Sanbonani and welcome to The Property Pod, South Africa’s premier property investor podcast. September is tourism month in SA, and September 27 is marked as World Tourism Day internationally.
We are continuing our Tourism Month theme on the podcast this week. Tourism naturally is an important part of the property sector, and if you’re talking tourism in South Africa, Cape Town must surely be part of the conversation as it is the country’s and arguably Africa’s top international tourism destination. And it’s a big part of South Africa’s post-Covid tourism recovery too.
Sector heavyweights have been increasingly talking about how well things are picking up in the Mother City on the tourism front, from the likes of Growthpoint – which owns or is a part-owner of the V&A Waterfront, to fellow JSE-listed Southern Sun and City Lodge, as well as the politicians.
On this latest podcast, we chat to someone who has been heading up tourism in the city for years. He’s the CEO of Cape Town Tourism – Enver Duminy.
We speak to Duminy about not just the boom in tourism in the Cape but, with this being the Property Pod, we are also talking about increasing tourism investment coming into the Mother City.
Highlights of his interview appear below. You can also listen to the full podcast above or download it from iono, Spotify or Apple Podcasts.
A view of Cape Town with the Zeitz Mocaa (Museum of Contemporary Art Africa) on the left. Image: Cape Town Tourism website
“Absolutely … I think as Cape Town Tourism we always strive to try and drive the volume of tourists into our city, both from an international and a domestic perspective. When we looked at the latest figures around airport arrivals, international arrivals have already surpassed the 2019 numbers, the pre-Covid numbers, and we’re not even into our high season yet.”
“So yes, we are buoyed. If you speak to hoteliers, hotels are full; conferencing is coming back in a big way. We were lucky enough to have hosted some amazing global events in our city as well over this period, including the Netball World Cup. So we are definitely on a good wicket and we are hoping that this boom continues, especially in trying to make up for the significant losses that we suffered as a sector during Covid.”
South Africa has had over four million international tourism arrivals for the first six months of 2023, according to Tourism Minister Patricia de Lille, and a lot of these tourists headed to Cape Town. Is it still a case of revenge travel post-Covid? What are your expectations for the rest of the year with the peak festive season coming up?
“For me what’s always exciting about tourism is that forecast for the high season. If the current path that we’re on continues, we’ll definitely be seeing a bumper, bumper season.”
“When we look at the airport arrivals – and one of the things we have confirmed through the Cape Town Air Access Initiative is that all the airlines have agreed to fly again this season, and some of them are even increasing their frequency – that means that the demand is there, the forward bookings are there.”
“Of course, domestic [travel] is still an area of concern for us. I think if you look at, again, financial pressures on us, the levels of unemployment, [those] remain a challenge and we are happy that the Reserve Bank kept the repo rate unchanged. We were hoping that there would maybe have been a reduction in the repo rate, but I’m aware that they’ll only do that next year.”
“So I think for us right now it’s about a balance of making sure that we can continue to deliver world-class experiences in our destination, and continue to drive that international and foreign exchange that comes to our country because of foreigners. For us it’s critically important to continue to do that.”
“But again, what we remain is cautiously optimistic. We’ve seen that before – anything can happen in the destination, and globally that could upend international travel. So at this stage we remain cautiously optimistic, but the signs are there that it’s definitely going to be a bumper season again.”
Let’s take it back a little. For those who don’t know you, tell us how long you have been CEO of Cape Town Tourism, and what have been your highlights during this time?
“I’ve been fortunate enough to be at the home of Cape Town Tourism for 10 years. So I’ve seen it all – from a water crisis to a global pandemic. To be honest with you, my highlights are actually getting the industry through those challenges.”
“I think to a large extent that when tourism is doing well, that means that the time, investment, and resourcing and plans have actually worked. What’s critically important for me, definitely the highlight, is kind of the breaking barriers aspect on tourism.”
“But I think for us also the way we are set up in Cape Town is completely different from other destinations in South Africa and globally. It’s the public-private setup that we have here at Cape Town Tourism. As Cape Town Tourism we’re not a government entity at all. In fact, we are a voluntary industry association that government trusts with funding in order to do its marketing and management of a destination.”
“So we’ve been recognised by the United Nations World Tourism Organisation as one of the best models in the world, and it’s purely because we understand the flexibility and sometimes the limitations of government entities in responding to changes and adapting, etc, quickly enough, [and] that we’ve been fortunate enough to have kind of the best of both worlds – of both the public and private sectors. I think that’s been the secret to our success.”
“And of course [we have] a board that trusts us, an industry that supports us and a government that allows us to just kind of get on with growing tourism. So we’ve been fortunate in this space, and we continue to [be] that. What I always say to my team on my board, I kind of live from board meeting to board meeting as CEO, and so far I’ve survived a good couple of board meetings …”
“Indeed, it’s exciting times for tourism and especially property investment in Cape Town – of course, as you indicated, with the resurgence of interest in these areas. We do see the significant developments of, like you mentioned, Growthpoint’s Canopy, also Kasada Investments.”
“I was fortunate enough to have met with Olivier [Granet] and his team of Kasada just as we were coming out of Covid and their ambitious plan. What we are doing as a destination – we continue to be a growing destination with a lot of potential. And because we have the world-class infrastructure, you’re looking at digital nomads coming into destinations. And of course, now with the Pullman [hotel] brand as well.”
“But then, when you’re looking at private property, there’s also a significant increase in that. We see the Airbnbs also in the growth in that, and people using that as opportunities to leverage growing their own income in a household. So we are fortunate enough to see that, but of course we need to find a balance [in that] the more hotels they build, the bigger my job is in filling those hotels. So it remains that balance around us.”
“But again, what we find critically important is that these developments will not simply just make for good press releases. In fact, what they do is create jobs.”
“And tourism and the business process outsourcing have been the biggest contributors to that.”
“So you create these jobs and then, once these hotels are established, you need to keep a team in there that continues to service the clients. Of course, then that means continued jobs and not just one or two job opportunities. Then the economy starts growing.”
“But especially when global brands come in, that means also that globally we are recognised [by] the customers of those global brands that are loyal to those brands – whether it’s InterContinental, Hilton, etc – who want to stay in those properties as part of also leveraging the loyalty scheme and points system they have.”
“So when you understand that, and that investment in property, then potentially when people are looking at securitising these assets in time for pension funds, etc, that also creates the value because they can see the return on investment.”
“And as long as we continue to grow the tourism sector, grow the economy, and make sure that the city itself is keeping up with its infrastructure, its safety, security, and making it a great place to live for citizens, it therefore becomes a great place to live, to visit, a great place to invest, to trade in.
“That is critically important, especially as we are coming out of not only Covid, but also kind of 10 years of load shedding [with] an economy that is ailing. So tourism is actually playing a far more significant role than it previously did, and it will continue to do so as long as we get the basics right and continue to market our destination authentically and make sure that we also spread tourism across the city, and not just to the traditional tourism attractions. That’s also part of our mission as Cape Town Tourism.”
What kind of new investment would you like to see coming into Cape Town and SA to take South African tourism to another level?
“I think because we have a high repeat-visitation rate, ‘what’s new’ is always something that we focus on. What we have seen is that of course attractions are beginning to reinvent themselves. I was fortunate enough to be at the opening of the Vista Space at Table Mountain Aerial Cableway at the lower station; that is also now enhancing its product, so that in the event, let’s say, that the top of the mountain is closed due to weather, or whatever reason, people can still have an amazing view of Cape Town from the lower cable station, and also then have a different type of experience.”
“So we are beginning to see a lot of [attractions] beginning to reinvent themselves, adding more to their stables so that they can continue to attract previous customers. And of course new customers get to experience the same thing.”
“But [there is] one thing that I would love to see in Cape Town – if there was ever an opportunity for us to build. You spoke about the Club Med concept. We don’t have proper resorts on beaches in Cape Town, and that would be a great place.”
“If you look at our coastal life – specifically in the areas of Mitchells Plain, Strandfontein to Muizenberg – it’s a great place to start investing in, especially [in terms of] affordability. I come from Mitchells Plain, and the challenge is always around affordability of experiences – not necessarily cheap [ones] …”
With international tourists being back in a big way in Cape Town, can domestic tourists afford a holiday in the city, especially during the peak December season going into February?
“I think as a tourism sector we are also challenged with a lot of the increased input costs and having to make sure we can offer full services – electricity backup supply etc, that is affecting of course the profitability of any organisation in the tourism sector.”
“But at the same time, what we do understand is that the domestic market remains under significant pressure, and there are going to going to be trade-offs between school fees and a Christmas holiday. What we are cognisant of is making sure that there’s affordability across the range. I think because a lot of international tours come here with dollars and euros, they can afford the luxury items.”
Pocket-friendly experiences
“But what we mustn’t forget is we’ve actually got myriad experiences, from five-star to one-star, and the affordability of the range is from the upper end to a more affordable experience. In fact, what we do as Cape Town Tourism is we focus on what we call pocket-friendly experiences for families, for people with a tight budget. And when you are [heading for] a destination, the biggest cost is always getting here.”
“But in the destination, there’s a lot of affordability from rooms that are, let’s say, R500 a night through to ones that will cost you maybe R5 000 or R15 000 a night. So we’ve got that spread …”
“Also, if you happen to be a Joburger coming to Cape Town and it’s your birthday, you can go free up Table Mountain. So again we are trying to do that, and we also have on our website 50 things to do in Cape Town for under R50. So we are definitely trying to demonstrate [attractions] to locals …”
Source : Money Web
