A Far cry from the backslapping that has accompanied South Africa’s successful hosting of the FIFA World Cup is the reality of the destroyed business and empty hotel rooms that are left in its wake.
ReservHotel International, a Cape Town-based global marketing and service company for hotels that provides 650 000 travel agents worldwide with hotel inventory through Galileo and Amadeus, had its business eroded when FIFA accommodation broker Match took over 90% of its room inventory. “They cut me out, they took my inventory and basically destroyed by business,” says MD, Vernon Kirsten, a South African tourism industry stalwart who pioneered Galileo in this market. His company’s turnover plummeted by up to 83% in June and July and by August has still not recovered. When Match began releasing rooms in phases before the event, these were located in difficult-to-sell outlying areas, while high-value rooms in the city were only released 30 days before kick-off, mostly too late to sell.
With only eight matches and no team bases in Cape Town, Kirsten claims the World Cup was disappointing for hotels, disastrous for guesthouses and brought no return on investment for people who rented out their homes. “I have the entire Seeff (estate agency) inventory on my system. Not one house was rented out.”
Kirsten is tackling FIFA on its prior promises that the World Cup would boost local business and is demanding compensation for loss of business. He has copied the demand to Western Cape Deputy Director-general, Dr Laurine Platzky, who was responsible for the co-ordinating policy and implementation of the province’s World Cup programme. “FIFA didn't help us at all,” he says. “We should have had a back-up reservation system.”
Meanwhile, hoteliers have slammed Match for not earlier communicating its failure to sell signed-up hotel inventory. Newmark Hotels Operations Director, Andy Nold, says Match gave back 99,2% of the Ambassador Hotel’s inventory only 30 days before kick-off. Luckily, the group had a Plan B and managed to fill 70% of the hotel for the tournament, albeit at lower rates.
Six weeks before kick-off, Match also returned unsold 80% of the rooms in Protea’s new 15 on Orange Hotel. “Match only kept 30 rooms over three nights,” says GM, Douglas Allen. The hotel did manage to sell 110 rooms for seven nights to Algerian soccer fans and, like most other hotels in the CBD, was full over match days.
The five-star Coral International Cape Town was not contracted to Match and managed an average 40% occupancy rate for the duration of the World Cup, not bad for a new hotel, says PR and Communications Manager, Gina Meintjies.
But with the tournament over, the hotel business has gone quiet in Cape Town. Most hotels reported no corporate business during the first two weeks after the event. At Coral International corporate business is only starting to trickle back in, while international leisure occupancies at the Winchester Mansions are worse than in winter last year, reports MD, Nils Heckscher. “Many international tourists will not come this year because of the World Cup and perceptions that rates are higher as a result. The economic crisis and the stronger rand are also playing a role.”
Despite this and despite the blow to his business, Kirsten is putting on a brave face and hoping for a bumper summer season and an even better 2011, thanks to the publicity received during the World Cup. “The spin-off that will happen now hopefully will make it all worth it,” he says.
World Cup destroys business
World Cup destroys business
12 Aug 2010 - by Hilka Birns
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