Tag Archives: IPL

Hotels in the crunch due to credit crunch

Statistics SA has confirmed what all in the hospitality industry have been experiencing – income from accommodation fell by 5 % in the April – June period compared to a year ago, reports the Weekend Argus.

Had the Confederations Cup and the British and Irish Lions Tour, and to a far lesser extent the IPL, not taken place in this quarter, the drop in accommodation revenue would have been even greater.  June showed positive growth of 6 % on average, compared to the negative growth in April and May, proving that the IPL did not live up to its promised contribution to the economy and protection against the recession!   June has been the only positive growth month this year so far.

In Cape Town RevPAR (revenue per available room) increased by 14 % in June, the first month in 2009 with a positive figure, based largely on two rugby matches in Cape Town, with rates having been increased to R 880 per room on average over the match days, and occupancy increased to 51 %, the first occupancy increase in the 12-month period.

Stats SA also records the “number of stay nights” to have decreased by 10 % compared to 2008, with hotel income dropping from R 1,99 billion in the second quarter of 2008 to R 1,86 billion in the second quarter this year, a 7 % decline.   Guest house income grew by 2 %, and that of caravan parks and campsites by 8 % in the same period.

Whale Cottage Portfolio : www.whalecottage.com

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.

Where did IPL billions go?

The IPL Championships were moved from India to South Africa in April, as the Indian elections in May were a threat to cricket players participating in the cricket tournament.  

The cricket championship was billed as the saving grace to prevent South Africa from sliding into a recession, due to the vast sums of money it would generate for the economy.

Rugby hero Francois Pienaar was charged with the marketing of the event – did he not have a day-job at FNB in Cape Town?   His marketing budget is said to have been R 150 million!  

One wonders where the billions went to, as they do not appear to have benefited the small accommodation sector in Cape Town,  if the guest houses in Camps Bay are anything to go by.  The Cape Town matches were played late in April, and in the ten day period not one Camps Bay guest house had a booking from an IPL cricket supporter.   Talk of the town was that the cricketers and their fans had received a special deal at the One&Only Cape Town in the V & A Waterfront.

During the time of the IPL championships, few Indians were visible in Cape Town.  A busload were seen leaving the Vintage India restaurant in the Gardens’ Centre, and in April a smallish party was seen having lunch at Salt restaurant in the Ambassador Hotel.

The IPL ended off with a kitsch Miss Bollywood IPL South Africa competition, broadcast live on M-Net last Monday.  Presenter Micheal Moll looked ill at ease and struggled over his words in hosting the show.   Ex-Miss Universe Michelle McLean and Francois Pienaar were included on the judging panel.

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.