Saturday, June 11, 2011

Mixed bag of World Cup Fortunes

June 10 2011 

ONE year after the soccer World Cup, it’s a mixed bag of fortunes for the city. 

The R4 billion Cape Town stadium has been credited with attracting a stream of international performers. Two major concerts are confirmed for the next six months, while another two are in the pipeline. 

And as the global economy slowly emerges from the recession, analysts credit the World Cup with keeping scores of local tourism businesses afloat. 

The Fan Walk also continues to be an integral and unique part of the stadium experience whenever events are held there. 

And city residents are still reaping the benefits of the new and upgraded infrastructure built for the event. 

Upgrades along the M5 and Hospital Bend have helped reduce congestion significantly.
The event also marked the start of the roll-out of the Integrated Rapid Transit system, which aims to transform the city’s public transport. 

On the flip side, however, several upmarket city hotels built ahead of the World Cup are battling with low occupancy rates. And few have managed to build on the event’s momentum to secure repeat visitors. 

The Fan Walk only operates with the stadium and its viability is still being assessed. 

According to analysts, the post-World Cup tourism boom appears to be “non-existent”, while the head of the city’s tourism authority says Cape Town after the World Cup appears to be in a “brand vacuum”. 

There are also frequent reports questioning when the stadium, hailed for its world-class design, will be able to pay for itself. Currently its annual costs are R57 million. 

The city took back ownership from SAIL Stadefrance in January and the long-term business plan is only expected to be complete by the year end. 

Grant Pascoe, mayco member for tourism, events and marketing, said yesterday the city had opened the tender process calling for business analysts to bid for the development of a business model for the stadium. 

“The consultant is expected to factor in the eventing, commercial, property development, financial, environmental and marketing aspects during this modelling exercise.” 

While the business analyst would focus on long-term plans, the city had already approved a short- to medium-term model. 

Pascoe said the short-term plan was for six months, and focused on “ensuring business continuity”. Two major concerts were confirmed, while negotiations for another two were continuing. 

The medium-term plan spanned three years and was aimed at improving operations and attracting lucrative events. 

On securing an anchor tenant, Pascoe said talks with Western Province Rugby were continuing, “with both parties intent on win-win outcomes”. 

Closely linked to the stadium was the Fan Walk, hailed as a major success during the World Cup. 

In a report last year, the Cape Town Partnership listed a range of reasons for why the Fan Walk worked. The report said it was well-marketed and practical as it ran from Cape Town station. And the route’s position took pedestrians through some of the city’s most historical landmarks. 

The report said the future challenge would be to establish the Fan Walk as a “24/7” walking route. It also suggested that the city appoint a permanent marketing team to get the most from the Fan Walk and other World Cup initiatives. 

Pascoe said the city had received proposals to use the Fan Walk outside event days.
He was adamant that the benefits of the World Cup, and the publicity surrounding the event, were “still paying off”. 

“Applications and proposals for major events have increased, the business and tourism sector gained valuable experience and business benefits. Cape Town was regarded as arguably the best World Cup host city with a compact pedestrian event footprint, including the transport hub, central city, Fan Fest, Fan Walk, stadium and Waterfront all within a 2.4km radius. The international publicity and marketing for Cape Town over a four-year period in the run-up and during the event is still paying off.” 

But not all industries are flourishing as a direct result. 

Hotels are grappling with low occupancy rates. 

Dirk Elzinga, chairman of the Federated Hospitality Association of Southern Africa (Fedhasa) Cape, said about nine hotels, with 1 500 new hotel rooms, were built in the city before the World Cup. 

The industry grew by about 15 percent, but he said this was not accompanied by a 15 percent increase in capacity in the past year. While some hotels had “extremely low occupancies”, this was normal for the off-season. 

Elzinga had not heard of a high number of repeat visitors, but some hotels had managed to establish relationships with overseas travel agents and travel companies. 

“I know of some hotels that have been able to continue the discussion with clients they met for the first time during the World Cup period. So there are some good examples of hotels that have built repeat business based on the World Cup, but as far as I know, that has not happened with many hotels.” 

Grant Thornton SA, an accounting and consulting firm, said while the post-World Cup tourism boom seemed to be “non-existent”, the event introduced infrastructure and helped many local businesses to survive the economic slump. 

Gillian Saunders, head of advisory services at the firm, attributed the slow growth in tourism numbers after the World Cup to the lingering effects of the recession.
In an opinion piece in the Cape Argus, Cape Town Tourism chief executive Mariette du Toit-Helmbold said the city needed a new branding strategy. 

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