Tag Archives: Cape Tourism

SAA crashes Cape tourism in cancelling direct Cape Town-London route!

The SAA announcement by its General Manager Theunis Potgieter on Tuesday that it plans to cancel the direct flights between Cape Town and London as of 16 August has been greeted with shock by the Cape tourism industry, and could not have come at a worse time, the industry suffering what could be another tourism crisis this winter. It appears that the tourism authorities did not receive any prior warning about SAA’s plan to cancel a route it introduced 20 years ago. At the SAA breakfast at Indaba last month the airline already announced that it ‘was hurting in the current global recession’, and that it had requested a R6 billion ‘government injection’!  The psychological damage of SAA’s decision probably is worse than its actual effect, in signalling that the country’s airline does not take Cape Town seriously as the country’s leading tourism destination.

Tourists and businesspersons travelling between Cape Town and London from 16 August will have to do so via Johannesburg, at no extra cost. Tickets already booked will be refunded, if required.  The change will allow SAA to expand its flights to and from Perth, Mumbai, Accra, and Abidjan, probably all flying to Johannesburg only. SAA has assured the industry that it will continue marketing Cape Town as a destination. The motivation for the cancellation of the service was said to be the reduced size by 24% of the demand for flights between South Africa and the UK in the past three years, largely caused by the increased airport departure tax and the £52 UK visa fee, reports Travelmole.  News24 added that air traffic control fees have also doubled. Of concern is SAA’s feedback that ‘South Africa is among the top five fastest declining visitor markets to the UK’, according to Visit Britain statistics.  SAA’s justification appears South African demand driven, and does not reflect the radical decline in the demand for the route from UK tourists, which has been evident in the past summer season.

Only British Airways operates direct flights between the two cities all year round. Virgin services the route between October and March. Emirates has good value flights to Dubai, which has become a hub connecting travelers to other hubs such as Heathrow. SAA is planning to increase its capacity by 13% through the use of larger aircraft on its reduced twice-daily (from three times a day) London-Johannesburg route, and has justified its decision on its ‘long-term growth and business optimisation strategy’, reports News24.

Reacting to the news, Cape Town Tourism issued a joint statement yesterday. Its CEO Mariette du Toit-Helmbold’s waffled and garbled response was disappointing and was not aggressive in challenging SAA on a decision it has made on a purely financial basis, without recognising that Cape Town is the most important drawcard for tourists in South Africa, something which Mrs Helmbold should be countering on behalf of its Cape Town tourism constituency: “This is disappointing news for Cape Town’s tourism industry and we fear it could affect tourism arrivals from the UK and the rest of Europe negatively… Whilst SAA’s growth strategy’s emphasis on expansion of routes into Africa and new markets like South America and Australasia is encouraging, the issue of direct air access to Cape Town is again highlighted. Airlines must make economic sense. When a flight is cancelled this is the reason. Decreased business travel, as a result of troubled economies, continues to plague key source markets. The business traveler is a major contributor to covering flight expenses, which points to a need to work hard on forging stronger business ties in addition to the leisure market.”  ACSA’s Cape Town Manager of Service Standards Ian Bartes is the Chairman of Cape Town Tourism, and one could expect that Cape Town International will lobby SAA to consider reversing its decision.

Surprisingly, the media release also contained a statement by Wesgro CEO Nils Flaatten, now responsible for tourism in the Western Cape, in having taking over the operation of the ex-Cape Town Routes Unlimited.  His comment was far more practical and business-orientated, and one hopes that it will lead to action, especially given that ACSA’s Cape Town International GM Deon Cloete now is Chairman of the still-existent Board of Cape Town Routes Unlimited: “Our research has indicated that the London-Cape Town route still holds strong economic value for the Western Cape and neighbouring Eastern Cape. International airlines identified this and are increasing their capacity during peak season. Many business and leisure travelers from the United States are using London as a connecting flight into Cape Town and we are at risk of losing these visitors, as the traveling time has been extended even further. A national debate on airlift strategy is urgently required to discuss direct flights into Cape Town International Airport as well as the other regional airports. Poor economic conditions in the global north and escalating fuel prices were making it difficult for many international airlines to remain competitive. These market conditions would also have an impact on the pricing of domestic flights and the ability to move tourists throughout South Africa.”

Once again City of Cape Town Councillor Grant Pascoe, Mayoral Committee member for Tourism, Events and Marketing, has demonstrated how out of touch he is with the tourism industry, which has just experienced one of its worst May months since 2007 and thereby proving that Seasonality is getting worse, in his reaction to the SAA announcement in Cape Town Tourism’s media release: “In order to sustain tourism in Cape Town, we need to counter seasonality with year-round inbound tourism. It is vital that flights to Cape Town remain consistent throughout the year. The only way we can secure more direct flights to Cape Town is by stimulating both business and leisure tourism demand for Cape Town. This will translate in more visitors and ultimately more jobs for the sector, year round.  Perception does not shift overnight – and it needs proof – the industry must stand together to tackle our tourism weaknesses and grow a more complex offering of product to multiple markets. Leisure and business visitors need to see that Cape Town is a 365 destination for a thousand good and different reasons.”

Provincial Minister of Tourism Alan Winde also expressed his concern to Southern African Tourism Update about SAA’s decision, and probably is the only tourism player able to come up with a viable solution to this tourism dilemma, affecting not only Cape Town but the whole Western Cape, describing it as “sad and disappointing for the whole of the province’s economy, saying direct airlift was important for business, tourism and airfreight. ‘I have no doubt it will have a negative impact,’ he said. ‘We will push forward with our airlift strategy to encourage other airlines to fly here.’ He said the Cape must review its long-haul competitiveness and create the right economic conditions for airlines to fly there”.

One has seen in the past that Cape Town Tourism does not have the clout to address something as substantial as this tourism issue, despite its Board Chairman’s job at ACSA, and we have no confidence that this tourism body will do anything about turning around SAA’s decision, or in devising a campaign to ensure that Cape Town does not lose any more precious UK visitors, which already are in short supply.

POSTSCRIPT 7/6: SAA agreed yesterday to pay a R18,8 million penalty to the Competitions Commission for fixing fuel rates and other surcharges for cargo, reports Southern African Tourism Update today! This probably is what they need the cost-cutting Cape Town-London saving for!

POSTSCRIPT 8/6: Columnist Tony Weaver wrote in the Cape Times today that it is clear that the tourism industry was not consulted by SAA in cancelling the Cape Town – London route as of 15 August. He wonders if it is a ‘punishment’ of the Western Cape to be DA-party led, seeking a reason greater than just cost-cutting for this drastic action by SAA.  A writer to the Letters page today highlighted that SAA’s decision is ‘bottom-line’ based, and not considerate of the ‘bottoms’ of its customers, many of whom have already migrated to other airlines serving the route, which may be the reason for the decline in demand on this route! The newspaper also provides response from some tourism players to the news:

*  Wesgro CEO Nils Flaatten told the FEDHASA Cape AGM yesterday that they have “secured a ’round-table’ discussion with South African Airways..”, given that their ‘research indicated that the London-Cape Town route still holds ‘strong economic value for the Western Cape and its neighbouring Eastern Cape'”. The increased travelling time for long-haul flights in having to travel via Johannesburg could adversely affect tourism to Cape Town, he said.

*   Surprising to read is that City of Cape Town Councillor Grant Pascoe has written to SAA Chairman Cheryl Carolus and CEO Siza Mzimela, expressing his ‘concern and disappointment‘ on behalf of the tourism and conference industries, importers and exporters, and investors, given that the tourism industry adds R14,6 billion to the GDP of the city annually, and employs 300000 staff.

*   Provincial Tourism Minister Alan Winde sounded more upbeat, saying that other airlines servicing this route ‘will pick up the slack‘.

*   Mossel Bay Tourism said that the ‘province seems to be under-supplied with direct flights’, and that the quickest way in which foreign tourism arrivals can increase is to ‘land larger numbers at Cape Town International‘.  The ‘hinterland‘ has suffered greatly since the soccer World Cup, with an over-supply of accommodation in Cape Town, and related offers,  making it attractive to stay in the city for longer, and to do day trips into other parts of the Western Cape, instead of staying over in towns and villages in the province, it added.

POSTSCRIPT 8/6:  On Twitter negative Tweets about SAA’s decision met with strong resistance from @JamesStyan, a journalist for Beeld and Die Burger today.  We met for coffee this afternoon.  He had met with SAA on Wednesday afternoon, after their announcement of the cancellation of the Cape Town-London route, and was told verbally, not documented in their media statement, that should the economics improve, that the route could be reinstated.  He is adamant that this decision is based on economic considerations and SAA’s hub strategy, making Johannesburg its hub from/to which all its flights connect.  He also reminded me that other airlines have cut their Cape Town routes since the World Cup too.

POSTSCRIPT 13/6: The band Roxette performed in venues around the country last week, and flew out of OR Thambo airport to their next destination. On their Facebook page they wrote: ‘Just spent 90 minutes at one of the world’s worst airports, Johannesburg. Could actually be the no.1 on that scary list.. how about some organisation with customs’, reported The Times on Monday.

POSTSCRIPT 14/6:  The MasterCard Global Destination Cities Index 2012 shows, according to Southern African Tourism Update that ‘the majority of international visitors to Cape Town are from London, with 185000 visitors expected to spend US$361 million throughout the year. This is followed by 127500 travellers from Dubai spending US$118 million, and 76000 visitors from Amsterdam spending US$68 million’. Once again this survey makes a mockery of the SAA decision to axe its Cape Town-London route!

POSTSCRIPT 14/6: The irony grows – the International Air Transport Association (IATA) has announced that it will hold its AGM and World Air Transport Summit in Cape Town from 2 – 4 June 2013, reports Southern African Tourism Update!  SAA is the host airline for the event!

POSTSCRIPT 4/7: Reuters reported today that Lufthansa will no longer service Cape Town from Frankfurt, due to the night flying ban over this airport.  All Cape Town flights will be serviced from Munich five times a week from 28 October.

POSTSCRIPT 6/7: The meeting with SAA and the Cape tourism industry representatives, hosted by Wesgro yesterday, has not made any impact nor reversed SAA’s decision to cancel the Cape Town – London route from next month. Instead it was agreed that greater demand needs to be built in attracting visitors to the Cape, so that SAA can then meet the demand and reinstate the route. Other airlines must be attracted to service the city with direct flights, it was agreed.

POSTSCRIPT 17/7: News24 has reported today that SAA has sold one of its three slots, being its Cape Town – London route, at Heathrow for an estimated R300 million!  The cancelling of the route therefore appears more cash driven than motivated by the low demand!

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

May Day! May Day! Cape Tourism ship is sinking! Seasonality getting worse!

It’s been a bad May, and appears to be the worst month of the year for the Cape hospitality and tourism industry, and it has sunk to its lowest low in the six years in which we have been tracking occupancy. Sadly, the soccer tournament is not benefiting the industry. Cape Town and the Western Cape may be slipping back into a tourism crisis, as we experienced in 2011!

From occupancy for Whale Cottage Camps Bay at 68% in May 2008, and about 42% in May 2007 and 2009, occupancy dropped sharply from May 2010 onwards, to 19%, rose slightly to 23 % in May last year, and down to a shocking 10% this month, the lowest in the six year period.  The May occupancy at our Whale Cottage in Hermanus is 8%, on a par with May figures for the past three years, crashing down in 2010 from about 24% per each of the May months in 2007 – 2009.  In Franschhoek the same pattern is evident, with occupancy also at 10% over the past three May months, dropping sharply from 27% in 2009 (and even 58% in May 2008). Any tourism ‘politician’ that claims that Seasonality is under control and that the winter period is shrinking is deceiving the tourism industry!

The shocking tourism performance this month is a surprise, in that even business tourists from Johannesburg have not been seen to any great extent in Cape Town, often the mainstay of the industry in winter, perhaps a sign that the South African economy is not yet out of recession.  The winter campaign in a downscaled marketing program, which Cape Town Tourism has launched appears to have had no impact on tourism at all, and neither has the Eight Nations Under 20 soccer tournament.  The Cape Times reported earlier this week that the attendance support of the soccer event is so poor that Cape Town faces losing the event for 2014, no loss if viewed from a tourism perspective.  The tournament was signed up and announced to the industry a week before its start, hardly an event timing that could be taken seriously.  The newspaper also reported that the City of Cape Town is giving away a free ticket for a match for every Semi-Final and Final match ticket bought. Surprisingly, the City’s tourism body, Cape Town Tourism, is not marketing the event at all, proving that it too sees no tourism benefit of the soccer tournament!  No other events have been held in Cape Town this month, and this is making itself felt.  In Franschhoek the Literary Festival earlier this month led to a full house, proving that events do attract visitors to a town or village. Next month its ‘Cook Franschhoek’ is attracting good bookings, and in July the Bastille Festival and an Art of Living retreat are almost sold out already.  Sadly, no events are planned for Cape Town nor Hermanus in the next few months.

Of even greater concern is that forward bookings from international tourists, which looked promising in April for early 2013, have all but dried up, demonstrating that the uncertainty of the Eurozone membership of Greece may be unsettling German travellers, who were planning their holidays far ahead. Increasingly one hears that travel to Greece is being curtailed, as tourists do not know if the Euro will be discontinued while they are travelling in that country, which could be an opportunity for Cape Town, if any marketing could be considered by Wesgro, Cape Town Tourism, or SA Tourism! Bookings from the UK market remain depressed and rare. At the time of international events, local tourism always suffers, and in the UK the Queen celebrates her Diamond Jubilee next month, and the Olympic Games take place in London from July to August. Perhaps some Londoners may leave their city during this time, but we are not seeing bookings from this market. On 8 June the three week long UEFA European Football Championship takes place, shared between Poland and the Ukraine as host countries, which will capture the interest of many European travellers, preventing them from coming to South Africa.

Once again, we call on our tourism authorities to help the Cape Tourism industry in attracting events to the region in winter, and to generate any marketing activities that can attract domestic tourists to our area.

POSTSCRIPT 31/5: We would like to add that Wesgro has not issued any media statements nor shown any industry leadership since taking over Cape Town Routes Unlimited two months ago! We have written to Nils Flaaten, to ask him what is planned for the marketing of the Western Cape.

POSTSCRIPT 1/6: Good news is the potential of a soccer match between Ajax Cape Town and Manchester United on 21 July, a real soccer event, to be played in the Cape Town Stadium, as reported by the Cape Argus yesterday!

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

World Tourism Day: Cape tourism does salsa and tango in South America!

Today is World Tourism Day, and therefore it is fitting to laud Cape Town Routes Unlimited for the marketing work it is doing for Cape Town and the Western Cape in South America.

One welcome advantage of the tough tourism times is that Cape Town Routes Unlimited is proactively sharing what it is doing for the Cape tourism industry, via almost daily media releases.  Cape Town Tourism, by comparison, is Tweeting torrentially, and does little for its media coverage and member communication.

A Special Edition of the Cape Town Routes Unlimited CEO Update provides interesting information about a recent trip to South America by its CEO Calvyn Gilfellan, who visited Buenos Aires in Argentina, and Sao Paulo and Rio de Janeiro in Brazil, earlier this month.   The 2010 Soccer World Cup got the ball rolling in developing relationships with the two countries. Two events took Gilfellan to South America:

* SAA São Paulo Workshop, which was attended by 33 Brazilian tour operators, wholesalers, and incentive houses.  At the workshop a ‘speed-dating’ approach was used, whereby the Cape exhibitors and the Brazilian tour operators were each given 15 minutes to represent their tourism products, resulting in 841 business connections

.   Visit SA Expo in Buenos Aires: Organised by the South African Embassy (headed by ex-DA leader Tony Leon), the Expo invited free participation by South African tourism players, including those involved in language schools, sports tourism, business tourism, and luxury travel.

Only one day was spent in Buenos Aires, and here Cape Town Routes Unlimited was encouraged to get involved in a special rugby match in honour of Nelson Mandela on 2 November, identified an opportunity for the creation of a West Coast Rooibos Tea Route on the initiative of the South American offices of South African Rooibos Tea, and the opportunity for tourism players to provide information via the South African Embassy offices in Chile, Uruguay and Buenos Aires.  The number of tourists from Argentina doubled in one year to reach 22000 in 2010, albeit off a low base and many of the tourists coming for the Soccer World Cup.

More time was spent in Brazil, and here Cape Town Routes Unlimited picked up the positive perception that our country has ‘extraordinary tourism offerings, friendly people, a safe environment and top-class infrastructure’.  Their economic growth at 5% per annum appears to have been more resilient to the world recession, and tourism to South Africa grew by 69 % in 2010 (no numbers provided).  With its massive population of 200 million it has fantastic potential for Cape tourism marketing.  Brazilians travel for language training, events, wildlife, golf, adventure, and surfing in the main.  They are ‘habitual’ travellers, enjoying returning to destinations that they have had good experiences in.   Marketing collateral is recommended to be provided in Portuguese, and SA Tourism is commended for having a website in Portuguese.  The BRICS inclusion of South Africa will open a platform for tourism, investment, trade, sport and cultural exchanges, writes Gilfellan.  Online Travel sells packages to Brazilians visiting South Africa, and 120000 brochures will be provided by the tourism body to the South African embassy.  Media visits are on the cards, and host sponsors are sought.  A group of 100 golfers is visiting our country next month, and one hopes that the Cape is on their agenda.  Wine and golf workshops are planned for next year with Brazilian tour operators.  A jazz exchange programme between the Cape Town International Jazz Festival and the Bourbon Street Jazz Festival in Brazil is being considered, allowing performers from each festival to perform at the other festival.  A Memorandum of Understanding is to be signed between Cape Town and Rio de Janiero, and a twinning agreement to be established between Robben Island and Ilha Grande, a former political prison island in Brazil.  An African Fan Village is being considered in Rio de Janiero for the 2013 FIFA Confederations Cup, 2014 FIFA World Cup, and 2016 Olympic Games.

It is time for Cape tourism players to brush up on their Portuguese and Spanish language skills, to welcome tourists from Brazil and Argentina.  With excellent flight connections via Air Malaysia from Buenos Aires and from Brazil via SAA, Cape Town and the Western Cape are sure to benefit from a new tourism market, sorely needed as the traditional tourism source markets are still depressed due to the global recession.

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

Cape Tourism crisis: defensive drivel, patronising platitudes!

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