had to dip into their scarce savings generated in summer, to stay alive financially.

Quoting the Statistics South Africa first quarter 2011 tourism arrival increase of 7,5%, they write that ‘destination South Africa is doing well’!  While the past summer season was not as good as experienced in previous years, the real impact of the tourism crisis only hit the industry in May.  The industry rejects the arrival statistics anyway, in counting cross-border shopping visits from residents of our neighbouring countries.  Added to this, our industry is ‘doing well’, they write, as seven new airlines are to fly to Cape Town, the BRICS countries offer big tourism potential (and percentage increases in arrivals are quoted, off low bases), the World Cup offered excellent exposure for the Western Cape (we would argue that it was for Cape Town at best), and interest in information about our region is good in Brazil and Argentina.

To help tourism businesses with ideas to ‘thrust us into the next decade’, the authors suggest the following:

*   marketing techniques must change, to adapt to the changed world around us

*   tourism development and promotion must be ‘responsible, environmentally conscious’

*   the industry must ‘take full ownership’ of the establishment of the Western Cape Economic Development Agency,  led by our provincial Tourism Minister Alan Winde, of which much has been talked about but little concrete information has been seen.

*   ‘we need to be really clever, and creative, with our pricing strategies, adding extra value wherever possible’. There can be few tourism businesses which have not already slashed their rates, many to pre-2007 levels, for the forthcoming summer season.

*   Social Media must be more widely adopted by the tourism industry (ironically Cape Town Routes Unlimited has not done so yet!).

The authors’ over-optimism about the future of our tourism industry is not convincing. They write:“Tourism has proven to be one of the most fickle, but also most resilient sectors of our economy and will overcome the current cyclical slump.  We therefore remain optimistic that together we shall overcome this and future hurdles in our quest to create a better tomorrow for all our people”.  Our response to this is as follows:

*  Stop defending the existence of a ‘tourism crisis’, and use the time to get on with marketing Cape Town and the Western Cape.  Business has NEVER been so poor!

*   Stop duplicating marketing Cape Town by Cape Town Tourism and Cape Town Routes Unlimited.  This is a costly overlap, and little joint marketing appears visible to the industry.  Ironic is that Cape Town Tourism is working with SA Tourism, Gauteng Tourism and the Durban tourism authority, yet the two Cape Town-based tourism agencies are not appearing to co-operate!

*   Continue informing our industry about what you are doing for us, but please do not patronise us with information that is different to what we experience at grass-roots level.  Use us for information (accommodation bookings are a good indicator for the coming tourism season), so that your predictions can be more accurate and realistic.  We can share with you, for example, that there is a minimal number of UK tourist bookings for the coming summer, a massive loss for our industry, and worthy of ‘crisis’ status in itself, having been our major source of business over the past years.  We can also share that we are seeing a most welcome increase in bookings from Germany, a country still relatively buoyant in economic and travel terms, despite being increasingly under pressure to support the economy of Europe and the Euro.  But the German tourism gain will not make up for the UK tourist loss.

*  Lobby for more accurate arrival statistics

*   Lobby SAA and ACSA for more reasonable airfares and airport taxes, respectively, especially as there are ACSA representatives on the Cape Town Routes Unlimited and Cape Town Tourism Boards.

*   Cape Town is receiving marketing support from Cape Town Tourism.  The rest of the Western Cape is suffering, and needs urgent marketing by Cape Town Routes Unlimited.

*   Employment is not mentioned in the article at all. Surely the benefit of a booming tourism industry is to maintain, and ideally to grow, employment of our local population.  Help us with directing young interns to our industry, and help us to educate staff about the important role that they play in tourism.

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

‘Cape of Good Business’ is ‘cool’ in winter too!

Three directors of Cape Town Tourism and heads of important Cape Town business tourism businesses have joined forces to make a plea for how “cool” Cape Town is in the winter months, a period typically plagued by seasonality, with far reduced accommodation bookings, which has an impact on all sectors of the tourism industry. 

In an article in the Cape Times last week, Guy Lundy of Accelerate, Ian Bartes of Cape Town International airport, and Rashid Toefy of the Cape Town International Convention Centre wrote that of all South African cities, Cape Town is unique in its seasonality, which “makes it hard for the hospitality industry to be sustainable”.   They add: “With 18  five-star hotels now operating in the city, we must find ways to increase visitor numbers during winter.”  The tourism leaders says it is not a surprise that Cape Town sees so many restaurants opening and then closing, in that they build restaurants to meet capacity support in summer, but cannot see this through in the winter months when business falls away.  They also state that the number of passenger arrivals in April and May is half of that in December and January.

They blame this on the positioning and marketing of Cape Town as mainly a leisure destination, which “always seem to feature the Waterfront, Clifton and the Winelands on their covers”, with not enough promotion of the city as an investment and business destination.   Conference facilities, factories and office blocks do not feature in the city’s marketing collateral.   They call for more direct international flights to Cape Town, and more flights between the city and other African cities, to make Cape Town a world business destination, and a global African city, given that it already has a world class airport, good hotels, excellent infrastructure, ‘some of the finest restaurants’, natural beauty, entertainment, world-class technology, sophisticated business networks, and a favourable time zone for doing business with the UK, Europe, the Middle East and Africa. 

To make Cape Town a global business destination, it needs to be considered for meetings, incentives, conferences and exhibitions (the M.I.C.E. market).    The Convention Centre is ranked 34th in the world in size of business, and it plans to double its capacity to reach its goal of making the top ten list.    Winter is an ideal time for conferences, the writers say, in that most activities take place indoors.   Whilst conference delegates spend less time in a city on average, their average spend is higher than that of a leisure tourist.   The writers also state that the businesses of the Western Cape, e.g. food and wine, oil and gas, boat-building and ship repair, design, film, technology, renewable energy, asset management, business process outsourcing and medical research should expose their businesses to overseas markets via exhibitions and conferences, to attract business travellers to Cape Town and the rest of the Western Cape, including Winelands, West Coast and Overberg towns.

The World Cup demonstrated what a good winter weather city Cape Town can be, with rain on only three of the match days, and snowfalls on the mountains for a short while during the soccer tournament month.  The soccer fans were not put off by the rain and cold, and their ‘gees’ was not dampened in any way.   This leads to a renewed call for the ‘green season’ to be marketed in the winter months.  The cooler Cape weather is attractive to visitors from the Middle East, and the Asian countries, who have to endure hot and humid weather at that time.  The writers also suggest a winter sale, which reduces accommodation, restaurants, and clothing, as is done in Paris, Singapore and New York.   The writers seem unaware that the small accommodation industry has been leading the tourism sector for years, in reducing its rates by as much as half in winter.  This year the restaurants in Cape Town and the Winelands also came to the party, and offered good winter specials, some even extending these into current summer specials.

We support the writers’ call for more events to be hosted to attract visitors, but it is sad to read that the City of Cape Town does not have enough funding to support big events (there is activity by Cape Town Routes Unlimited in marketing a small number of approved events, all hosted in summer months).  

If Cape Town had no seasonality, airlines would fly into the city all year round, and would bring travellers, making tourism business more viable and reducing unemployment.   It is for this reason that the business tourism leaders ask that the tourism industry get on board the Cape of Good Business!  

It is interesting that the three writers are Board members of Cape Town Tourism, which focuses almost exclusively on leisure tourism, while the business tourism business that they are pleading for is in the domain of Cape Town Routes Unlimited, on which Board only ACSA is represented, and on which the three tourism leaders may have been able to make a greater contribution than at Cape Town Tourism.

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

So what impact did the World Cup really make on Cape Town and the Cape?

Cape Town Routes Unlimited has released statistics, comparing the tourism performance between June 2009 and 2010.  In general it would appear that tourism facilities fared better in June this year compared to last June, due to the World Cup, which kicked off on 11 June.

 The following statistics were provided in the Cape Town Routes Unlimited “World Cup Impact” report:

1.  The Table Mountain Aerial Cableway received 63861 visitors in June, an increase of 69 %

2.   Boulders Beach in Simonstown had just less than 20 000 visitors from 1-20 June this year, compared to 21 314 for the whole of June 2009

3.   Kirstenbosch received 7 % more visitors in June, at 25 469, compared to last year

4.   The V&A Waterfront received 1,6 million visitors in June, up 7 % compared to last year.

5.   Robben Island doubled its visitor numbers between June this year and last year.

6.   International arrivals at Cape Town International airport increased by 18 % in June relative to a year ago, (and by 24 % for the period 11 June – 16 July, according to Cape Town Tourism’s World Cup Impact report, released yesterday).

7.   Domestic arrivals at Cape Town International airport increased by 10 %, at 261260 in June 

8.   The Cape Town “Lodging Statistics Summary” (where did they get that name from?) seems very wrong, from own experience and discussions with other industry colleagues, given the exceptionally poor May 2010 accommodation bookings.  We publish the information with a warning (the Cape Town Routes Unlimited report does not identify the source of its statistics):

             Occupancy:                 2010                                              2009

             April                             59%                                                 62%

             May                              55%                                                 46%

             June                              68%                                                 41%

9.  The FIFA Fan Fest at the Grand Parade had its best day on 11 June, the Opening Match between Bafana Bafana and Mexico, with 41000 visitors, and had to be closed at that number due to overcrowding. The second busiest day was the Bafana Bafana match against France on 16 June, with 39000 visitors.  The quietest day was 21 June, with just less than 8000 soccer fans.

10.   In June the busiest Fan Walk day was when Holland played Cameroon, with an estimated 72000 walkers between the City centre and the Cape Town Stadium.  The Portugal/Korea DPR match attracted only 25 000 – 30 000 walkers, a day with heavy rain.

11.   Public Viewing set up in provincial towns was highest on 11 June in all such towns, and highest overall in Worcester (8000), followed by George (more than 7000).  Attendance dropped strongly on other days, and night matches were not well supported where public transport had not been organised.

12.   The V&A Waterfront Gateway (one assumes the one at the Clocktower) attracted 23911 visitors in June, up by 8 %, but the value of bookings increased by 55%.   Only 94 bookings were made last month, a disappointing number, given the traffic in the V&A Waterfront in this period.

13.   The Cape Town Tourism International airport office served 6841 visitors, the City branch 1206, the Table Mountain Cableway branch 849, and Kirstenbosch 803 visitors.  No comparable 2009 figures are provided, which is a surprise and disappointment.  (Cape Town Tourism’s World Cup Impact report states that 71 % more international visitors and 15 % more domestic tourists visited a Cape Town Tourism branch during the World Cup period – even though I have never seen information about the origin of the tourist asked) 

14.   Franschhoek claims to have received more than 4000 visitors (no 2009 comparative figures) in its Information office in June, which did not translate into much business as far as accommodation and restaurant bookings are concerned.  Paarl claims to have served 1 961 visitors (no 2009 comparative figures), and Knysna Tourism received 1433 visitors, double the number of last June.   Ceres received 1173 visitors, treble the 2009 figure, but this may have been due to the heavy snowfalls last month.

It is a pity that 2009 figures are not available across the board for the statistics provided, and that the 11 days of the World Cup are not reflected either, as Cape Town and the towns close to it were fuller in July, given the round of 16, quarter-final and semi-final matches played in Cape Town in this period.  Yet it is commendable that statistics were made available at all, no matter how questionable some of them appear to be!

Cape Town Tourism’s World Cup Impact report, presented to the media yesterday, claims that 200000 of the 350000 international visitors that came to South Africa for the World Cup came to Cape Town (even though its earlier pre-World Cup surveys showed that the majority of such soccer fans planned to visit Cape Town!).   One wonders how this estimate was made.  Cape Town Tourism CEO Mariette du Toit-Helmbold said that the World Cup was never about the short term, but about long-term benefits for Cape Town, turning soccer fans into fans of Cape Town.  City of Cape Town Mayco Member of Economic Development and Tourism Felicity Purchase noted that events hosted in winter months are needed to counter the seasonality of Cape Town’s tourism industry.   The 750 journalists that were shown around Cape Town loved the city, describing it as “photogenic”, and falling in love with it.   The Report also addresses accommodation occupancy during the World Cup, but its “research” was so poorly conducted that their misleading results will not be reported here (read our criticism of their intital results, mid-way through the World Cup).

What all the reports lose sight off is the extremely poor May that the tourism and hospitality industry experienced, a vacuum having been created due to the World Cup, which wiped out any gains made between 11 June – 11 July!

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

New Cape Tourism Marketing conflict between province and city

One could see it coming!   The marketing of Cape Town and the Western Cape province has been a problem for the last number of years, in that the province and the city were run by the Democratic Alliance and ANC parties, respectively.  That is, until last year, when the Democratic Alliance won the city and the provincial elections.   The new MEC for Economic Affairs, Finance and Tourism, Alan Winde, vowed from the word go that he would address the strained relationship between Cape Town Tourism and Cape Town Routes Unlimited, as far as each body’s marketing of Cape Town in particular, but also of the Western Cape province, is concerned.  Now the relationship is about to become more, rather than less, strained!

One needs to go back in history to paint a picture of continuous turmoil in the tourism industry.   Initially Cape Town Tourism was marketing Cape Town, and the Western Cape Tourism Board marketed the province, a harmonious relationship existing between the two tourism bodies, one funded by the City of Cape Town, and the other by the province.   As the political parties changed, new Ministers of Tourism at provincial level tried to reinvent the wheel, and the biggest change of all was the establishment of the Destination Marketing Organisation (DMO), taking over the old Western Cape Tourism Board, as well as the marketing role for Cape Town from Cape Town Tourism, about seven years ago.   Cape Town Tourism only retained its role as Tourism Information agency.

Numerous complaints from the tourism industry about the lack of marketing visibility of Cape Town, the “gateway” to the rest of the Western Cape, were aired, and the new DMO, which became known as Cape Town Routes Unlimited, was blamed for not knowing what it was doing.   Political differences between the province and the City of Cape Town, as well as the lack of Cape Town Routes Unlimited’s marketing performance, led the City to withdraw its 50 % contribution to the running of Cape Town Routes Unlimited two years ago, leaving that body vulnerable in terms of its funding, and crippling it in terms of its marketing role.   The City signed an agreement with Cape Town Tourism, whereby it allocated its previous Cape Town Routes Unlimited funds to Cape Town Tourism, with the responsibility for the agency to market Cape Town in addition to its tourism information role.   Due to its funding cuts, Cape Town Routes Unlimited was forced to cut its marketing projects dramatically, and to focus mainly on marketing the province.

However, Cape Town Routes Unlimited did not leave the marketing of Cape Town out of its marketing strategy, and once again the industry complained about the duplication in the marketing of Cape Town by both bodies, something that the new DMO had been created to avoid.   When Winde, and his counterpart in the City of Cape Town, Felicity Purchase, met last year, the two marketing partners agreed that they would encourage co-operation and that they would avoid duplication where possible.  Winde confirmed that there would be no consolidation of the two bodies.   The industry was told that a strategy of co-existence between the two bodies would be presented to it, but no such strategy has been forthcoming in the past year.   Cape Town Tourism was forced to appoint a Cape Town Routes Unlimited director on its Board (this is not reciprocated on the Cape Town Routes Unlimited board), to ensure that the two bodies were aligned.

This week the Minister changed his mind, and made the shock announcement that he is “pushing for the speedy implementation of a new efficient destination marketing model so that the region may benefit from the current window of opportunity created by the Soccer World Cup”, reports Southern African Tourism Update.  Now this sounds like a ludicrous statement as a start – another DMO in the making, when we have one already?   Did we not just host the most amazing World Cup without integration of the two bodies?   What window of opportunity is the Minister referring to?   Why did he not get his act together, and create a united body before the World Cup, when it was needed most?   Accommodation in Cape Town and the Western Cape was not well booked for the World Cup, and the city did not have a single soccer team setting up a base camp in it.

Reading the Southern African Tourism Update article, and having been closely involved with the setting up of the DMO whilst I was Deputy Chairman of Cape Town Tourism, it sounded like deja vu.  The Minister wants to set up a new DMO, with a new “trading name”, responsible for the “marketing of the province, regions and cities within the Western Cape – as well as single tourism brand for the destination.”  This is exactly what Cape Town Routes Unlimited is meant to be, currently having the schizophrenic brand name “Cape Town and Western Cape”, all of which was criticised by the industry when it was launched about 5 years ago!

The new DMO would be solely funded by the Western Cape province, according to the Minister, and all municipalities in the province must contribute to the DMO, including the City of Cape Town, endangering the marketing role which has been allocated to Cape Town Tourism.  Members of Cape Town voted by overwhelming majority to support the acceptance by Cape Town Tourism of the marketing of Cape Town at its AGM two years ago.    Municipalities must present their marketing plans to the new DMO, it is proposed, and define how they will support the marketing activities of the DMO.  The Minister also wants to move the head office of the DMO from Burg Street to the V&A Waterfront, in a building to be called “Tourism HQ”, to be “more visible and accessible to tourists”!   Now this is something I do not understand, given that Cape Town Tourism is responsible for tourism information and accommodation  bookings, via its network of tourism bureaus around the Cape Town metropole, including Somerset West and Strand.  The first problem one saw was when Cape Town Routes Unlimited set up a “Gateway” tourism bureau at the V&A Waterfront, taking the “ownership” of it away from Cape Town Tourism, even though it is staffed by and carries the branding of Cape Town Tourism!

The municipalities were presented the new model by the Minister last week, and they have been given two months to table their response.  It is interesting to see how the new Cape Whale Coast DMO will deal with this news of the Minister, as it set itself up as a marketing agency for the coastal area stretching from Rooi Els to Gansbaai and including Hermanus.  This DMO is already making the fatal error of encouraging the members of the local tourism bureaus to become members of the DMO, in addition to being members of the bureaus.

Winde motivated his new strategy on the basis of “absolute duplication of national, provincial, and municipal marketing resulting in taxpayers’ money being spent three times in the same place”.   He stated that the Cape Town Tourism and Cape Town Routes Unlimited marketing of the city and the province caused confusion, and that the city and province did not have a clearly defined marketing strategy.

Not surprisingly Cape Town Tourism is not happy with the Minister’s announcement, and its Board announced last Friday that it will oppose the Minister’s move.  CEO Mariette du Toit-Helmbold’s words were carefully chosen when she wrote: “Cape Town Tourism has noted the proposal and embarked on a  comprehensive negotiation process with the City of Cape Town and the office of the MEC.   The Board of Cape Town Tourism has indicated that it is not in agreement with the proposal in its current format.”

She continued by stating the support of the City of Cape Town for the marketing role of Cape Town Tourism in marketing the city, exactly what the Minister proposes to change.  She wrote: “Cape Town Tourism is committed to protecting the interests of tourism in Cape Town and finding a workable solution that will most effectively realise the tourism opportunities in the city, whilst eliminating duplication and confusion. Cape Town Tourism has received reassurance from the City of Cape Town that we are and will remain the City’s tourism promotional and marketing body and that Cape Town Tourism’s structure will not change.”

It is disturbing to see that the same tourism marketing issues are being addressed again, and that tourism history is repeating itself, a waste of taxpayers’ funds in itself. It appears that every new provincial Minister of Tourism in the Western Cape sees it as his role to redesign the tourism bodies and their role, much like new Marketing and Brand Managers like to change their marketing strategies and advertising campaigns (and ad agencies at times too), just to make their mark.

This is likely to become another long drawn-out battle between the City and Province about the marketing of our precious brand “Cape Town”!

POSTSCRIPT 26/7:  Cape Town Tourism has sent out another e-mail to its members, reiterating its view about the Minister’s proposal, and has made the document available, inviting comment and input from its members:   “I informed you of the proposed centralised model for tourism marketing that was put forward by the MEC for Tourism and Economic Development, Minister Alan Winde. Cape Town Tourism has indicated to the office of the MEC and the City of Cape Town that the proposed model for a single, provincially centralised tourism destination marketing structure and brand for Cape Town and the Western Cape is patently misguided. If implemented, it will have negative consequences for tourism in Cape Town” , wrote Cape Town Tourism CEO today.

 

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