Tag Archives: credit crunch

Tourism could reverse recession

Mmastsatsi Marobe, CEO of the Tourism Business Council, has said that tourism could be one way in which the South African economy can be stimulated, as reported in Travelwires.

She said that while individual accommodation establishments have seen a decline in occupancy, the IPL cricket and British and Irish Lions Rugby tours are good for the national economy, and demonstrated that South Africa is a viable destination for sport, business and leisure.

She identified a number of tourism trends that can stimulate the economy:

1.   Local tourism is on the up, at the expense of international tourism.  In the UK 20 % of British holidaymakers will travel in their own country this year.

2.   Going on holiday is a means of escapism from the doom and gloom of the effects of the credit crunch.   “Tourism provides a psychological lift to the psyche of the public”.

3.   Green is gold, in that tourists are becoming more discerning in expecting their accommodation to be environmentally responsible.

Marobe called for more young persons to be employed by the tourism industry, as they are the future of the tourism industry.

“…we all have a role to play in stimulating the economy through tourism – keep visiting, keep hosting, and keep investing” concluded Marobe.

Hospitality industry should be grateful

The Cape Times article “Restaurants, hotels ‘need innovation to survive slump'” (28 May) appears to exaggerate the effect of the credit crunch on the hospitality industry.
 
The hospitality players interviewed are not reflecting the seasonality problem, which affects the hospitality business badly in winter in Cape Town, compared to many other cities in South Africa.
 
Misleading reports heralding closures of restaurants in Cape Town, neglect to correct these when a restaurant like Summerville in Camps Bay never stopped trading – the liquidators handed over the running of the restaurant to new owners on 1 May, just a week after the news that the restaurant had “closed down”.    Bruce Robertson, of The Showroom, which closed down at the same time, has already opened a new but smaller “gourmet bunny-chow restaurant” called The Quarter.   Ian Halfon has also denied that his coffee shop Donatella’s in the V & A Waterfront closed due to the credit crunch.  He says that his lease expired. 
 
The hospitality industry has a lot to be grateful for, and does not need to ride on World Cup 2010 to say that all will be well.   The British and Irish Lions rugby matches in Cape Town on 13 and 23 June will lead to many hotels and guest houses being fully booked around those dates, and these rugby fans are staying for four days or more, which is unusual for winter bookings.  Sadly, the IPL did not benefit the mainstream guesthouse and hotel industry in our city at all.
 
The five successive interest rate cuts are fantastic news for all with bonds on their guest houses and B & B’s  –  the Whale Cottage bond costs for four guest houses are now down by R 50 000 per month compared to December 2008, when the first rate cut was announced.   This means that Whale Cottage can afford to drop its winter rates by 50 % relative to the summer rate, and it helps to cushion the reduced occupancy. 

MATCH is ripping off 2010 tourists, not hospitality industry

The attack by SATSA Chairman Michael Tatalias on the accommodation industry for not signing with the FIFA accommodation and ticketing agency MATCH, and accusing it of “holding back” so that “they could inflate their prices to rip off tourists” (Cape Argus, 12 May, ‘City hoteliers warned against hiking prices”) is uncalled for.
 
SATSA is an association of tour operators, car rental companies, business tourism suppliers, etc, and has a small number of accommodation members.  Accommodation is not the association’s major focus.   It therefore cannot speak for the accommodation industry.
 
It is MATCH that has been greedy, in originally dictating to accommodation establishments that they should use the 2007 rate and add a 16 % inflation factor to this, to get to the 2010 rate.  MATCH then would take a preposterous 30 % commission on this rate.  However, with inflation in 2008 at around 13 %, this rate dictate was not acceptable to most establishments, and that is why the number of rooms offered to MATCH has been so low.
 
MATCH has been viewed critically, and its unfavourable terms as far as the small accommodation industry (i.e. guest houses, B&B’s, self-catering establishments) goes, but over the past two years MATCH has come to the party by becoming far more flexible in its pricing (accepting any fair price) and cancellation policy is concerned, mainly because they have no other choice.   It is still taking a 30 % commission, now as an add-on, making accommodation appear extremely expensive, unless it is hidden in ticket/accommodation/transport packages!
 
The cancellation of rooms at short notice during the 2006 World Cup in Germany has been communicated to the industry, and MATCH’s dictate to supply 80 % of one’s room stock was therefore not acceptable.   Even in this regard MATCH has become flexible, and they will now accept any number of rooms one will offer.
 
The accommodation industry believes that it is able to sell its rooms directly to soccer fans who do not wish to be ripped off by MATCH’s rates.   They are not short-sighted enough nor that dishonourable to “rip-off” any 2010 World Cup tourists.  Many will use the 2009/2010 summer rate for June/July 2010, instead of discounting rates to winter levels, as is usually the case. 
 
Ultimately pricing is about supply and demand – if they cannot sell their rooms at the summer rate, accommodation establishments will have to lower them.   Tourists are far too astute these days, given the credit crunch, to allow themselves to be “ripped-off”! 

Premium travel less affected in Africa

Africa is the only continent in which first and business class air travel is increasing, in contradiction to the worldwide trend of a decline in such luxury travel, caused by the credit crunch, reported Business Report in March.

This is a finding of the latest International Air Transportation Association (IATA) survey, which found that the drop in premium class passengers declined by 17 % in January, following a 13 % drop in December.   In Africa premium travel rose by 19 % in January.