The annual Tourism Destination Conference, organised by Cape Town Routes Unlimited on behalf of the Western Cape Department of Tourism, on “Elevating our Destination’s Global Profile”, was held in the Waterfront yesterday, and had a sobering message for tourism players – South Africa, and the Cape with it, has become too expensive!   Tourism players were encouraged to relook their rates, and contain their costs, to see how they can offer better value.  Ironically the theme of the Conference focused on global marketing, but more than one speaker encouraged the industry to invest in domestic marketing, rather than international marketing, even at provincial level. 

The Conference was intended to provide “a platform for the tourism industry to engage on relevant topics that could enhance our destination’s competitve advantage to contribute towords industry growth”, Western Cape Minister of Tourism Alan  Winde said ahead of the Conference.  Cape Town Routes Unlimited CEO Calvyn Gilfellan added that “Platforms such as the Cape Town and Western Cape Destination Conference are critical to ensuring that everyone in the industry is working towards a common goal: the enhancement of the Western Cape tourism industry”.

Western Cape Minister  Winde said pertinently that Cape Town is not cheap, and despite the oversupply of accommodation, the resultant effect of the law of demand and supply in leading to lower rates is not evident in the Cape.  He said that a comparative study of hotel prices locally and internationally will be conducted by FEDHASA, the hotel association.  Winde said that the focus of his department’s marketing is to increase the market share of the Western Cape, which has been overshadowed by KwaZulu-Natal.  Africa as a source continent is vital for Cape Town, but there are no direct flights between Cape Town and major African cities, all African tourists having to fly via Johannesburg.  Asked how a region like the Garden Route, which is suffering extremely low tourism numbers, can improve its performance, the Minister encouraged players in regions to work together, to attract tourists, Cape Town residents in particular.  He mentioned the example of Knysna and Franschhoek, who are ‘tourism twined’ now, and are going on marketing trips to Gauteng and to the USA, to benefit both towns.  The recently created Cape Country Meander passes on its visitors to the next towns, and includes Elgin/Grabouw, Bot River, Caledon, Villiersdorp, and Greyton.  The recently signposted Cape Whale Coast route shows how tourism players can work together to share more broadly their tourism success.   Minister Winde said that many players in tourism are insular, and think they are ‘the centre of the universe’.  To meet President Zuma’s goal of 5 million jobs to be created by 2015, the tourism sector would have to grow four to five times.  But he said the responsibility cannot be placed on corporates alone to achieve this goal, and that small and medium sized businesses must show growth, to achieve growth in employment.

National Minister of Tourism, Marthinus van Schalkwyk, encouraged the tourism players to evaluate what Cape Town can do more to allow it to compete with the best in the world.  South Africa had its best ever tourism performance last year, with 8 million foreign arrivals, and a 15 % growth.   Now the country needs to capitalise on the top of mind awareness that was created for it through the World Cup, and meet the goal of 15 million arrivals by 2020, and to increase tourism’s contribution to the economy from R190 billion in 2009, to R499 billion in 2020.  Awareness needs to translate into sales, he said.   Tourism is now one of the six cornerstones of economic growth and job creation, and the success of the tourism industry must lead to the greater economic benefit for the South African population.  Minister van Schalkwyk urged the provincial tourism marketing bodies to focus more on domestic marketing, given the restricted marketing funds.   The Minister indicated that the traditional markets of the USA, the United Kingdom and Europe are the largest source countries of tourism, but are still strongly influenced by the recession.  He highlighted the importance of Africa as a tourism market, showing a growth of 4 – 7 %.  The tremendous potential shown by the Chinese market has been recognised, and direct flights between Beijing and Johannesburg will be introduced by SAA later this year.  SA Tourism will allocate a share of its marketing budget to attract Chinese tourists.  The Minister also said that whilst 50 airlines service South Africa currently, more are needed to fly to the country, so that supply and demand can drive down the cost of flying to this destination.   Airport tax increases were identified as a deterrent to tourism growth.

The biggest challenge that Minister van Schalkwyk threw to the industry was ‘green tourism’.  By going beyond talking about sustainability and biodiversity, and taking the lead in creating low carbon cities, a competitive advantage can be created for South Africa.   “…as the world changes around us, it is imperative that we as a travel and tourism industry in South Africa stay one step ahead.  This will mean challenging ourselves in terms of how we understand the environment, our responsibilities, our markets and our consumers.  It means innovative and strategic thinking in terms of how we plan for the future, as well as the flexibility to adapt to rapidly evolving circumstances” he concluded.

Peter Bacon is an industry player, and was a previous CEO of Sun International, and currently is the Chairman of Cape Town Routes Unlimited and of the Tourism Grading Council of South Africa.   He said that South Africa is doing better than most long-haul destinations in respect of tourist arrivals.   It was good to hear him say that Cape Town is the ‘jewel in the crown of S A Tourism’.   Cape Town does not suffer a decline in demand, explaining the decline in accommodation occupancy, he said, it is suffering from an oversupply of accommodation created by the opening of six hotels in the last two years.   Coupled to this is that corporate demand for accommodation is down severely, as businesses come to grips with their policies on company travelling.  It was Bacon who said that South Africa’s image has changed from being a  ‘low cost, high value’ destination to one that is ‘high cost, low value’.  Overall average tourism spend is down compared to the past, and the average tourist stay is two days shorter.   He urged the industry to package Cape Town ‘beyond the beach’, and to address the poor value image.  He did understand that rising costs, especially those for electricity, make it difficult to cut rates, but South Africa must be competitively priced, and our destination is not!   Bacon also urged that domestic marketing take the foreground.  Bookings are increasingly on-line, and he urged the accommodation industry to be where the bookings are, on Hotel.com, Expedia.com etc.  Cape Town, and South Africa with it, is a world class destination, and its tourism marketing must be aligned.  He also requested event organisers to not program events in the Cape on the same days – e.g. the Cape Town International Jazz Festival, and the Cape Epic taking place this past weekend.  He said: “We need to package our destination and the diversity of its attractions and experience more effectively.  We need to address the value proposition by differentiating South Africa from other long-haul destinations”.

The presentation by Dr Nikolaus Eberl, a branding consultant to the World Cups in Germany and South Africa, was one that attracted me to attend the Conference, but it was disappointing that he went back to the past, focusing largely on the success of the World Cup, and then showed video clip after video clip of Hawaii’s cliff-diving industry, neither addressing the topic of the Conference.  He did remind the audience that South Africa’s World Cup FIFA score of 92 %, 4 percentage points higher than Germany, was an exceptional performance record, and that South Africa could be Plan B to Brazil!   What did make the World Cup such a success was the ‘ubuntu’ of the South African nation, radiating its friendliness and care to visitors and locals alike.  An interesting case study presented was that of the Harley Davidson Club, showing how a ‘brand community’ can be created around a product or service that consumers naturally concentrate around, mentioning the example of the now dead polar bear Knut, who received a world following in the Berlin Zoo.   He talked about creating Brand Ambassadors, which is what visitors to Cape Town become, through word of mouth and social media communication, and this can lead to a ‘brand community’, he said.  

Although the most eloquent speaker, the City of Cape Town’s Pieter Cronje’s talk disappointed in not revealing which other mega events are lined up at the Cape Town Stadium or elsewhere in the city, other than Neil Diamond’s concert in April. He did say that the city would bid for the Olympics, but not for 2020, as Cape Town’s public transport system is not yet ready to handle such an event.  He also indicated that Cape Town has seen an increase in the number of event proposals since the World Cup, which will be good news for the tourism industry if they are staged.   He said what all in the room know already – events create money for the economy, and benefit all tourism players.

With tourism contributing 10 %  to the Western Cape economy it has a significant effect on economic growth and job creation.   The Conference had a contradictory outcome, in that its theme was global marketing, yet its message was one of domestic tourism marketing first.

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