Airports Company South Africa is on a massive spending drive.
More than twice as many foreign tourists will visit South Africa in 2030 than is currently the case. President Cyril Ramaphosa has publicly announced that a target of 21-million foreign tourists per year is attainable.
What might seem like a lofty goal is given credence by the success of a remarkable Western Cape project to increase the number of seats on routes to and from Cape Town called Cape Town Air Access. It has been spectacularly successful. Direct flights to the city have increased the number of seats available by more than 700 000 since the programme was launched in 2015.
Cape Town Air Access is a partnership between Wesgro, the City of Cape Town, the Western Cape Government, Airports Company South Africa, Cape Town Tourism and South African Tourism.
The announcement of a new direct flight between New York and Cape Town in July 2019 by United Airlines is significant as it gives direct access to the lucrative United States market. The estimated impact on direct tourism spend is in the region of R283-million (Grant Thornton). South African Tourism believes that revenue from the US could continue to grow at 16%, leading to income for South Africa of R8.6-billion. By way of comparison, spending from the UK currently accounts for R11-billion.
Cape Town International Airport has regularly been breaking its own records for passengers, having topped 10-million passengers for the first time in 2016. Airports Company South Africa (ACSA) will spend R150-million every month for the next five years to build a new runway and in creating domestic and international terminals.
Similar programmes have been underway at South Africa’s biggest airport, OR Tambo International Airport (ORTIA) for some time, and are continuing. This Johannesburg hub and the airport management at Durban and Port Elizabeth are all exploring ways of introducing some version of the successful Air Access programme at their venues. Success will improve the chances of reaching President Ramaphosa’s ambitious goals.
Another way of raising the numbers of visitors is to improve South Africa’s visa and document regime. A decision to demand unabridged birth certificates of travelling children proved damaging but steps have been taken to amend this decision. The Department of Home Affairs has committed to introducing e-visas. Some testing has been done and it is expected to be rolled out in 2020.
Another initiative is a private-public data and booking platform to help businesses in the tourism sector to track trends and allow people to connect. The Department of Tourism, Thebe Tourism and Amadeus IT are partners in Jurni.
There are 711 745 people employed in the tourism industry, with road transport (29%), food and beverages (20%) and accommodation (19%) absorbing the largest numbers. The sector contributes 9% to South Africa’s gross domestic product (GDP).
The R900-million expansion of the Cape Town International Convention Centre (CTICC2) has given the city’s biggest venue additional volume and flexibility. Johannesburg and Durban are the other two South African cities with large MICE sectors, but towns linked to research universities (like Potchefstroom and Stellenbosch) and game and nature reserves are also popular destinations for conferences. Sun City in the North West has a wide range of venues.
Club Med has bought land on the North Coast of KwaZulu-Natal, and according to the Sunday Times, will open a 350-room, 50-villa resort in 2022.
A three-billion-year-old micro-fossil found in the Makhonjwa Mountains in Mpumalanga is thought to be the oldest sign of life on the planet. The Makhonjwa Mountains were declared a World Heritage Site by UNESCO in 2018. Culture and heritage accounts for 40% of world tourism and is one of the fastest-growing subsectors.
In Durban, a joint venture between MSA Cruises SA and Africa Armada Consortium will spend R175-million on the financing‚ construction‚ maintenance and operation of a cruise terminal for a 25-year concession period.
The Port of Cape Town has launched its dedicated cruise-ship terminal, and the area between the terminal and the Cape Town International Convention Centre is being developed as a multi-use precinct called The Yacht Club.
A significant move in the South African hotel sector is the decision by Marriott International to develop Marriott-branded hotels in the country.
On the eastern edge of Cape Town’s Foreshore, an ambitious plan envisages two new hotels, flats, retail space and offices rising out of ground currently occupied by three car dealerships and a roadworthy station on Christiaan Barnard Street. The Harbour Arch concept is based on Johannesburg’s Melrose Arch, with seven tower blocks to be constructed on 200 000m², roughly half the footprint of the V&A Waterfront.
In 2018 Autograph Collection Hotels, another Marriott International brand, acquired five African Pride Hotels in South Africa. These range from properties in Cape Town and Johannesburg to a lodge in the small town of Irene and a mountain getaway in the Magaliesburg mountains.
Buying into Protea Hotels has given Marriott access not only to the South African market, but to many other African countries. The company now operates 61 hotels in South Africa across six brands, with a total of 8 000 rooms.
Neal Jones is Marriott International’s Chief Sales and Marketing Officer, Middle East and Africa. He says the company has another five hotels under development which will add more than 1 000 more rooms. Still more brands are due to be rolled out: Residence Inn by Marriott and Marriott Executive Apartments. Jones describes South Africa as “one of our key markets and strategic to our growth”.
Says Jones, “With our diverse brands we pretty much have a brand for every type of traveller.”
Marriott is embracing new technology. “They key is to balance hi-tech with hi-touch,” comments Jones. “So technology becomes an enabler for our guests to experience a more personalised experience and to do this seamlessly.” Through the Marriott Bonvoy app, guests can check in and make requests.
Tsogo Sun Holdings split its casino and hotel operations in 2019 in order to unlock value in the two sectors. With a market cap of R25-billion, Tsogo is the country’s biggest hotel group. It has 36 hotels and three casinos in Gauteng. The hotels range across several brands covering four market segments. SunSquare, Southern Sun Hotels, Southern Sun Resorts, Garden Court and StayEasy are among the group’s brands.
In the Cape Town CBD 500 new rooms have been added to the city’s stock, courtesy of two Tsogo Sun hotels, plus a smaller hotel in the De Waterkant (Capital Mirage). Tsogo Sun already operates several hotels in greater Cape Town, including three full-service hotels in the city centre, the Cullinan, Southern Sun Waterfront and Southern Sun Cape Sun. The other seven hotels cover five brands in the Tsogo Sun stable.
Peermont Hotels, Casinos and Resorts has added the Emerald Resort & Casino to its portfolio of properties. Peermont purchased the Vanderbijlpark property from US company Caesars Entertainment Corporation, which brings to 11 the number of casino resorts it runs on the subcontinent.
Located on the Vaal River, Emerald Resort has a water park, a game park, a spa and several restaurants. Peermont’s suite of four hotels in the Emperors Palace complex next to OR Tambo International Airport, also houses a large casino where players have access to 1 724 slot machines and 67 tables.
The Kruger National Park is one of South Africa’s great tourism assets and the Thebe Tourism Group has come up with a unique new way to enjoy the reserve. It has refurbished a train as a hotel and parked it on a bridge on the Sabie River, famous for its buffalo and hippo. The Kruger Shalati Development is one of three developments in Mpumalanga being undertaken by Thebe. The other two are the Blyde Canyon Community Project and proposed developments for Lisbon Estate which is adjacent to Kruger Park. The Lisbon development (not far from Skukuza Camp) is projected to comprise two hotels, retail, hospitality and dining facilities and staff housing associated with the Lisbon Estate.
First appeared in South African Business 2020.