Tag Archives: Olympic Games

May Day! May Day! Cape Tourism ship is sinking! Seasonality getting worse!

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

2012 Olympic Games come to ‘world class’ Stellenbosch!

I was surprised but delighted to read an article in the latest The Sunday Independent, reporting that more than 260 athletes participating in the 2012 Olympic Games, to be held in London from July to August, are in Stellenbosch to prepare for this top event this month.  This includes top athletes Blanka Vlasic from Croatia and Dwain Chambers, British world indoor champion in the 60 metre track event.

The University of Stellenbosch’s Coetzenburg Stadium athletic facilities have been deemed to be ‘world class’ by Charles van Commensee, head coach of the British athletics team, who has been bringing his athletes to Stellenbosch for the past 12 years.  “Stellenbosch is the ideal place to train for us. Athletes get injured easily and always need warmth and sunshine to prevent injuries, so the warm weather is great”, he said, his team getting an overdose of ‘warmth’ at the moment, as the Cape suffers a heat wave!  He added further benefits being that they have access to the track, the pool, the gym as well as ‘top notch recovery facilities‘.

Athletes from The United Kingdom, Germany, Belgium, Denmark, and the Czech Republic have arrived since the beginning of this month, to train here.  More athletes are expected to arrive next year, ahead of the 2013 World Championships of Athletics. Athletes have praised both the facilities, as well as the beauty surrounding them when they train.   Tille Scheerlinch, the Belgium team ‘high performance director’, said that an advantage of training in Stellenbosch is that there is a minimal time difference, compared to a country like Australia, with similar weather, but the time difference would affect his athletes when they return home. He said: “They call it a paradise and I can see why”!

The University of Stellenbosch’s athletics administration officer Mario Smith said it is an honour to have the athletes practising here, and a good learning experience for local athletes to learn from the world’s best. Stellenbosch and the Western Cape are sure to benefit from the athletes training locally, advantaging accommodation establishments, restaurants, and retail outlets currently, and from the good feedback that the athletes will take back with them to their home countries.

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

World Tourism Day: Cape tourism does salsa and tango in South America!

Today is World Tourism Day, and therefore it is fitting to laud Cape Town Routes Unlimited for the marketing work it is doing for Cape Town and the Western Cape in South America.

One welcome advantage of the tough tourism times is that Cape Town Routes Unlimited is proactively sharing what it is doing for the Cape tourism industry, via almost daily media releases.  Cape Town Tourism, by comparison, is Tweeting torrentially, and does little for its media coverage and member communication.

A Special Edition of the Cape Town Routes Unlimited CEO Update provides interesting information about a recent trip to South America by its CEO Calvyn Gilfellan, who visited Buenos Aires in Argentina, and Sao Paulo and Rio de Janeiro in Brazil, earlier this month.   The 2010 Soccer World Cup got the ball rolling in developing relationships with the two countries. Two events took Gilfellan to South America:

* SAA São Paulo Workshop, which was attended by 33 Brazilian tour operators, wholesalers, and incentive houses.  At the workshop a ‘speed-dating’ approach was used, whereby the Cape exhibitors and the Brazilian tour operators were each given 15 minutes to represent their tourism products, resulting in 841 business connections

.   Visit SA Expo in Buenos Aires: Organised by the South African Embassy (headed by ex-DA leader Tony Leon), the Expo invited free participation by South African tourism players, including those involved in language schools, sports tourism, business tourism, and luxury travel.

Only one day was spent in Buenos Aires, and here Cape Town Routes Unlimited was encouraged to get involved in a special rugby match in honour of Nelson Mandela on 2 November, identified an opportunity for the creation of a West Coast Rooibos Tea Route on the initiative of the South American offices of South African Rooibos Tea, and the opportunity for tourism players to provide information via the South African Embassy offices in Chile, Uruguay and Buenos Aires.  The number of tourists from Argentina doubled in one year to reach 22000 in 2010, albeit off a low base and many of the tourists coming for the Soccer World Cup.

More time was spent in Brazil, and here Cape Town Routes Unlimited picked up the positive perception that our country has ‘extraordinary tourism offerings, friendly people, a safe environment and top-class infrastructure’.  Their economic growth at 5% per annum appears to have been more resilient to the world recession, and tourism to South Africa grew by 69 % in 2010 (no numbers provided).  With its massive population of 200 million it has fantastic potential for Cape tourism marketing.  Brazilians travel for language training, events, wildlife, golf, adventure, and surfing in the main.  They are ‘habitual’ travellers, enjoying returning to destinations that they have had good experiences in.   Marketing collateral is recommended to be provided in Portuguese, and SA Tourism is commended for having a website in Portuguese.  The BRICS inclusion of South Africa will open a platform for tourism, investment, trade, sport and cultural exchanges, writes Gilfellan.  Online Travel sells packages to Brazilians visiting South Africa, and 120000 brochures will be provided by the tourism body to the South African embassy.  Media visits are on the cards, and host sponsors are sought.  A group of 100 golfers is visiting our country next month, and one hopes that the Cape is on their agenda.  Wine and golf workshops are planned for next year with Brazilian tour operators.  A jazz exchange programme between the Cape Town International Jazz Festival and the Bourbon Street Jazz Festival in Brazil is being considered, allowing performers from each festival to perform at the other festival.  A Memorandum of Understanding is to be signed between Cape Town and Rio de Janiero, and a twinning agreement to be established between Robben Island and Ilha Grande, a former political prison island in Brazil.  An African Fan Village is being considered in Rio de Janiero for the 2013 FIFA Confederations Cup, 2014 FIFA World Cup, and 2016 Olympic Games.

It is time for Cape tourism players to brush up on their Portuguese and Spanish language skills, to welcome tourists from Brazil and Argentina.  With excellent flight connections via Air Malaysia from Buenos Aires and from Brazil via SAA, Cape Town and the Western Cape are sure to benefit from a new tourism market, sorely needed as the traditional tourism source markets are still depressed due to the global recession.

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

World Cup anniversary: South Africa was ‘ripped off’!

It is interesting that a review of the advantages and disadvantages of South Africa hosting the World Cup, which started on 11 June last year, and particularly the downside of this world event, is only emerging now.

Yesterday we wrote about the tourism slump that has been caused by the World Cup. In yesterday’s Weekend Argus, a very critical article was published, summarising the book to be published in September and to be entitled “South Africa’s World Cup: A Legacy for Whom?”, written by Eddie Cottle, ‘regional policy and campaign officer for the Building and Wood Workers International, a global trade union federation’.

Cottle is given a prominent space in the paper, and in summary he argues that “…the promises made about the benefits of hosting the soccer World Cup were nothing but ‘bald lies'”!  His introduction is complimentary and gentle, praising the benefits of the event, in there being few technical hitches and little crime. The negatives far outweigh the event, he writes, and he says that South Africa fell for the ‘sales pitch’ of the positives of a mega-event, despite “…the volumes of academic studies on the negative impact of mega-sporting events such as the World Cup”.  He says that the promises made about the financial benefit that was the drawcard for South Africa hosting the event, with its resultant contribution to the GDP, tax revenues and job creation, which was promised by the government, FIFA, the local organising committee and tourism consultancy Grant Thornton,  were “…bald lies, wrapped up in the haze of developmental spin. There was no serious study of the opportunity cost of the investment to be made by the government; the impact on the environment; nor the contribution of the event towards the country’s debt position or the social costs of hosting the event.”  He adds that the official economic report was kept secret, and not open to public scrutiny, because of the flaws it contains.

Grant Thornton made many projection errors, not just in overestimating the number of international visitors to the country for the event, but also in the expected expenditure of tourists while in the country, which was only 16 % of the estimated R55 billion. 

The cost to the government for hosting the event was initially estimated in 2003 to be a ‘mere’ R2,3 billion, but given an estimate of R7,2 billion tax revenue, the event was packaged as generating profit.  In reality, the event cost R39 billion. This figure may not reflect the final cost tally.  The Reserve Bank estimated the cost to the state on capital formation to have been just under R130 billion, creating a deficit of R 63 billion.  What is causing a large income hole is that FIFA took R25 billion profit made by the event out of the country without paying any tax! It was the largest profit that FIFA has ever made out of a World Cup, Cottle states.

South Africa was also misled by projections of the employment benefits of the World Cup, 695000 jobs to have been created, of which just less than half were estimated to be retained after the World Cup.  This scenario proved to be incorrect, in that employment decreased by 5 % in the second quarter of 2010.  The losses of jobs in the construction sector was even higher, at 7 %.  Cottle says that as only a handful of construction companies, including Aveng, Murray & Roberts, WBHO, Group Five and Basil Read, built the insfrstastructure for the World Cup, their quotes were higher than required, a ‘grand theft’, he says.   

South Africans were caught up in the spirit of the World Cup, and went on a spending spree using their credit cards, which they are feeling the after-effects of now, partly as locals were led to believe that things would be better financially as a result of the World Cup.  Informal traders were moved out of their normal trading locations, on the basis of FIFA’s rules of a non-trade zone around stadia, impacting on the incomes of such traders.

Cottle concludes: “Indeed, a considerable negative impact has been left through higher levels of both public and individual indebtedness, the high opportunity costs associated with the event, the displacement of local spending and the reinforcing of already high social inequalities in income among and within cities.”  He states that the government’s decision to not bid for the 2020 Olympic Games ‘surely is a wise decision’!   

POSTSCRIPT 14/6: Southern African Tourism Update  reports today that the Department of Sport and Recreation will request the government to re-consider the Olympic Games bid for Durban for 2020, before the bid deadline of September.

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