THE future of Cape Town Tourism (CTT) hangs in the balance after its main funder, the City of Cape Town, last week restricted the organisation’s mandate and cut its funding.

In a notice send out to its members on the eve of its annual general meeting on October 18, CTT said it would now be unable to deliver on its full marketing plan and was at risk of a qualified audit because of budget shortfalls. 

According to the notice, CTT’s financial year started in July, but the City only informed CTT in mid September that its grant funding for 2012/13 would be cut from R42m to R36m.  In effect, this means a R9m reduced operating budget from R48m to R39m for 2012/2013. A new Service Level Agreement received from the City on October 12 specified that CTT would no longer be responsible for “destination marketing, but only for “tourism marketing”. The difference between these functions was not immediately clear.

A new internal directorate, called Tourism, Events and Marketing, which the city established late last year, will in future manage destination marketing of Cape Town. It bridges the following city departments: Tourism, Place Marketing, Events, Arts and Culture and Strategic Assets. The City’s reasons for establishing this directorate in competition with CTT were not clear.

CTT said it was committed to a “continued positive partnership” with the City. Its Board was working with the City leadership to resolve the impact of these changes on the organisation and the tourism industry in the short-term, whilst hoping to negotiate a new long-term agreement between the City and CTT.

 The City is due to address the industry on the matter at CTT’s AGM, where members will discuss the implications and the best strategy forward.

CTT receives about 80% of its funding from the City, while the remainder is made up of membership fees and own generated funds.