Tag Archives: conventions

Tourism is ‘bread and butter’ of Western Cape, says Minister Alan Winde!

The tourism industry in the Western Cape makes up 10 % of the R 450 billion Western Cape economy, says Western Cape Minister of Finance, Economic Development, and Tourism Alan Winde, and thus forms the ‘bread and butter’ of the province.  A large part of the industry consists of small businesses, that need to be ‘professionalised’ to run their businesses as businesses.  The Minister shared that a massive sporting event with tourism benefit is to take place in May next year.

A spontaneous request to have a coffee with Minister Winde, who is known to not stand on ceremony, is friendly and approachable, allows one to call him by his first name, is good on Twitter and offers his contact details if he can assist in a matter, led to an invitation from his office to meet with him in his provincial office in Wale Street.  From the guest list I had to sign, I saw that I was one of three industry operators meeting with the Minister on Monday afternoon, a reflection of his open door policy. The reception room is part office, but felt very homely, like someone’s lounge, and the staff is exceptionally friendly, head of the office Tammy Evans, spokesperson Phumzile Van Damme, and PA Lucille Fester coming to introduce themselves.

The Minister’s office is spacious, with a leather couch, upholstered chairs, and paintings of District Six. It feels friendly and welcoming.  Minister Winde explained his approach to his position is as he would run his business, being responsive, approachable, and accessible, not like politicians that are corrupt, hide in their ivory towers, and don’t care about their electorate, he said.

We talked a lot about Wesgro, and it was a relief to hear that a head of tourism will be appointed, and key tourism positions will be filled due to contract positions not having been renewed when Cape Town Routes Unlimited was closed down and merged into Wesgro on 1 April. The Minister is proud of his plan to place the tourism promotion agency inside Wesgro, as he believes that ‘tourism is business’, and used agriculture as an example of also being included in Wesgro’s trade and investment activities.

We discussed seasonality, not only in tourism, but also in business generally in the Western Cape, and how tourism has a ripple effect on all businesses, every Western Cape business being in the tourism business, even though they may not offer accommodation nor are they restaurants.  Excellent news is that Premier Helen Zille signed off support for a massive 12 km marathon to be held in the province, attracting 50000 runners next May, and to be organised by Elana Meyer.  We shared with the Minister that the Camps Bay Business Forum is looking to attract businesses to the prime beachfront suburb in the winter months, and is planning to host two special events, in May and in September next year.

An interesting concept is that ‘Cape Town is a second city to Johannesburg’, the Minister said, as Melbourne is to Sydney, and Rio de Janeiro is to Sao Paulo in Brazil.  It will always be a beach and holiday city predominantly, yet needs businesses to support and grow the local economy. He mentioned the shocking statistic that only 3% of Cape Town’s income is business related, the rest coming from tourism. ‘Cape Town is a great place in which to do business’, he said, and he is encouraging the growth in conventions, attended by businesspersons. He is proud of the growing multinational call centre industry in Cape Town (e.g. Lufthansa), and it is the home of the oil and gas industry. He mentioned with pride that DHL has set up its Africa head office in Cape Town, while Steinhoff International has opened offices in Stellenbosch. If we had more business in the Western Cape, more businesspersons would fly first and business class, and therefore the Cape Town – London route would be more profitable for SAA, and its axing in two weeks time could have been prevented.  The Minister has challenged Wesgro CEO Nils Flaatten to come up with a plan to fill the Lufthansa flights between Cape Town and Munich (the change takes place in October due to Lufthansa not being allowed to land late at night at Frankfurt airport due to noise restrictions), to ensure that flights are as full as possible, and that Lufthansa retains the Cape Town – Munich route for more than the year that it has committed to.  The Minister would even like to see international tourists use Munich as a hub instead of London, so that they can fly directly into Cape Town, so avoiding having to fly via Johannesburg, even if they are coming from the USA, other European destinations, or Eastern Europe.

Africa is an important continent for business, as it has six of the top ten fastest growing world economies, and hence Wesgro is focusing its energy on the BRICS countries as well as Africa. He dislikes the use of the term ‘Gateway’ to describe Cape Town’s geographic role relative to other African countries, the Minister said, because of its link to ‘gate’, and would rather that the terms ‘platform‘ or ‘springboard’ be used in this context.

The local tourism industry is divided into two extremes, one part being large hotels and tour operators, with organised industry representation, and the other part consisting of many small ‘mom and pop’ tourism business owners, such as B&Bs and tour companies, and not represented at industry level.  The latter need to be ‘professionalised’, the Minister said.  They need skills training in how to run their businesses, how to do marketing, and how to reinvent their businesses. He mentioned a number of examples, such as the parking area blocking the restaurants from the kite-surfing beach in Saldanha Bay, and the Knysna forest having an old-world feel of 30 years ago with little tourist appeal, no operators having seen the business potential in the forest, such as offering yoga and retreats, picnics, unique weddings, and more. One of the Minister’s favourite examples is the West Coast Fossil Park outside Langebaan, which has world-class historical fossils of whales, walruses, sabre tooth tigers, and more, and is highly sophisticated scientifically, but is not from a visitor and tourism perspective. This is set to change, with the R30 million they have received from the Lotto, and the province is also contributing, to create a tourism route.

The Minister is very excited about the idea which he has for an Events app, which will request information of one’s favourite activities (e.g. winetasting), and will communicate with the user in providing information of all wine-related events to be held over the year, to allow the user to book for such events well in advance.  A ‘hackathon’ of tech geeks is to be briefed by the Minister in September, to develop the app within two to three hours.

We ended off our chat about the False Bay Coastal Route, and the allegation levied by the previous Tourism Minister Lynne Brown, of the ANC, of Minister Winde ‘stealing‘ her plans. The Minister has seen no need to respond, given that the plans belong to the Western Cape, and not to a political party. The plan is to develop ‘recreation space’ along the False Bay coastline, to encourage locals and tourists to spend time on the beach, coming for walks, buying something to eat or drink from an informal trader, playing soccer and volleyball, or camping along the beach at new campsites.  It will include the Zeekoevlei eco-park, and the upgrade of Monwabisi, including the provision of security, funded by the Ministry with assistance from the City of Cape Town and the National Tourism department as seed money, to act as a catalyst to attract developers to the area.

The Minister impresses with his hands-on approach to promoting tourism, and having run businesses in tourism town Knysna, he has practical experience of what small businesses need from his department.  The Western Cape is blessed with its dynamic Premier Helen Zille and its savvy Finance, Economic Development and Tourism Minister Alan Winde.

POSTSCRIPT 5/8: Minister Alan Winde announced on 2 August that in the last three years, the Western Cape has attracted 80 international investment projects, to the value of R30 billion, and creating close to 7000 jobs. The projects have come from the United Kingdom, the USA, France, Germany, and The Netherlands, and include companies such as Amazon, IBM, Harley Davidson, ColorMatrix, and Altech setting up in the Western Cape.

POSTSCRIPT 5/8: The ‘multimillion Rand‘ upgrade of Zeekoeivlei to provide braai areas, eco-friendly toilets, and a massive lawn similar to that at Kirstenbosch, has created 100 jobs, and is aimed at enhancing the area’s attractiveness as a tourist destination, reports the Cape Argus. The national Department of Tourism contributed R25 million, and the Western Cape government R1 million, for the upgrade.  The Rondevlei, which borders Zeekoeivlei, has hippos, the only reserve in Cape Town.  The park attracts 130000 visitors annually, and this number is set to increase.

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

Cape Town Routes Unlimited does not spend enough on Marketing

A heavyweight delegation from the Western Cape Department of Finance, Economic Development and Tourism, members of the Board of Cape Town Routes Unlimited, and ‘stakeholders’ of the organisation attended a presentation at the Table Bay Hotel last week, to receive feedback about Cape Town Routes Unlimited’s performance in the past twelve months, and its way forward.  Attendees also received a copy of the 2009/2010 Annual Report, a detailed document of the activities of the body which states that its “core business is marketing communications”.  It is a shame that so little of the organisation’s budget is spent on beneficial marketing on behalf of the tourism industry in the Western Cape.

The problem with handing out the Annual Report is that it reveals information which is not always to the benefit of the organisation, even though its “honesty” is commendable and meets accounting procedures.  A greater part (52%) of the R 38,5 million annual budget which Cape Town Routes Unlimited received from the Western Cape province in the past year, supplemented by R 15 million from additional special project income generated, was spent on administrative expenses rather than on marketing, which is bad news for the tourism industry in the Western Cape, which has seen the worst year ever, with most provincial tourism businesses having been detrimentally affected by the World Cup, by the strong Rand, and therefore by a reduced number of bookings. 

The importance of Marketing to the organisation is highlighted by the fact that the CEO, Calvyn Gilfellan, is also the Chief Marketing Officer.   He has three Marketing Executives reporting to him:

David Frandsen: Executive Manager – International Marketing: Europe and the Americas and the Convention Bureau 

Itumeleng Pooe: Executive Manager – International and Domestic Marketing: Africa, Asia, and the Middle East

Romeo Adams: Executive Manager – Marketing and Organisational Support 

In the Annual Report, each of these executives feeds back what their performance has been relative to targets set at the beginning of the financial year.   It is a shame to see how much of their time and action was directed at meeting administrative requirements in the preparation of the Annual Report as well as the financial reporting.   Many of the targets they set themselves seemed rather low, so that it looks good on paper when many are exceeded.   I was shocked to see the declaration of salaries of the Executive Management, and how some of these have increased in the past twelve months.   Gilfellan’s annual income is listed in the financial statements at just under R1 million (up by 6,6 % on the year before).  The Marketing Executives earned between R692000 – R839000 in the past year (close to R58000 – R70000 per month), salaries which seem way above the norm, especially when the industry cannot see much benefit of the work done by Cape Town Routes Unlimited!  Even the directors are paid emoluments, some as high as R26000.

In summary, Cape Town Routes Unlimited lists as its tourism marketing achievements in the past year the following: R20 billion of tourism business generated through international trade shows; organising the ’67 minutes for Nelson Mandela’ birthday celebration; close to 400 media mentions valued at R162 million, reaching 107 million persons – these are very bold claims!; Summer Welcome campaign; regional tourism road shows; organising Tourism Month; hosting VIP delegations; a green tourism initiative; SMME Marketing Support programme; receiving bookings at its Visitor Information Centers (set up in the Waterfront in opposition to Cape Town Tourism) to the value  of R2,4 million; a Google Adword campaign; a campaign with CNN; and an e-mail campaign in the Benelux countries.   Conventions are lucrative for tourism business in the Western Cape, and for Cape Town in particular, nine conferences having been secured for the next three years, to be attended by 5650 delegates, with R55 million in economic impact.

The recent upheaval caused by provincial Minister Alan Winde’s announcement that he wants to amalgamate Cape Town Tourism and Cape Town Routes Unlimited was not addressed by the Minister when he spoke at the meeting.   Cape Town Routes Unlimited Chairman Peter Bacon was critical of the separation between the two tourism bodies in his ‘Chairperson’s Review’: “… following the City of Cape Town’s withdrawal of its financial support and decision to mandate Cape Town Tourism to market the City and provide visitor support services on the ground. This effectively gave rise to the creation of a second Destination Marketing Organisation with the resultant confusion, duplication of effort and wasteful expenditure.”   Bacon does praise the closer co-operation between the Western Cape province, the City of Cape Town (which steadfastly is supporting Cape Town Tourism for the marketing of the Mother City) and municipalities in the province.   Cape Town Tourism is not mentioned by Bacon in this context.  Bacon states that the province is working on:

*  a clear vision for the development of the tourism industry

*  a single strategy with clearly defined roles, responsibilities and deliverables.

*   business plans for Cape Town Routes Unlimited,  Cape Town Tourism and other regional tourist organisations aligned to the goals and strategy of the province,

and this will lead to a Memorandum of Agreement to be signed between the Province and the City in the next twelve months, he writes.     

In his Chief Executive Officer’s Review, Gilfellan writes: “One of our organisation’s greatest achievements during this challenging year was that it established itself as a credible and authoritative voice in tourism”, on the basis of media comments requested from the organisation.   Many will question his claim.  He states that industry challenges are the following:

*   “overcoming the effects of the worse (sic) economic crisis to hit the the industry in 60 years

*   The slow pace of transformation and diversification of the industry

*   Stunted growth in our traditional core markets of the UK, Germany, Netherlands and France

*   Limited marketing resources compromising our global competitiveness, and

*   Institutional disarray leading to the current role confusion, duplication and possible fruitless expenditure.”

Gilfellan also looks to the future in his review, and calls for “a speedy resolution to the protracted institutional calamity”, referring to the problem between his organisation and Cape Town Tourism; Events, Sports and Business Tourism will capitalise on the World Cup; new target markets like Brazil, India, China, Russia, the Middle East and Africa must be targeted; a tourism community in which business, labour, government and the communities unify around a common vision and partnership;  embracing technological advances in marketing; promoting the principle of a ‘quadruple bottom line’, encouraging the tourism industry to pay attention to social responsibility, environmental sensitivity, economic imperative, and climate change.

In providing such detail to the industry, one can request Cape Town Routes Unlimited to connect with its stakeholders more frequently than once a year at a function; to allow stakeholders to ask questions so that a dialogue can be created at such functions; to inform stakeholders about achievements as frequently as possible, so that they can help spread the word about the work of the organisation (Cape Town Tourism is excellent at this);  to address the imbalance in “employment equity” by gender, occupation and population group; to improve its market research techniques, a weakness it shares with Cape Town Tourism; to contain any duplication in its marketing activities relating to Cape Town that is already managed by Cape Town Tourism; to address the non-sensical brand “Cape Town & Western Cape”;  and to speak to tourism leaders about how it can more effectively direct its marketing budget to the benefit of the industry, being Events, Events and more Events in the seasonal winter months. 

I am very impressed with Minister Winde, and how approachable he is – he has no airs and graces, picks up a phone to make a call to a tourism player with an opinion, is embracing social media with a Twitter account (@AlanWinde), and reads and comments on blogs related to tourism.  As an outcome to the presentation, hearing stakeholders reinforce how poor business is, he promised to set up a meeting to address the poor bookings issue, especially given the feedback from World Travel Market held in London last week that our country has priced itself out of the market.

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

Convention Centre city carrot

The Cape Town International Convention Centre has proven to be a powerful carrot for the local tourism industry, in attracting millions of delegates to Cape Town in its five years of operation.  Business tourists are known to extend their visits to add sight-seeing and leisure activities once they come to Cape Town, and also generate a higher spend per capita than do leisure visitors.

In the past twelve months more than half a million delegates attended conferences at the Convention Centre, and 325 banquets were hosted at the venue.    The current world economic crisis does not appear to have affected bookings, other than in a small reduction of delegates attending in the past month.

In the past year, the Convention Centre contributed R 2,7 billion to the economy of the Western Cape directly and indirectly, according to the University of Cape Town Graduate School of Business, reports Business Report.   This will grow to R 3,38 billion next year, and to R 5,67 billion in five years from now, it is estimated.  

The Convention Centre is a case study for a successful public/private partnership, with shares in the holding company Convenco owned by the City of Cape Town (50 %), the Western Cape province (25%) and SunWest International (25%).   This role model was unable to work for Cape Town Routes Unlimited, previously a joint venture between the City and the Province.  Now it is solely funded by the Western Cape government.

Future growth is constrained until the Convention Centre receives the go-ahead to extend onto the nearby Custom’s House site.   The planned extension would cost R 1,4 billion, and would be the “greenest” and most technologically advanced building in the city.    It will use 40 % less energy and 95% less water and create 25 % less waste than the existing building, reports the Cape Argus.  Wind turbines will be used to generate electricity whilst ventilating the parking garage, and solar energy will be generated.   It will have a grey and black water treatment facility; with rainwater recycled; a seawater cooling system; and have a planted green roof, all designed to make the building environmentally responsible.   The new building has been described as “iconic” by Rashid Toeffy, the CEO of Convenco. 

Looking ahead, the Convention Centre already has 133 bookings for the next eight years.