South Africa’s tourism industry has massive potential but a few greedy operators could kill the golden goose, David Shapshak and Rehana Rossouw report
Cape Town is fast becoming one of the most expensive tourist destinations in the world with widespread profiteering in its hospitality industry. While South Africa’s tourism industry has the potential to generate 10% of the country’s income, international goodwill could be ruined by overpricing and poor service, say industry sources.
The reputation of the country’s premier destination, Cape Town, sustained a heavy knock recently when a British survey found that accommodation rates had soared well above international standards.
British consultants Pannell Kerr Foster Associates found that room rates in Cape hotels increased by 20% in the past year. This was the third highest in Africa and the Middle East, with only Kuwait and Tel Aviv increasing prices faster. Other countries increased their hotel rates by 7%.
Hong Kong is the most expensive tourist destination in the world, with an average hotel room price of $240 (about R1 080). Cape Town’s average price is $126 a night (about R567).
Cape Town ranks highly as an international destination. In a recent survey readers of the American glossy magazine Harpers Bazaar placed Cape Town third, behind San Francisco and Vancouver, in the world’s top 100 cities.
The city attracts 60% of all foreign tourists to South Africa, with 630 000 expected to visit this year. The weak rand stretches the spending power of foreign visitors and has increased tourist numbers, especially from the United Kingdom, the United States, Germany and Australia.
On the other hand the decline of the rand affects the ability of South Africans to travel abroad, and domestic visitors to Cape Town are expected to exceed 730 000 this year.
But prices and services draw fire. With four- and five-star hotel rates ranging from about R800 to R1 360 a night for a double room, the accommodation industry has come in for criticism of high prices and poor service.
Dale Pretorius, of Satour’s international section, warns that South Africa could be pricing itself out of the market. European tourists could travel to several other destinations for a fraction of the cost of travelling to South Africa.
“There’s definitely a danger of killing the golden goose,” he said. “We’re no longer the flavour of the month; we’re one of 160 destinations competing for the (tourism) traffic.
“The South African tourism industry is catering for the business and wealthy brackets, but has missed the boat for the ordinary client. There is a pricing problem, especially with four- and five-star hotels. Some hotels offer dual rates, in dollars and rands, for international and domestic customers.
“It doesn’t take long for foreign guests to find out they’ve been taken for a ride.”
Captour spokesman Jeremy Harris said the organisation had received complaints from tourists who believed they were paying slightly more than they should. Most were from people who had visited Cape Town before and were shocked at price increases.
Captour’s concern was that Cape Town was pricing itself out of the market, he said. “We would like the city to be attractive to tourists not only in terms of its natural beauty but affordability as well,” said Harris.
He said that Captour’s board included representatives of the hotel industry and at a meeting in July they had been asked to justify their prices. They had replied that price increases had been linked to the economy and profits were channelled back in the form of improving services and facilities for foreign tourists and improving staff training.
“We were satisfied with their explanation and felt their initiatives to improve their services were applaudable. At the same time, Captour would like to encourage the industry not only to look at the short-term benefits of tourism,” Harris said. “This should not be seen as a honeymoon phase, the benefits of tourism should last a whole lot longer.”
Surveys Captour conducted among tourists departing Cape Town found most were highly satisfied with rates and services offered by tour operators, he said. Day trips to wine farms, Table Mountain and Cape Point ranged from R50 to R140 per person. A personal guide could cost up to R250 a day.
Harris agreed that domestic tourists to Cape Town could find that accommodation was priced beyond their reach. He said the city could do more to attract South African visitors.
Protea Hotels group managing director, Arthur Gillis, said the R179 a night charged by some of their hotels would probably be too high for a person earning a salary of R2 000 a month, but he doubted people earning those salaries would spend their holiday at a hotel.
“Our rates have increased by the rate of inflation over the past number of years. We believe that is acceptable in South African terms. How much is too much anyway? We have a free market society.”
Gillis said his advice to domestic tourists was to avoid the peak season in Cape Town, which was between December 20 and January 5. Most hotel groups offered special packages to tourists out of season, such as Protea’s seven nights’ accommodation and car rental for the price of an airticket from Johannesburg.
“We have received no complaints about our rates, from foreign or domestic tourists who fill our hotels 12 months a year. We have a reputation to maintain and it would be foolhardy to push our rates up unrealistically.
“Our group is building four new hotels in Cape Town – that should give some idea of the demand for accommodation in the city.”
Service standards have attracted a lot of criticism, said Michael Farr, executive director of the Tourism Business Council, which represents the major players in the industry. “There’s no quick fix,” he said, adding that the industry was embarking on effective incentive-driven training to remedy the problem.
Mike Fabricius, chief director of tourism of the Department of Environment Affairs and Tourism, said the tourism industry saw significant growth of 52% from the 1994 elections to late 1995.
Tourism generated 3% of South Africa’s gross national product, compared to a world average of 10%. Crime was affecting Johannesburg which had lost significant market share to Cape Town, although recent violent anti-crime campaigns that had made headline news overseas had also scared some tourists away from the mother city.
Other industry spokesmen said that, apart from Cape Town, game lodges were also pricing themselves out of the market, with many foreign visitors preferring to pay the fractional extra for a flight to Harare to visit a Zimbabwean game farm instead.
Ian and Beulah MacKenzie from Sussex, England, are among the foreign tourists who have enjoyed Cape Town: they chose South Africa to celebrate their 20th wedding anniversary. “If your currency wasn’t so weak, we’d probably be staying somewhere far less luxurious,” he said. “Our room costs just over 100 a night and we can well afford that for just four nights.
“What we do find a bit steep are the prices at some of your restaurants. They’re similar to what you’d expect in Paris, but the food’s nowhere near as good.”
The MacKenzies said they would recommend Cape Town as a holiday destination to their friends and acquaintances. They had experienced bad weather “but the city’s far more breathtakingly beautiful than we expected”.
At the other end of the scale, Australian backpackers Boomer and Mark are paying R30 a night at their Cape Town hostel which is within walking distance of most city highlights.
“It’s close to the clubs, and that’s all that matters. We went to the Waterfront once in the three weeks we’ve been here, but there’s just shops there man, with way-out prices. I suppose it’s okay for people who come here to shop, but we’ve come to rave. We’ll buy our souvenirs on the pavement the day before we leave,” said Boomer.
The duo had only one bad experience during their stay. A week ago, after nightclubbing until the early hours of the morning, they decided they would not find their own way home and hailed a taxi. They were charged R60 for a trip they think lasted less than five minutes.
“But that was our own fault, we take the blame entirely. If we weren’t so drunk, we might have noticed we were being ripped off,” said Boomer.
“But then, if the taxi driver didn’t rip us off, we might have been mugged while we were staggering back to our digs,” said Mark philosophically.