As a small operator, it has often felt like David versus Goliath when WhaleTales has criticised MATCH, FIFA’s accommodation agency, in its terms and conditions of wanting to do business with small accommodation establishments for the 2010 World Cup.
Whale Cottage has been vindicated for its brave public stand against the MATCH terms, which it first wrote about in a WhaleTales newsletter dated June 2007, soon after MATCH did its first presentation to the Cape Town hospitality industry at the Cape Sun.
An in-depth article in the Sunday Times of 13 September says what Whale Cottage has been saying for the past two years – that MATCH is a rip-off as far as accommodation for visitors to South Africa is concerned in 2010, and that many other accommodation establishments are saying so too, and are not contracting with MATCH.
Initially MATCH set very stringent criteria for hotels, and for small accommodation establishments, the latter being an accommodation category not previously utilised by MATCH, but necessary due to the 55 000 beds required for the FIFA officials, the media, VIP visitors, and package purchasers.
The major complaints from small accommodation establishments related to the setting of the rate, initially dictated by MATCH as being the 2007 rate + 16 %, of which MATCH would take 30 % commission. There was to be one uniform cancellation policy, despite the poor track record MATCH has in cancelling hotel rooms in Germany in 2006, without compensating the establishments. MATCH dictated that 80 % of an establishment’s rooms were to be made available to MATCH. Payment would only be received on the day of arrival of the guest, by means of a sealed cheque, which the accommodation establishment could only bank the following day. No deposits were to be payable upfront. Whale Cottage tried to reason with the MATCH authorities whilst it was a member of the FEDHASA Cape Board, but little attention was paid to the needs of and feedback from the small accommodation sector, given that FEDHASA is an hotel association looking after its large hotel member needs first and foremost.
Regular criticism of MATCH and its terms, and the company’s inability to sign up the required number of beds – it is still about 15 000 beds short of its target – led MATCH to relax its conditions, in that the cancellation policy has been relaxed somewhat, in that establishments may set their own “fair” accommodation rates, and that MATCH will take 30 % on top of this rate as its commission. From the outset MATCH, and FIFA’s PR machine, has stated that 30 % is an average rate of commission paid by the accommodation industry, which is blatantly untrue, given that the norm is 10 %, and at most 20 % for operators with whom one has done business for a long time.
Accommodation establishments in Cape Town, especially along the Atlantic Seaboard, are receiving a steady flow of 2010 bookings, and therefore do not need MATCH to sell their rooms. The accommodation rate norm is to use the summer rate for 2009/2010 and to add 10 % to set the 2010 World Cup rate. These establishments are receiving the cashflow benefit of 50 % deposits at a time when the credit crunch is still making itself felt.
What is most interesting about the Sunday Times article is that it stated that one of the directors of MATCH Hospitality shareholder Infront Sports and Media is Philippe Blatter, nephew of FIFA President Sepp Blatter. MATCH Hospitality was contracted in 2007 to sell tickets and suites for FIFA matches, for the 2009 Confederations Cup and the 2010 World Cup in South Africa, and the 2014 World Cup in Brazil. MATCH Hospitality is said to have paid $ 120 million for the rights to provide hospitality services at the FIFA events.
MATCH Event Services belongs to Byrom PLC, a British company, says the Sunday Times, selling 55 000 rooms, transportation and tickets as all-in-one packages, which will make it far more difficult for soccer fans to see how badly they are being ripped off. In the Sunday Times article, for example, angry Kruger National Park regulars state that they cannot book the Kruger Park accommodation, as it has all been contracted to MATCH, at prices 400 % above the normal rates.
The Sunday Times article contains quotes from the CEO’s of Southern Sun, City Lodge and Protea Hotels, all praising and supporting MATCH, and downplaying the size of the MATCH commission. Given that these are the largest hotel groups in the country, which will benefit greatly from its MATCH bookings, they cannot but sing the praises of MATCH.
What has also been confirmed by the Sunday Times article, and is something Whale Cottage has been concerned about, is that the bulk of the commission which MATCH will be making, plus FIFA’s profits generated from the Word Cup, will leave South Africa. On the accommodation side alone this could easily amount to R 330 million at a most conservative estimate.
Whale Cottage Portfolio: www.whalecottage.com
