Tag Archives: tour operators

Hotel marketing should be global and local!

International booking agency Expedia has advised South African hotels to compete globally against other destinations and not against other local hotels, reports Travel News Weekly.

Diego Lofeudo, Expedia Marketing Management Director for the Eastern Mediterranean and Africa, commenting on 30 South African hotels having closed their doors since the beginning of this year, said: “South Africans tend to compete with the hotel next door rather than competing with another destination, for example Cape Town competing against Sydney”.  He added that overcapitalisation of rooms by South African hoteliers has led to over-pricing.  He advised against ‘flash sales’, as it ‘simply degrades the market‘.   In his opinion, the domestic market should become the focus of local hoteliers, and the country’s tourism product has to compare itself globally, and then set prices accordingly.

Lofeudo also encouraged hoteliers to stop relying on travel agents and tour operators, and to become their own sales managers, taking control of their stock, and managing the online content of their property. This includes checking what is being said about them on social media platforms.

Expedia has 2000 hotels on its books, and is setting up a co.za site in the next year and a half.  Once low-cost carriers service Africa, the continent should see an explosion of business, given political stability and safety.  The booking site offers hoteliers more profit in selling empty rooms than selling them through other distribution channels, it claims.

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

Cape Town Tourism sees business improvement, poorly communicated!

Cape Town tourism businesses are expecting ‘a marginally better business window (sic) for season 2011/2012′, says one of the most badly worded media releases ever received from Cape Town Tourism, the City’s tourism marketing body.

The media release received yesterday is riddled with errors, making it difficult to understand – in short, it appears that a poll was ‘tallied’ (sic) amongst Cape Town Tourism members last week, which led to the following conclusions:

*   ‘a promising (sic) 57% of accommodation providers are expecting to have a better or much better remainder of the 2011/2012 summer season, when compared to 2010′. It is unclear how Cape Town Tourism defines the summer season, its CEO Mariette du Toit-Helmbold having been confused about the exact definition of the summer season in Cape Town earlier this year.

*   bookings are ‘last minute’

*   tourism spend is lagging its growth (but this apparent contradiction is not explained)

*   the accommodation sector ‘anticipated‘ (sic) the ‘Global Financial Crisis’, ‘with only 18,9% saying that the impact was more than they expected’, in contrast to 54,5 % of tour operators, amongst whom ‘the impact was more than expected’. What was expected is not clear from the release.

*   half the tour operators polled have had a better year

*   ‘the hard work poured (sic) into developing new markets in the emerging economies’ (one assumes they are referring to BRICS countries, not all ‘emerging’ any more), is not yet paying off, Cape Town Tourism admits

*    ‘Traditional key source markets such as the UK, Germany and the Netherlands are still dominating the visitor scene’ – every tourism business will laugh at this statement, experiencing first hand that the UK tourist market has fallen away almost completely!

*   accommodation occupancy does not reflect domestic arrivals, which means that locals are staying with friends and family.

*  tourists are price sensitive, and should not be lured by lower rates, but rather should be offered ‘great value’, advises Mrs Helmbold

*    ‘…visitors are using online tools like Tripadvisor to plot (sic) their stay’!

*   Given Cape Town’s number one Tripadvisor destination status, ‘Cape Town already has a place in the sun, but we need to make sure we maintain our level of exposure and favour’ (sic)!

*   Accolades such as World Design Capital 2014 and ‘New Natural 7 Wonders of the World’ – actually called New7Wonders of Nature – give Cape Town greater appeal.

*   ‘We may not see our global brand position translate into visitors this year, but the attention we sought in 2010 is being sustained and capitalised on during 2011’, Cape Town Tourism admitting that the marketing of the city in the World Cup year of 2010 will not have borne fruit in 2011, one must assume, but the sentence is contradictory.

*   Cape Town’s tourism industry and the city economy need a boost in 2012, admits ‘MAYCO member for Tourism Events (sic) and Marketing’ Grant Pascoe. On Linked In Pascoe’s title is ‘Mayoral Committee Member : Social Development and Special Projects’ for the City, while on Twitter his ‘Bio’ says he is the ‘Executive Mayoral Committee Member for Tourism, Events and Marketing’. Given that Pascoe holds the Cape Town Tourism purse strings, one would have thought that the tourism body would get his title correct.

One wonders what the Cape Town Tourism PR and Communication Manager was smoking and/or drinking when writing this shockingly poor media release, how it could have been approved by her bosses, and how its PR company Rabbit in a Hat Communications could have been happy to distribute it!  It is riddled with factual and grammatical errors, and is an embarrassment to the city’s tourism marketing, which is funded by the City of Cape Town to the value of R40 million, coming from ratepayers’ monies!  Furthermore, Cape Town Tourism has a very poor grasp of market research in general, and in questionnaire design and research interpretation specifically, and therefore any results from its member polls should be evaluated with the greatest of care.  A link provided in the release, which is intended to allow one to see the results of the survey, goes to a Cape Town Partnership release, and not to the survey! Mrs Helmbold is on maternity leave for the next few months, but is quoted in the media release.

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

Tourism News: South Africa loses ‘value for money’ image in UK

Tour operators say South African accommodation has become too expensive for their UK clients, and they have called on local accommodation suppliers to relook their prices for 2011, reports South African Tourism Update.

Portfolio of Places representative in the UK, James Westrip of Africa Collection, says that the “good-value-for-money perception” of South Africa has gone in the past year.  This changed perception about tourism prices, coupled with tough economic times in the UK and the strong Rand “…is proving problematic for us all”, he said.  He feels that “SA is pricing itself out of the market”.   Portfolio of Places has experienced its worst year ever in its more than 20-year existence, we have been told.

Another operator said that it is no longer feasible for local establishments to increase their rates by 10 % annually, in excess of the inflation rate.  These increases effect the value for money perception of South Africa, says Louise de Waal of Baobab Travel.  She stated that budget accommodation options often are questionable as far as quality goes, and therefore cannot be booked.  Tourvest Inbound’s Martin Wiest says that high pricing makes our country less competitive globally.

&Beyond’s Gary Lotter acknowledges that not all accommodation establishments have increased their prices above the inflation rate, or at all, but it is the strong Rand that is the root of the problem.  He also said that if establishments were to drop their rates, they could receive more business, although this is not guaranteed.

Westrip also complained about establishments charging their direct clients better rates than they do tour operators, even though their clients may be a once-off and tour operators usually are loyal to establishments and book them regularly.  De Waal queried the wisdom of last minute rate reductions, and called for early-bird discounts instead.

It is interesting to read that tour operators cry wolf about high rates when it is the operators that are exceptionally greedy in their commission demands.  Africa Collection takes 20 % commission on bookings it gives Portfolio of Places clients, on top of close to the entry level R20000 annual advertising costs for the Bed and Breakfast Collection advertisers.  While the standard commission rate is 10 %, tour operators tend to do business with establishments if they can get commissions of 20 % or more, leading their business to go to hotels rather than guest houses and B&B’s, which would be far more affordable for tourists. 

It may well therefore be the tour operators that are the cause of the loss-of-value-for-money image that they are complaining about!

A survey on the Southern African Travel News  website shows that the majority of respondents indicated that they have frozen their rates.

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

2010 World Cup: cash in or lose out?

2010 World Cup soccer fans coming to South Africa next year will be the target of overpricing of car rental, hotel accommodation and air transport, according to a number of travel industry players interviewed by Travel News Weekly.

Tour operators and travel agents complain about the “2010 rip-off”, and many have been quoted double the normal accommodation rate by hotels.  Showing their greedy side, the hotels are also cutting the commission percentage they are offering agents, given that they expect to be fully booked.   “It is great for those making the money, but in the long run, it is going to reflect badly on South Africa.” said an agent.  Others have decided to not be part of the ‘rip-off brigade’, and Dorienne Levitt of African Stay said as follows: “I have decided to not be part of that and am only dealing with providers who offer reasonable prices.  I will try my hardest not to use vendors who are acting without integrity, during 2010 and thereafter”.    In addition the conditions set by hotels with minimum stays of 8 – 30 days are too stringent, agents say.   Protea Hotels has contracted 80 % of its rooms to MATCH, at prices ranging between R 950 – R 4 500 per room. 

The Travel News Weekly article also quotes Brett Dungan, the national CEO of FEDHASA, as saying that his organisation would not “associate with nor support hotels that were not affiliated to MATCH and were “ripping off” clients.  The reason why we have been working so closely with MATCH is to eradicate the issue of price gouging”.  But it is MATCH that is ripping soccer fans off, by adding 30 % commission on all its contracted accommodation rates!

Transport costs too have soared, with car rental prices doubling from the already high 2009 Confederations Cup rates levels.  Avis says it will increase its rates by 15 – 20 %, justifying this on the basis of “the expected demand and additional work required”!

Airfares for 2010 too are a rip-off, for both incoming and outgoing flights, and for domestic travel, that is if any tickets can be found to be available.  Most airlines have not released their seats for the World Cup period.    Domestic flight tickets are likely to cost double the normal fare, reports the Weekend Argus, at about R 3 800 for a return airfare between Johannesburg and Cape Town on SAA, and at R 5 300 on BA/Comair.   International flight prices are set to triple, the airlines milking a money-making opportunity after many years of tough trading.  

Coach companies too have imposed “crippling conditions”, agents say.

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