The boom projection of foreign attendance of the World Cup of 483 000 has been revised to a still-optimistic 373 000 by Grant Thornton, the tourism consultancy that created the original projection about 3 years ago, a drop of 23 %, reports SA Tourism Update.
The Grant Thornton estimate contradicts the FIFA estimates that the number of international soccer fans attending matches in South Africa has dropped by almost half, from 500 000 to 220000, reports The Times.
Based on the original optimistic international soccer fan attendance, the hospitality industry saw $-signs , and actively renovated their establishments, and put excessive price tags onto their properties. Private home owners did quick renovations of their properties in the major cities, and planned to travel overseas during the World Cup period, spending their rental income, only to find the rental market being almost non-existent for the World Cup, given the over-supply of accommodation.
MATCH, the accommodation and ticketing agency for FIFA, also greedily added a 30 % surcharge onto the accommodation it contracted, and will have added similar commission rates to transport, flight and ticket prices, giving South Africa a dreadful label of “rip-off” pricing in the international media. It is the fear of the excessive costs as well as the soccer fans’ fear of the perceived crime risk, that has kept soccer fans away in the main, report the international media.
Grant Thornton only revised its international attendance projections in the last month, when it became clear that MATCH could not sell all its contracted rooms, and gave them back to establishments, and that more than two-thirds of the tickets sold to date are to South Africans. Even World Cup sponsors and football associations have not been able to sell all their tickets, and have returned them to MATCH.
One wonders why it took Grant Thornton such a long time to revise the estimates, as its first estimate set the expectations for the hospitality industry. The tourism consultancy now blames the credit crunch (which has been around for 2 years) and the distance of our country from the qualifying nations as the main reasons for the poor international bookings. It also says that accredited Tour Operators also did poorly in selling packages. Such Tour Operators had to pay $ 30 000 for a licence fee per country in which they were looking to sell packages, reports The Daily Maverick.
MATCH cancelled 1,3 million room nights out of the 1,9 million it had originally contracted, reports SA Tourism Update. Many of the rooms released were in Zimbabwe, Mauritius, and in smaller local country towns (e.g. Plettenberg Bay, Hermanus). The Protea Hotel Group has had 60 % of its rooms returned, in Cape Town, Durban and smaller towns, having originally been forced to allocate 80 % of their rooms to MATCH. The Kruger National Park had 25 000 room nights returned.
Grant Thornton is trying to put a positive spin on the tourism benefit of the World Cup, by claiming that the average length of stay now is 18 days as opposed to 14 days as estimated originally, and that the average spend per trip would be R 30 200 as opposed to the originally estimated R 22 000. On average, international soccer fans will watch 5 World Cup matches, as opposed to the 3 previously estimated.
Attendance by African soccer fans has fallen to an estimate of 11 000, in what was meant to be an “African World Cup”, reports Business Report. High ticket prices and lack of access to credit cards and the internet in other African countries has been blamed on the poor support from this continent. It had originally been estimated that 48 000 African soccer fans would attend the World Cup, which still would not have been a satisfactory attendance level.
Grant Thornton in 2007 estimated the impact of the World Cup on the economy of R21,3 billion, with 159000 new jobs created. International consultants Morgan Stanley published an estimate two months ago, of 350000 international fans attending and the local economy benefit being R15 billion. The government has spent R33 billion on the tournament, for the building of stadiums and upgrading its infrastructure around the country to date, reports The Times.
Grant Thornton now says that no new jobs appear to have been created due to the World Cup, but that it has prevented job losses, reports Business Report. An estimated 2,5% – 3,5 % growth in the GDP of South Africa has been drastically reduced to 0,54 %. Many fans have chosen to book via the internet, and are booking at B&B’s and guest houses, rather than hotels, and therefore are not booking via the “official MATCH-hosted channels”, says Business Report.
FIFA President Sapp Blatter will be staying in the 5-star Michelangelo Towers during the World Cup, while the rest of his FIFA entourage of 200 will be accommodated at the Michelangelo Hotel next door, reports The Times. Herr President’s requirements are a minibar stocked with South African wines, which is a good boost for the local wine industry, but the ice cubes in his fridge must be made from Evian water. He will be protected by 5 bodyguards. While sponsors’ products are meant to be used, which would mean that Blatter would have to drink Coca Cola’s Bonaqua, he is breaking protocol by drinking imported San Pellegrino mineral water.
Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com