The Western Cape water crisis is having a serious economic impact on the local tourism industry.
Forward bookings between April and September are down 30% to 50%, according to a Wesgro survey amongst 18 top hotels in Cape Town and top inbound tour operators servicing the market. “The concern around 2019 is that the people are telling us that their books are empty compared with last year,” says Wesgro chief marketing officer, Judy Lain. She says the same group of hotels and tour operators reported a 10% to 15% loss of revenue year-on-year in January and February, equating to a loss of R90m (€6.22m), predominantly from South Africa, the UK, Germany and the US.
She says the biggest reason for the slump is that traditionally most people make their bookings in January and February, a time when the messaging around ‘Day Zero’ was worst and when “images of empty dams, people queuing for water at the Newlands spring and talk of Armageddon” circulated in the international media. She says uncertainty around water security in 2019 is also impacting forward bookings.
In addition, she says, there is concern from inbound operators around the listeriosis outbreak and land reform. “I received a mail from an American agent yesterday needing clarity around land reform, which we now need to provide in partnership with the National Department of Tourism and SA Tourism,” she says.
Satsa CEO, David Frost, says the losses being recorded are “definitely concerning, but not just drought related”. “They are rather a combination of South Africa’s strong exchange rate and pricing on the back of strong demand that doesn’t necessarily make us the best value for money; concerns around water, listeriosis and land reform; plus the VAT increase – which no one has an issue with – but it does have implications for forward bookings. We’re becoming a destination with which it is difficult to do business and the danger is that our overseas suppliers will shift their focus somewhere else.”
He questions why the Western Cape government is not spending more on marketing the province, as it is a R42bn (€2.9bn) a year industry. Wesgro’s annual tourism marketing budget (excluding staff, operations and special projects) is R14.7m (€1m) and involves a staff of five for leisure tourism and six staff members at the convention bureau.
Asked to comment, Western Cape Economic Opportunities MEC, Alan Winde, said: “When it comes to actual spend, the totality of marketing spend needs to be looked at, including what is spent by local authorities, provincial and national authorities, as well as the private sector, all of which play a vital role in ensuring we remain a top of mind destination.
“The Western Cape is one of the only provinces that has an agency like Wesgro, which is mandated to market the province as a tourism and investment destination. Together with Wesgro, we have implemented several highly successful plans, including the Cape Town Air Access project, which has focused on securing direct flights into Cape Town International Airport, and has, since inception in 2015, contributed over R4bn (€276m) in direct tourism spending. Wesgro’s conferencing bureau has secured major, international conferences for the province and their team has been instrumental in managing tourism marketing in the province in the face of Day Zero and the drought.”
