Tag Archives: economic impact

Cape Town U2 360° concert will have added to billions in city coffers

The U2 360° concert in Cape Town on Friday evening will have contributed largely to the R 4 billion the City of Cape Town estimates is generated annually for the local economy from live performances, with 72000 spectators having attended a visually stunning and extremely well organised concert at the Cape Town Stadium. 

Writing in the Sunday Argus, the City of Cape Town’s  Executive Director of Economic, Social Development and Tourism, Mansoor Mohamed, states that films and events  are the largest contributors to the Cape Town economy, the film industry generating R5 billion, and conferences and live events R4 billion each.  Mohamed writes that it is not only income that is generated, but jobs are created too.   The services and products required to host such events go into the pockets of mainly Cape Town-based businesses, which in turn will pay for rates and taxes, and thus share the burden of payment of these to generate income for the city, but they will also share the benefit of the use of these monies (an excellent example is the wonderful new Green Point Park).

Writing about the contribution of the film industry to Cape Town, Mohamed mentions the two movies currently being filmed in Cape Town – ‘Safe House’ wrapped up filming on Kloof Street over the weekend, and stars Denzel Washington and Ryan Reynolds, who have been seen eating at Cape Town restaurants, and hanging around in Camps Bay, another location for the movie.  ‘Judge Dredd’ is another movie being filmed, and the two movies combined have a production budget of R400 million, going to two Cape Town companies (Moonlighting and Cape Town Film Studios, respectively), and their suppliers.  In addition, still productions, and print advertising and TV commercial shoots contribute to the economy.   Mohamed requests Cape Town residents to be tolerant of road closures and other inconveniences linked to these, in understanding that every R1 billion income allows 15000 jobs to be sustained in the city.

The Cape Town International Jazz Festival generated R685 million to the local economy, and created 2000 jobs, mentioned by President Zuma in his Station of the Nation address ten days ago.   It attracts 35 000 attendees, and runs over ten days, incorporating local art, culture and heritage, and local musicians blended with international stars such as George Benson.   Some of the local musicians performing at the Jazz Festival have received  bookings on international stages as a result of their performances at the Festival.  

The Pick ‘n Pay Cape Argus Cycle Tour contributes R650 million to the local economy. It has attracted the attention of international VIP’s such as Matt Damon and Lance Armstrong, who have participated, and this has been recorded in the world media, having a tourism benefit too.  This year executives from top companies such as RIM (manufacturers of Blackberry), Sainsbury in the UK and Vodafone Europe will participate in the event.   Some Cycle Tour lovers are said by Mohamed to have bought houses in Cape Town, and they pay their rates and taxes annually and in advance, he writes!  “They create tomorrow’s tourists and South Africa’s future foreign investment”.  He added that events such as the Cycle Tour, the Jazz Festival and the U2 concert play an important role to ‘start, facilitate or help to close deals’.

The recent Mining Indaba, which was held at the Cape Town International Convention Centre, filled up all surrounding hotels, created a taxi shortage in the city, and filled up restaurants in Cape Town on a scale not often experienced in the city.   Delegates attending were from Africa, Brazil, Russia, India and China, amongst others.    Similarly, the Design Indaba taking place at the moment as a Conference, Expo and Film Festival, is staging top international designers, such as Alberto Alessi, Michael Wolff, billionaire Mark Shuttleworth and trend forecaster Li Edelkoort, with about 37000 delegates attending, according to Cape Town Tourism.  The Design Indaba attracts them to Cape Town, the city enjoying the most glorious weather currently, and therefore making future tourists out of these delegates, one can confidently predict, and more business deals benefiting the city could flow from this event, contributing R 232 million per annum.   At the Design Indaba the latest updated Cape Town Design Route map  will be launched, marketing some of the city’s top design artists and their businesses.

In September the World Veterinary Congress takes place in the Cape Town International Convention Centre, and will be attended by 3000 delegates, and contributing R30 million to the economy.   Other conferences to be hosted this year include the 4th Pan African Pain Congress (500 delegates), the World Congress of the World Federation for Mental Health (800 delegates), the Global Forum for Health Research Forum 2011 Meeting (1500 delegates), World Conference of the International Association for Educational and Vocational Guidance (600 delegates), The Southern African Association for Learning and Educational Differences Conference (500 delegates), and the World Economic Forum on Africa (2000 delegates).

The 20th Cape Town Pairs, the largest sponsored open bowls event in South Africa, was held at the Glen Country Club in Clifton last week, and attracted 36 teams from around the country, as well as from the United Kingdom, Namibia and Zimbabwe.   The gale force Southeaster almost forced a change in venue, blowing over 100 km/hr!   We congratulate our Whale Cottage Camps Bay guests Phil Downs and Greg Bingham from Johannesburg for having won the hotly contested tournament.

The Cape leg of the Cell C Tour of SA 2011 takes place over the weekend, and covers Gordon’s Bay, Grabouw, along the Theewaterskloof Dam, Franschhoek, the Helshoogte Pass in Stellenbosch, and finishes in Paarl, 120 cyclists participating in the race, reports the Cape Argus.

The J&B Met and the Cape Epic have an economic impact of R 200 million each, and the Two Oceans Marathon R223 million.  Mohamed has estimated that the city’s events and the film industry jointly add more than R 15 billion to the local economy. 

The benefit of these events reaches the hospitality industry too.  Six out of our 20 guests staying at Whale Cottage Camps Bay this past weekend flew down from Durban, to attend the U2 concert, and they made a three-day ‘weekend’ out of it.   Three of the U2 band members ate at Pierneef á La Motte last week, each visit widely reported (Bono and The Edge’s visit at La Motte even made the Sunday Times), which will attract more business to this wonderful Winelands wine estate.  Cargo Carriers has booked out Whale Cottage Camps Bay for the Argus Cycle Tour weekend, to accommodate its team over three days.   Delegates attending the Mining Indaba stayed at Whale Cottage Camps Bay too.

And a final note on the U2 concert – it was a ‘must attend’ concert, with amazing lighting effects on The Claw and the 360° screen ensured that every attendee saw the band on the relatively small stage, no matter where they were sitting or standing.  Many did not know most of the U2 music performed, but the performances of Amazing Grace, Stand by Me with Yvonne Chaka Chaka, and Without You were real crowd pleasers.  I did not pick up sound distortion, but read complaints about this on Twitter.  The quick and easy in and out of the stadium was commendable, and the event was run by Big Concerts without any hiccups, it was reported.   Replacing the Stadium pitch for the concert cost Big Concerts R803000 alone.  Taxis were in good supply before and after the concert, and the R50 per trip between Green Point and Fresnaye was the best money I have spent in a long time!  The long sit, from 7.30 – 11.30 pm, was the only off-putting part, as the seats are not the most comfortable.   Neil Diamond is the next big name performer at the Cape Town Stadium, his concert taking place on 11 April.

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

Cape Town to become top 10 world brand

Cape Town Tourism sees one of its goals as developing Cape Town into a world city by 2020.  This was announced at the Cape Town Tourism AGM by its CEO Mariette du Toit-Helmbold earlier this week.

Du Toit-Helmbold sees Cape Town developing into a top world city in 2020 in which to “live, visit, study, work and invest in”, and into a centre of innovation and creativity, welcoming 4 million international visitors annually.  It will become a favourite domestic destination too, and will be known as the ‘events capital of Africa’, she said.   “The city is clean, green and safe – recognised as one of the most livable cities in the world” in 2020, she added.

We welcome her vision that by 2020 “Cape Town now sustains a healthy year-round tourism industry with many direct flights from key markets across the world”, especially as she mentioned that feedback from Cape Town Tourism members shows that “…some establishments reporting alarmingly low occupancy levels” since the World Cup.  Also, she indicated that there was no clear picture yet about the festive season bookings, and reiterated how important it is to address seasonality variations, the winter months being a severe problem.  Events are an important means of countering seasonality, and she announced that with its funder, the City of Cape Town, Cape Town Tourism is working on an Events Strategy for the city, linking already established events with new ones held in “off-peak” season.

Du Toit-Helmbold also said that world cities such as Cape Town, and its tourism brands, must work on their “future fit”, in exploring new markets, and in investing in web, emarketing and technology to ensure that Cape Town Tourism can meet its goal of doubling its economic impact on the city in the next 10 years.   She said that more than 70 % of tourism bookings are made on-line.

On the topic of the suggested amalgamation of Cape Town Tourism and Cape Town Routes Unlimited, which Cape Town Tourism is respectfully resisting, a guest speaker Claes Bjerkne, a destination marketing expert, said that Cape Town is the “ideal master brand as it is one of the better known cities of the world’, on a par with Paris, London, San Francisco and Beijing.  Du Toit-Helmbold said that Cape Town Tourism was seeking an apolitical tourism structure for the province and the city, “driven by the private sector and supported by government”.   “Cape Town Tourism will not compromise our status as an industry-led association, and we remain committed to marketing Cape Town and its unique experience”, she concluded.

At the AGM, new directors were elected/re-elected: quantity surveyor Pierre du Plessis (we question his tourism knowledge), Susanne Faussner-Ringer (who pushed for MATCH bookings for the World Cup with her friend Nils Heckscher, which should have got both of them fired from the Board of Cape Town Tourism for their irresponsible advice to and pressure on the accommodation industry, in our opinion), Bulelwa Nobuzwe Makalima-Ngewana (Deputy CEO of the Cape Town Partnership), Sarah Struys (Events and Marketing Manager of Kirstenbosch), and Claus Tworeck (CEO of City Sightseeing Cape Town).  They join existing directors Sabine Lehmann of the Table Mountain Aerial Cableway Company, Nils Heckscher of the Winchester Mansions Hotel, Guy Lundy of Accelerate Cape Town, and Rashid Toefy, of the Cape Town International Convention Centre.

POSTSCRIPT 10/10 : Southern African Tourism Update provides extra input to the Cape Town Tourism AGM, the future of brand Cape Town, and of the funding of Cape Town Tourism, not mentioned in the Cape Town Tourism media release:

“Keynote speaker, Claes Bjerkne, CEO of Bjerkne & Co, a Swedish destination marketing consultancy, said the city and province should work together to develop a tourism strategy, “but it’s a waste of time not to use the strong city brand”. He suggested: “Let Cape Town be the driving force in the process of developing tourism in the city as well as the province.” He proposed local tourism marketers combine brand Cape Town with topics of interest – such as wine, whales, flowers, culture, golf and wildlife – to entice visitors further into the region.

Pointing out that few people knew the provinces that housed such strong city brands as Berlin, San Francisco, Paris, Beijing, Edinburgh, Amsterdam and London, he said similarly visitors to South Africa didn’t know its various regions but recognised brand Cape Town. This did not mean they would not travel further into the province to pursue their interests. The same was true overseas, he said, where tourists combined San Francisco with the Nappa Valley to taste wine, travelled to the Great Wall of China from Beijing, or left Edinburgh behind to play golf at St Andrews.

CTT CEO, Mariëtte du Toit-Helmbold, also made a strong case for Cape Town to be the brand for the city and the province and for tourism marketing to remain driven by the tourism industry and not by civil servants. “We will not compromise on the industry playing the leading role,” she said. “Cities are the super-brands of the future. Cape Town has all the potential to become this.”

Cape Town City Council Mayoral Committee for Economic Development & Tourism, Felicity Purchase, expressed continued confidence in CTT as the city’s marketer. The city will fund CTT to the tune of R38m for the next financial year.”

POSTSCRIPT 12/10:  We have amended our blog post after receiving feedback from Cape Town Tourism.  A future vision for Cape Town for 2020 was oddly written in the present rather than in the future tense in the media release.

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