A newly launched TBCSA FNB Tourism Business Index shows conditions in tourism to still be depressed, and there is little confidence that trading conditions will improve for the rest of 2011, reports Business Day. Initiated by the Tourism Business Council of South Africa, and sponsored by FNB, utilising the advisory services of tourism consultancy Grant Thornton, the Tourism Business Index was developed to “provide a clearer picture of the performance of the tourism industry for investors”. The first Tourism Business Index scored 89,4 %, and is expected to have a similar score for the second quarter of this year. An index of 100 would signify ‘normal trading conditions’, signalling that the tourism ‘business environment is negative’, the report says. The accommodation sector was particularly negative and depressed about future trading conditions. The performance of the last quarter of 2010 was weaker than the two quarters preceding it, the Index showed, reports Southern African Tourism Update. The Tourism Business Index is aimed at providing not only an update of business sentiment in the tourism industry, but also to position the tourism industry as an important sector of the economy, said Gillian Saunders of Grant Thornton, the consultant who vastly over-predicted the number of international visitors to South Africa during the World Cup. FNB says its role is to help the tourism industry ‘become world class’.
 
It was disconcerting to note how the two CEO’s of Cape Town tourism bodies Cape Town Tourism and Cape Town Routes Unlimited contradicted each other so strongly in respect of their view of the festive season. Cape Town Routes Unlimited stated that ‘tourism in greater Cape Town had slumped over the Christmas holidays’, after the success of the World Cup last year, according to its CEO Calvyn Gilfellan, as reported in the Sunday Argus. Gilfellan blamed the unusually strong and extended gale-force south-easter in Cape Town between Christmas and New Year, and the heavy snowfalls in Europe, for the tourism “damper”. The heavy winds kept visitors from most Cape’s beaches and from Table Mountain, Gilfellan said. He quoted arrival statistics, having dropped by more than 3000 international arrivals, on last year’s 77 000 arrivals between December 2009/January 2010, and a decrease by an astounding 16312 domestic arrivals at Cape Town International airport. The Robben Island ferry operation was not affected by the wind, and its 41000 visitors in December was up on 2009 figures, but the ferry did not operate for a week a year ago. Cape Point saw a decrease in visitor numbers of 9 % and Boulder’s Beach a decrease of 14 %. The Table Mountain Cableway had its lowest visitor numbers in ten years in December. FEDHASA Cape Restaurant sector chairman Rey Franco reported “a drop in overall revenue in December”.
  
Cape Town Tourism, by contrast, reported that Cape Town’s tourist season over the festive period had been ”better than average”, the “average” undefined, and that the city had experienced an “unexpected increase” in hotel occupancies. In a media release dated 22 December, the Cape Town tourism marketing body stated that the city would not experience a “bumper season”. Mrs Helmbold was quoted ten days later about the festive season, at a time when it had not yet ended, and this appeared to be a thumb-suck not validated by any tourism statistics, given that Mrs Helmbold herself was on holiday over the festive period! Mrs Helmbold described the Cape’s summer season as consisting of two parts:
  

•

a domestic high point during December (and the school holidays)” - Mrs Helmbold has no clue of the reality of the tourism pattern in this quote, in that the festive season period is made up of a mix of international (German and UK in the main) and domestic visitors, who only arrive in the Cape in any large numbers from 26 December onwards, and who largely left the Cape to return home on 9 January, making it a very short festive season of two weeks. South African visitors to the Cape were more likely to be staying with friends and family than in accommodation establishments, and made little use of tourism services.

•

an international season that peaks between mid-January and the end of February” - once again, Mrs Helmbold is out of touch, in that a tourism vacuum started mid-January, lasting for two weeks before things pick up again, and then the season will run through until Easter. February looks well-booked ahead already, mainly by British visitors, and those attending weddings.

    

The exceptionally strong Rand, and the increase to 20% in the VAT rate in the UK, have been prime deterrents to the UK tourists visiting the Cape, the region’s largest source of international tourism. The decline in UK visitor numbers has been pronounced this summer season. However, the extremely severe winter weather experienced in the UK and in Europe has encouraged many tourists to come to the Cape in search of warmth and sun, which they had to the extreme between Christmas and New Year, when Cape temperatures rose up to 42°C in Franschhoek, for example, Cape Town not being much cooler.

 
A blow at the start of the festive season was the snow-stuck UK visitors, who could not fly out for three or four days around Christmas, costing hospitality establishments lost bookings. This could have cost Cape Town R 10,5 million per day in lost revenue, estimated the City of Cape Town’s Mansoor Mohamed, Director for Economic, Social Development and Tourism, reported the Cape Argus. Seaside towns such as Plettenberg Bay and Hermanus experienced far lower visitor numbers than in previous years, Johannesburg visitors noticeably absent in the Garden Route town for the second year running. Inland towns such as Franschhoek had lots of day visitors, but reduced numbers of guests staying over in accommodation.
  

One of the worst weather periods co-incided with the Festive Season in Cape Town and the Western Cape, leaving many visitors disappointed with the weather, and the effect it has had on their holidays, especially for those that have travelled from far. The South-Easter battered Cape Town in December and has not relented in January, and the Table Mountain Aerial Cableway Company has reported that the largest number of cableway closures was experienced last month by far, and that the Cableway was only able to operate for 55% of its potential operating hours in December, reports the Cape Argus.

 
In the festive season week, the Cableway lost 25000 visitors due to the gale force winds and resultant restricted visibility. The wind blew at a speed of over 100 km/hour in Camps Bay and in many parts of Cape Town, leading guests to check out of accommodation establishments early. No sooner had the wind died down, two days of rain followed. Inland areas, as well as towns such as Hermanus and those on the Garden Route, were overcast and experienced rain while the South-Easter was pumping in Cape Town. Not only did the wind and rain affect the holiday plans of tourists, but the weather also played havoc with swimming pools of accommodation establishments, which were filled with sand daily, and which were difficult to keep blue. The wonderful Camps Bay beach, as well as many others, were a no-go zone on South-Easter days, ’sandblasting’ beachgoers. Few beaches in Cape Town are South-Easter proof, Clifton being the best protected against the wind.
   
This summer is also seeing one of the poorest occupancy levels. The Times reports that Cape Town’s top 5-star hotels such as the Mount Nelson Hotel, Cape Grace and Table Bay Hotel are seeing occupancy levels decreased by 10 - 20 %, according to Cape Town Routes Unlimited CEO Calvyn Gilfellan. He attributed the reduced occupancy to the opening of twelve new hotels in the past one and a half years. Gilfellan is quoted as saying that big events are needed for the city, to fill hotel beds. He also said that the positive effect of the World Cup was overshadowing the recent tragic event in a Cape Town township. He said that bookings were more last-minute, and that tourists were trading down, into camping sites and staying with relatives, over the festive season. A price shake-up could be on the cards, Gilfellan added.
 
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, to receive feedback about Cape Town Routes Unlimited’s performance in the past twelve months, and its way forward. Attendees 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, 52% of the R 38,5 million annual budget which Cape Town Routes Unlimited received from the Western Cape province, supplemented by R 15 million from additional special project income generated, having been spent on administrative expenses. Cape Town Routes Unlimited listed as its tourism marketing achievements some of 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!; regional tourism road shows; organising Tourism Month; hosting VIP delegations; a green tourism initiative; 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. 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. 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 stated that industry challenges are the following: “overcoming the effects of the worse (sic) economic crisis to hit 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 global competitiveness, and institutional disarray leading to the current role confusion, duplication and possible fruitless expenditure.”
 
Gilfellan also looked to the future, and called for “a speedy resolution to the protracted institutional calamity”, referring to the problem between his organisation and Cape Town Tourism, which the provincial Minister of Tourism Alan Winde threatened to solve by amalgamation of the two bodies, but has since gone quiet about ; 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. One wishes for Cape Town Routes Unlimited that it addresses its staff 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.
 
Three directors of Cape Town Tourism and heads of important Cape Town business tourism businesses joined forces to make a plea for how “cool” Cape Town is in the winter months, a period typically plagued by seasonality, with far reduced accommodation bookings, which has an impact on all sectors of the Cape economy. In an article in the Cape Times, Guy Lundy of Accelerate, Ian Bartes of Cape Town International airport, and Rashid Toefy of the Cape Town International Convention Centre wrote that of all South African cities, Cape Town is unique in its seasonality, which “makes it hard for the hospitality industry to be sustainable”. They added: “With 18 five-star hotels now operating in the city, we must find ways to increase visitor numbers during winter.” The tourism leaders says it is not a surprise that Cape Town sees so many restaurants opening and then closing, in that they build restaurants to meet capacity support in summer, but cannot see this through in the winter months when business falls away. They also state that the number of passenger arrivals in April and May is half of that in December and January. They blamed this on the positioning and marketing of Cape Town as mainly a leisure destination, which “always seem to feature the Waterfront, Clifton and the Winelands on their covers”, with not enough promotion of the city as an investment and business destination. Conference facilities, factories and office blocks do not feature in the city’s marketing collateral. They called for more direct international flights to Cape Town, and more flights between the city and other African cities, to make Cape Town a world business destination, and a global African city, given that it already has a world class airport, good hotels, excellent infrastructure, ’some of the finest restaurants’, natural beauty, entertainment, world-class technology, sophisticated business networks, and a favourable time zone for doing business with the UK, Europe, the Middle East and Africa.
  
To make Cape Town a global business destination, it needs to be considered for meetings, incentives, conferences and exhibitions (the M.I.C.E. market). The Convention Centre is ranked 34th in the world in size of business, and it plans to double its capacity to reach its goal of making the top ten list. Winter is an ideal time for conferences, the writers say, in that most activities take place indoors. Whilst conference delegates spend less time in a city on average, their average spend is higher than that of a leisure tourist. The World Cup demonstrated what a good winter weather city Cape Town can be. The soccer fans were not put off by the rain and cold, and their ‘gees’ was not dampened in any way. This leads to a renewed call for the ‘green season’ to be marketed in the winter months. The cooler Cape weather is attractive to visitors from the Middle East, and the Asian countries, who have to endure hot and humid weather at that time. The writers also suggest a winter sale, which reduces accommodation, restaurants, and clothing, as is done in Paris, Singapore and New York. The writers seem unaware that the small accommodation industry has been leading the tourism sector for years, in reducing its rates by as much as half in winter. Last year the restaurants in Cape Town and the Winelands also came to the party, and offered good winter specials, some even extending these into current summer specials. If Cape Town had no seasonality, airlines would fly into the city all year round, and would bring travellers, making tourism business more viable and reducing unemployment. It is for this reason that the business tourism leaders asked that the tourism industry get on board the Cape of Good Business!
  
On the topic of the proposed amalgamation of Cape Town Tourism and Cape Town Routes Unlimited, which Cape Town Tourism is respectfully resisting, a Cape Town Tourism AGM guest speaker Claes Bjerkne, a destination marketing expert, said that Cape Town is the “ideal master brand as it is one of the better known cities of the world’, on a par with Paris, London, San Francisco and Beijing. “Cape Town Tourism will not compromise our status as an industry-led association, and we remain committed to marketing Cape Town and its unique experience”, said Mrs Helmbold, the Cape Town Tourism CEO, in response to provincial Minister Winde’s amalgamation plans.
  
Protea Hotel CEO Arthur Gillis says that delighted World Cup soccer fans that visited Cape Town six months ago will not be coming back this season, but they will recommend the city to friends and family. ”People in the UK are getting fed up with austerity and some will probably decide they would like to go abroad this year, to somewhere different, particularly if airfares stay at reasonable levels” he said.
 
In our April newsletter last year, we reported about the shock that the proposed onerous guidelines for a new grading assessment system to be implemented by the Tourism Grading Council of South Africa had caused. The reaction to the proposal was so negative that its implementation was delayed by four months. Input was sought from assessors, who themselves appeared to be unhappy, and from accommodation establishments, to such an extent that it had to go back to the drawing board. Many accommodation establishments took the bold decision to revoke their star grading, not feeling that they will meet the new criteria sufficiently enough to make them retain their previous star grading. What was surprising was the poor communication by the Tourism Grading Council, in having had feedback that many establishments would withdraw from the voluntary grading assessment system. The new grading system requires all existing clients of the Tourism Grading Council to be registered from scratch. A most pleasant surprise is that the actual assessment has been vastly simplified compared to the initial draft, and the criteria have been relaxed relative to what was intended in the draft, making most of them little different to the previous assessment criteria. We highlight the most important ones:
  

•	The draft document required a security guard, and onerous specified security features. This caused an outcry due to the cost of the extra staff and features needed. Now the minimum requirement is for the ‘best possible” safety and security to be offered for one’s guests
•	Statutory obligations include being registered as a business; registered with the provincial authority (the exact registration is unclear); having public liability insurance; and complying with local authority fire; and hygiene and building access regulations.
•	No discrimination of any kind is allowed, in terms of denying access to any guests.
•	Bed linen and towels must be changed every five days - given water shortages and rising electricity costs, the draft requirement of changing towels daily and of changing bed linen every three days caused an outcry.
•	The bedroom and bathroom size, specified in square meters per accommodation type and star grading in the draft document, has been dropped, the only requirement being that the space “should allow guests to move easily”, with a minimum ceiling height, and should provide “freedom of movement”. The minimum bedroom and bathroom sizes were a sore point in the draft, and would have disqualified many establishments from retaining their current star grading.
•	Airconditioning is only required of 5-star establishments - a heater or fan must be made available.
•	Colour TV’s are required, but no longer have to be flat-screen, as specified in the draft.
•	Telephones in guest rooms are optional, and not a requirement.
•	One of the biggest issues was the provision of an 18 hour reception service in the draft document - this has mercifully been changed to “reasonable hours during the period that the establishment is open”.
•	The minimum Breakfast requirement is a Continental one. Breakfast serving time was specified in the draft, and this has been removed.

     
The Tourism Grading Council of South Africa project to completely overhaul its grading assessment criteria, and then to withdraw most of the proposed changes due to the outcry from the accommodation industry, is the biggest PR gaffe of the body that has been tasked by South African Tourism to set accommodation quality standards. The Tourism Grading Council’s charming Chief Quality Assurance Officer Thembi Kunene admitted that an error had been made in presenting the first draft to the industry. At a belated presentation in November to the Cape Town accommodation industry, Ms Kunene was commendably honest in her feedback about the effect that the draft proposal had, and that the potential loss of many accommodation establishments from the grading system led to a rethink, and a delay in introducing the new assessment criteria.
 
Cape Town is bidding to become the Design Capital 2014, and already has earned a reputation for its design strengths, being the home of the highly successful annual Design Indaba, and hosting the annual advertising industry Loerie Awards event for the second year running. Cape Town also is known for its artisic and design talent, and therefore the City of Cape Town has created a Cape Town Design Route.