Cape Town linking with other SA cities in global drive to save tourism
A few recently published articles which raise issues about tourism marketing and the role of Cape Town Tourism warrant commentary:
Cape Town Tourism is the Regional Tourism Organisation for Cape Town, constituted as voluntary industry association responsible for destination marketing for Cape Town visitor and industry services. It has been hailed as a world best practice private/public partnership organisation, working closely with the industry and in a dynamic partnership with the City of Cape Town. The organisation’s annualised operating budget is in the order of R46-million, of which the City contributes R40-million towards destination marketing, visitor services (which includes operating a network of 18 visitor centres) and related product development support functions. The balance of the operating budget is covered by self-generated income derived from membership fees and commercial activities.
It is important to clarify that the City’s funding cannot be applied in totality for destination marketing. After overheads, general operating expenses and commitments to meeting SLA requirements, the marketing programme budget needs to cover all trade and consumer marketing expenses, including web portal development and maintenance, media programmes, trade promotions, events, campaigns etc.
Cape Town Tourism’s marketing strategy has always revolved around the formation of partnerships to allow for optimum use of limited resources. The current state of tourism globally requires specific interventions with the focus on generating greater demand in key markets for Cape Town. The world faces the worst tourism downturn since pre-1994 times. Never has our industry been so greatly affected by external economic factors, and we are not the only destination in the world to be smarting from a withdrawal of market demand.
A knee-jerk reaction to the situation, which it is believed will prevail in the short- to mid-term, would be foolhardy and would result in Cape Town Tourism throwing private and public money at quick-fix solutions that may or may not pay off.
As we explained in the recent tourism industry road show, our industry is facing declining returns and recovery is in the distant future unless we can induce sustainable demand. We have a strategy which will see a joint marketing programme with Johannesburg, Durban and South African Tourism to position the urban centres of South Africa to a global audience. This is essential for Cape Town if we are to address the dampened demand and reach urban tourists, who make up 70% of the world’s travellers. In addition, we are developing a campaign to secure a greater percentage of the domestic market using our events calendar to increase visits in the short break market segment, particularly during the low season.
Whilst we would like to say that all of this can be done without incremental investment, we cannot. We have explored a number of options and have a number of partners with whom we can conduct cooperative campaigns, but all these initiatives can only be generated effectively if they leverage off a strong proposition and campaign. This needs to be built and it will require incremental funding.
Competing destinations around the world have invested significant finances into global marketing campaigns, with budgets far in excess of ours, in response to the declined demand. Cape Town Tourism and the industry are grateful for the investment made by local government in the tourism sector; however, it is safe to say that, in order to compete globally, the budget needs a significant boost. In the meantime, Cape Town Tourism is working through a number of options and hopes to present an incremental funding plan to our board within the next month that will increase the operating budget substantially. Lack of funding can no longer be cited as an excuse for not competing with other national and international cities for market share; we have to work smarter and continue to identify suitable partners in the public and private sector that can work with us to turn the tide.
Cape Town Tourism’s marketing actions have been informed by global and local trends as well as input from experts and the industry. We have been flexible, open and honest in developing and sharing our plans, never afraid to adapt when market conditions dictate change. We have never proclaimed to have all the answers, but we are certainly committed to remaining relevant and dynamic. Our performance is monitored by a Memorandum of Agreement and a Service Level Agreement with the City of Cape Town. Furthermore, we have developed an organisational scorecard to monitor our progress and results against agreed-upon objectives and targets. We take accountability for what we have been contracted to do on behalf of the City (and therefore its ratepayers), but many factors impact on a destination’s market share, many factors not in the control of one organisation like Cape Town Tourism.
Ultimately as partners in government and the private sector, we should collectively aim to grow sustainable, year-round jobs, which is the real reflection of a healthy and growing local economy. Each partner has a specific role to play, and while we welcome constructive criticism, we are calling for partners to assist us in flighting an ambitious new marketing plan and global campaign aligned with and complementary to a broader economic development strategy for the region, which we believe is the correct path to follow in order to increase demand for Cape Town, aligned with and complementary to a broader economic development strategy for the region.
Mariëtte Du Toit-Helmbold, Cape Town Tourism CEO