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The 2010 World Cup and the State of the Hospitality Industry in South Africa

by Fred Roed on 14/04/10 at 10:41 pm
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The Ideate team are big fans of Peter Fleck and the team over at The Last Word Hotels. Having worked with this innovative hospitality company for three years at World Wide Creative, I’ve gotten to know and respect the single minded vision of Peter and his colleagues. We recently asked Peter to share his views on the fluctuating fortunes of the tourism industry as the spectre of the 2010 World Cup Soccer Tournament looms. Be warned: this is a sober and hard-hitting interview, yet thought-provoking at the same time.

Peter, what has happened to many of the tourists that used to come to South Africa in our summer? Is this the lull before the storm or the retreating water before the tsunami comes crashing down on us in June and July?

It’s neither. The expected 450 000 international tourists who will spend R8.5 billion sustaining over 400 000 annual jobs is a pipe dream. It’s the greatest misconception since the Y2K crisis. What you have to subtract from these figures even if they prove to be correct is the cost of the lull before the storm. The loss of normal business that would have taken place without the World Cup.

No doubt the games will take place and some fans will come. The stadiums will be filled, largely with locals. It will be a television spectacular and all the world will be exposed to the beauty of the host nation. And for 30 something days some hotels will have decent occupancies and bars and restaurants will sell food and drink.

So, is there really a shortage of accommodation as was expected?

Reports that there will be a shortage of accommodation and transport facilities are already being rubbished by Match returning over 400 000 provisionally booked bed nights and releasing 300 000 airline bookings. The hype is giving way to reality and reality is starting to suggest that if we get half of those international tourists it might be a lot. FIFA and Match will get exactly what it has planned for out of the “extravaganza” but will the hospitality industry really benefit as much as the enthusiasts suggest?

There is a big danger that after the party is over the hospitality industry will be left licking some serious wounds. In fact it has already started. There are two perceptions running in parallel; one negative the other positive. Most South African’s are upbeat about the event and rightly so. We will be a proud nation to have hosted the World Cup and it will put South Africa on the map. The exposure will be unbelievable although there is a high cost to the country.

For the hospitality industry some perceptions are already influencing trade. Many potential travellers are more acutely aware of higher prices for airfares, hotel rooms and restaurant meals. And they think it’s in place already. Add to this a strong rand which mentally doubles everything again and the world recession and the logistical issues and congestion issues and maybe if you’re not a soccer fan South Africa is perhaps the one place to avoid in 2010.

How has all the negative publicity recently (Terre’blanche, Malema, etc.) affected the situation?

The World Cup will not chase away these images in a hurry. It will not explain away the cultural and political wrangling emanating from South Africa. Zuma’s visit to the UK and Malema’s mouth are unfortunately made of sterner stuff. The words kill, nationalization, corruption and crime keep people away. They arouse emotion. They provide grist to the mill and ever more compelling reasons why South Africa should be given a miss in 2010.

The problem of course is that it’s not just the 30 odd days during the staging of the World Cup. It’s a problem that has manifested itself at the beginning of the year and may extend into the following year if those that are charged with looking after South African tourism are not diligent.

What has really happened is that the World Cup, while highlighting the natural beauty and diverse cultures of our so-called rainbow nation, has also highlighted reasons why it’s not all that attractive anymore. British tourists particularly, but also some Europeans understand Africa. They know there’s crime and cultural differences but they don’t really want to be publically reminded of the issues. They don’t need that exposure like we don’t need it ourselves. Then exacerbate this with bad economic conditions, a strong rand and high prices and it’s all too convincing for the health of our industry.

Will this revelation of this unfortunate exposure now create more permanent perceptive reasons why not to go?

South Africa and Cape Town have a real challenge to prevent this from becoming reality. These reasons have stopped many tourists from coming to South Africa this summer. How many will stay away for the rest of the year and into the future. The drop in occupancies pre World Cup are frightening so much so that we need to call in the spin-doctors now in order to lessen the damage after the event. The wrong things are now headlines in the minds of many. Unlike ‘flu’ they will not go away with time or after the event.

There are already a lot of hotels and guest houses on the market and we’re 70 days away from the biggest event ever staged in Africa. How many more will be on the market after the World Cup? How many jobs will be lost to failed restaurants, hotels and associated suppliers?

In the spirit of the World Cup nobody wants to be negative. It’s a celebration to be in a position to host it. The exposure will bring many returns but we have to address the negative perceptions with equal enthusiasm; we have to understand the World Cup is not a cure-all for things that need attention; it is not a silver bullet. We cannot sit on our laurels and think the World Cup will save South Africa. We need to understand why travellers are not as agreeable to visiting us as they were before.

And if we don’t take appropriate action we may find the fascination with South Africa may have peaked in 2008.

Peter, thanks for your insight and thanks for the wake-up call. Ideate readers, head on over to The Last Word to get an idea of Peter’s vision and why he’s considered one of the pioneers in luxury hospitality in South Africa. Having recently stayed at one of their resorts, I can personally vouch that Peter’s team are certainly not resting on their laurels and are single-mindedly working towards giving guests an experience of a lifetime.

Fred Roed is the marketing guy in the Ideate crew. Fred is the CEO of web marketing company World Wide Creative and the co-founder of online learning portal Heavy Chef. Fred loves writing about people out there doing marketing right. Follow Fred on Twitter here. View more articles by Fred Roed.

Tags: 2010 world cup, football, hotels, Mike Perk, soccer, South Africa, tourism

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