Tag Archives: Economic Development Agency

What happens to marketing Western Cape tourism, with closure of Cape Town Routes Unlimited?

Loved it or hated it, Cape Town Routes Unlimited tried its best to gain exposure for the tourism industry of the Western Cape province, even though it led to duplication with Cape Town Tourism in marketing Cape Town. Seven years after the Western Cape Tourism Act of 2004 was promulgated to establish a destination marketing organisation, later branded as Cape Town Routes Unlimited, it closed its doors yesterday. A new era starts, with its remaining staff and Board transferring across to Wesgro as of today – no, this is not an April Fools’ Day joke!

In a statement sent to the industry on Friday by Western Cape Minister of Finance, Economic Development and Tourism Alan Winde, he announced that ‘incorporating trade, investment and tourism marketing under one roof would bring greater efficiency in these strained economic times. It would also ensure coordination of the Western Cape Government’s outward facing marketing initiatives‘.  From today, Wesgro is the ‘single economic development delivery agency of the Western Cape Government, and its official implementation agency’, said the Minister.  He added that financial and human resources would be combined to drive ‘a far more aggressive international marketing campaign with a unified brand focused on business and tourism‘. Combined market research will also be beneficial to both parties, in providing information about the world economy, he added.  While the industry knew about the amalgamation commencing today, it was not told that Peter Bacon, Chairman of Cape Town Routes Unlimited, had left Cape Town for Mauritius. We picked this up in the media conference during a tea break at the Cultural Tourism Conference earlier this week, which was jointly hosted by Cape Town Routes Unlimited and the Western Cape Economic Development and Tourism department.   Another shock was reading the Minister’s announcement that Cape Town Routes Unlimited CEO Calvyn Gilfellan has left the organisation, not allowing one to say farewell to him at the Conference.

One could be concerned about the continuation of tourism marketing within Wesgro, given a new Chairman of the Cape Town Routes Unlimited Board (Deon Cloete from ACSA) until the organisation is wound down through the Western Cape Tourism Act being repealed, the departure of the CEO who also was the marketing driver for the organisation, and the departure of all the Marketing executives in the past year, leaving mainly administrative Cape Town Routes Unlimited staff moving to Wesgro.  The Minister stated that a Service Level Agreement has been signed between the Cape Town Routes Unlimited Board and Wesgro, for the delivery of the tourism marketing organisation’s functions.  The staff will remain in its current offices in the Waldorf Building, completing the compilation of the Annual Report, and staff receiving the same benefits as they did at Cape Town Routes Unlimited.

The Minister’s concluding paragraph is a subtle admission that all was not well with the marketing of the Western Cape by Cape Town Routes Unlimited: “I would like to assure all stakeholders and partners in the tourism industry that we are committed to ensuring even better tourism destination marketing programmes and support. Tourism accounts for 10% of this province’s GDP, making it very serious business. This move will allow us to give this industry the attention it deserves”.

In his last newsletter sent to the tourism industry on Friday, Mr Gilfellan nostalgically looked to the past as well as forward, and said goodbye without announcing his departure from the organisation.  He joined Cape Town Routes Unlimited in 2004, handling Visitor and Membership Services, when Noki Dube was the organisation’s first CEO. After Sheryl Ozinsky was the CEO for a short stint, Mr Gilfellan was appointed as the CEO in 2008. He praised the work of his team in having created ‘a healthy, growing, universally recognised, admired tourism destination marketing organisation… in prime condition’, few in the industry agreeing with this over-exaggeration, and clearly Minister Winde also did not agree, in making such a radical organisational change.  Mr Gilfellan wrote with sadness how the Cape Town Routes Unlimited budget reduced from R60 million at its inception to R 25 million in the past year, due to the withdrawal of the 50% funding of the organisation by the City of Cape Town, monies (R42 million in the current financial year) which were allocated to Cape Town Tourism, which led to duplication of activities in marketing Cape Town specifically, but also the rest of the Western Cape.  He wrote that they found ‘strength, guts and determination to continue delivering work of the highest quality’, despite the financial impediment.

There were many aspects of Cape Town Routes Unlimited which we criticised over the past seven years, but it seemed as if the organisation had finally found its niche in the past twelve months, in its commendable industry communication via media releases, which we received almost daily (compared to the infrequent ones from Cape Town Tourism, which Tweets rather than taxing itself with the preparation of releases), and its marketing activities in Angola, Brazil and Argentina, and in China and India. The biggest criticism of the organisation was the development of a double brand name at its inception, which goes against the grain of all marketing wisdom, being ‘Cape Town & Western Cape’.  The duplication of marketing action lies between Cape Town Tourism and Cape Town Routes Unlimited, and the Minister has not shared with the industry how this duplication will be addressed, other than by closing down Cape Town Routes Unlimited. One wonders what synergies there really are between Cape Town Routes Unlimited and Wesgro, with the latter body focusing on marketing our province as an investment and trade destination.  We request the Minister to give the industry far more information as to the ‘route’ ahead in marketing the Western Cape, which is not dealt with in any depth in his letter to the industry.

It will take months for the two bodies to find each other, for the Western Cape Tourism Act of 2004 to be repealed, and for the marketing synergies to be developed, meaning that the marketing of Cape Town and the Western Cape will grind to a halt over the critical winter months, characterised by seasonality, and a time during which marketing is most needed, given the tourism crisis experienced last year.

POSTSCRIPT 4/4: In a harsh letter to Southern African Tourism Update, former co-head of marketing at Cape Town Routes Unlimited and now Director of Sales and Marketing for the Durban International Conference Centre, David Frandsen, said that ‘Wesgro is taking tourism into the wrong direction’.  He called for an autonomous convention bureau for Cape Town, which he describes as being ‘emasculated’ now, given the closure of Cape Town Routes Unlimited.  Even more sharp is his attack against who must be assumed is Western Cape Tourism Minister Alan Winde: ‘It would seem that every decision taken by the politicians seems to retard the proper functioning of tourism marketing in the province, particularly with regard to business tourism. So much potential is bedevilled by those who do not understand how the business tourism industry works!’

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

Tourism in the Cape to be transformed from ‘ugly stepsister to Cinderella’!

Four days ago we called for the establishment of a co-ordinated marketing body representing Cape Town and the Western Cape, given the contradictory articles written in the Cape Times by Cape Town Routes Unlimited CEO Calvyn Gilfellan and City Councillor Tony Ehrenreich.  The day after our blogpost appeared provincial Tourism Minister Alan Winde announced a surprise move for Cape Town Routes Unlimited, which will see the provincial tourism marketing body incorporated into the provincial investment and trade marketing body Wesgro from April.

Minister Winde said that the new body does not have a name yet, and it is uncertain if its name will change. Cape Town Routes Unlimited will be wound down, and the province’s tourism, trade and investment marketing will be pulled in under one roof, to ‘bring greater efficiency in these strained economic times’, said the Minister’s media release.  Minister Winde had previously announced the creation of an Economic Development Agency, a co-ordinated body of about twenty associations marketing various business aspects of the Western Cape.  The Agency will provide economic and marketing intelligence, develop an economic vision and strategy, help to attract, retain and build business, create a united brand, and will encourage ‘optimal delivery’ of the new body.  What was not revealed previously was that Wesgro is to become ‘the single economic development delivery agency of the Western Cape Government, and its official implementing agency’ from April.

Wesgro CEO Nils Flaatten motivated the incorporation of the tourism body into Wesgro as follows: “Through this move, we can combine our financial and personnel resources to drive a far more aggressive international marketing campaign with a unified brand name focused on business and tourism.  The creation of tourism marketing within Wesgro will result in greater efficiencies, economies of scale and a complete set of services”. He added that data collection will guide the organisation’s understanding of the world economy, and will guide ‘action plans and delivery’. Gilfellan assured the industry that it can expect ‘even better tourism destination marketing programmes and support’, an unfortunate overstatement of the industry’s trust in and support of Cape Town Routes Unlimited, which demise will not be missed.

A task team representing both Wesgro and Cape Town Routes Unlimited is working on the incorporation, and on repealing the Western Cape Tourism Act of 2004, which dictated the setting up of the Destination Marketing Organisation (DMO), which later became Cape Town Routes Unlimited.  The Western Cape Trade and Investment Agency Law Amendment Act of 2005 is to be expanded, to incorporate the function of tourism marketing.

Minister Winde said about the role of tourism in the Western Cape that ‘it is seen as the ugly stepsister when in fact it has the potential to be the Cinderella of our economy.  Tourism accounts for 10% of this province’s GDP, making it a very serious business. This move will allow us to give this industry the attention it deserves’.

Minister Winde would not commit to the incorporation of Cape Town Tourism into the new provincial marketing body, stating that he can only make decisions at a provincial level.  The real wasteful and duplicated marketing expenditure occurs between Cape Town Tourism and Cape Town Routes Unlimited, and it is this duplication and resultant cost that should be prioritised before Cape Town Routes Unlimited is incorporated into Wesgro.  Given that both the City of Cape Town and the Western Cape province are run by the DA, one would think that this would be a relatively easy amalgamation to achieve!

Nils Flaatten was appointed CEO of Wesgro earlier this month, having been its Acting CEO since June 2010. He has been a Rotary Exchange student, studied at the University of Stellenbosch, worked in London for Dresdner RCM Global Investors, in Jersey for Barclays Global Investors, in Hong Kong for Citigroup, in London for the Capital Markets Company, was an advisor for the provincial Minister for Development, Economics and Planning, and was the MD of the African Carbon Trust.  Ironically Cape Town Tourism’s CEO Mariette du Toit-Helmbold sits on the Wesgro Board, with Accelerate Cape Town CEO Guy Lundy (who is closely allied to Cape Town Tourism), and Bulelwa Ngwana, the MD of the Cape Town Partnership, all three also serving on the Cape Town Tourism Board, and others.  It will be interesting to see how Cape Town Tourism’s Mrs Helmbold reacts to the incorporation of Cape Town Routes Unlimited, but she will be out of action until the incorporation takes place, being on maternity leave.

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

Economic Development Programme to amalgamate Cape tourism bodies?

The planned Economic Development Programme (EDP), which was announced by Alan Winde, Western Cape Provincial Minister of Finance, Economic Development and Tourism, more than a year ago, could see the amalgamation of Cape Town Routes Unlimited and Cape Town Tourism.

In a report in Southern African Tourism Update, a new steering committee of seventeen members for the EDP is announced, which includes current Cape Town Routes Unlimited (CTRU) Chairman Peter Bacon, Protea Hotels Group’s Otto Stehlik, and Western Cape province head of Economic Development and Tourism Solly Fourie, with Minister Winde.  The role of the Steering Committee is to ‘guide the final design, implementation and launch of the EDP’. More specifically, the Steering Committee agreed that the EDP should seamlessly integrate all sectors of the Western Cape economy, it should ‘institutionalise’the partnership between government and business to create mutual accountability for the future of the economy’ of the province, it should guide business around shared goals, it should create an environment that is conducive to small and large business as well as attracting investment to the province, it should provide ‘economic and market intelligence’, and should monitor the performance of the economy.  Greater employment will also be addressed by this not-for-profit body. One of the specific aims of the EDP is to create ‘a single strategy and brand for the region’s economy’, says a media release issued by Minister Winde earlier this year.  The ‘Cape Town and Western Cape’ brand name was highly controversial when it was introduced at the inception of Cape Town Routes Unlimited.

The report states interestingly that ‘it is anticipated that the EDP will resolve the current duplication of marketing efforts by CTRU and Cape Town Tourism (CTT), resulting from a historical impasse between the province and the city, which funds CTT’.  When the Minister first announced the establishment of the EDP, and his desire to amalgamate all economic and tourism related bodies in the Western Cape, Cape Town Tourism expressed its vehement opposition to the EDP, and declared its independence.  The Minister has not mentioned Cape Town Tourism as one of the bodies to be amalgamated more recently, and Cape Town Tourism has also not done so, just referring to its benefit for the province in general at its recent AGM.  Even more interesting as that Cape Town Tourism’s legal advisor Mike Evans of Webber Wentzel referred blatantly, and out of context to the AGM proceedings, to the closing down of Cape Town Routes Unlimited, while he may have meant that the operations of the EDP would be incorporated into the EDP.

Winde has used the model of the London Development Agency for the EDP, and has appointed Cape Town Partnership CEO to lead a task team for the establishment of the EDP, which is to open its doors in April 2012. In September we wrote about the Economic Development Agency, its name at the time, and the list of eighteen Western Cape economic promotion bodies which are to be amalgamated into it, including Wesgro, the Cape Film Commission, Cape Town Routes Unlimited, and the Cape Town Fashion Council. There has been no mention of Cape Town Tourism as being one of the bodies since then.

Only through the amalgamation of both Cape Town Routes Unlimited and Cape Town Tourism can the current costly duplication of marketing Cape Town and the Western Cape be eliminated.  Whilst the City of Cape Town funds Cape Town Tourism, and the DA rules both the city and the province, it will be interesting to see if the City of Cape Town and Western Cape province can see the bigger picture and co-operate in pulling Cape Town Tourism into the body as well, for the benefit of a united tourism industry in the Cape. The proviso of course would be that the EDP should be run efficiently and along business principles.  The management of Cape Town Routes Unlimited has been a disaster, and is not a model for how the EDP should be run!  We call on the Minister to communicate in more detail with the tourism industry, to explain his plans with the EDP.

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