Olympic Games | WhaleTales Blog by Chris von Ulmenstein

Today the World Cup 2010 started a year ago. While many may remember the wonderful 30-day period nostalgically, the hard reality of this largest world event is attracting criticism in its impact on the hospitality and tourism industry, which has reached its lowest low, something other mega-event cities have experienced before. The event was commemorated yesterday with the launch of a new coffee table book ‘CapeAbility: Stories and Successes from the 2010 FIFA World Cup’.

The infrastructure benefits of the World Cup cannot be denied : Cape Town has a renewed station building, a world-class airport, and far improved access into and from the city on its N1 and N2 highways. It has a beautiful Cape Town Stadium, which has become a tourist icon for the city in itself. It has a most wonderful Green Point Park, which was developed next to the Stadium, as well as a general upliftment of the Green Point and Mouille Point area. It led to the roll-out of the recently completed and far improved public transport MyCiti service. It added more international hotel brands to the city’s five-star hotel portfolio. It created an Ubuntu amongst Capetonians and the city’s visitors, on its festive flag-decorated Fan Walks. It positioned Cape Town, and South Africa with it, as a safer country than had been perceived before.

But the downside appears to outweigh the benefits a year down the line: there is no operator for the Cape Town Stadium since SAIL Stade de France reneged on its contract with the City of Cape Town. Cape Town ratepayers will have to carry the cost of operating the Stadium, not making ends meet with the few events that have been hosted in the venue since July last year. The tourism industry suffered poor pre- and post-event bookings last year, and was led to believe that it would benefit from a tourism boom that would last for years to come. The industry was conned by MATCH, the FIFA accommodation booking agency, with massive cancellations just days before the start of the Wold Cup. Surprisingly, the industry is experiencing its worst ever year, and even more surprisingly, Cape Town Tourism told its members yesterday that it was to have been expected, given the Sydney experience – a 5-year slump after the 2000 Olympic Games, largely because the city tourism authorities assumed that no marketing was required after the widely publicised event. Cape Town appears to have made the same mistake, an error which is compounded by the poor UK economy, the largest tourism source market for the city, the strong Rand, and high airfares.

Not unsurprisingly, tourism consultants Grant Thornton, who badly overestimated the World Cup tourism numbers, praised the R40 billion national capital expenditure on the World Cup, the consultancy’s Gillian Saunders saying it was money “well spent, with some areas still to be leveraged”, reports the Cape Times. She states that the infrastructure benefit had ‘significant legacy value leading to a better quality of life and provided long-term valuable assets’. She admitted that the slow recovery from the global recession was responsible for the lack of the tourism boom which had been predicted. Yet she said that “a large number of tourism businesses would not have survived the economic slump if it weren’t for the event”. She reminded the industry that R3,6 billion revenue had been generated and that just more than 100000 tourists had visited the Western Cape, and just more than double this number visited Gauteng.

Cape Town Tourism has blamed SA Tourism for focusing too much on wildlife and the natural beauty of the country, and too little on its cities, in its marketing of the country. The World Cup had created a greater city focus, but this has not been sustained by SA Tourism in its post-World Cup marketing, Cape Town Tourism says. To strengthen brand Cape Town, Cape Town Tourism proposes that the “city’s urban identity, innovative outlook, entrepreneurial spirit, academic excellence and pioneering medical and science sectors must be added to the brand palette in order for it to effectively compete in the domestic and global market”, in addition to its leisure tourism positioning, it is reported in BizCommunity.com.

The Cape Argus yesterday ‘shouted’ in a headline:”Post-World Cup tourism boom ‘non-existent'”, stating that the benefits have been the international performers who held concerts in the Stadium, the city’s improved infrastructure, and the survival of a number of tourism businesses. It quotes Cape Town Tourism as saying that Cape Town is in a ‘brand vacuum’. The annual operating cost of the Stadium is quoted as being R57 million. Two concerts have been booked, and a further two are in the pipeline, according to the city’s new head of Tourism, Grant Pascoe. Talks with Western Province rugby continue, he said. He added that the city is receiving more event applications than it did prior to the World Cup. Developing the Fan Walk into a 24/7 facility is also being considered. The oversupply of hotel accommodation can be attributed to nine new hotels with 1500 rooms in total, which were built for the World Cup, says Dirk Elzinga, Chairman of FEDHASA Cape. He naively states that many hotels have already received repeat World Cup business, and that the ‘extremely low occupancies’ of some hotels ‘was normal for the off-season’!

Launched by Premier Helen Zille and Mayor Patricia de Lille, the ‘CapeAbility’ book documents the ‘planning, delivery and effect’ of the World Cup on the Western Cape, says BizCommunity.com. The book “makes every effort to extract honest lessons to understand the hosting of such mega-events better. It is designed therefore not as a memento of the event, but a review of what worked, what didn’t and what could be done better and become a guide to hosting future events”. “The book is meant to play a marketing role and points out that it is crucial that opportunities, such as the World Cup, are converted into more than just short-term profits for a small tourism and events sector, but into huge brand building opportunities for a country”.

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

Cape Town Tourism issued a media release “A Mid-Way 2010 FIFA World Cup Report from Cape Town Tourism” on Friday, which has (frighteningly) been picked up by news agencies and reported upon immediately.

My problem with surveys conducted by companies that do not have the faintest idea of market research is that the answers received will only be as good or as bad as the questions asked. I knew immediately that the results would be used for publicity purposes when I received a survey participation request as an accommodation establishment from Cape Town Tourism two weeks ago.

The first questionnaire was embarrassingly bad, with poor grammar, poor time scales provided as answer options, leading questions asked, and a 5-day timeline referred to when they meant 7 days! I wrote to Cape Town Tourism CEO Mariette du Toit-Helmbold immediately, telling her that it would be irresponsible if the results were to be used for PR purposes. I offered my help, having been a market researcher for 20 years, and was sent the second accommodation survey for input a week later. I had to correct almost every question, and hoped that it would be used as it had been corrected. But no, many questions were altered, new ones introduced relative to the draft questionnaire, making comparison between week 1 and week 2 impossible, more grammatical errors were made in that my corrections were “corrected” nonsensically, so much so that I wrote to Du Toit-Helmbold again, withdrawing my offer to assist in future, in not wanting to be associated with such unprofessional work and by implication condone its irresponsible use for publicity purposes.

And so two days after the last “survey” went out, the results of the two weeks’ “surveys” were neatly packaged and presented as a valid “survey” and findings presented as the gospel in a press release for all the world to read!

The first problem is that the sample size is not specified – i.e. the number of respondents relative to the universe of accommodation establishments. Second, the “survey” only would reflect Cape Town Tourism members, and not all accommodation establishments in Cape Town (in Camps Bay, for example, most guest houses do not belong to Cape Town Tourism) – this is not mentioned in the press release, which is irresponsible in itself. Third, the geographic definition that was used in the press release was the “Cape Town Metropole” – in my definition that would be the inner city of Cape Town, but in the definition of the City of Cape Town, it would be the municipal area of the whole area of Cape Town (e.g. Southern Suburbs, Atlantic Seaboard, Northern Suburbs, and even Somerset West and Strand). Incorporating all of these areas of greater Cape Town would certainly skew the findings – whilst the press release referred to such areas as Green Point and City Bowl, the suburb of the respondents was not asked in the questionnaires, which makes one wonder how they got to this information!

And so if one were to waste one’s time in evaluating the results of the accommodation “survey”, the finding of a 40 % average occupancy would reflect the geographic bias in the “survey” design, as low occupancy of guest houses in Somerset West or Durbanville would reduce the higher occupancies in the city and Atlantic Seaboard areas on average. The press release reports an average occupancy of 71 % for the City Bowl, Waterfront and Green Point areas. Once again, this finding is questioned as the geographic question was not asked, and the respondents were anonymous! Where the press release states that the “survey” found that business had improved in the second week of the World Cup, our experience in Camps Bay is the opposite, it having become very quiet since the departure of the England fans last Monday. The majority of the 25000 Dutch fans (unfortunately for Cape Town) camped at the Berg River Resort in Paarl.

Even worse is the predictions that are made by the writer of the release, sent out by the Cape Town Tourism’s PR company Rabbit in a Hat Communications, the authors of the “survey” questionnaire. It finds that the average length of stay is only 3 – 4 days (we would disagree), and predicts that the “length of stay in Cape Town will increase as the tournament progresses. Cape Town hosts a Quarter Final on Saturday, 3 July and the Semi Final on Tuesday, 6 July 2010 and expects visitor numbers will peak during these times”. Anyone observing the movement of soccer fans will know that this is a dangerous prediction to make, and that soccer fans follow their teams, not cities! The teams playing the Round of 16 in Cape Town tomorrow are Portugal and Spain, and Germany faces Argentina in the Quarter Final on Saturday, but no additional bookings have been received from their fans. The teams for the Semi Final are not yet known, and therefore bookings are not being made for these dates yet. However, it may be impossible to still buy tickets for these last three Cape Town matches, as they were the first to be ‘sold out’, according to media reports.

More reliable information is contained in the press release as far as other tourism World Cup indicators are concerned:

* Cape Town International airport reports that its number of international arrivals is up by 44 %, the busiest day to date being 20 June, when 25 000 passengers were “processed”. Bookings for flights to South Africa were being made while England was playing Slovenia last Wednesday, the release says.

* Luxury coach company Springbok Atlas reports fully booked coaches, with two trips per day per coach on average

* Car rental companies “are reporting mixed results, many saying that figures have been disappointing but that business increases around match days”, say the press release.

* The 18 branch offices of Cape Town Tourism report a 16 % increase in “international visitors” and a 3 % decline in “domestic visitors”, compared to the same period as last year. One wonders how this is recorded, as the country of origin has never been seen to be recorded when visiting such a branch.

* The V&A Waterfront reports that its tenants are enjoying trading as in the summer season, with 150 000 – 160 000 persons per day (not all tenants would agree).

* The Table Mountain Aerial Cableway Company reports increased business of 50 % higher than in 2009

* The Cape Quarter reports good results for its restaurants, and less so for the retail tenants

* Tour operator business has increased by 20 % (this comes from another Cape Town Tourism “survey”, so the result should be treated with caution, as the sample size was not revealed)

* Restaurants must be trading very poorly, as their business levels compared to 2009 are not reported

* Probably the most valuable measurement of success of the World Cup to date is the media coverage for Cape Town. Cape Town Tourism reports that it has hosted 205 international journalists since January until 10 June, mainly focusing on the readiness of the city to host the World Cup. Since 11 June 85 international journalists were hosted on sightseeing tours of the city, and information was provided to 93 media channels. The Media Centre at the Cape Town Stadium, as well as at the Fan Park at the Grand Parade, is staffed by Cape Town Tourism, and the brochures and information packs provided to the media are commendable.

(An irony is that FIFA President Sepp Blatter wanted a new stadium in Cape Town for media purposes, because Table Mountain could not be seen from the old Green Point Stadium. The few meters that the Stadium had to be moved meant a spectacularly beautiful new building for the city, which in fact is the backdrop for much international media reporting, taking away from the beautiful landmarks Cape Town has. The new Stadium therefore is an important landmark in its own right, a surprise outcome).

* VIP visitors to Cape Town have been an accolade for the city (not reported upon by Cape Town Tourism), and the stay in Cape Town last week by Princes William and Harry, London Mayor Boris Johnson and David Beckham have already been documented on this blog. Now Bill Clinton is visiting the city, staying at one of the Penthouses of the One&Only Hotel in the Waterfront. Prince Harry has also returned to Cape Town after last week’s match, and was seen having lunch at the Grand on the Beach on Thursday.

* One should not forget how good Cape Town is looking, and the World Cup has done the city proud in its upgraded and largely smooth-flowing N1 and N2 highways, its beautiful new airport building and recently renovated train station, its modern buses, upgrade of Green Point, upgrade of the Grand Parade, the great walkability of the Fan Mile, the greening of Green Point, and upgrade of the Metropolitan Golf Club, new modern street lighting around Green Point, the lit-up Table Mountain – all combining to make Cape Town feel like a world-class city, even to its residents!

* If media reports are to be believed, Cape Town has been approached to host the Olympic Games in 2020 – what an amazing compliment for the city.

To fill the tourism gaps in Cape Town (having been left out of much of the action in only having eight matches played at the Cape Town Stadium, and no teams based in the city), Cape Town Tourism has embarked on a “Come to Cape Town” marketing campaign, to attract Johannesburg-based soccer fans to come to Cape Town in-between matches. Airline partners are offering flights at R 700 one-way, while accommodation establishments are offering their rooms at R 500 per person.

* Cape Town Tourism’s funder, the City of Cape Town, simultaneously reported on the status of Cape Town, but this was not incorporated in the Cape Town Tourism press release. Mansoor Mohamed, the Executive Director of Economic and Social Development and Tourism of the City, indicated that informal traders were doing well, more expensive hotels were experiencing low occupancy (20 – 40 %), and that restaurants “are also doing better than expected trade, with some even beating their actual Christmas figures”, reports South Africa.info. We disagree with the restaurant finding, having experienced empty restaurants, and observing soccer fans mainly ordering beer and very little food when they sit in pubs and restaurants. Mohamed has admitted that his observations are based on “initial surveys”, and stated that the economic impact of the World Cup will be established by means of comprehensive research at the end of the tournament. “The World Cup is the single most important event for South Africa and the African continent in recent time. It is positively changing the world’s perceptions about Africa” Mohamed said.

* A very low-key but most high profile event taking place in Cape Town until today (not reported upon by Cape Town Tourism in their media release) is the Fortune, TIME and CNN Global Forum. About 140 heads of global and local companies such a Royal Dutch Shell, China Mobile, Deutsche Bank, The Coca Cola Company, DuPont, Rio Tinto Group, McKinsey & Company, Trilogy, Merck Vaccines, Kissinger Associates, Inc, De Beers Group, Richemont SA, One&Only, Naspers Limited, De Beers Group, SEACOM Limited, ABSA Group Limited, Standard Bank Group, Symantec, First Rand Limited, Sanlam Limited, Pioneer Foods, Investec Asset Management, and Daimler, paying $5000 each to attend, will meet influential persons from TIME magazine’s top 100 list, reports the Weekend Argus. Bill Clinton, Ex-President FW de Klerk, Minister in the Presidency Trevor Manuel, Minister of Trade & Industry Rob Davies, Francois Pienaar, and World Cup Local Organising Committee Danny Jordaan and others will be addressing the Forum, while President Zuma will be addressing the delegates via satellite from the G20 summit in Canada. High level journalists and news anchors from Time, Fortune, CNN, and CBS News will also attend the Forum at the Cape Town International Convention Centre. Delegates are staying at the Mount Nelson Hotel and the Cullinan Hotel.

There can be no doubt that Cape Town is busier than it would have been in any other June. The reality is that May was the worst month ever experienced, the World Cup having created a vacuum of bookings. One hopes the same is not true for the rest of July. It is disturbing to see the low number of bookings made for Christmas and New Year, traditionally the most popular period in Cape Town, and a period that would have been booked up by now already. If Whale Cottage Camps Bay is anything to go by, it is going to be a lean summer, despite the World Cup hype – the British travellers are the largest source of bookings for Cape Town, and they are under severe financial pressure with the new Conservative/Lib-Dem government having imposed stringent financial measures in their budget earlier this week, including an increase in VAT of 2,5 percentage points to 20%. Many countries in Europe are also facing tight economic measures imposed by their governments (e.g. Greece, Italy, Spain) and even Germany is affected by Europe’s economic woes.

An interesting issue is the effect of the World Cup on travel aspirations to South Africa of Americans. The American soccer fans were the largest ticket-buying nation of all, beating England and Germany, and were the first to book, more than a year ago.

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