Cape Town is set to offer the best value for money during the 2010 FIFA World Cup; according to the results of a month-long accommodation pricing survey carried out by Grant Thornton South Africa (26 March 2010).
On the back of much international criticism that South Africa is price-gouging during the 2010 FIFA World Cup, a survey was contracted by Minister of Tourism, Marthinus van Schalkwyk to establish a clear picture of prices throughout the country.
The survey polled 2479 accommodation establishments from all nine provinces with 38 percent of respondents coming from the Western Cape region. Establishments included hotels, guest houses, bed and breakfast establishments, lodges, backpackers, camping and self-catering facilities. The survey results have shown that 65 percent of Johannesburg establishments are charging more than 50 percent higher than their peak season rates, with Durban coming in at 53 percent hiking their prices to 50 percent and over their high season rates. The survey found that less than 20 percent of Cape Town’s establishments are going this route, proving that a hands-on pricing message campaign by the region’s tourism authorities has resulted in a fair, realistic pricing market for Cape Town.
The Grant Thornton Survey attributed the fair pricing in Cape Town to two occurrences namely; the excess supply of accommodation due to Cape Town’s excellent accommodation capacity and the recent opening of many new hotels adding to the already good levels of supply. This coupled with a significant slowdown in demand has forced operators to tightly control rates in order to achieve acceptable occupancies. The second factor is the efforts of Cape Town Tourism to promote ethical pricing during the 2010 FIFA World Cup™ and the signing of a 2010 FIFA World Cup™ “pricing code-of-conduct.
Cape Town Tourism warns against overpricing
Cape Town Tourism CEO, Mariette Du-Toit Helmbold comments; “Already, as far back as 2006, Cape Town Tourism launched a series of awareness sessions around the World Cup and provided the industry with pricing guidelines for the event in line with peak season rates. I strongly believe that our consistent messaging around responsible pricing and the industry’s commitment have paid off – setting an excellent standard for Cape Town in long term pricing legacy and sustainability.”
Cape Town Tourism in particular was quick to warn the industry of pitfalls experienced by other international destinations who have previously hosted major events. “Countries that inflated tourism costs during the event damaged their brand and it has taken some of them years to rebuild perception,” warns Du Toit-Helmbold.
Cape Town Tourism conduct private survey
International price sensitivity, security fears and a perception that SA was out-pricing itself, led Cape Town Tourism to conduct their own price point survey as of January 2010. Their findings reflected those of Grant Thornton’s survey; that the larger portion of establishment owners in the Cape are pricing responsibly and bookings are on the increase.
The Code of Responsible Pricing for Cape Town
Only a few weeks ago major Cape Town tourism industry role players signed the Code of Responsible Pricing for Cape Town thus committing to, and encouraging establishment owners to, price sensibly and offer value for money. It also serves as a reminder to be mindful of tourism’s role in social responsibility and the sustainable legacy of the 2010 FIFA World Cup.
Location and occupancy levels
Cape Town Tourism’s most recent member poll around hotel occupancy during the FIFA World Cup period, revealed that five and four star hotels in and around the CBD and Green Point areas are doing very well. Most were fully booked on match days with limited availability for the rest of the World Cup, whereas hotels of the same grading further afield, in the Northern and Southern suburbs as well as Somerset West, are seeing slower bookings and more availability due to their distance from the games.
Du-Toit Helmbold carries on to say, “My advice to tourism businesses is to remain responsible as far as pricing is concerned and not expect significant immediate or short term gains. If we can deliver excellent value for money experiences, the long term benefits of hosting the World Cup will far outweigh the short term and will have positive spin-offs for all of us. Let us work together towards an unforgettable event, welcoming all visitors with open arms to the Mother City and let us look towards a bright future for tourism in Cape Town. Thank you Cape Town!”