Tag Archives: Two Oceans Marathon

‘Fabulous February’ Cape Tourism’s best month, but media report irresponsible!

February has drawn to a close, and has not disappointed the tourism industry in Cape Town in giving it a welcome confidence and income boost.  However, February occupancy in Camps Bay has been on a par with 2011, at just under 90%.  February is by far the most popular tourist month of the year now, which it previously shared with November.

February is attractive to the UK market specifically, and to the northern hemisphere generally, to have a break after a long and bitterly cold winter this year.  The UK had school half term in this period too, allowing families to travel.  The Mining Indaba earlier this month was a tremendous boost for the city.  Our statistics for Camps Bay show that the share of the UK market in February was at its lowest level in the past six years, at only 20%, with that of South African visitors having increased dramatically from 9 % in 2007 to 38% this month.  The German tourist share at 15 % this month is on a par with 2007 and 2008, a welcome improvement after a decline in the years between 2008 and 2012.

In January occupancy in Camps Bay improved significantly to 72%, from 58% the year before, but it was still below the occupancy achieved in January between 2007 and 2010.   A similar trend was evident in December 2011.  Hermanus showed a significant recovery in February, with a 40% occupancy, double that of February 2011, the best performance since 2008.  Sadly Franschhoek experienced by far its worst February ever in six years, largely due to the sharp decline in the number of weddings which have traditionally been held in the village in February, and German tourists being less interested in visiting Franschhoek, choosing Stellenbosch in preference.  The Franschhoek Wine Valley tourism association has done no visible marketing in the past year, other than the hosting of a few events, and its reduced marketing in using the services of a one-day-a-week consultant is not helping!

It was with concern that we read an article in the Weekend Argus last weekend, irresponsibly entitled ‘Tourists flock to Mother City in record numbers’. The article’s claim that ‘Cape Town’s extended summer has translated into the city’s best-ever holiday season, with tourism experts declaring that predictions for a much-improved season have been right on the money’, is misleading, and completely incorrect.  The problem probably lies with who the journalist interviewed as so-called ‘tourism experts’.

The article quoted a number of tourism players, and the statements of most would be shot down by the industry, given their own experiences of the past few months, and how these compare with previous years:

*   The biggest culprit is Cape Chamber of Commerce President Michael Bagraim, who has enjoyed using his position as President to make media statements about any possible topic, including tourism, about which he has little experience as a labour lawyer. He claimed that the tourism figures ‘were the best he had seen yet for the city’ (our underlining).  His statement implies that he may not have seen all potential past tourism information, and it shows in his subsequent quotes to the journalist, including the nonsensical statement that ‘This past summer has certainly been the best, and we hope the upcoming summer will be even better. At the current rate I think Cape Town could easily become the best tourist destination in the world’, not defining how he defines ‘best’!  He clearly does not understand the definition of ‘summer’, and that it still has another six weeks to go, with far lower occupancy expected in this period.

Mr Bagraim goes from bad to worse, by praising the World Cup for the good performance: “I believe that we are now experiencing the rewards from the World Cup, the reason being that so many tourists currently in the city were here during that period, and are now returning”. We cannot agree with Mr Bagraim at all, showing that he was completely out of his depth in this interview!   He added that word of mouth from those that had attended the World Cup 18 months ago, the resultant media coverage, Table Mountain’s New7Wonders of Nature (not yet confirmed for Cape Town), and being named 2014 World Design Capital ‘would help ensure that Cape Town’s tourist enterprise would continue to thrive’ (our underlining).  Mr Bagraim clearly was not aware that the tourism industry experienced a crisis in 2011, and was nowhere near ‘thriving’!  He added:‘The one thing to remember about tourism is that it is foreign money which comes into the city, meaning it is new money that gets recycled throughout the economy’ (our underlining).  Once again Mr Bagraim has not been briefed about the visitor composition, and that the majority of tourists in the Cape are South African!  The rest of his statement would make economists shudder!  We can however agree with his declaration that ‘Tourism is certainly the biggest money-spinner for the city, and it will continue to be so for many years to come’!

*  Western Cape Minister of Tourism Alan Winde quoted improved visitor numbers for ‘Table Mountain National Park’ and Robben Island, but the time period was not stated.

*   Calvyn Gilfellan, CEO of Cape Town Routes Unlimited, issued a media statement a week ago, along similar lines of the Weekend Argus article, and the journalist must have sought inspiration for his headline from this irresponsible media statement about the ‘interim summer’ period.  Mr Gilfellan is quoted as saying that Table Mountain had seen a 25 % increase in visitor numbers between November – January relative to the same period a year ago.  His conclusion is that it proves ‘the impact an international accolade has on the popularity of the attraction’. What Gilfellan neglected to mention was that the improved weather (i.e. reduced number of days on which the Cableway did not operate due to rain and gale force wind) in the past three months relative to a year ago played a huge role in the tourism numbers achieved for Cape Town’s icon.

*   Cape Town Tourism’s Communication Manager Skye Grove was also quoted, in a nonsensical linkage made between tour guides and the increased use of technology, ‘which should spur tour guides to up their game’, she is quoted as saying.  Further she is quoted as saying that tour guides should maintain high standards of quality and content ‘to keep up both with the challenge of technology, but also with the high tourist numbers’, a statement that does not make sense!  Ms Grove sent out a media release last week, sharing informal ‘research’ Cape Town Tourism had conducted amongst its members about their performance in December and January. With the exception of the accommodation members, the sample sizes were not mentioned, yet detailed analyses were provided, and one can assume that the subsample sizes were tiny (only 106 accommodation establishments responded, representing by far their largest member segment).  Ms Grove quotes passenger arrival figures at Cape Town International, up on the year before, which was a particularly poor period of arrivals.  She quoted Ravi Nadasen, GM of The Cullinan, who stated that accommodation establishments had not experienced the same good performance as had tourism products, due to the oversupply of accommodation in the city, as well as a trend to visitors staying with family and friends.

*   Mayoral Committee Member for Tourism, Events and Marketing, Grant Pascoe, is receiving a lot of coverage via Cape Town Tourism’s media releases, in the few that they issue, and his statements in the Cape Town Tourism media release were included in the Weekend Argus article, once again demonstrating how out of touch the Councillor is with tourism in the city.  He is quoted as saying that ‘the boost in the number of visitors to the city was a trend that was expected to continue into 2012’, given a number of events in March and April, including the Argus Cycle Tour, the Cape Town International Jazz Festival, Design Indaba, and the Two Oceans Marathon.  Our experience is that events (e.g. J&B Met) have attracted fewer non-Cape Town visitors to Cape Town this year, and even the Argus Cycle Tour has not yet filled Camps Bay, as it has in the past years.

We have previously pleaded for greater honesty and reliability in the reporting of the performance of the tourism industry.  The summer season is not yet over, and the past twelve months should not be the only benchmark of tourism performance, given that 2011 was the worst tourism year ever experienced in the Cape. It is no achievement to see tourism improvements relative to 2011!

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

Tourism in the Cape: is it up, or is it down?!

Reports about the status of the tourism industry in Cape Town and the Western Cape in the last few days are enough to confuse anyone, as the view on how the industry is doing this summer, two months into the season, appear contradictory, some saying that it is better, and others saying that it is the worst ever!

Reports about a FEDHASA Cape media review held last week contradict each other.  The Cape Argus, using the headline ‘Hotels catch the scent of recovery’, reported that a ‘fair’ season is expected this summer. It stated that the industry had come through a ‘pretty bad year’.   Gotravel24 had a more realistic headline ‘Worst year yet for Cape Town tourism’, quoting FEDHASA Cape Chairman Dirk Elzinga admitting for the first time that the past year has been ‘one of the worst the Cape Town tourism industry has ever seen’.  When we wrote about the tourism crisis in winter, which was subsequently picked up by the Cape Argus, Elzinga did not seem perturbed, and said that Cape Town was just experiencing its annual seasonal dip!

In its review FEDHASA Cape indicated that average revenue per available room decreased by 10% this year, due to the ‘double dip recession’ in Europe as well as the 20% increase in accommodation rooms for the World Cup. The past winter was particularly tough, with four hotels and 10 restaurants that were FEDHASA Cape members closing their doors (many more non-FEDHASA restaurants closed their doors too). Elzinga is hopeful of a recovery, based on average revenue per available room increasing by 5 % in October, relative to the same month a year ago.  Occupancy was estimated to reach 60 – 80 % this summer, Elzinga said, and events such as the J&B Met, the Two Oceans Marathon, and Cape Town International Jazz Festival would attract more local tourists, the type of tourist Elzinga said Cape Town tourism businesses should encourage.  However, Eye Witness News’ report on the FEDHASA Cape  meeting was that ’70-80 percent hotel occupancy (could not be referred) ‘as a standard anymore’.  Elzinga sees positive spin-off from Cape Town being named the World Design Capital 2014, and a provisional New7Wonders of Nature. We have written before that none of the accolades that were heaped upon Cape Town so far this year have led to any significant increase in tourism to Cape Town, probably because tourism from the United Kingdom has all but dried up.

FEDHASA Cape also used the opportunity to share results of a 30-week pricing survey conducted not only for Cape Town hotels, but also for hotels in Barcelona, Melbourne, Vancouver, Boston, Nice, Hong Kong and Munich, chosen to be comparable to Cape Town in that they are not capital cities, and attract convention business.  The survey was instituted due to feedback levelled against the local accommodation industry for its high prices, which FEDHASA Cape wished to dispute.  Predictably it did so, stating that ‘….the Mother City is not out of line with its peers around the world’.  No hard statistics, such as average hotel prices, are provided from the survey. The FEDHASA Cape survey had found that Cape Town’s price and room offering is wider than that of the comparative cities, with the exception of Barcelona.  Five star hotel rates generally are on a par with the comparative international hotels.  Room rates for 4-star hotels were up to 20 % lower than the international hotels, the report states.  We too have checked Cape Town rates at the top-end hotels, and conducted three telephonic surveys, in May, August and November this year, finding a wide range of 5-star hotel rates, and that rates had been lowered in the harsh winter months.

Moneyweb also reported on the hotel pricing survey of FEDHASA Cape, writing that the finding about Cape Town’s hotel prices being on a par with those in other international cities was a ‘surprising result’.  The description about the worst winter is far more explicit, as being ‘one of the most dismal in recent memory”! Elzinga is quoted as saying that Cape Town is ‘not cheaper, but also not more expensive. People think that prices in Africa should be lower than in Munich or Singapore. But luxury costs the same; it doesn’t matter where you are’. An interesting observation by FEDHASA Cape was that those hotels that did not drop rates recovered more quickly than those hotels that cut rates. Our Whale Cottage hotel surveys demonstrated that all hotels decreased rates in winter, contradicting FEDHASA Cape’s observation!  What Elzinga did not appear to consider was that given the lower operational costs of running an accommodation establishment in Cape Town relative to the comparative cities, on labour costs alone, combined with the 20 % increase in accommodation supply since last year, accommodation prices should have decreased, based on the law of supply and demand.  A further negative impact on rates should be the cost of long haul air travel and airport taxes to Cape Town. Therefore there can be no justification for Cape Town’s hotel prices to be the same as those of its international counterparts.

FEDHASA Cape sees a positive impact of direct flights to Cape Town by Air France and Swiss-based Edelweiss, but which could be countered by the cancellation of Malaysian Airlines flights to Cape Town next year.  Elzinga has called for more marketing by Cape Town Tourism and Cape Town Routes Unlimited in India and China, given the problems with the USA and European economies.

At Whale Cottage we have compared Occupancy over the past five years, and we have seen a steady decline over this period, halving over the five year period.  Occupancy at Whale Cottage Camps Bay this month will be the second best this year after the record 88% in February, and an improvement on last November, but is far below the 88 – 96% occupancy experienced in November between 2007 -2009.

FEDHASA Cape only predicts a recovery for the Cape Town accommodation industry in 2013, with occupancy and room rates returning to a ‘normal level’.   The European and USA economies are in such disarray that one wonders how any tourism body can make any prediction about the future of tourism, especially given FEDHASA Cape’s poor interpretation of the industry in winter!  FEDHASA Cape also indicates that bookings are increasingly last-minute, which makes it even more difficult to predict future tourism performance. We urge FEDHASA Cape to be conservative in its estimates, and to not create hopes about the season for the industry, which led to disastrous results when Grant Thornton did the same about the soccer World Cup last year.

The Protea Hospitality Group has seen similar cause for optimism, its Danny Bryer, Director of Sales, Marketing and Revenue, writing a letter to the editor of Southern African Tourism Update that it saw occupancy increase by 3-4% in August and September. Against the background of the unstable USA and European economies, Bryer says that it is hard to make predictions for the hospitality industry, especially with the heavy discounting taking place (contradicting Elzinga too).  Bryer pleads for an end to discounting, even though his hotel group probably is the one to slash rates most severely, quoting day by day rates, and generally is at the bottom end of the rates scale in the comparative hotel rate surveys we have conducted: “Continued discounting devalues every hotel in South Africa, as the battle is fought on price rather than value”. Bryer says the proof of this is that the average daily rate has decreased and the costs are increasing, meaning a declining profit.  This can only be turned around with an increase in rates, he argues.  He deplores that developers, investors and owners added on new rooms, the accommodation oversupply resulting in hotel closures and local companies taking over the management of international hotel groups. Bryer warned against reducing one’s offering to justify a lower price.  Offering value for money is vital.  He also warned that 3, 4 and 5 star hotels are marketing their rooms at similar price points, which he believes to be ‘foolhardy and unnecessary‘.  The Protea Hospitality Group is focusing on offering value-added packages for the domestic market this summer.

Bryer was also quoted in Business Report, saying that their December bookings are up on a year ago, that 5-star guests are travelling again, but that ‘inbound business to South Africa is still quite tight and long haul flights are losing out to short haul’.  The South African Tourism Services Association (SATSA) CEO Michael Tatalias predicts a better ‘holiday’ season than last year, but says that the rates charged will be more realistic than in the past.

Western Cape Provincial Minister of Tourism Alan Winde warned that he will present a ‘bare-bones’ 2012 budget in March, and about ‘emptier’ provincial government coffers and budget cuts, which could impact on its funding of tourism too, reported the Cape Argus last week.  Winde said that the local economy had to be ‘buffered against current shocks in traditional markets’, and urged exporters in the province to find ‘high-growth emerging markets’.  The European growth outlook is poor too, the fourth quarter prediction being one of slipping back into recession, reports Business Report.

What is certain is that it is impossible to predict the summer season until Easter, given the continued economic woes of our tourism source markets, the UK market being sorely missed, and the forecast of Europe slipping back into recession.  Bookings for the summer ahead for Whale Cottage Camps Bay look good until 10 January. Domestic tourism will be the major source market for the medium term, until the global economy recovers.

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

Cape Town U2 360° concert will have added to billions in city coffers

The U2 360° concert in Cape Town on Friday evening will have contributed largely to the R 4 billion the City of Cape Town estimates is generated annually for the local economy from live performances, with 72000 spectators having attended a visually stunning and extremely well organised concert at the Cape Town Stadium. 

Writing in the Sunday Argus, the City of Cape Town’s  Executive Director of Economic, Social Development and Tourism, Mansoor Mohamed, states that films and events  are the largest contributors to the Cape Town economy, the film industry generating R5 billion, and conferences and live events R4 billion each.  Mohamed writes that it is not only income that is generated, but jobs are created too.   The services and products required to host such events go into the pockets of mainly Cape Town-based businesses, which in turn will pay for rates and taxes, and thus share the burden of payment of these to generate income for the city, but they will also share the benefit of the use of these monies (an excellent example is the wonderful new Green Point Park).

Writing about the contribution of the film industry to Cape Town, Mohamed mentions the two movies currently being filmed in Cape Town – ‘Safe House’ wrapped up filming on Kloof Street over the weekend, and stars Denzel Washington and Ryan Reynolds, who have been seen eating at Cape Town restaurants, and hanging around in Camps Bay, another location for the movie.  ‘Judge Dredd’ is another movie being filmed, and the two movies combined have a production budget of R400 million, going to two Cape Town companies (Moonlighting and Cape Town Film Studios, respectively), and their suppliers.  In addition, still productions, and print advertising and TV commercial shoots contribute to the economy.   Mohamed requests Cape Town residents to be tolerant of road closures and other inconveniences linked to these, in understanding that every R1 billion income allows 15000 jobs to be sustained in the city.

The Cape Town International Jazz Festival generated R685 million to the local economy, and created 2000 jobs, mentioned by President Zuma in his Station of the Nation address ten days ago.   It attracts 35 000 attendees, and runs over ten days, incorporating local art, culture and heritage, and local musicians blended with international stars such as George Benson.   Some of the local musicians performing at the Jazz Festival have received  bookings on international stages as a result of their performances at the Festival.  

The Pick ‘n Pay Cape Argus Cycle Tour contributes R650 million to the local economy. It has attracted the attention of international VIP’s such as Matt Damon and Lance Armstrong, who have participated, and this has been recorded in the world media, having a tourism benefit too.  This year executives from top companies such as RIM (manufacturers of Blackberry), Sainsbury in the UK and Vodafone Europe will participate in the event.   Some Cycle Tour lovers are said by Mohamed to have bought houses in Cape Town, and they pay their rates and taxes annually and in advance, he writes!  “They create tomorrow’s tourists and South Africa’s future foreign investment”.  He added that events such as the Cycle Tour, the Jazz Festival and the U2 concert play an important role to ‘start, facilitate or help to close deals’.

The recent Mining Indaba, which was held at the Cape Town International Convention Centre, filled up all surrounding hotels, created a taxi shortage in the city, and filled up restaurants in Cape Town on a scale not often experienced in the city.   Delegates attending were from Africa, Brazil, Russia, India and China, amongst others.    Similarly, the Design Indaba taking place at the moment as a Conference, Expo and Film Festival, is staging top international designers, such as Alberto Alessi, Michael Wolff, billionaire Mark Shuttleworth and trend forecaster Li Edelkoort, with about 37000 delegates attending, according to Cape Town Tourism.  The Design Indaba attracts them to Cape Town, the city enjoying the most glorious weather currently, and therefore making future tourists out of these delegates, one can confidently predict, and more business deals benefiting the city could flow from this event, contributing R 232 million per annum.   At the Design Indaba the latest updated Cape Town Design Route map  will be launched, marketing some of the city’s top design artists and their businesses.

In September the World Veterinary Congress takes place in the Cape Town International Convention Centre, and will be attended by 3000 delegates, and contributing R30 million to the economy.   Other conferences to be hosted this year include the 4th Pan African Pain Congress (500 delegates), the World Congress of the World Federation for Mental Health (800 delegates), the Global Forum for Health Research Forum 2011 Meeting (1500 delegates), World Conference of the International Association for Educational and Vocational Guidance (600 delegates), The Southern African Association for Learning and Educational Differences Conference (500 delegates), and the World Economic Forum on Africa (2000 delegates).

The 20th Cape Town Pairs, the largest sponsored open bowls event in South Africa, was held at the Glen Country Club in Clifton last week, and attracted 36 teams from around the country, as well as from the United Kingdom, Namibia and Zimbabwe.   The gale force Southeaster almost forced a change in venue, blowing over 100 km/hr!   We congratulate our Whale Cottage Camps Bay guests Phil Downs and Greg Bingham from Johannesburg for having won the hotly contested tournament.

The Cape leg of the Cell C Tour of SA 2011 takes place over the weekend, and covers Gordon’s Bay, Grabouw, along the Theewaterskloof Dam, Franschhoek, the Helshoogte Pass in Stellenbosch, and finishes in Paarl, 120 cyclists participating in the race, reports the Cape Argus.

The J&B Met and the Cape Epic have an economic impact of R 200 million each, and the Two Oceans Marathon R223 million.  Mohamed has estimated that the city’s events and the film industry jointly add more than R 15 billion to the local economy. 

The benefit of these events reaches the hospitality industry too.  Six out of our 20 guests staying at Whale Cottage Camps Bay this past weekend flew down from Durban, to attend the U2 concert, and they made a three-day ‘weekend’ out of it.   Three of the U2 band members ate at Pierneef á La Motte last week, each visit widely reported (Bono and The Edge’s visit at La Motte even made the Sunday Times), which will attract more business to this wonderful Winelands wine estate.  Cargo Carriers has booked out Whale Cottage Camps Bay for the Argus Cycle Tour weekend, to accommodate its team over three days.   Delegates attending the Mining Indaba stayed at Whale Cottage Camps Bay too.

And a final note on the U2 concert – it was a ‘must attend’ concert, with amazing lighting effects on The Claw and the 360° screen ensured that every attendee saw the band on the relatively small stage, no matter where they were sitting or standing.  Many did not know most of the U2 music performed, but the performances of Amazing Grace, Stand by Me with Yvonne Chaka Chaka, and Without You were real crowd pleasers.  I did not pick up sound distortion, but read complaints about this on Twitter.  The quick and easy in and out of the stadium was commendable, and the event was run by Big Concerts without any hiccups, it was reported.   Replacing the Stadium pitch for the concert cost Big Concerts R803000 alone.  Taxis were in good supply before and after the concert, and the R50 per trip between Green Point and Fresnaye was the best money I have spent in a long time!  The long sit, from 7.30 – 11.30 pm, was the only off-putting part, as the seats are not the most comfortable.   Neil Diamond is the next big name performer at the Cape Town Stadium, his concert taking place on 11 April.

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

Rio comes to Cape Town!

Cape Town is to have its own Rio-style Carnival as of March 2010.   This was announced by Cape Town Mayor Helen Zille last night.

The Cape Town Carnival will run from 12 – 14 March 2010, the weekend in between the Argus Cycle Tour and the Two Oceans Marathon.   It will be a weekend of music, dance and cultural expression, and “is a celebration of diversity”, according to its website www.capetowncarnival.com

The theme of the first Cape Town Carnival will be “Rhythm, Roots & Boots”.  It aims at “celebrating uniting diverse communities through music, dance and creativity, show-casing the best of Cape Town, annually…” says Dr Rachel Jafta, the Cape Town Carnival Trust Chairman and University of Stellenbosch Associate Professor of Economics.  “We wanted to create something new, where communities interact and celebrate our uniqueness, but also unite as citizens of one of the most beautiful cities of the world.” she added, reports the Cape Times.

The Trust team are largely unknown to the tourism industry, and includes Clarence Ford, radio presenter and previous owner of the now defunct Manenbergs, Craig Lemboe, Eldridge Moses, Anton Liebenberg, Henry Hockey, Themba Nolutshungu, Fritz Marx and Programme Manager Isabel Meyer.   It is worrying that the Trustees do not appear to have Tourism or Event Management experience, and that the tourism bodies Cape Town Tourism and Cape Town Routes Unlimited are not involved.

On 12 March 2010 the Carnival will kick off with themed balls and dance shows in community halls around Cape Town,  as well as with street, club and beach parties.    On 13 March floats will parade through the city.