March update from the CEO
It’s good to be back at work after four months away on maternity leave.
With less than three months to go to the World Cup, the debate on whether the event will be worth all the investments made is heating up. In general, there seems to be a growing sense of optimism among South Africans – all the stadiums have been completed well in time, the new road infrastructure is taking shape and soon we will be able to brag with a newly upgraded airport and railway station. One thing for sure, with her facelift almost complete, Cape Town after the World Cup will be a much-improved place as far as liveability is concerned.
Many still question the merit of hosting the World Cup in South Africa and now worries that occupancy levels will not live up to previous predictions, and concerns about over-pricing, are adding to that negative sentiment.
In 2006, Cape Town Tourism launched a series of awareness sessions around the World Cup and provided the industry with pricing guidelines for the event, in line with peak season rates. As 2010 approached, more and more rumours of overpricing emerged. We knew that the majority of the industry practised responsible pricing, but needed to prove this. To this end, we developed a 2010 World Cup accommodation survey in partnership with capeinfo.com. The survey results are proving that Cape Town is not overpriced, with 75% of Cape Town establishments charging between current winter and peak season rates, with no more than 20% charging more than peak season rates.
Tourism minister, Marthinus van Schalkwyk, also contracted Grant Thornton to do an accommodation pricing survey among more than 2 000 accommodation establishments earlier this year. Interestingly, the results are in line with those of our accommodation survey. In a media conference last week Van Schalkwyk said that Cape Town is the most reasonably priced destination, with 70% of establishments charging around peak season rates. About 26% of establishments were charging premiums of at least 50%, while 11% were at least doubling prices during the month-long tournament, which kicks off on June 11. Hotels were more likely to increase rates in Johannesburg, where 65% of establishments planned premiums of at least 50% over peak season rates. In Durban the figure was 53%, but in Cape Town only 20% of establishments planned big increases.
I strongly believe that our consistent messaging around responsible pricing and the industry’s commitment have paid off – setting an excellent standard for Cape Town in long-term pricing legacy and sustainability. Thank you Cape Town!
My advice to tourism businesses is to remain responsible as far as pricing is concerned and not expect significant immediate or short-term gains. Not everyone will, or can, benefit from the World Cup, but if we can deliver excellent value-for-money experiences, the long-term benefits of hosting the World Cup will far outweigh those of the short-term, and will have positive spin-offs for us all.
Let’s work together towards an unforgettable event, welcoming all visitors with open arms to the Mother City and let us look towards a bright future for tourism in Cape Town.