travel agents | WhaleTales Blog by Chris von Ulmenstein

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

The global economic crisis may not be such a bad thing for South African tourism after all, given its effect on the Rand exchange rates, and resultant greater affordability as a destination for international tourists. Domestic tourism too should benefit from the exchange rate volatility, in that locals may switch to local holidays over the festive season, instead of going overseas.

The outlook for 2009 and 2010 is favourable, given the Confederations Cup and British Lions Tour taking place in winter 2009, and the soccer World Cup taking place in winter 2010. Winter traditionally is a very low income period for the Western Cape in particular.

The past week has seen the US dollar exceed R 10, its weakest ever, and exchange rates of R 18 to the pound sterling and R 14 to the Euro. It is the dollar exchange rate volatility that may cost the country a petrol price decrease next month, and also may see an interest rate increase instead of the hoped-for decrease.

The tourism industry appears to be optimistic to date about the effect of the international credit crunch. Tourism Business Africa quotes Joop Demes of Pam Golding Hospitality as saying that the hotel market grew by 19% in the first six months of this year compared to the same period last year. Growth is in Gauteng, and particlurly for hotels at OR Thambo airport in Johannesburg. Revenue per available room has increased by 16 %, and by 19 % for 5-star hotels, and by 25% in Johannesburg. Demes says that about three-quarters of the country’s 57 000 hotel rooms are booked by locals, driven in particular by the MICE market of conferences and meetings, as well as budget holidays.

Travel agents are seeing a switch to domestic products. Their international clients are booking accommodation inclusive of meals, as a result of the exchange rate weakening, and are paying more promptly, to avoid further price increases, reports Travel News Weekly.

The credit crunch is also driving locals to game reserves, instead of overseas, says FEDHASA KwaZulu-Natal, as well as to beach hotels in the province.

Southern Sun Hotels is confidently predicting that 2009 will be busier than 2010, not only because of the Confederations Cup and British Lions Tour, but also due to the elections and inauguration of the new President, Soccerex, the Australian and English cricket tours, and the FIFA World Cup Final Draw, which takes place in Cape Town in December 2009, reports Travel News Weekly. Southern Sun has contracted about 10000 of its rooms to MATCH, the FIFA accommodation agency, and is the single largest accommodation provider for the World Cup 2010.