Cape Town Tourism CEO Mariëtte du Toit-Helmbold on the pricing debate

This week, Tourism Update Online ran a letter from an inbound operator commenting on inflated prices in South Africa.

Cape Town Tourism CEO Mariëtte du Toit-Helmbold responds as follows:

Pricing and perception of pricing was an issue raised and debated with fervour prior to the World Cup, urging the tourism industry to maintain responsible pricing and reinforce Cape Town’s value for money position. At the time, we pointed out that many of the allegations were based on sensationalist, isolated incidents of absorbency by certain establishments, but that the majority of Cape Town operators were charging standard, reasonable prices for quality accommodation, services and experiences. From the research we conducted across our membership base during and after the World Cup, we know that 67.5% of guests were price sensitive – shopping around for the best deals and/or wanting to barter room rates.

We have not seen a post-World Cup boom, teaching us again that the economic knock-on effect of a World Cup is long-term, rather than an instant gratification. Add to this a recession gnawing away at our traditional source markets, and it’s easy to see why price is a hot topic.

Cape Town has a lot of hotels, most of which can compete with the top global brands. Many of these are in the four- and five-star sector. They were built in response to a need. Our visitors demanded luxury on par with the best in the world and we proved we were capable of attracting the investors to make this happen. The hotels opened and are world class.

This pre-recession, pre-World Cup response means that we now have a large supply. Earlier this week I said in an opinion piece on the future of tourism: “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.”

To tell hotels not to discount in response to leaner times is difficult. They too must run businesses, pay salaries and keep the doors open. Their running costs are exceptionally high and the landscape, locally and internationally, is a competitive one.

I believe we must offer a clearer vision of what we are selling overseas, what a visitor can expect and that one can experience the ultimate in luxury (at the price that it comes) or the best in budget accommodation, all in one incredible destination. Greed is transparent and will chase away customers. Value for money is the order of the day, whether on a large or small scale. Learning to package our destination in a more competitive, diverse and creative way that offers visitors incredible, once in a lifetime experiences and added value has to be our focus.

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