Mark Gold asserts that tourism in South Africa is not taking off because “apartheid-era” regulations are preventing charter flights from Europe (Why tourism will not take off, November 21).
It’s a pity Gold raises such an important question on the basis of shaky “facts” and anecdotes. He ignores the 24,2% growth in tourism from Europe to South Africa last year.
First, his dismissal of tourism from Africa: African overland travellers who are, he says, “looking for work rather than spending R1 000 a day”, actually contributed a full 39% of the R48,8-billion spent by foreign tourists in South Africa last year.
Sure, this money doesn’t flow to luxury game lodges or five-star hotels. But it does go to retailers and wholesalers — which is why Gauteng’s economy earns more from tourism than any other province.
These tourists do stay in hotels, visit shebeens and enjoy the city nightlife. How do we know? Not because of revenue-service forms, which Gold says are the main source, but from surveys at all major ports of entry by SA Tourism.
The government’s tourism growth strategy is about targeting a focused portfolio of markets in North America, Europe, Asia and Africa. Marketing resources and effort are focused on the high-yield opportunities — and Europe, as the world’s largest market, lies at its heart.
There are access issues, as Gold asserts, and charters have been debated as a solution for years. But the reality is that demand for charters has been low, both from operators and consumers. European tourists who enjoy charter-package travel are generally looking for a holiday experience more akin to Mediterranean and Caribbean resorts. South Africa is not set up for that.
Take Kenya’s beach resorts, for example. The packages are pre-paid in Germany and Italy to operators who own the charters and resorts. The “benefit” to Kenya comes mainly from airport and bed taxes, and the meagre wages of chambermaids and bellboys. Is this the tourism South Africa wants? It’s better to develop strategy from the other side — asking which consumers in these important markets are valuable in numbers and dollars and can be acquired at a reasonable cost.
The government has done exactly that. SA Tourism research shows that the net benefit to South Africa — measured in arrivals, spending and jobs — is highest among a different kind of traveller, experienced and worldly leisure travellers who prefer independent package holidays.
These tourists spend more per person, are flexible about when to travel and stay longer, while the cost of acquiring them is a lot lower because they are already considering coming to South Africa. Doubling South Africa’s overseas arrivals by focusing on these segments in the short- to medium-term is possible. Achieving growth will be about effective marketing, competitive pricing, the right products, good service, and yes, enough airlift capacity.
SA Tourism research shows that constraints on market access are driven less by regulation than by market dynamics and South Africa’s traditional approach to them.
Seat availability is a function of seasonality. European arrivals to South Africa fluctuate dramatically between the summer peak and winter low. Hotels and airlines cannot add capacity to meet peak demand when they are half-empty for the other eight months of the year.
Some airlines with spare aircraft add flights in the peak. But ultimately, the answer lies in increasing off-season demand. Interestingly, European travellers are becoming more flexible, and most of SA Tourism’s target segments would prefer to travel in the shoulder season or the European summer.
Increased low-season demand would improve average capacity utilisation and encourage investment in new capacity. Can we please stop selling our winters short? The game viewing is better, and Cape Town on a rainy day beats London weather hands down! The second access issue is price, including the air fare.
The real apartheid (that is, sanctions) legacy is that South Africa was sold mainly by smaller niche operators and retailers. They got the cheap tickets from the airlines and special rates from South African product owners, and sold them to their high-end customers at handsome margins.
This is changing. The huge growth in arrivals from Germany in recent years is a good example. It has come mainly because SA Tourism changed strategy, opening relationships with three of the four largest German tour operators who, between them, control access to more than half the consumers.
The scale opportunity presented by increasing access to new market segments has ensured that packages are competitively priced. Today South Africa is beating Australia hands down, despite their strong brand. Flight capacity needs to be watched to sustain this growth, and charters may be part of the answer. A review of charter policy, together with a more flexible approach to the bilateral air-service agreements, would be important steps.
But charters are not the silver bullet we all long for. South Africa’s competitiveness depends on a range of factors, and solutions can only be found through dialogue about the key issues facing the industry.
Recognising that tourism is a team sport would be an important starting point. Next week’s National Tourism Conference, on the theme of “Gearing up for Global Competitiveness”, is the ideal opportunity to start that dialogue.
Harald Harvey is a strategy consultant with Monitor Group, working in the tourism sector