Tag Archives: Mmatsatsi Marobe

Tourism performance: why is tourism industry being misled?

Increasingly the tourism industry is seeing information that informs it about its successful performance, but this information does not tie in with actual business experience.

Yesterday on Twitter Guy Lundy, CEO of Accelerate Cape Town and Board member of Cape Town Tourism, created a PR gaffe (accommodation establishments make up a substantial proportion of Cape Town tourism members) by writing disparagingly:  ‘So if the airport & Table Mountain had a record December, why are the hotels crying? Because people want bargains & they’re too expensive’. When challenged on his statement, Lundy quoted the record 813000 arrivals at Cape Town International in December, and its best ever year in 2011, and the record Table Mountain Aerial Cableway 142000 ticket sales from mid-December – mid-January, attributing this success as follows: Positive legacy of 2010 World Cup; increased profile & awareness’. Few tourism businesses would agree with Lundy about the tourism benefit of the 2010 World Cup.

The Tourism Business Council of South Africa also described its 4th quarter Tourism Business Index of 87 as a ‘marked improvement in business performance for the last quarter of 2011’, correct relative to last year’s 3rd quarter (70), 2nd quarter (74,5), and 1st quarter (79) Index measurements.  What the Tourism Business Council media release neglected to point out is that the 4th quarter Index of 2011 is below that of the 4th quarter of 2010, which was at at 89.  The improved performance was attributed to the COP17 Climate Change Conference and the better than expected festive season.

The Tourism Business Index is sponsored by FNB, and compiled by Grant Thornton, the tourism consultancy that got the 2010 World Cup tourism estimates so badly wrong. Pieter de Bruin, Head of Industry Sales at FNB, said that the results showed that there are ‘different cycles in business, such is the importance of South Africa being an events destination and having a healthy domestic tourism market. We trust that this may be the first sign of the industry making a turn into positive territory’. Tourism Business Council CEO Mmatšatši Marobe commented: “When we launched the TBI (Tourism Business Index) project in 2010, one of the key objectives was to develop a business tool which would produce relevant information that will assist us to map out a clear picture of general ‘health’ our (sic) industry.  At this point the index is showing positive signs of progress; however it also highlights the important role that the domestic and regional markets can play in boosting tourism trade”.  The Tourism Business Index is a national measure of current and future performance of the tourism and travel industry, and sub-sectors within the sector. A score of 100 is the norm, reflecting that the tourism industry is still operating below par.  The industry has predicted an Index of 82 for the first quarter of 2012.

Durban bragged about its excellent performance over the past two years, claiming to have ‘outperformed other major SA cities’, reports The Mercury, due to the COP 17 Conference, achieving near 100 % occupancy for about a month, and the excellent local visitor numbers over the December school holidays, with hotel occupancy of around 80%, according to the local FEDHASA branch.

FEDHASA Cape Chairman Dirk Elzinga would not admit to a tourism crisis last winter, blaming the poor hospitality performance on the Cape scapegoat of Seasonality.  Eventually he had to admit that it was the worst season ever. Elzinga has deplored the cancellation of direct flights to Cape Town by Malaysia Airlines and Etihad Airways, stating that Cape Town’s tourism fortune is reliant on ‘direct access’.

Once again we would like to encourage the tourism authorities to be honest and realistic in reporting tourism successes, and to be correct in defining the summer season being from October, which showed poor performance with November too, and runs until April. The Cape is currently experiencing a ten-day dip, and yesterday’s J&B Met was the poorest ever for the hospitality industry.  Very encouraging is the almost fully-booked February, due to the Mining Conference taking place in Cape Town, as well as Valentine’s Day, with a welcome increase in British tourists too.

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

“Tourism still in doldrums”, say experts, and will be for rest of year

A newly launched TBCSA FNB Tourism Business Index shows conditions in tourism to still be depressed, and there is little confidence that trading conditions will improve for the rest of 2011, reports Business Day, with the headline “Tourism still in doldrums – new index”.

Initiated by the Tourism Business Council of South Africa, and sponsored by FNB, utilising the advisory services of tourism consultancy Grant Thornton, the Tourism Business Index was developed to “provide a clearer picture of the performance of the tourism industry for investors”.  “The index will keep the business community at large well informed on the current and likely future performance of the sector”, said Mmatsatsi Marobe, the CEO of the Tourism Business Council of South Africa.   Seventy tourism business leaders were polled in the last quarter of last year, in order to develop the index result.   

The first Tourism Business Index scored 89,4 %, and is expected to have a similar score for the second quarter of this year.  An index of 100 would signify ‘normal trading conditions’, signalling that the tourism ‘business environment is negative’, the report says.   The accommodation sector was particularly negative and depressed about future trading conditions.  The performance of the last quarter of 2010 was weaker than the two quarters preceding it, the Tourism Business Index showed, reports Southern African Tourism Update.

The Tourism Business Index is aimed at providing not only an update of business sentiment in the tourism industry, but also to position the tourism industry as an important sector of the economy, said Gillian Saunders of Grant Thornton, the consultant who vastly over-predicted the number of international visitors to South Africa during the World Cup.   FNB says its role is to help the tourism industry ‘become world class’.

From a research perspective, one hopes that the Tourism Business Index will expand its sample size, will include non-Tourism Business Council members, smaller accommodation establishments such as guest houses, and also will include more respondents from other tourism sub-sectors. 

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

World Cup accommodation pricing to be investigated

The Minister of Tourism, Marthinus van Schalkwyk, has announced that he has contracted Grant Thornton to conduct a survey of accommodation prices during the June/July World Cup period, and to benchmark these against the prices of accommodation in countries that previously hosted FIFA World Cups, reports www.iol.co.za.  The survey is to be conducted, despite the tourism industry body Tourism Business Council of South Africa and FIFA’s MATCH accommodation agency denying that World Cup prices are excessive.

The survey comes amidst international criticism that accommodation pricing is excessive and deemed to be “rip-off”.   Van Schalkwyk said that “the survey would help safeguard the reputation of the South African tourism industry, since South Africa is a ‘value-for-money destination’  Price-hiking could damage the reputation of our tourism industry”, he said.

Van Schalkwyk did make it clear that tourists could not expect to pay normal low-season rates during the World Cup : “……June and July 2010 will be high season in South Africa”.

The Grant Thornton survey will only be conducted amongst professional accommodation establishments, and will exclude private homes.

The Tourism Business Council of South Africa (TBCSA), which claims to be ‘the official umbrella body for organised business in the South African travel and tourism industry’, and MATCH, FIFA’s accommodation agency, have made a joint statement that the industry pricing is not rip-off nor excessive, reports S A Tourism Update.  The TBCSA chairman Mmatsatsi Marobe praised the tourism sector for not charging “exorbitant prices as they understood the long-term effect on tourism into South Africa, but it was the doing of a few small suppliers that put South Africa in a bad light”, she said.   The MATCH Chairman, Jaime Byron, came with the following brilliant logic about pricing: “…the 2010 FIFA World Cup was expected to be more expensive than previous tournaments because it was a long-haul destination.  This makes South Africa inherently more expensive”, he is quoted as saying!   It was noted by them that the media should be careful about attacking the World Cup pricing, as it had to be accurate about what exactly was included in the prices quoted in such media reports (e.g. accommodation, tickets, transport).  

The TBCSA/MATCH statements are ironic, as MATCH has been blamed for excessive “rip-off pricing” since it started recruiting accommodation for the World Cup four years ago, demanding a 30 % commission from accommodation establishments initially, and now just adding this commission percentage on to the already high accommodation rates! 

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