by Scott Dunlop

TRAVELLING LIGHT

Business tourism represents a significant opportunity to tourism professionals and entrepreneurs in building on existing tourism offerings or creating new ones aimed at this market

Opportunity_78_-_Article_18629_-_CTT-CEO-02.jpg

Tourism is one sector in SA that is showing consistent growth. The scope is vast: there’s the economic engine of traditional tourism, or international and domestic visitors coming on holiday, niche tourism (where visitors enjoy some more targeted attractions and experiences—sports, arts, culture, music, science, medical, wildlife and religious tourism) and then day trips and local tourism. Cape Town, as one of the economic hubs of South Africa is growing in popularity for business tourism.

“Business tourism holds great importance within the tourism sector as its benefits are two-fold: it creates direct revenue via tourism activities and is also central to economic development on a broader scale. It contributes to sustainability in retaining jobs and helps to create more employment opportunities. For this reason, it’s essential to focus on leveraging events and conferences to attract return and first-time visitors,” says Cape Town Tourism CEO, Enver Duminy.

Business tourism can refer to large, multi-national conferences or to individuals travelling for meetings. The primary purpose for travel is business, but leisure activities are often combined, so business tourism can become what’s known as ‘bleisure’ tourism. Given that this form of tourism contributed to 9% of all tourism in December (according to Cape Town Tourism’s polls at their Visitor Information Centres), it represents a significant opportunity to tourism professionals and entrepreneurs in building on existing tourism offerings or creating new ones aimed at this market.

As for visitors travelling for conferences, studies have shown that a positive experience in an attractive destination influences the likelihood that they will return to visit for leisure purposes, or recommend that destination for additional conferences by as much as 85%. The primary goal is to ensure that their initial experience of the city entices them back for a more complete holiday experience, and that they’d become consistent users of and ambassadors for conferencing and events facilities.

If Cape Town has a great airport but lacks hotels or conference venues, then we cannot recommend the city for business travel. Fortunately, Cape Town International Airport is already operating at increased capacity and is looking at further improvements to facilitate even more traffic. There are three hotel developments underway and the recent launch of the Century City Conference Centre has added to the international standard of event venues already established by the Cape Town International Convention Centre.

Although the exchange rate is currently favourable for international visitors, presenting this as a value-add for business travel is problematic, since the exchange rate can fluctuate. It may be used as leverage in obtaining advance long-term booking fees, or for negotiating accommodation or other tourism deals, but if local businesses price their offerings according to the international visitors they run the risk of pricing local business travellers out of the market.

Tourism contributes directly to 10% of the GDP in Cape Town, and is responsible for 38 838 permanent jobs and 15 489 temporary jobs created in the local sector. The spin-off on the economy and in job creation is much bigger when indirect tourism is taken into consideration. As an example of the significance of domestic spend on day trips to Cape Town in 2013 this was calculated at R3.2 billion. This is money not spent on accommodation, but on the city’s attractions, restaurants, local transport, and shopping, among others. At R3.2 billion per year, this is a significant contribution to the economy of Cape Town and an indication of the revenue supporting families across the city, according to research conducted by Grant Thornton.

For smaller operators, business tourism has the benefit of providing opportunities. SMMEs such as B&Bs close to conference venues can provide a welcome change to larger hotels, as a home from home for frequent travellers who appreciate the personal touch. Tourism professionals such as accommodation operators working with shuttle services can cultivate professional relationships with business travellers who make return visits, establishing customer loyalty. Innovators can develop products around business travellers’ needs. A prime example is Ozzies Golf Guide that provides a full golfing experience to people who have travelled for business but would like to have a round of golf while visiting. SMME Ozzies Golf Guide has partnered with hotels and golf courses to fill this gap in a niche market.

Thebe Tourism General Manager, Brett Hendricks, says it is imperative that tourism operators drive transformation by providing skills development and opportunities for young, black tourism professionals. “Partnerships and mentorships can aid entrepreneurs in creating sustainable businesses that reach a bigger consumer base. This contributes to boosting our economy in ways that benefit a wider cross-section of the population. SMMEs are at the heart of transformation in the industry.”

Events generate interest in the city, awareness of its world-class conference venues and a spin-off impact to industries peripheral to tourism such as restaurants, transport and retail. Growth in revenue from conferences being held on the African continent amounts to 15%, according to the Trends Watch report 2015, compared with a worldwide average growth of 4.5%. Cape Town, known as the ‘Gateway to Africa’, is ideally positioned to maximise the opportunities available, particularly for regional events.

A multi-stakeholder approach can assist in driving a business tourism strategy. An active example of this is the Air Access initiative in the Western Cape. Air Access is a collaboration between the Western Cape Government, the City of Cape Town, Cape Town Tourism, Airports Company South Africa, Wesgro and airline industries, all of which agree that improving accessibility to the Western Cape via more direct flights will create employment opportunities.

The initiative has already met with success and several airline operators have introduced new direct flights to the city, providing better access for business travellers for whom direct flights reduce time spent in the air or waiting for connecting flights.

Duminy says partnerships are an essential part of business tourism. “They increase the reach companies have in marketing their offerings, and the compound resources allow for operators to offer value-adds to entice bigger groups. While companies must remain competitive, strategic partnerships can result in mutually-beneficial outcomes.”

While South Africa wrestles with the challenge of unemployment (the unemployment rate as of June 2016 was 26.6%), tourism, as an employment sector is an attractive one, with 4.4% of all jobs being in tourism: one out of every 12 jobs is within the industry.

Job losses and gains by sector between 2008 to 2014

  • The manufacturing sector shed 331 000 jobs between 2008 and 2014.
  • Agriculture shed 117 000 jobs in the same period.
  • Tourism provided 48 000 more jobs in the same period.

The total contribution of the tourism sector including wider investments and the supply chain is projected to grow from 9.5% of the GDP in 2015 to 10.5% of the GDP by 2025. This is an indication that the opportunities for successful business development will continue. Cape Town has experienced steady growth in tourism numbers with direct tourism spend increasing by R1.2 billion from 2012 to 2014, according to Grant Thornton, increasing from R14.4 billion in 2012 to R15.6 billion in 2014.

“As an already-popular world-class tourism destination, Cape Town can maximise on this status quo by diversifying, so not being limited to leisure tourism, but increasing efforts to attract business tourism investment domestically, regionally and internationally,” says Hendricks.

With the much-anticipated launch of the Zeitz Museum of Contemporary Art Africa (Zeitz MOCAA) in 2017 in the V&A Waterfront’s Grain Silo District, the spotlight will once again be on the city—and tourism operators will be seeking ways to engage with the attraction and provide memorable experiences for first-time visitors.

comments powered by Disqus

RW1
R1
R1
R1

This edition

Issue 82
Current


Archive


Opportunitymag 2nd Intra-African Trade and Investment Expo: 29 - 31 August 2017. Cape Town South Africa https://t.co/rCtNDz5ZSX https://t.co/QT3nwpo0Xk 11 days - reply - retweet - favorite

Opportunitymag Here’s why workplace diversity makes business sense https://t.co/NuRuNGB1yE https://t.co/hCe0gmiKL2 11 days - reply - retweet - favorite

Opportunitymag Workplace learning the key to moving South Africa forward https://t.co/rD5Of6nQub https://t.co/Ey5ySzB5Jb 12 days - reply - retweet - favorite

  • Vusi Chaklas Mazibuko
  • Njabulobrajaay Brajaay
  • Shakira Bassa
  • Paul Nkogatse