Tag Archives: tourism crisis

Cape Town Tourism misleads tourism industry on state of winter business (or lack of)!

It is shocking to see how Cape Town Tourism publishes meaningless media statements, especially during winter, to attempt to deceive the tourism industry about the state of business.  Every tourism business owner and manager is aware how poor the current winter business is on a daily basis.  Last week the predictable media release once again was sent out, exaggerating the ‘state of the tourist nation’, when most in the industry are reporting that their current winter performance is even worse than 2011, which then was labelled as ‘a tourism crisis‘.

Cape Town Tourism conducts a survey amongst its members irregularly, and reported that the 83 members (out of at least 1000 – 1500 accommodation members making up the bulk of its membership, an embarrassingly poor response rate) had experienced unbelievable occupancy levels of 50 % and 39% in April and May, respectively.  Making the figures even more unbelievable is that Cape Town Tourism’s membership is no reflection of the average accommodation establishment in Cape Town, many leading guest houses having elected to no longer be members of the Cape Town tourism body.

It is no surprise that Seasonality is mentioned as tourism’s biggest threat, and blamed for the poor tourism performance, the winter weather being a deterrent for local tourists to visit the city, and the ‘over-reliance on leisure tourism’ leading to mainly summer tourist visitors, it is written. Surprising is that Cape Town Tourism has been tasked with promoting leisure tourism specifically, and just cannot crack the ‘Seasonality’ nut. Last year the tourism body bragged at its AGM how it would promote tourism during the winter season, but its winter advertising activity has been poorly executed, and has resulted in no impact to date!

Cape Town Tourism CEO Mariette du Toit-Helmbold is quoted in the media release as saying: “If we cannot establish a year-round demand for Cape Town as leisure, business and events destination the industry will remain threatened and we will not be able to grow the sector. This is a critical issue for an industry that employs more than 300 000 people and is the second largest contributor to the Western Cape’s GDP.”  The tourism body does not have a mandate to promote business tourism, even though it tried to expand its advertising campaign with the slogan ‘You don’t need a holiday, you need Cape Town’ to include conferencing, and setting up businesses locally.  The business application of the campaign has not been visible since the launch.

The media release also records the ‘modest‘ increases in passenger arrivals (it is not qualified if the arrivals were international or local) compared to 2011, a year all in the tourism industry know was the worst winter in years.

The media release is shocking in its poor quality information, in stating that the Pick ‘n Pay Cape Argus Cycle tour and the Cape Town International Jazz Festival took place in April, when in fact they were held in March! We have seen the poor writing quality by Cape Town in the past, but these factual errors are unforgivable!

The shocking conclusion to the release is Mrs Helmbold’s admission that Seasonality is out of control of her organisation, with a waffled identification of what is needed to fix the problem, which the industry is told year in and year out: “The need for a year-round brand positioning and demand-generation strategy to fill beds during the quieter months has been recognised, but seasonality and destination marketing are not one organisation’s concern. We can only solve Cape Town’s seasonality challenges and create year-round demand through partnerships and through understanding the changing needs and travel habits of potential visitors, whether business or leisure. We need collaboration within the industry, innovation, new experiences to promote, joint mobilisation within niche sectors on unusual projects, value-for-money travel packages and convenient access to the destination. We need an exciting calendar of events all year round and we need to cultivate tourism sectors such as food and wine, family travel, extreme adventure and sport”.

It is time that some new thinking is demonstrated at Cape Town Tourism.  The organisation’s strategic and marketing skills clearly are lacking, and even its CEO appears to no longer have the respect she once had, and seems severely taxed by her domestic challenges. She should take responsibility for the poor quality media information which her Communications department is issuing. It is time for new blood at Cape Town Tourism, to save Cape Town’s tourism industry from drowning!

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

Cape Town Tourism winter advertising campaign a marketing failure!

Last Sunday my eye caught a full page advertisement for Cape Town, in the Travel Weekly supplement of the Sunday Times. Its content, headline, media placement, and advertising frequency point to a marketing failure on behalf of the tourism industry of Cape Town.

At its AGM last year Cape Town Tourism announced with loud fanfare that its marketing would include a winter advertising campaign, in which its members could offer their specials, and that it was offering special packages via Thompsons Holidays.  One would have expected the campaign to run throughout winter, as we are not even midway through winter, and it is exceptionally quiet so far, worse than the same months last year, which was deemed a ‘tourism crisis’. Utilising Ogilvy Cape Town, one of the country’s top advertising agencies, one would have thought that the agency would have found a creative way to design the advertisement.

The advertisement looks like a dog’s breakfast, which should have made the art director cringe, being individual special offer ads placed higgledy piggledy within a template of a headline and a footer with contact details.  Even Lisa Clark, Ogilvy Cape Town Account Executive for Cape Town Tourism, admitted that the ad was ‘very busy’ – one wonders why she allowed her client to place such an ad, the agency being the custodian of its client’s brand image and reputation.

Our critique of the Cape Town Winter advertising campaign is the following:

1.  The headline ‘Come and discover why Cape Town warms up in winter’ does not communicate that Cape Town is ‘warm’ due to its specials, and does not change the perception most Johannesburgers have about Cape Town, namely that it is wet and cold all winter long!

2.   The footer refers to ‘weekend packages’ – it’s school holiday time now, so surely the Cape Town tourism industry would love to have tourists for longer than a weekend!

3.   Ironically, with the pay-off line You don’t need a holiday, you need Cape Town’, the ad is placed in the travel supplement of the Sunday Times, filled mainly with ads for international destinations, not a place locals would be likely to look for local destination ads.

4.  The advertisers themselves appear to have little marketing understanding, some not having a website address and/or telephone number in their ads, for a call to action!  Cape Town Tourism itself is not branded in the ad, even though its contact details are provided, so one would not know which company is co-ordinating the deals and taking bookings for them.  Identity of the advertisers is also poor in most ads, the Table Mountain Cableway not being identifiable in its crass ad, trying to communicate far too much.  The exception is the classy looking ad for the V&A Waterfront’s ‘Master of the Trade Routes Culinary Challenge ad, but it does not communicate that there are excellent restaurant special offers. Its website address is almost unreadable, being so small.

5.  Not all ads contain special offers, which is what the ad is meant to communicate

6.  The frequency of three insertions only, this ad having been the final one of the three, is ineffective in making any impact on the target market.

Cape Town Tourism may just as well not have bothered to run this advertising campaign, it being so badly done from a creative, production, and media perspective, reflecting how weak the marketing calibre of Cape Town Tourism is.  It reflects cutting marketing corners, cutting back on its marketing program which it shared with the industry earlier this year.  The tourism body receives R42 million a year from the City of Cape Town to market our city!

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

SAA crashes Cape tourism in cancelling direct Cape Town-London route!

The SAA announcement by its General Manager Theunis Potgieter on Tuesday that it plans to cancel the direct flights between Cape Town and London as of 16 August has been greeted with shock by the Cape tourism industry, and could not have come at a worse time, the industry suffering what could be another tourism crisis this winter. It appears that the tourism authorities did not receive any prior warning about SAA’s plan to cancel a route it introduced 20 years ago. At the SAA breakfast at Indaba last month the airline already announced that it ‘was hurting in the current global recession’, and that it had requested a R6 billion ‘government injection’!  The psychological damage of SAA’s decision probably is worse than its actual effect, in signalling that the country’s airline does not take Cape Town seriously as the country’s leading tourism destination.

Tourists and businesspersons travelling between Cape Town and London from 16 August will have to do so via Johannesburg, at no extra cost. Tickets already booked will be refunded, if required.  The change will allow SAA to expand its flights to and from Perth, Mumbai, Accra, and Abidjan, probably all flying to Johannesburg only. SAA has assured the industry that it will continue marketing Cape Town as a destination. The motivation for the cancellation of the service was said to be the reduced size by 24% of the demand for flights between South Africa and the UK in the past three years, largely caused by the increased airport departure tax and the £52 UK visa fee, reports Travelmole.  News24 added that air traffic control fees have also doubled. Of concern is SAA’s feedback that ‘South Africa is among the top five fastest declining visitor markets to the UK’, according to Visit Britain statistics.  SAA’s justification appears South African demand driven, and does not reflect the radical decline in the demand for the route from UK tourists, which has been evident in the past summer season.

Only British Airways operates direct flights between the two cities all year round. Virgin services the route between October and March. Emirates has good value flights to Dubai, which has become a hub connecting travelers to other hubs such as Heathrow. SAA is planning to increase its capacity by 13% through the use of larger aircraft on its reduced twice-daily (from three times a day) London-Johannesburg route, and has justified its decision on its ‘long-term growth and business optimisation strategy’, reports News24.

Reacting to the news, Cape Town Tourism issued a joint statement yesterday. Its CEO Mariette du Toit-Helmbold’s waffled and garbled response was disappointing and was not aggressive in challenging SAA on a decision it has made on a purely financial basis, without recognising that Cape Town is the most important drawcard for tourists in South Africa, something which Mrs Helmbold should be countering on behalf of its Cape Town tourism constituency: “This is disappointing news for Cape Town’s tourism industry and we fear it could affect tourism arrivals from the UK and the rest of Europe negatively… Whilst SAA’s growth strategy’s emphasis on expansion of routes into Africa and new markets like South America and Australasia is encouraging, the issue of direct air access to Cape Town is again highlighted. Airlines must make economic sense. When a flight is cancelled this is the reason. Decreased business travel, as a result of troubled economies, continues to plague key source markets. The business traveler is a major contributor to covering flight expenses, which points to a need to work hard on forging stronger business ties in addition to the leisure market.”  ACSA’s Cape Town Manager of Service Standards Ian Bartes is the Chairman of Cape Town Tourism, and one could expect that Cape Town International will lobby SAA to consider reversing its decision.

Surprisingly, the media release also contained a statement by Wesgro CEO Nils Flaatten, now responsible for tourism in the Western Cape, in having taking over the operation of the ex-Cape Town Routes Unlimited.  His comment was far more practical and business-orientated, and one hopes that it will lead to action, especially given that ACSA’s Cape Town International GM Deon Cloete now is Chairman of the still-existent Board of Cape Town Routes Unlimited: “Our research has indicated that the London-Cape Town route still holds strong economic value for the Western Cape and neighbouring Eastern Cape. International airlines identified this and are increasing their capacity during peak season. Many business and leisure travelers from the United States are using London as a connecting flight into Cape Town and we are at risk of losing these visitors, as the traveling time has been extended even further. A national debate on airlift strategy is urgently required to discuss direct flights into Cape Town International Airport as well as the other regional airports. Poor economic conditions in the global north and escalating fuel prices were making it difficult for many international airlines to remain competitive. These market conditions would also have an impact on the pricing of domestic flights and the ability to move tourists throughout South Africa.”

Once again City of Cape Town Councillor Grant Pascoe, Mayoral Committee member for Tourism, Events and Marketing, has demonstrated how out of touch he is with the tourism industry, which has just experienced one of its worst May months since 2007 and thereby proving that Seasonality is getting worse, in his reaction to the SAA announcement in Cape Town Tourism’s media release: “In order to sustain tourism in Cape Town, we need to counter seasonality with year-round inbound tourism. It is vital that flights to Cape Town remain consistent throughout the year. The only way we can secure more direct flights to Cape Town is by stimulating both business and leisure tourism demand for Cape Town. This will translate in more visitors and ultimately more jobs for the sector, year round.  Perception does not shift overnight – and it needs proof – the industry must stand together to tackle our tourism weaknesses and grow a more complex offering of product to multiple markets. Leisure and business visitors need to see that Cape Town is a 365 destination for a thousand good and different reasons.”

Provincial Minister of Tourism Alan Winde also expressed his concern to Southern African Tourism Update about SAA’s decision, and probably is the only tourism player able to come up with a viable solution to this tourism dilemma, affecting not only Cape Town but the whole Western Cape, describing it as sad and disappointing for the whole of the province’s economy, saying direct airlift was important for business, tourism and airfreight. ‘I have no doubt it will have a negative impact,’ he said. ‘We will push forward with our airlift strategy to encourage other airlines to fly here.’ He said the Cape must review its long-haul competitiveness and create the right economic conditions for airlines to fly there”.

One has seen in the past that Cape Town Tourism does not have the clout to address something as substantial as this tourism issue, despite its Board Chairman’s job at ACSA, and we have no confidence that this tourism body will do anything about turning around SAA’s decision, or in devising a campaign to ensure that Cape Town does not lose any more precious UK visitors, which already are in short supply.

POSTSCRIPT 7/6SAA agreed yesterday to pay a R18,8 million penalty to the Competitions Commission for fixing fuel rates and other surcharges for cargo, reports Southern African Tourism Update today! This probably is what they need the cost-cutting Cape Town-London saving for!

POSTSCRIPT 8/6: Columnist Tony Weaver wrote in the Cape Times today that it is clear that the tourism industry was not consulted by SAA in cancelling the Cape Town – London route as of 15 August. He wonders if it is a ‘punishment’ of the Western Cape to be DA-party led, seeking a reason greater than just cost-cutting for this drastic action by SAA.  A writer to the Letters page today highlighted that SAA’s decision is ‘bottom-line’ based, and not considerate of the ‘bottoms’ of its customers, many of whom have already migrated to other airlines serving the route, which may be the reason for the decline in demand on this route! The newspaper also provides response from some tourism players to the news:

*  Wesgro CEO Nils Flaatten told the FEDHASA Cape AGM yesterday that they have “secured a ’round-table’ discussion with South African Airways..”, given that their ‘research indicated that the London-Cape Town route still holds ‘strong economic value for the Western Cape and its neighbouring Eastern Cape'”. The increased travelling time for long-haul flights in having to travel via Johannesburg could adversely affect tourism to Cape Town, he said.

*   Surprising to read is that City of Cape Town Councillor Grant Pascoe has written to SAA Chairman Cheryl Carolus and CEO Siza Mzimela, expressing his ‘concern and disappointment‘ on behalf of the tourism and conference industries, importers and exporters, and investors, given that the tourism industry adds R14,6 billion to the GDP of the city annually, and employs 300000 staff.

*   Provincial Tourism Minister Alan Winde sounded more upbeat, saying that other airlines servicing this route ‘will pick up the slack‘.

*   Mossel Bay Tourism said that the ‘province seems to be under-supplied with direct flights’, and that the quickest way in which foreign tourism arrivals can increase is to ‘land larger numbers at Cape Town International‘.  The ‘hinterland‘ has suffered greatly since the soccer World Cup, with an over-supply of accommodation in Cape Town, and related offers,  making it attractive to stay in the city for longer, and to do day trips into other parts of the Western Cape, instead of staying over in towns and villages in the province, it added.

POSTSCRIPT 8/6:  On Twitter negative Tweets about SAA’s decision met with strong resistance from @JamesStyan, a journalist for Beeld and Die Burger today.  We met for coffee this afternoon.  He had met with SAA on Wednesday afternoon, after their announcement of the cancellation of the Cape Town-London route, and was told verbally, not documented in their media statement, that should the economics improve, that the route could be reinstated.  He is adamant that this decision is based on economic considerations and SAA’s hub strategy, making Johannesburg its hub from/to which all its flights connect.  He also reminded me that other airlines have cut their Cape Town routes since the World Cup too.

POSTSCRIPT 13/6: The band Roxette performed in venues around the country last week, and flew out of OR Thambo airport to their next destination. On their Facebook page they wrote: ‘Just spent 90 minutes at one of the world’s worst airports, Johannesburg. Could actually be the no.1 on that scary list.. how about some organisation with customs’, reported The Times on Monday.

POSTSCRIPT 14/6:  The MasterCard Global Destination Cities Index 2012 shows, according to Southern African Tourism Update that ‘the majority of international visitors to Cape Town are from London, with 185000 visitors expected to spend US$361 million throughout the year. This is followed by 127500 travellers from Dubai spending US$118 million, and 76000 visitors from Amsterdam spending US$68 million’. Once again this survey makes a mockery of the SAA decision to axe its Cape Town-London route!

POSTSCRIPT 14/6: The irony grows – the International Air Transport Association (IATA) has announced that it will hold its AGM and World Air Transport Summit in Cape Town from 2 – 4 June 2013, reports Southern African Tourism Update!  SAA is the host airline for the event!

POSTSCRIPT 4/7: Reuters reported today that Lufthansa will no longer service Cape Town from Frankfurt, due to the night flying ban over this airport.  All Cape Town flights will be serviced from Munich five times a week from 28 October.

POSTSCRIPT 6/7: The meeting with SAA and the Cape tourism industry representatives, hosted by Wesgro yesterday, has not made any impact nor reversed SAA’s decision to cancel the Cape Town – London route from next month. Instead it was agreed that greater demand needs to be built in attracting visitors to the Cape, so that SAA can then meet the demand and reinstate the route. Other airlines must be attracted to service the city with direct flights, it was agreed.

POSTSCRIPT 17/7: News24 has reported today that SAA has sold one of its three slots, being its Cape Town – London route, at Heathrow for an estimated R300 million!  The cancelling of the route therefore appears more cash driven than motivated by the low demand!

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

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