Tag Archives: Western Cape province

Cape Town Routes Unlimited does not spend enough on Marketing

A heavyweight delegation from the Western Cape Department of Finance, Economic Development and Tourism, members of the Board of Cape Town Routes Unlimited, and ‘stakeholders’ of the organisation attended a presentation at the Table Bay Hotel last week, to receive feedback about Cape Town Routes Unlimited’s performance in the past twelve months, and its way forward.  Attendees also received a copy of the 2009/2010 Annual Report, a detailed document of the activities of the body which states that its “core business is marketing communications”.  It is a shame that so little of the organisation’s budget is spent on beneficial marketing on behalf of the tourism industry in the Western Cape.

The problem with handing out the Annual Report is that it reveals information which is not always to the benefit of the organisation, even though its “honesty” is commendable and meets accounting procedures.  A greater part (52%) of the R 38,5 million annual budget which Cape Town Routes Unlimited received from the Western Cape province in the past year, supplemented by R 15 million from additional special project income generated, was spent on administrative expenses rather than on marketing, which is bad news for the tourism industry in the Western Cape, which has seen the worst year ever, with most provincial tourism businesses having been detrimentally affected by the World Cup, by the strong Rand, and therefore by a reduced number of bookings. 

The importance of Marketing to the organisation is highlighted by the fact that the CEO, Calvyn Gilfellan, is also the Chief Marketing Officer.   He has three Marketing Executives reporting to him:

David Frandsen: Executive Manager – International Marketing: Europe and the Americas and the Convention Bureau 

Itumeleng Pooe: Executive Manager – International and Domestic Marketing: Africa, Asia, and the Middle East

Romeo Adams: Executive Manager – Marketing and Organisational Support 

In the Annual Report, each of these executives feeds back what their performance has been relative to targets set at the beginning of the financial year.   It is a shame to see how much of their time and action was directed at meeting administrative requirements in the preparation of the Annual Report as well as the financial reporting.   Many of the targets they set themselves seemed rather low, so that it looks good on paper when many are exceeded.   I was shocked to see the declaration of salaries of the Executive Management, and how some of these have increased in the past twelve months.   Gilfellan’s annual income is listed in the financial statements at just under R1 million (up by 6,6 % on the year before).  The Marketing Executives earned between R692000 – R839000 in the past year (close to R58000 – R70000 per month), salaries which seem way above the norm, especially when the industry cannot see much benefit of the work done by Cape Town Routes Unlimited!  Even the directors are paid emoluments, some as high as R26000.

In summary, Cape Town Routes Unlimited lists as its tourism marketing achievements in the past year the following: R20 billion of tourism business generated through international trade shows; organising the ’67 minutes for Nelson Mandela’ birthday celebration; close to 400 media mentions valued at R162 million, reaching 107 million persons – these are very bold claims!; Summer Welcome campaign; regional tourism road shows; organising Tourism Month; hosting VIP delegations; a green tourism initiative; SMME Marketing Support programme; receiving bookings at its Visitor Information Centers (set up in the Waterfront in opposition to Cape Town Tourism) to the value  of R2,4 million; a Google Adword campaign; a campaign with CNN; and an e-mail campaign in the Benelux countries.   Conventions are lucrative for tourism business in the Western Cape, and for Cape Town in particular, nine conferences having been secured for the next three years, to be attended by 5650 delegates, with R55 million in economic impact.

The recent upheaval caused by provincial Minister Alan Winde’s announcement that he wants to amalgamate Cape Town Tourism and Cape Town Routes Unlimited was not addressed by the Minister when he spoke at the meeting.   Cape Town Routes Unlimited Chairman Peter Bacon was critical of the separation between the two tourism bodies in his ‘Chairperson’s Review’: “… following the City of Cape Town’s withdrawal of its financial support and decision to mandate Cape Town Tourism to market the City and provide visitor support services on the ground. This effectively gave rise to the creation of a second Destination Marketing Organisation with the resultant confusion, duplication of effort and wasteful expenditure.”   Bacon does praise the closer co-operation between the Western Cape province, the City of Cape Town (which steadfastly is supporting Cape Town Tourism for the marketing of the Mother City) and municipalities in the province.   Cape Town Tourism is not mentioned by Bacon in this context.  Bacon states that the province is working on:

*  a clear vision for the development of the tourism industry

*  a single strategy with clearly defined roles, responsibilities and deliverables.

*   business plans for Cape Town Routes Unlimited,  Cape Town Tourism and other regional tourist organisations aligned to the goals and strategy of the province,

and this will lead to a Memorandum of Agreement to be signed between the Province and the City in the next twelve months, he writes.     

In his Chief Executive Officer’s Review, Gilfellan writes: “One of our organisation’s greatest achievements during this challenging year was that it established itself as a credible and authoritative voice in tourism”, on the basis of media comments requested from the organisation.   Many will question his claim.  He states that industry challenges are the following:

*   “overcoming the effects of the worse (sic) economic crisis to hit the the industry in 60 years

*   The slow pace of transformation and diversification of the industry

*   Stunted growth in our traditional core markets of the UK, Germany, Netherlands and France

*   Limited marketing resources compromising our global competitiveness, and

*   Institutional disarray leading to the current role confusion, duplication and possible fruitless expenditure.”

Gilfellan also looks to the future in his review, and calls for “a speedy resolution to the protracted institutional calamity”, referring to the problem between his organisation and Cape Town Tourism; Events, Sports and Business Tourism will capitalise on the World Cup; new target markets like Brazil, India, China, Russia, the Middle East and Africa must be targeted; a tourism community in which business, labour, government and the communities unify around a common vision and partnership;  embracing technological advances in marketing; promoting the principle of a ‘quadruple bottom line’, encouraging the tourism industry to pay attention to social responsibility, environmental sensitivity, economic imperative, and climate change.

In providing such detail to the industry, one can request Cape Town Routes Unlimited to connect with its stakeholders more frequently than once a year at a function; to allow stakeholders to ask questions so that a dialogue can be created at such functions; to inform stakeholders about achievements as frequently as possible, so that they can help spread the word about the work of the organisation (Cape Town Tourism is excellent at this);  to address the imbalance in “employment equity” by gender, occupation and population group; to improve its market research techniques, a weakness it shares with Cape Town Tourism; to contain any duplication in its marketing activities relating to Cape Town that is already managed by Cape Town Tourism; to address the non-sensical brand “Cape Town & Western Cape”;  and to speak to tourism leaders about how it can more effectively direct its marketing budget to the benefit of the industry, being Events, Events and more Events in the seasonal winter months. 

I am very impressed with Minister Winde, and how approachable he is – he has no airs and graces, picks up a phone to make a call to a tourism player with an opinion, is embracing social media with a Twitter account (@AlanWinde), and reads and comments on blogs related to tourism.  As an outcome to the presentation, hearing stakeholders reinforce how poor business is, he promised to set up a meeting to address the poor bookings issue, especially given the feedback from World Travel Market held in London last week that our country has priced itself out of the market.

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

New Cape Tourism Marketing conflict between province and city

One could see it coming!   The marketing of Cape Town and the Western Cape province has been a problem for the last number of years, in that the province and the city were run by the Democratic Alliance and ANC parties, respectively.  That is, until last year, when the Democratic Alliance won the city and the provincial elections.   The new MEC for Economic Affairs, Finance and Tourism, Alan Winde, vowed from the word go that he would address the strained relationship between Cape Town Tourism and Cape Town Routes Unlimited, as far as each body’s marketing of Cape Town in particular, but also of the Western Cape province, is concerned.  Now the relationship is about to become more, rather than less, strained!

One needs to go back in history to paint a picture of continuous turmoil in the tourism industry.   Initially Cape Town Tourism was marketing Cape Town, and the Western Cape Tourism Board marketed the province, a harmonious relationship existing between the two tourism bodies, one funded by the City of Cape Town, and the other by the province.   As the political parties changed, new Ministers of Tourism at provincial level tried to reinvent the wheel, and the biggest change of all was the establishment of the Destination Marketing Organisation (DMO), taking over the old Western Cape Tourism Board, as well as the marketing role for Cape Town from Cape Town Tourism, about seven years ago.   Cape Town Tourism only retained its role as Tourism Information agency.

Numerous complaints from the tourism industry about the lack of marketing visibility of Cape Town, the “gateway” to the rest of the Western Cape, were aired, and the new DMO, which became known as Cape Town Routes Unlimited, was blamed for not knowing what it was doing.   Political differences between the province and the City of Cape Town, as well as the lack of Cape Town Routes Unlimited’s marketing performance, led the City to withdraw its 50 % contribution to the running of Cape Town Routes Unlimited two years ago, leaving that body vulnerable in terms of its funding, and crippling it in terms of its marketing role.   The City signed an agreement with Cape Town Tourism, whereby it allocated its previous Cape Town Routes Unlimited funds to Cape Town Tourism, with the responsibility for the agency to market Cape Town in addition to its tourism information role.   Due to its funding cuts, Cape Town Routes Unlimited was forced to cut its marketing projects dramatically, and to focus mainly on marketing the province.

However, Cape Town Routes Unlimited did not leave the marketing of Cape Town out of its marketing strategy, and once again the industry complained about the duplication in the marketing of Cape Town by both bodies, something that the new DMO had been created to avoid.   When Winde, and his counterpart in the City of Cape Town, Felicity Purchase, met last year, the two marketing partners agreed that they would encourage co-operation and that they would avoid duplication where possible.  Winde confirmed that there would be no consolidation of the two bodies.   The industry was told that a strategy of co-existence between the two bodies would be presented to it, but no such strategy has been forthcoming in the past year.   Cape Town Tourism was forced to appoint a Cape Town Routes Unlimited director on its Board (this is not reciprocated on the Cape Town Routes Unlimited board), to ensure that the two bodies were aligned.

This week the Minister changed his mind, and made the shock announcement that he is “pushing for the speedy implementation of a new efficient destination marketing model so that the region may benefit from the current window of opportunity created by the Soccer World Cup”, reports Southern African Tourism Update.  Now this sounds like a ludicrous statement as a start – another DMO in the making, when we have one already?   Did we not just host the most amazing World Cup without integration of the two bodies?   What window of opportunity is the Minister referring to?   Why did he not get his act together, and create a united body before the World Cup, when it was needed most?   Accommodation in Cape Town and the Western Cape was not well booked for the World Cup, and the city did not have a single soccer team setting up a base camp in it.

Reading the Southern African Tourism Update article, and having been closely involved with the setting up of the DMO whilst I was Deputy Chairman of Cape Town Tourism, it sounded like deja vu.  The Minister wants to set up a new DMO, with a new “trading name”, responsible for the “marketing of the province, regions and cities within the Western Cape – as well as single tourism brand for the destination.”  This is exactly what Cape Town Routes Unlimited is meant to be, currently having the schizophrenic brand name “Cape Town and Western Cape”, all of which was criticised by the industry when it was launched about 5 years ago!

The new DMO would be solely funded by the Western Cape province, according to the Minister, and all municipalities in the province must contribute to the DMO, including the City of Cape Town, endangering the marketing role which has been allocated to Cape Town Tourism.  Members of Cape Town voted by overwhelming majority to support the acceptance by Cape Town Tourism of the marketing of Cape Town at its AGM two years ago.    Municipalities must present their marketing plans to the new DMO, it is proposed, and define how they will support the marketing activities of the DMO.  The Minister also wants to move the head office of the DMO from Burg Street to the V&A Waterfront, in a building to be called “Tourism HQ”, to be “more visible and accessible to tourists”!   Now this is something I do not understand, given that Cape Town Tourism is responsible for tourism information and accommodation  bookings, via its network of tourism bureaus around the Cape Town metropole, including Somerset West and Strand.  The first problem one saw was when Cape Town Routes Unlimited set up a “Gateway” tourism bureau at the V&A Waterfront, taking the “ownership” of it away from Cape Town Tourism, even though it is staffed by and carries the branding of Cape Town Tourism!

The municipalities were presented the new model by the Minister last week, and they have been given two months to table their response.  It is interesting to see how the new Cape Whale Coast DMO will deal with this news of the Minister, as it set itself up as a marketing agency for the coastal area stretching from Rooi Els to Gansbaai and including Hermanus.  This DMO is already making the fatal error of encouraging the members of the local tourism bureaus to become members of the DMO, in addition to being members of the bureaus.

Winde motivated his new strategy on the basis of “absolute duplication of national, provincial, and municipal marketing resulting in taxpayers’ money being spent three times in the same place”.   He stated that the Cape Town Tourism and Cape Town Routes Unlimited marketing of the city and the province caused confusion, and that the city and province did not have a clearly defined marketing strategy.

Not surprisingly Cape Town Tourism is not happy with the Minister’s announcement, and its Board announced last Friday that it will oppose the Minister’s move.  CEO Mariette du Toit-Helmbold’s words were carefully chosen when she wrote: “Cape Town Tourism has noted the proposal and embarked on a  comprehensive negotiation process with the City of Cape Town and the office of the MEC.   The Board of Cape Town Tourism has indicated that it is not in agreement with the proposal in its current format.”

She continued by stating the support of the City of Cape Town for the marketing role of Cape Town Tourism in marketing the city, exactly what the Minister proposes to change.  She wrote: “Cape Town Tourism is committed to protecting the interests of tourism in Cape Town and finding a workable solution that will most effectively realise the tourism opportunities in the city, whilst eliminating duplication and confusion. Cape Town Tourism has received reassurance from the City of Cape Town that we are and will remain the City’s tourism promotional and marketing body and that Cape Town Tourism’s structure will not change.”

It is disturbing to see that the same tourism marketing issues are being addressed again, and that tourism history is repeating itself, a waste of taxpayers’ funds in itself. It appears that every new provincial Minister of Tourism in the Western Cape sees it as his role to redesign the tourism bodies and their role, much like new Marketing and Brand Managers like to change their marketing strategies and advertising campaigns (and ad agencies at times too), just to make their mark.

This is likely to become another long drawn-out battle between the City and Province about the marketing of our precious brand “Cape Town”!

POSTSCRIPT 26/7:  Cape Town Tourism has sent out another e-mail to its members, reiterating its view about the Minister’s proposal, and has made the document available, inviting comment and input from its members:   “I informed you of the proposed centralised model for tourism marketing that was put forward by the MEC for Tourism and Economic Development, Minister Alan Winde. Cape Town Tourism has indicated to the office of the MEC and the City of Cape Town that the proposed model for a single, provincially centralised tourism destination marketing structure and brand for Cape Town and the Western Cape is patently misguided. If implemented, it will have negative consequences for tourism in Cape Town” , wrote Cape Town Tourism CEO today.

 

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

Beyond World Cup 2010: making SA a winning nation!

A media conference called by Dr Laurine Platzky, Western Cape Deputy Director-General Governance & Integration and 2010 FIFA World Cup Co-ordinator, and the World Future Society of South Africa, on Monday highlighted the way forward for South Africa in the next twenty years.   The positive ethos and energy generated by the World Cup will stand South Africa in good stead to maintain its level of excellence into the future, said the speakers.

Mike Lee, Founder of the World Future Society of South Africa, focused on the legacies of the World Cup.  The Rainbow Nation-building benefit is an “historic bridge”, connecting South Africans. It is a “moment in our destiny”, and paves the path to our country’s future, he said.  He highlighted five priorities for South Africa for the period until 2030 :   1. Improve the country’s ethics and standards   2. An economy growing at 7% per annum, to “meaningfully reduce poverty and unemployment”  3.The education system must be reformed   4. The ecosystem must be rescued   5. The country must undergo an energy revolution, moving away from coal-based energy to renewable and nuclear energy.   “The World Cup has renewed our licence to dream”, Lee said.

Dr Platzky focused on the legacy of the World Cup, and this was the infrastructure improvements, she said, Cape Town Stadium having become an iconic asset of the province.   She admonished local businesses for not having embraced the event well enough in bidding for the manufacture of memorabilia and clothing, rather than letting the contracts go to the Far East.   She said that the construction and hospitality industries had been the biggest winners of the World Cup, and stated that South Africa had been cushioned from the worst ravages of the recession because of hosting the World Cup.   The event has also led to “social cohesion”, creating an exceptional memory for school children, who will remember the event for their rest of their lifetime, and who also had the opportunity to learn about 31 other participating countries in their school projects, and also about other cities and towns in South Africa.   The legacy of the World Cup is also environmental, she said, with 41 “Green Goal” projects focusing on the long-term sustainability environmentally.   These projects will be taken to Brazil for the 2014 World Cup as well. She also mentioned that South Africans should proudly take recognition for their achievements in hosting the World Cup so successfully, rather than sitting back for the international media to tell us so.

Guy Lundy is the CEO of Accelerate Cape Town, and his first observation was the good winter weather during the World Cup – 5 sunny days and only 3 rainy days on match days – proving that Cape Town should not have tourism seasonality.   He also felt that ex-South Africans should no longer have to be apologetic about their country of origin, and should be proudly calling themselves “South Africans living abroad”.   He predicted an increase in wine sales due to the World Cup, and Cape Town’s marketability as a skills outsourcing centre.    He predicted that the World Cup would improve Cape Town’s chances of winning the 2014 World Design Capital bid.   The World Cup must lead to greater job creation, he said, and South Africans must become more positive, in not always waiting for the next disaster.   He said the country had an enormous potential to improve due to the World Cup.

Merle O’Brien is the Deputy President of the World Future Society, and spoke about the World Cup “gees” creating “social cohesion”, in making a collective “we” nation and society of South Africans.   The ethos of South Africans now would be Ubuntu and Ke Nako, the human spirit that will connect locals that are no longer commercially-driven but rather spirit-driven.

In question time, Dr Platzky was challenged about the duplicity of market research which is currently taking place in Cape Town (the Western Cape Province, Cape Town Routes Unlimited, the City of Cape Town, and Cape Town Tourism), all conducting unprofessional informal research and using these results to make media announcements on the basis thereof.  She agreed that the 50 interviews done by her department at the airport last week “was a bit of a joke” (even though the “9/10 rating” became the lead front-page story of the Cape Times).  She confirmed that professional research would be conducted to establish the benefits of the World Cup for Cape Town and the Western Cape.

More details about the World Future Society of South Africa can be found at www.wfs-sa.com.

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