Tag Archives: B&B’s

S A Government blasts FIFA about World Cup bookings

In what is an unprecedented attack on FIFA, Marthinus van Schalkwyk, the South African Minister of Tourism, has blasted FIFA over the low number of international visitors coming to attend the World Cup in 18 days from today, reports the Cape Times.   It is the first attack on FIFA by a member of the South African Cabinet.

Van Schalkwyk told Parliament that only a quarter of the 44000 tickets which had been allocated for Africa (excluding South Africa) had in fact been sold, and he blamed this on the lack of internet access for bookings to be made by soccer fans in African countries, and the exorbitant prices of the tickets.  “This is what I will tell Fifa to improve on when they next host the cup in developing countries: ‘Look at the way you sold tickets in Africa’.  ‘Africans do not buy tickets on the internet”, he is said to have added.

Van Schalkwyk’s outburst is interesting in that S A Tourism, the country’s national marketing tourism marketing agency, did little to make South Africa attractive to international soccer fans – other than some ads on CNN and SKYNews there was little visibility of advertising for this country.  Many soccer fans are not English-speaking, or from the UK and USA, and would not have seen the advertising.  The pay-off line for South Africa “It’s Possible” is hardly inspiring, exciting or informative about what South Africa stands for as a tourism destination. 

Van Schalkwyk also criticised MATCH, the FIFA ticketing and accommodation agency, about its strategy to book accommodation at small accommodation establishments, and then cancel the majority of these bookings as late as two months before the start of the World Cup.   “I think the escape clause in the contracts for accommodation is unfair to small operators.  We raised this issue with Fifa from the start”, he said.  

This writer criticised MATCH about the legally worded contract and the MATCH cancellation policy, which did not allow establishments to set their own cancellation terms, whilst a Director of FEDHASA Cape, via this WhaleTales Blog, and via the WhaleTales newsletters since 2006.   For the first time in its history, MATCH booked accommodation at ‘non-hotel’ establishments, at guest houses, B&B’s, and self-catering establishments. 

POSTSCRIPT:Poor Minister Van Schalkwyk is having a bad time – on Fin24.com today he is quoted as saying he was pained and embarrassed that guests were handed scarves with a “Made in China” label on them at a media conference, at which he outlined the country’s tourism strategy going forward, two days ago.

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

International World Cup soccer fan attendance halves

The boom projection of foreign attendance of the World Cup of 483 000 has been revised to a still-optimistic 373 000 by Grant Thornton, the tourism consultancy that created the original projection about 3 years ago, a drop of 23 %, reports SA Tourism Update.

The Grant Thornton estimate contradicts the FIFA estimates that the number of international soccer fans attending matches in South Africa has dropped by almost half, from 500 000 to 220000, reports The Times.

Based on the original optimistic international soccer fan attendance, the hospitality industry saw $-signs , and actively renovated their establishments, and put excessive price tags onto their properties.  Private home owners did quick renovations of their properties in the major cities, and planned to travel overseas during the World Cup period, spending their rental income, only to find the rental market being almost non-existent for the World Cup, given the over-supply of accommodation.

MATCH, the accommodation and ticketing agency for FIFA, also greedily added a 30 % surcharge onto the accommodation it contracted, and will have added similar commission rates to transport, flight and ticket prices, giving South Africa a dreadful label of “rip-off” pricing in the international media.  It is the fear of the excessive costs as well as the soccer fans’ fear of the perceived crime risk, that has kept soccer fans away in the main, report the international media.

Grant Thornton only revised its international attendance projections in the last month, when it became clear that MATCH could not sell all its contracted rooms, and gave them back to establishments, and that more than two-thirds of the tickets sold to date are to South Africans.  Even World Cup sponsors and football associations have not been able to sell all their tickets, and have returned them to MATCH.  

One wonders why it took Grant Thornton such a long time to revise the estimates, as its first estimate set the expectations for the hospitality industry.   The tourism consultancy now blames the credit crunch (which has been around for 2 years) and the distance of our country from the qualifying nations as the main reasons for the poor international bookings.  It also says that accredited Tour Operators also did poorly in selling packages.   Such Tour Operators had to pay $ 30 000 for a licence fee per country in which they were looking to sell packages, reports The Daily Maverick.

MATCH cancelled 1,3 million room nights out of the 1,9 million it had originally contracted, reports SA Tourism Update.    Many of the rooms released were in Zimbabwe, Mauritius, and in smaller local country towns (e.g. Plettenberg Bay, Hermanus).  The Protea Hotel Group has had 60 % of its rooms returned, in Cape Town, Durban and smaller towns, having originally been forced to allocate 80 % of their rooms to MATCH.  The Kruger National Park had 25 000 room nights returned.

Grant Thornton is trying to put a positive spin on the tourism benefit of the World Cup, by claiming that the average length of stay now is 18 days as opposed to 14 days as estimated originally, and that the average spend per trip would be R 30 200 as opposed to the originally estimated R 22 000.  On average, international soccer fans will watch 5 World Cup  matches, as opposed to the 3 previously estimated.

Attendance by African soccer fans has fallen to an estimate of 11 000, in what was meant to be an “African World Cup”, reports Business Report.    High ticket prices and lack of access to credit cards and the internet in other African countries has been blamed on the poor support from this continent.   It had originally been estimated that 48 000 African soccer fans would attend the World Cup, which still would not have been a satisfactory attendance level.

Grant Thornton in 2007 estimated the impact of the World Cup on the economy of R21,3 billion, with 159000 new jobs created.   International consultants Morgan Stanley published an estimate two months ago, of 350000 international fans attending and the local economy benefit being R15 billion.  The government has spent R33 billion on the tournament, for the building of stadiums and upgrading its infrastructure around the country to date, reports The Times. 

Grant Thornton now says that no new jobs appear to have been created due to the World Cup, but that it has prevented job losses, reports Business Report.   An estimated 2,5% – 3,5 % growth in the GDP of South Africa has been drastically reduced to 0,54 %.   Many fans have chosen to book via the internet, and are booking at B&B’s and guest houses, rather than hotels, and therefore are not booking via the “official MATCH-hosted channels”, says  Business Report.

FIFA President Sapp Blatter will be staying in the 5-star Michelangelo Towers during the World Cup, while the rest of his FIFA entourage of 200 will be accommodated at the Michelangelo Hotel next door, reports The Times.   Herr President’s requirements are a minibar stocked with South African wines, which is a good boost for the local wine industry, but the ice cubes in his fridge must be made from Evian water.  He will be protected by 5 bodyguards.   While sponsors’ products are meant to be used, which would mean that Blatter would have to drink Coca Cola’s Bonaqua, he is breaking protocol by drinking imported San Pellegrino mineral water.

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

World Cup accommodation rates “reasonable”, says survey

The Grant Thornton survey about World Cup pricing, conducted on behalf of the Ministry of Tourism, shows that “most World Cup accommodation prices have increased by a reasonable amount, despite persistent concerns about profiteering, South African Tourism Minister Marthinus van Schalkwyk said on Friday”, says a Reuters report.

The survey found that the accommodation pricing of the 2479 accommodation establishments, including hotels, guest houses, B&B’s and self-catering establishments, that participated in the survey, were charging a premium of less than 50 % on their 2010 summer rate.  However, the rates premium in Gauteng, which sees Johannesburg hosting the opening and closing matches, is more than 50 % for more than two-thirds of the establishments, according to the survey.

According to a media release from Cape Town Tourism, the survey results show that fewer than 20 % of accommodation establishments in the Western Cape are charging more than 50 % of their 2010 rate, reflecting this province’s call to responsible pricing.

Van Schalkwyk is quoted as saying that “The majority of accommodation establishments in South Africa are very responsible, we know that 74 percent will be charging prices during the World Cup that are very reasonable” at the news conference.

The Tourism Minister said that rate increases were to be expected during major events, but warned the industry about the damaging effect exorbitant prices could have on the World Cup legacy.  “We will continue to do everything to discourage excessive premiums when these do occur.  I am satisfied that by far the majority of accommodation establishments are acting responsibly and are sensitive to our warnings about price hiking and its effects” said Minister van Schalkwyk.    The Minister encouraged soccer visitors “to shop around to get the best deal”. 

The Tourism Minister’s “praise” of the industry was to be expected, in that the survey conducted on his Department’s behalf could not have come up with any other finding for South Africa, to save face in the face of international criticism about “price gouging”.   However, praising price increases of “below 50 %” is not commendable, as the accommodation industry guideline for World Cup accommodation rates was the 2010 rate + 10 %.  The ‘under 50%’ rate that lies between 11 – 49 % is equally rip-off as is that which lies over 50 %!  

The Gauteng accommodation industry is profiteering from the demand versus supply in Johannesburg, and it being a central point for matches at a number of stadia.   The two-thirds of estabishments charging an add-on of more than 50 % should be ashamed of themselves for charging excessively.  

The sample size of just more than 2 400 establishments is small in comparison to the many thousands of accommodation establishments in the country.   One would assume that the more price compliant establishments would have been more likely to have responded to the survey, therefore skewing the results.

Minister of Finance, Tourism and Economic Development in the Western Cape, Alan Winde, has threatened to name and shame the Western Cape “overnight accommodation establishments” that charge excessive rates during the World Cup.  The Minister would be advised to check on restaurant and transport prices too, as reports of excessive pricing have also been levelled against these sectors, reports Eye Witness News.  

Flaws in the Grant Thornton questionnaire design may also have skewed the results – read our criticism of the study questionnaire here.

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

New accommodation grading criteria could lead to star-wars!

The accommodation industry is up in arms about the 83-page document they have been sent by the Tourism Grading Council of South Africa, asking it to comment on the proposed new assessment criteria to be used by assessors for their annual assessment from October onwards, to confirm the maintenance, upgrade or downgrading of their star allocation within a very short period of time. 

Initially accommodation establishments were given only six days to comment, but the Council has extended its deadline for the feedback to 9 April due to the furore which the document has caused.  It appears that assessors themselves may not be happy with all the proposed changes.  The final assessment criteria will be announced at Indaba in Durban on 8 May, reports the Southern African Tourism Update.

The majority of the criteria are as before, and this should be good news to owners of accommodation establishments.  However, some of the requirements are radically stringent, and as they imply costs in meeting the new criteria, they are highly contentious, especially given the poor state of the economy and the precarious financial situation that many establishments find themselves in.  The reaction of many establishments in seeing the criteria is that they will withdraw from the grading system, which is the opposite to what the Tourism Grading Council would be wishing to achieve with the new criteria.  Establishments in the lower star grading bands and B&B’s may be especially tempted to withdraw from the system.

The document does not state how much time establishments have to adjust to the new criteria, if they are an established business.   Feedback from the National Accommodation Association (NAA) indicates that properties will be given 2 years to implement the new criteria.  New establishments will obviously have to meet the new criteria from October onwards.

The new assessment criteria were compiled with input from accommodation owners, as well as research which consulting firm KPMG conducted to benchmark South Africa’s grading criteria against international standards (mainly UK, New Zealand and Australia).

The document was assessed in this post from a 4-star Guest House, B&B and Country House perspective, for which the criteria are the same, with the emphasis on Guest Houses:

1.   The practicality of completing a 66 page document is questioned, meaning that the current two-hour assessment visit will double in time, given the large number of aspects to be assessed.  This can only imply that the assessment fees, already around R2000 per visit, will have to increase.

2.   Guest house owners/hosts must live in a separate entity if they live on the property, but may not live more than a 10-minute drive away for check-ins.  Breakfast must be served every day, rooms must be serviced daily, and a guest lounge and breakfast room must be available for guests’ exclusive use.   All these criteria appear fair.

3.  All three accommodation types must meet “minimum entry requirements” before they can be assessed: 

      *   public liability insurance

      *   the safety and security of guests, which includes lockable doors and secured windows

      *   the visual privacy of guests from the street

      *   the booking service must be available all year

      *   “health and safety certificate – fire and building regulations” (the exact requirement in this regard is not clear)

       *   must be registered as a business with the provincial authority (no such registration requirement is known in the Western Cape)

       *   “no lawful discrimination on the basis of race, gender, citizenship, physical and mental conditions, etc” (the word “lawful” seems a contradiction!)   

       *   clear and visible signage (this could be contentious, as many establishments, B&B’s in particular, wish to remain low key about their existence)

       *   staff dealing with guests must be professional and courteous at all times

4.   The marks awarded from the assessment are to change in determining the star grading, meaning more 4 and 5 star establishments potentially, as the mark requirement has dropped.   This contradicts the previous tightening of the percentages, as it was felt that there were too many 4 and 5 star establishments (this should be generally acceptable to establishments) :

        *   1 star 30 – 43%

        *   2 star 44 – 58 %

        *   3 star 58 – 74 %

        *   4 star 74 – 88 % (currently is 85 – 94 %)

        *   5 star 88 – 100 % (currently 95 – 100%)

5.    The assessment allows for the establishments’ Universal Access to be evaluated at no extra charge, and for a bronze, silver, gold or platinum plaque to be awarded to establishments that cater for guests with disabilities.  Establishments will not be penalised for not offering these facilities.   The evaluation for the Universal Access takes up a large part of the space on the assessment questionnaire, making it feel longer and more onerous than it is if the Universal Access is not evaluated.

6.   Some of the key requirements are the following:

      *   One off-street parking bay per bedroom must be offered, but can be up to 2 rooms per bay in “urban areas” (this should be what most establishments have already)

      *   Staff must be on 24 hour call as far as safety and security is concerned (this probably is in place in most establishments)

      *   Contentious could be the minimum room and bathroom sizes specified, given that the current dimensions of rooms in existing establishments cannot be altered: a 4* guest establishment must have a size of at least 30 sq. meters for the bedroom, bathroom and landing.  The bedroom must have at least 9 sq meters of “free floor space”, and the bathroom 2 sq. meters of such space

      *   All 4* and 5* establishments must offer a safe fitting a “17 inch” laptop – this could be very contentious, given that most guest houses have built-in safes for valuables already.  This could be a very costly requirement change to meet

      *   Each wardrobe must have a minimum of 14 clothes hangers in it (one wonders how they came to this number – surely 10 can do?)

      *   All 4* and 5* establishments must have airconditioning – this is the most costly requirement change, and will create resentment amongst those establishments that do not have airconditioners, especially for B&B’s, as well as for those that do, given the punitive electricity cost increases

      *   Each bedroom must have a “master lighting switch” at the beside, something which requires installation at building stage, so this too can cause controversy and cost

      *   Mirrors must measure 120 x 40 cm, and may not be on the back of the door.  Most establishment mirrors are on the back of the bedroom door!

     *    Bathrooms may be open plan to the bedroom, but the toilet must have a lockable door.  Guests must be informed about open plan bathrooms when they book.

    *    Towels have to be changed every day – this is very controversial, given water shortages and punitive electricity charge increases from 1 April.   Bed linen must be changed every 3 days.

    *   A hot and a cold breakfast choice must be offered, and the breakfast time must be at least three hours (this is a fair requirement).

    *   A laundry service must be offered on at least 5 days a week (this is a fair requirement)

    *   An internet service must be offered in 3*, 4* and 5 * establishments (this is a fair requirement, given guest needs, but will add to the running costs of the business).

    *   The MOST controversial requirement is an 18 hour Reception service, from 6h00 – midnight, in 4* establishments.  Guest house staff work an extremely long day, and given the recession, this is a most irrational and expensive requirement.  Staff working until midnight without their own cars cannot get home if they do not live on the property, given the lack of public transport at that time of night!

The full document regarding the proposed Tourism Grading Council grading criteria for Country Houses, Guest Houses and B&B’s can be read here.

POSTSCRIPT 1: The deadline for comments has now been extended to 27 April, reports South African Tourism Update on 31 March.

POSTSCRIPT 2 : The accommodation establishments will be given one year to implement the new criteria, says an e-mail sent to them by the Tourism Grading Council on 31 March, and not 2 years as the NAA wrote.

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