Tag Archives: Minister of Finance

WhaleTales Tourism, Food, and Wine news headlines: 18 February

WhaleTalesTourism, Food, and Wine news headlines

*   Taittinger has redesigned its bottle label and gift pack, to reflect its status as official champagne sponsor of the 2014 World Cup soccer in Brazil.   Holograms have been used, and the footballs on the label appear raised but are flat.  The brand has already been fined in France for advertising its link to the World Cup, but will communicate this in other countries, especially in South America, having the right to the title until the end of 2015.

*   The directive by the Minister of Finance that VAT be levied on international e-books levels the playing field says the Publishers’ Association of South Africa (PASA), despite VAT being charged on books not being encouraged by the PASA.  The new legislation is not a surprise as governments are working on collecting VAT/sales tax on sales in their regions. Foreign retailers selling into South Africa will now have to register as VAT vendors. A healthier retail book trade is expect to result. Internationally digital book sales are at about 50%, but in South Africa they are currently only at 20%.  Charging VAT could generate R 1 billion in revenue for the country. The Cape Town Book Fair, running from 13 – 15 June, will showcase the latest technological developments on e-reading. (received via media release from The Embassy)

*   Bushman’s Kloof Wilderness Reserve is hosting a  number of Food and Wine Weekend treats in winter, pairing with top wine estates, including Meerlust (30 May – 1 June), Bouchard Finlayson (27 – Continue reading →

World Cup in South Africa sets new records, best ever

The 2010 FIFA World Cup is likely to be the most successful ever organised by FIFA, says brand consultant Dr Nikolaus Ebert, CEO of Brandovation and a 2010 World Cup analyst.   In the 2010 Scorecard, which is an analysis of the World Cup preparations, South Africa had exceeded all expectations prior to kick-off, ahead of Germany’s scorecard in the same period four years ago, reports the Weekend Argus.

“South Africa shocked the world, and showed everybody that the country can host a successful tournament.  The World Cup is a catalyst for national reconciliation and locals have come together to prove all disbelievers wrong” said Eberl.   “We are pretty certain that South Africa will host the best World Cup ever held”, he added.

Celebrating the advent of the World Cup, as South Africa did at midday last Wednesday, was a world-first celebration prior to a World Cup.  The world witnessed an euphoric and loyal South African nation taking to the streets, blowing their vuvuzelas and hooting their cars.  “The celebrations on Wednesday were totally unprecedented.  Never before have the host country’s fans ever celebrated before kick-off.  We were shocked at what unfolded throughout the country”, said Eberl.

Referring to the 2006 World Cup, he noted that the German nation was “anxious, moody and were very unhappy with the national team’s performance”.   Only after the group stages did the German nation get behind their team.

“Fifa have now become to believe that the host team can get very far in the tournament.  They have witnessed the entire country backing Bafana Bafana and now they have extra faith in the team” added Eberl.  “Fifa have so much belief in Bafana (Bafana) because (coach) Carlos (Alberto Parreira) has led them to a 13-game unbeaten streak”.  

Eberl believes that the World Cup will unify South Africans “for the rest of their lives”. “Thirty one days of national euphoria are more than enough to change the behaviour of all South Africans.  Over the course of the World Cup South Africans will grow even closer and it will have lasting effects well after the World Cup”, said Eberl.

But Bafana Bafana trainer Parreira was unhappy about all the media and fan focus on his team, two days ahead of their first match, and disallowed them from participating in an open-bus parade. “I have never seen something like this in my life” he is reported to have said.

According to Local Organising Committee CEO Danny Jordaan, the World Cup is the most lucrative tournament ever, reports the Sunday Times.   “Fifa decided to pay a bonus to its 208 members.  Previously there was talk that this World Cup could leave Fifa financially bankrupt, but the international broadcast rights alone have been a major source of income” he is reported to have said.   FIFA announced that it was paying R1,8 million to the S A Football Association, and that each of its 208 member associations would receive $250 000.   FIFA generated $1 billion in income last year, and holds the same amount in reserves.  Its income from television and marketing rights is $3,2 billion for this World Cup, a 30 % increase on that of 2006. 

Pravin Gordhan, the Minister of Finance, wrote euphorically in Business Report “Yes we can!  This is the best advertisement ever for South Africa” yesterday.  He praised the benefit the World Cup would have in future, and how South Africa exceeded the expectations of sceptics, who said the the country could not do it.  The R30 billion spent on infrastructure was a catalyst for development, he said.   Broadcast technology had also been improved, he said, as had 40 000 more police officers been trained.  “What is certain is that the World Cup will be the best possible advertisement for South Africa and the region, showcasing the endless variety and opportunities on offer”, he is quoted as saying.

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

World Cup accommodation rates “reasonable”, says survey

The Grant Thornton survey about World Cup pricing, conducted on behalf of the Ministry of Tourism, shows that “most World Cup accommodation prices have increased by a reasonable amount, despite persistent concerns about profiteering, South African Tourism Minister Marthinus van Schalkwyk said on Friday”, says a Reuters report.

The survey found that the accommodation pricing of the 2479 accommodation establishments, including hotels, guest houses, B&B’s and self-catering establishments, that participated in the survey, were charging a premium of less than 50 % on their 2010 summer rate.  However, the rates premium in Gauteng, which sees Johannesburg hosting the opening and closing matches, is more than 50 % for more than two-thirds of the establishments, according to the survey.

According to a media release from Cape Town Tourism, the survey results show that fewer than 20 % of accommodation establishments in the Western Cape are charging more than 50 % of their 2010 rate, reflecting this province’s call to responsible pricing.

Van Schalkwyk is quoted as saying that “The majority of accommodation establishments in South Africa are very responsible, we know that 74 percent will be charging prices during the World Cup that are very reasonable” at the news conference.

The Tourism Minister said that rate increases were to be expected during major events, but warned the industry about the damaging effect exorbitant prices could have on the World Cup legacy.  “We will continue to do everything to discourage excessive premiums when these do occur.  I am satisfied that by far the majority of accommodation establishments are acting responsibly and are sensitive to our warnings about price hiking and its effects” said Minister van Schalkwyk.    The Minister encouraged soccer visitors “to shop around to get the best deal”. 

The Tourism Minister’s “praise” of the industry was to be expected, in that the survey conducted on his Department’s behalf could not have come up with any other finding for South Africa, to save face in the face of international criticism about “price gouging”.   However, praising price increases of “below 50 %” is not commendable, as the accommodation industry guideline for World Cup accommodation rates was the 2010 rate + 10 %.  The ‘under 50%’ rate that lies between 11 – 49 % is equally rip-off as is that which lies over 50 %!  

The Gauteng accommodation industry is profiteering from the demand versus supply in Johannesburg, and it being a central point for matches at a number of stadia.   The two-thirds of estabishments charging an add-on of more than 50 % should be ashamed of themselves for charging excessively.  

The sample size of just more than 2 400 establishments is small in comparison to the many thousands of accommodation establishments in the country.   One would assume that the more price compliant establishments would have been more likely to have responded to the survey, therefore skewing the results.

Minister of Finance, Tourism and Economic Development in the Western Cape, Alan Winde, has threatened to name and shame the Western Cape “overnight accommodation establishments” that charge excessive rates during the World Cup.  The Minister would be advised to check on restaurant and transport prices too, as reports of excessive pricing have also been levelled against these sectors, reports Eye Witness News.  

Flaws in the Grant Thornton questionnaire design may also have skewed the results – read our criticism of the study questionnaire here.

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

Tourism on Budget

The Budget speech presented by Trevor Manuel, Minister of Finance, earlier this week makes little reference to tourism and, even more surprising, to FIFA World Cup 2010.

The Minister specifically mentioned: “funding is provided for additional policing capacity during the 2010 Fifa World Cup….”.    He also said that the departure tax on international flights would increase, which was last raised in 2005/6.

Beverages will increase in price to recover the “sin tax” increases of 10,5 cents for a bottle of wine, 7 cents on a can of beer, and R 3, 21 on a bottle of whisky.    The fuel levy will increase by 23 cents a litre for fuel and 24 cents a litre for diesel from April, to fund road construction and maintenance.

SAA received R 1,6 billion to turn the organisation around, an allocation not widely welcomed, given allegations of irregularities by Khaya Ngqula, the SAA CEO.

Manuel warned of the stormy path ahead, and downscaled the growth forecast for the economy to 1,2 % for this year, down from the 3,1 % growth last year.   However, he did indicate his optimism for 2010, given lower interest rates, more public spending, the 2010 World Cup, and the recovery in the world economy, reports Business Report.