As the celebrations around the World Cup reach a crescendo, it is worth reflecting on what lies beyond the tournament. Amid the excitement, it is easy to forget that, for the tourism industry, the tournament was never about the six weeks in the middle of this year, but part of a multi-year strategy that started in 2006, when South Africa won the right to host the event.
Four years ago, the industry began to gear for the world’s largest sports event. Hotel operators began to expand their capacity to meet the demand from tourists during and beyond 2010. Sponsors, airlines, tour operators and the country’s tourism authorities began to market the country.
This first phase – marketing and implementation – is almost complete. The tournament has been highly successful. Publicity around South Africa and the tournament swung from criticism of the preparations to general approval.
The initial tourist arrival and spending numbers are encouraging. Data from the Department of Home Affairs show that in the first 24 days of June, 744000 foreign visitors arrived in South Africa, up from 541000 at the same time last year. Data from credit card group Visa show that in the first 25 days of last month, spending on Visa-branded payment cards exceeded R1,33-billion, up 65 percent from R810-million during the same period last year.
While much of this data reflects a trend rather than the final picture, the trend it shows is clearly positive.
South Africa has perfectly executed the first phase. Now, as we return to work, the tourism industry must begin implementing the final part of the strategy: converting all the goodwill into increased visitor numbers.
The decade ahead looks extremely positive for South Africa’s tourism industry. South Africa is seen more as an ideal travel destination . However, the final phase may prove far harder than the initial phase of the strategy – the road ahead is filled with considerable obstacles. The immediate challenge is clearly economic. While trading conditions in the next six months may be somewhat better than they were 12 to 18 months ago, the picture is far from rosy.
The UK and Germany, two of South Africa’s largest markets, are struggling to cut their deficits and have entered a new age of austerity. Visitors from these regions will think twice before going on holiday. The problems in the rest of Europe, where the economic situation is far worse than the UK and Germany, have seen the rand surge against the euro, making South Africa more expensive to visit. Prospects in the United States are not much better, as new fears of recession have surfaced, while in Asia it appears that growth may be stalling.
However, beyond this challenge, the growth potential of the tourism industry is large – provided we do a few simple things. Importantly, South Africa must not only focus on increasing visitor numbers, but ensure visitors stay longer and spend more. One way to achieve this is by broadening the appeal of South Africa’s many regions to international visitors. Simply put, the more attractions, the longer the stay, the more they spend.
Data from SA Tourism show that Gauteng and the Western Cape see the most foreign visitors. Last year, Gauteng captured 37.7 percent of all bed nights sold in South Africa and the Western Cape 25,2 percent. Yet one of the most beautiful provinces in the country, the Eastern Cape, secured only 4,3 percent. And Mpumalanga managed only 6.7 percent. Because of the bias towards Gauteng and the Western Cape, they also secured most tourism spending – 63 percent.
Obviously one way to achieve a greater spread of visitors throughout South Africa is having a co-ordinated marketing plan – in the past, every city and province marketed itself independently of South Africa. Without being associated with South Africa as a destination as a whole, these campaigns often miss their mark.
But the bigger problem is one of limited tourism infrastructure in the less visited provinces. We need to go further by investing in world-class tourism infrastructure in regions or provinces whose appeal is not immediately recognised or known.
The work being done by the Mpumalanga Tourism and Parks Agency is a prime example of how this can be achieved. Air access to the province has improved by an agreement with airline group Comair , and this year it will spend R45m on a new skywalk at Blyde River Canyon and revamping former mining town Pilgrim’s Rest. The agency’s work has also opened up Loskop Dam as a destination, offering new concessions to developers. This combined work makes the province more attractive and more likely to secure visitors.
If initiatives such as these are implemented throughout South Africa, it will have the vital benefit of spreading tourism spending across the country and increasing employment, particularly in the poorer provinces.
South Africa also needs to seek out new markets. While our traditional markets are under immense economic pressure, new markets such as China and India continue to grow rapidly. SA Tourism data show that, last year, these two markets showed year-on-year growth of 12.4 and 17.5 percent respectively. African markets such as Nigeria and Angola also continue to grow. SA Tourism has already recognised the potential of many of these markets and is increasingly active in these countries, including opening its first office in China earlier this year.
But a market that appears not to be the focus of any campaign is the “budget” market. The World Cup has shown that there is real demand in this segment, with thousands of Dutch and English fans having opted to camp or stay in one- or two-star accommodation.
Investing in budget tourist hotels and transportation is one way to counter a strong rand and open South Africa up as a long-haul destination to budget travellers. It is also a segment that will secure the young, less affluent traveller. They may not be big spenders now but as they mature so will their travel habits.
Data from Pam Golding Hospitality shows that, nationally, the number of one-star rooms has grown only 13 percent since 2007, from 3156 to 3645 rooms in 46 hotels. Yet the number of five-star rooms has grown 22 percent, from 8013 in 2007 to 10295 rooms in 71 hotels this year. We have missed the opportunity presented by this market.
As we enter this final phase of our tourism strategy, it is worth acknowledging what the World Cup has left us: new transport infrastructure, increased air capacity; greater choice and capacity in hotel rooms that will permit unfettered growth in tourist numbers; and introduced a new way of doing things that allows us to deal with a large influx of visitors.
As the World Cup draws to a close, the tournament has put South Africa in the best possible position to become one of the world’s biggest tourism destinations. It is up to us to build on these gains.
Julius Baumann is transport and tourism editor of Business Day where this article first appeared