Tourism, Food, and Wine news headlines
*. Sun International has won the bid to run the Blue Train on behalf of Transnet, the two hospitality services sharing similar guest profiles. More trains and new routes are planned.
* The occupancy of Cape Town hotels has declined by 6%, it was said at the Hospitality Investment Conference Africa 2015. The decline in tourists Continue reading →
Both the Bureau of Economic Research and the Tourism Business Council of South Africa (TBCSA) FNB Tourism Business Index reflect that the first three months of this year showed an improvement in the confidence level for the South African tourism industry. While Cape restaurants would agree, the confidence may not have been shared by the Cape accommodation industry, who still cannot see a significant improvement in their occupancy levels, and dread the early arrival of the winter season.
The Bureau of Market Research released its results for the first quarter of this year last week, and showed a 7% growth in the volume of Accommodation business, with a very positive expectation of an 11% growth rate in the second quarter – this contrasted strongly with the 16% decline reported for the last quarter of 2012. Since 2009 the Bureau had measured declining volumes of Accommodation business, the first sign of a turn around being measured in the first and third quarters of 2012, but with declines in the second and fourth quarters of the same year, demonstrating how variable the growth is and how susceptible it is to global recessionary influences. Business confidence in the Accommodation sector increased to 52 (an index measured out of 100) in the first quarter of this year, a significant increase from 38 the quarter before. In contrast, the real estate and business services industries showed minimal business confidence growth in the same period.
The TBCSA FNB Tourism Index was introduced in 2010, and is based on a study of tourism confidence conducted quarterly by Grant Thornton. The Index is measured and compared against a score of 100 reflecting ‘normality’. For the third consecutive reading the Tourism Business Index has exceeded the score of 100, a positive step given that most of the scores since 2010 lay below the 100 mark. The latest index measurement is 111, just below that measured at the time our country hosted the World Cup, the highest score ever achieved, before the scores slid. Respondents are asked to quantify their expectations for the quarter ahead, and the actual first quarter confidence score far exceeded the anticipated score of 102,5.
Grant Thornton’s Gillian Saunders said that the survey results were split, with 30% reporting strong demand and another 30% reporting it as weak. ‘Playing in different geographic markets may impact this; for instance in 2012, Asian markets saw a huge growth in tourist arrivals and businesses targeting those markets have no doubt benefited’. One hopes that Mrs Saunders is not referring to the SA Tourism statistics for China, which appear to include transit passengers! More likely could be a geographical difference, in that Gauteng and Durban may have been more positive in the past quarter due to the AFCON Cup of Nations which took place in Johannesburg and Durban in January – February, while Cape Town missed out as a host city for the soccer event due to the City of Cape Town’s mismanagement of the bid process, and therefore Cape Town’s tourism industry may not have been as confident as a result! Durban has hosted a number of top conferences and events, including a meeting of the BRICS country presidents, and an Indian tour operator conference. Saunders emphasised that there is still concern about the impact of the recessionary problems of Europe. While tourism confidence may have improved, the TBCSA CEO Mmatšatši Ramawela stated that the petrol price, cost of sales, electricity prices, municipal tariffs, and labour issues negated the confidence levels of tourism players.
Grant Thornton, the company that got the estimate of the World Cup 2010 attendance so badly wrong, is to conduct a three year study of the Cape Town tourism industry, to measure the value of its tourism industry. A 2009 survey had put a value of R17,3 billion on our City’s tourism industry, a 6% increase on the 2008 value of R16,3 billion. The study results will become a benchmark to measure the economic value of Cape Town’s tourism industry, said Mayoral Committee member for Tourism, Events and Marketing Grant Pascoe. The study will use national data (read highly criticised) SA Tourism statistics and tourism surveys to measure the spend by tourists whilst in the city. Tourism businesses will be interviewed, to establish their turnover and employment figures. One can be sceptical about the co-operation that the researchers will receive from the hospitality industry in extracting turnover figures! Councillor Pascoe said that collecting the tourism industry information could be used to assess the infrastructure requirements for Cape Town, and could be used to motivate infrastructure upgrades to benefit the tourism industry! One wonders how many millions the Grant Thornton Cape Town tourism study will cost, and how reliable its results will be, given the sensitive information sought!
Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com Twitter: WhaleCottage
Yesterday the Cape Argus and Cape Town Tourism released their forecasts about the Festive Season and the November – January period. The Cape Argus prediction of a ‘flood of tourists’ over the Festive Season and Cape Town Tourism’s description of the November – January period seeing ‘positive seasonal growth’ are exaggerated, and not reflective of what the tourism industry is experiencing. Both information sources do not acknowledge something we have called ‘Summer Seasonality’, which is becoming more pronounced!
Cape Town Tourism astounds with its poorly written media releases, and it is clear that their PR and Communications Manager Skye Grove struggles in expressing herself coherently, sounding out of depth in writing about accommodation occupancy, rates, and RevPAR (Revenue per Available Room), clearly terms which are foreign to her, as is market research in general. While her headline refers to ‘positive seasonal growth’ being seen by ‘Cape Town’s Tourism Sector’, she contradicts herself in her introductory paragraph, clumsily writing that there are ‘slight growth trends across occupancy and average room rates indicators for the months November 2012 – January 2013‘. She forecasts Occupancy over the three months at 71% and an average room rate of R 1136, without providing details of how the information was arrived at. She then compares the results from two different surveys conducted a year apart, and concludes that Occupancy will be higher this summer compared to last, a nonsense deduction.
Even worse is the poorly written paragraph attributed to Cape Town Tourism CEO Mariette du Toit-Helmbold, in which she contradicts herself in predicting that ‘we are not expecting a record season of arrivals and bookings’, yet states in two sentences further that ‘..the City Bowl, The V&A Waterfront and the Atlantic Seaboard will be a hive of activity’, clearly not knowing what is happening in the tourism industry! She does admit that the Festive Season only covers the period of the third week of December (i.e. from 21 December onwards) to ‘early January‘. Mrs Helmbold admonishes the tourism industry for not coming up with ‘new and interesting experiences‘, something our tourists are ‘hungry for’, she writes!
A statement by poor Nils Flaatten, the CEO of Wesgro, is also incorporated in the media release (aren’t they in competition with each other in marketing Cape Town, one would ask), and justifies the hard work they are doing with Cape Town Tourism to ‘ensure improved dispersal of visitors across the greater Cape Town region and beyond’, his mandate being to market the Western Cape and to minimise the duplication of marketing Cape Town. Flaatten refers to international tourists visiting the V&A Waterfront to shop, and to visit Robben Island and Table Mountain. Domestic tourists, he says, ‘are experiencing a greater appetite (sic) for festivals and events across the province’, and then refers to the 600 festivals which took place in the province in the past six months! Ironically there are no festivals and events taking place over the Festive Season! We have seen no marketing activity or communication from Wesgro and Cape Town Tourism to ‘disperse’ the Cape Town-based tourists into other parts of the province, the tourists doing their own research about where else to stay. Fact is that the Atlantic Seaboard is the most desired location for Festive Season visitors to Cape Town, and it would only be the non-availability of accommodation in this area that would make them stay further away from the city.
The Cape Argus article, written by journalist Daneel Knoetze, was based on two interviews, with Mrs Helmbold and her Board member Susanne Faussner, the headline shouting that a ‘Flood of tourists expected in Mother City’, and misleadingly stating that our industry is ‘expecting one of the most successful festive seasons to date’! The only justification for this misleading claim is a quote attributed to Mrs Faussner about an increase in Occupancy relative to last year, but as the Festive Season has not even begun, no accurate Occupancy figures are available! She added that the poor European winter and the favourable exchange rates are in our industry’s favour, but we have not seen the effect of this. Immediately after the exaggerated positive claim, the journalist lists dreadful crime-related accusations against Cape Town, and states that the positive publicity generated by Cape Town performing well in international tourism lists will outweigh the negative shock crime information relating to Cape Town! Mrs Helmbold places all her bets on an increase in tourism numbers on Table Mountain’s new ‘New7Wonders of Nature’ status, which was confirmed at the beginning of this month. Ironically Cape Town Tourism Chairman and CEO of the Table Mountain Aerial Cableway Company, Sabine Lehmann, deplored the very windy beginning of December, and the number of days that the Cableway
had to be closed due to adverse weather conditions in the Cape Town Tourism release. Funny was seeing the Christmas Lights on Adderley Street, supplied by the City of Cape Town, which includes an illustration of Table Mountain and the incorrect title ‘New7Wonder of Nature’! One would have thought that Mrs Lehmann or Cape Town Tourism would have advised the City of Cape Town of its faux pas!
Summer Seasonality is becoming increasingly apparent, and adds to the woes of the Tourism industry, which experienced extreme Winter Seasonality in the past two years, worse than ever before, largely due to the extremely wet winter, which kept Johannesburgers from Cape Town, and Capetonians from the rest of the Western Cape. Even more frustrating is the increased Summer Seasonality, which gives the industry two very good weeks and two very slow weeks each in November, December, and January, resulting in an average Occupancy of 50% for each of these months, an unsustainable performance. February is the best booked month, the only one with Occupancy close to 90%.
Cape Town Tourism likes to brag about its performance, and clearly is under pressure from the City of Cape Town to justify the R35 million it receives from the City. It is irresponsible to mislead the Tourism industry with platitudes, contradictory information, and the false presentation and interpretation of statistics! We would like to request the City of Cape Town to act against this unprofessional communication by Cape Town Tourism, and to appoint a professional Communications company that can assist Cape Town Tourism in issuing more credible and professional media statements, for the benefit of our City’s image and reputation! The PR company it uses currently appears to only distribute the media releases.
Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com Twitter: @WhaleCottage
It’s been a bad May, and appears to be the worst month of the year for the Cape hospitality and tourism industry, and it has sunk to its lowest low in the six years in which we have been tracking occupancy. Sadly, the soccer tournament is not benefiting the industry. Cape Town and the Western Cape may be slipping back into a tourism crisis, as we experienced in 2011!
From occupancy for Whale Cottage Camps Bay at 68% in May 2008, and about 42% in May 2007 and 2009, occupancy dropped sharply from May 2010 onwards, to 19%, rose slightly to 23 % in May last year, and down to a shocking 10% this month, the lowest in the six year period. The May occupancy at our Whale Cottage in Hermanus is 8%, on a par with May figures for the past three years, crashing down in 2010 from about 24% per each of the May months in 2007 – 2009. In Franschhoek the same pattern is evident, with occupancy also at 10% over the past three May months, dropping sharply from 27% in 2009 (and even 58% in May 2008). Any tourism ‘politician’ that claims that Seasonality is under control and that the winter period is shrinking is deceiving the tourism industry!
The shocking tourism performance this month is a surprise, in that even business tourists from Johannesburg have not been seen to any great extent in Cape Town, often the mainstay of the industry in winter, perhaps a sign that the South African economy is not yet out of recession. The winter campaign in a downscaled marketing program, which Cape Town Tourism has launched appears to have had no impact on tourism at all, and neither has the Eight Nations Under 20 soccer tournament. The Cape Times reported earlier this week that the attendance support of the soccer event is so poor that Cape Town faces losing the event for 2014, no loss if viewed from a tourism perspective. The tournament was signed up and announced to the industry a week before its start, hardly an event timing that could be taken seriously. The newspaper also reported that the City of Cape Town is giving away a free ticket for a match for every Semi-Final and Final match ticket bought. Surprisingly, the City’s tourism body, Cape Town Tourism, is not marketing the event at all, proving that it too sees no tourism benefit of the soccer tournament! No other events have been held in Cape Town this month, and this is making itself felt. In Franschhoek the Literary Festival earlier this month led to a full house, proving that events do attract visitors to a town or village. Next month its ‘Cook Franschhoek’ is attracting good bookings, and in July the Bastille Festival and an Art of Living retreat are almost sold out already. Sadly, no events are planned for Cape Town nor Hermanus in the next few months.
Of even greater concern is that forward bookings from international tourists, which looked promising in April for early 2013, have all but dried up, demonstrating that the uncertainty of the Eurozone membership of Greece may be unsettling German travellers, who were planning their holidays far ahead. Increasingly one hears that travel to Greece is being curtailed, as tourists do not know if the Euro will be discontinued while they are travelling in that country, which could be an opportunity for Cape Town, if any marketing could be considered by Wesgro, Cape Town Tourism, or SA Tourism! Bookings from the UK market remain depressed and rare. At the time of international events, local tourism always suffers, and in the UK the Queen celebrates her Diamond Jubilee next month, and the Olympic Games take place in London from July to August. Perhaps some Londoners may leave their city during this time, but we are not seeing bookings from this market. On 8 June the three week long UEFA European Football Championship takes place, shared between Poland and the Ukraine as host countries, which will capture the interest of many European travellers, preventing them from coming to South Africa.
Once again, we call on our tourism authorities to help the Cape Tourism industry in attracting events to the region in winter, and to generate any marketing activities that can attract domestic tourists to our area.
POSTSCRIPT 31/5: We would like to add that Wesgro has not issued any media statements nor shown any industry leadership since taking over Cape Town Routes Unlimited two months ago! We have written to Nils Flaaten, to ask him what is planned for the marketing of the Western Cape.
POSTSCRIPT 1/6: Good news is the potential of a soccer match between Ajax Cape Town and Manchester United on 21 July, a real soccer event, to be played in the Cape Town Stadium, as reported by the Cape Argus yesterday!
Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com Twitter: @WhaleCottage