A tough 2011 for tourism in SA

We think it’ going to be a tough year for tourism.  Sorry… yes, one should be filled with optimism and hope at the beginning of a new year, but it doesn’t seem to be warranted.

There are a number of reasons:

  • Don’t count on significant growth in overseas visitors.  It’s tough times overseas and major sporting events, like World Cup, are usually followed by a vacuum.
  • The World Tourism Organisation expects business travel in SA to increase by 2.8% in 2011.  Compare that to Nigeria’s 7.8%, Kenya’s 5.9% and Malawi’s 8.4%!
  • The next 33% electricity cost increase is due soon.  The impact of the first increase was minimised by savings that could be made – switching hot water cylinders and pool pumps off for longer – but the next increase will hit accommodation establishments and the disposable income of their guests.  And the fuel price keeps climbing.
  • The IMF and other organisations predict SA’s growth will be lower than last year.

Government’s planned interventions are going to make running businesses more onerous rather than easier.  Government’s policies have failed to create entrepreneurs who create wealth and jobs – in favour of the transfer of wealth to a select few who never worked or showed the creative skills that is usually associated with wealth creation.  And then there are the “tenderpreneurs”…

Does President Zuma’s government in fact have a plan?  The Times reported in January 2011: “President Jacob Zuma has instructed the ANC to stop “theorising” and devise “concrete” plans on how his government is to create the millions of jobs it has promised South Africans.” Does this mean that leaders in government are clueless?

CapeInfo does have a plan, which we will roll out in the coming weeks.

One response to “A tough 2011 for tourism in SA”

  1. I agree wholeheartedly that 2011 will be a tough year for tourism. I wrote an opinion piece published in today’s Argus about my thoughts on tourism post 2010. Here is an extract:

    “We were a country wholeheartedly and publicly committed to tourism in 2010, but as 2011 hatches freshly on our doorsteps, we are called to heed, more than ever, a pressing need to platform tourism as an essential component of our economic survival.

    What do we need to do as a city and as a province to stand out from the plethora of destinations, each with its own compelling marketing messages? How do we remain relevant and sustainable as an industry and city within an ever-changing global environment?

    As a sector we are called to be at the forefront of innovation and of real solutions to the challenges that face our fragile world. But what will set us apart from the rest? How do we position ourselves in these times of inordinate international challenges and opportunities?

    It is my prediction that international tourism uncertainty will remain the norm. In Cape Town we have seen the trajectory of tourism from the assurance of a golden period of abundant demand and lesser supply to the palpability of abundant, world-class supply and shrinking, competitively driven, financially constrained demand.

    Add to this a growing awareness, and need for, wholly sustainable solutions to a growing population and urban landscape, and 2011 is a year in which tourism (and its affiliate public and private partners) should be hunkering down to put some serious strategy into action in a long-term vision for the decade and beyond.

    Back in 2009, I wrote about the dramatic changes in the tourism sector on the back of a global economic meltdown and growing challenges surrounding climate change: “Whether because of climate or economy (which are interrelated anyhow) one thing is evident: the tourism and travel world will change fundamentally, for good.”

    The first ever Tourism Business Index (TBI) recently revealed that tourism in South Africa was subject to a weak, underperforming closing quarter (October-December 2010). Within the report, these findings were qualified by the publisher’s admittance that the survey sample is, as yet, below the critical mass needed for representative findings.

    It also concluded that the highs experienced by, for instance, independent hotels, were negated by the lows experienced by B&Bs and that there is plenty of optimism ahead yet.

    Cape Town Tourism welcomes the arrival of the TBI report and encourages the industry to support this initiative.

    Timeous, reliable access to statistics is a key component of agility when responding to the market’s ever-fickle and shifting demands and it is a long overdue player in the information lounge.

    Cape Town Tourism will do an industry survey during February to measure the impact of the 2011 international tourism season across the accommodation, tour, restaurant and attraction sectors.

    Results of our mid-December industry survey have been posted on http://www.capetown.travel/industry.

    It has indeed been an uncertain time for tourism in Cape Town (and South Africa). A mega-event such as the 2010 FIFA World Cup™ became the axis around which the rest of the year pivoted.

    The unseasonal June/July negated all traditional expectations and disappointed many, who expected a double boom in the year over winter and then again in summer.

    While Cape Town’s traditional international season is only starting, and is therefore unquantifiable as yet, a Cape Town Tourism industry poll found that the recent festive season was an average one. People downscaled, spent less and stayed for shorter periods. Bookings were largely last-minute and severe weather conditions had an impact on people’s holiday plans and occupancy levels. Major attractions are reporting a busy December, but hotels and guest houses complain about poor occupancies, signs that visitors, whilst still travelling, are trading down and domestic visitors opting to stay with friends and relatives.

    We have to remain vigilant, especially in challenging times. We must stay ahead of trends and use some of these trends to our advantage, for instance promoting the great Cape Town weather to visitors facing severe winter conditions; if they are willing to travel at the last minute we can offer great value-for-money experiences.

    Innovative marketing can allow us to turn challenges into opportunities for Cape Town. We must continue investing in marketing, but not marketing in the traditional sense of the word.

    These extraordinary times call for extraordinary ideas and action. We must convince decision-makers and governments that spending on tourism promotion can pay massive returns across entire economies because tourism remains our most valuable export.

    While some are hoping for a recovery that will return us to what we were used to, I argue that nostalgia is counter-productive. It would be detrimental to our sector’s future well-being if we return to the comfortable, and now irrelevant, past. We need to shape a new purpose and a new roadmap through bold leadership and innovation.

    The solutions to current challenges and the key to future success do not lie in our past. I do not want to see Cape Town recover; I want Cape Town to lead the way to a new, future-fit environment through fundamental change!

    2011 is a make-or-break year and Cape Town Tourism will focus on some key areas to deliver real results. Cape Town is in the process of rebranding. Or, more accurately, it is moving towards being branded – since it has not, to date, had a definitive brand identity.

    This is a key element of a successful marketing campaign: creating coherence not only for the market but also for the industry and the public. The formation of an identity for Cape Town will go a long way towards the creation of niche market genres. These are the key elements of a successful 365-day marketing strategy.

    If Cape Town is going to win a year-round tourism following, it must create multiple points at which multiple markets can access it; and all at different times of the year. These include eco-tourism, cultural tourism, sporting, wine and cruise tourism – to name but a few.

    Tourism will only weather the storms of uncertainty, the seasonal nature of weather and the ups and downs of financial fortune, if it is to appeal to a number of different markets through well-packaged, quality-driven tourism propositions in several source markets, new markets and within our own domestic market.

    There is a real danger of becoming over reliant on our natural beauty and complacent as a leisure tourism destination. We must diversify and invest in new experiences and products.

    Cape Town Tourism (in partnership with the City of Cape Town, Cape Town Routes Unlimited, South African Tourism and the Training Enterprises Partnership) will, in the next weeks and months, be holding a series of workshops designed to raise awareness and action around the issues of tourism product development. This will include providing insight into how to match the product to the market, highlighting the important role of cultural and heritage tourism in our country, as well as the need for sustainable, responsible tourism: both in practice and as a packaged product.

    I have just returned from the Philippines where I was a guest speaker at an international conference on community tourism. I highlighted responsible tourism as the foundation of community-based tourism, without which it can do much more harm than good. When done right, tourism can sustain an entire society by empowering people with work and skills.

    Revenue generation is key to the industry’s ability to sustain a year-round tourism employment foundation. Without this consistency, tourism is simply not a major contributor to a more secure social fabric and is therefore, not sustainable. Meeting the needs of the bottom line, while also upholding a healthy respect for the environment, is a challenge we are not alone in facing. By environment, I mean the social as well as natural environment.

    A need for public-private partnership is increasingly apparent as we reposition Cape Town as more than just a summer leisure city. Organisations like Accelerate Cape Town have done much to elevate the business status of Cape Town, causing entire company head offices to relocate to Cape Town and adding a significant boost to the economy. Tourism in Cape Town needs more of this…

    …The Tourism Development Framework (TDF) is a City of Cape Town-born initiative to help keep us all on track as we grow our tourism industry. This framework guides the sustained development and maintenance of our tourism attractions and infrastructure, the expansion of products and services and the capacity of local businesses to benefit from tourism on a city level.

    The TDF also looks at our culture of tourism. How do we see ourselves in relation to the visitors who come here year after year, and the new visitors who are yet to come?

    To date, the common profile of a visitor to Cape Town is a white, affluent, well-travelled, English speaker. We must broaden our horizons if we are to be a real and sustainable tourism player. Our tolerant attitudes and cosmopolitan flavour must also embrace those people who come to investigate our culture because theirs is so entirely different.

    We need to sharpen our perception and get more creative in the ways we receive visitors who are not from our traditional markets, demand different experiences and are not familiar with the language, customs and ways of a westernised tourism destination.

    We had a taste of it last year when people from far-flung places came to celebrate soccer with us and we need to open up to the possibility that things must and will change to include more diversity…”

    Mariette du Toit-Helmbold
    Cape Town Tourism

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