The Sweet Service Award goes to low-cost airline Mango, which is the first local airline to pass on fuel savings to its passengers, due to the decrease in the cost of crude oil. Mango announced this week that it was dropping fares by up to 25%, with immediate effect. The tourism industry is more than delighted.
Tourism, Food, and Wine news headlines
* SA Tourism has launched a cinema advertising campaign highlighting the beauty and thrill our country offers, at 94 cinemas in seven Indian cities. In the foyer of the cinemas one is able to book a holiday to South Africa via travel agents, taking the movie-goers to action in booking. Part of the marketing campaign is ‘Take me to South Africa‘ promotion, in which four winners travel with cricketer Jonty Rhodes as their tour guide.
* Comair says that domestic airfares are unlikely to come down, even if new low cost airlines enter the market, as it would not be sustainable to operate as such lower rates.
* Chef Liam Tomlin’s Chefs Warehouse has moved to Bree Street (ex Caveau and ex Awestruck), having dropped the second part of the original business name (& Cookery School). They serve lunch from 11h30 onwards, and an early dinner. (received via newsletter from Chef’s Warehouse)
* The government has lashed out at the media for its negative reporting about events in South Continue reading →
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
Shakespeare asked what is in a name! He must have been referring to the heads of both Cape Town Tourism and Cape Town Routes Unlimited, in both bodies denying that the Cape tourism industry is in ‘crisis’, naively countering that it is only in a little bit in trouble, in facing a ‘tourism slump’!
Cape Town Routes Unlimited sent a ‘CEO Update’ e-mail to its stakeholders a week ago, and wrote that “some captains of industry are theorizing about the ‘crisis’ in the tourism industry”. The poorly written letter also stated that the ‘global economy is mulling over a new potential US debt induced recession’ (my underlining in both sentences)! It then questions (defensively) if the ‘alarmist inclinations’ are in fact accurate, yet lists a number of aspects about the current state of tourism in the Western Cape and South Africa that support exactly what the industry is saying: the tourism industry in the Cape is in crisis!:
* compared to 2008, the current winter performance ‘is perfectly normal’ – this is not supported by any occupancy statistics, and everyone in tourism says that it is the worst winter ever experienced
* there is 20 % more accommodation stock, causing lower occupancy
* the strong Rand makes it more expensive to come to Cape Town
* 70 % of international tourists coming to Cape Town are from ‘recessive economies’, explaining the decline
* Tourism is a ‘luxury item’, and ‘under recessionary economic conditions people tend not to travel’
* High airfares and airport taxes inhibit travel
* Bookings are last-minute, and stays are shorter
* the cost of running tourism businesses has increased, especially in respect of electricity, labour, food, and municipal costs.
* International tourist arrivals are at their highest in 10 years – this is a beauty, and everyone in tourism would disagree!
* SA Tourism statistics for the first three months of this year show growth, but with tourism ‘buy-down’, which is not explained
* ‘Domestic travel, which is very much dependent on the state of the local economy is on the decline; but fortunately we can and are doing something about it’.
Cape Town Routes Unlimited CEO Calvyn Gilfellan summarises patronisingly that all of the factors are ‘partially the product of international economic forces and a correction of supply and demand structure of our tourism industry. I remain optimistic that the tourism industry will begin to show an upward trend closer to the end of the year’! I do not think that any tourism player will take comfort in Gilfellan’s prediction, which is not explained nor justified, and contradicts that of our national Minister of Tourism, Marthinus van Schalkwyk, who said that things will get worse by the end of this year! Once again, the stakeholders are spoken to patronisingly, advising them to price our products ‘responsibly and competitively’, package experiences ‘in a creative and appealing way’, to add value to our tourists’ experiences, and ‘leverage existing partnerships’ (unexplained)! He supports some of what he writes by the greater presence of special offer advertising in print and on-line; and that the industry is marketing to the local market, as well as to Europe, the USA, the Middle East, Africa and Asia. The key sentence, that contradicts everything else he writes is: “Everybody is doing their bit to counter the effects of the slump”. OK, so we have a ‘tourism slump’, and not a ‘tourism crisis’!
Reporting on the recent stakeholder Cape Town Routes Unlimited breakfast held at Sante Hotel, Southern African Tourism Update said that Gilfellan denied that the tourism industry in the Western Cape is in a ‘post-World Cup crisis. ‘It is serious but we should not be alarmist and call it a crisis’ he told the stakeholders. ‘There are people who are doing well and there are people who are struggling’, he added naively. He was reacting to COSATU Western Cape General Secretary and City of Cape Town Councillor Tony Ehrenreich’s recent criticism that the tourism industry is in crisis, as tourists are being overcharged. What is interesting in the report is that Gilfellan told the stakeholders that a slump was to have been expected after the World Cup, but the tourism industry was not told this, and new hotel operators were not warned about the ‘slump’ potential, given the experience of other cities hosting big events, such as ‘South Korea and Germany’. Gilfellan clearly was just grasping at straws, as Germany never suffered a post-World Cup slump! He also told the stakeholders that the government could not interfere in the ‘market-led correction of market forces’. Not mentioned in his stakeholder letter, but emphasised at the breakfast, was that twelve airlines are flying to South Africa this summer and he asked the audience:”Why would they invest if we were doing so badly? They know the situation will correct itself”!
Gilfellan focused the rest of his stakeholder letter on the newly planned Western Cape domestic campaign ‘esCape to the Cape whatever the weather’. We say it is too little, too late. We are in our last winter month. The campaign does not appear to have been launched yet, as the letter says its next edition will provide a ‘complete update on the campaign’. A number of the problems identified by Gilfellan should be addressed by a tourism body such as Cape Town Routes Unlimited: airport taxes (the Airports Company’s Cape Town International head sits on the Cape Town Routes Unlimited Board!), airfares, special deals for tourism players re municipal costs, and more accurate and realistic tourism arrival information!
Cape Town Tourism CEO Mariette du Toit-Helmbold countered the recent Cape Argus front-page article about the Cape Tourism crisis, by denying that things were as bad as depicted, also playing with semantics. Interestingly, the Southern African Tourism Update article headline reporting on the new ‘strategic plan’ for Cape Town, ‘Cape Town Tourism meets slump head-on with new tourism drive’, uses the same ‘slump’ word as does Cape Town Routes Unlimited, and says that its proposed “brand positioning and destination marketing campaign…(will) counter the current slump that has already seen 118 tourism businesses in the Cape to close shop in the past two years and 18000 jobs lost due to lack of growth in the industry since 2007″ ! At the Cape Town Tourism ‘strategic plan’ presentation last week, its Australian strategy consultant Ian Macfarlane told Cape Town Tourism members that there is no correlation between the exchange rate and travel!
It is embarrassing to see Cape Town Tourism and Cape Town Routes Unlimited being so out of their depth that they are just throwing clichés and patronising platitudes at the industry, in an attempt to defend themselves against criticism that they should have predicted the ‘tourism crisis’, and done something proactive about it. It appears far too little too late right now! Cape Town Routes Unlimited continues to be seen as playing a meaningless role in the local tourism industry by most, and its most recent stakeholder letter confirms this perception! The defensive drivel by both Cape tourism bodies once again emphasis how divided they are, seemingly duplicating marketing actions, and what a waste it is to have two bodies marketing Cape Town!
Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com Twitter:@WhaleCottage