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Maybe the tour operators should reduce there commission % aswell
I agree that our prices have become silly. My Swiss guests who have been coming to SA for years are complaining that they are paying Zurich prices at restaurants and some hotels - especially in places like Camps Bay, which is fast becoming the St. Tropez of Africa.Tourists feel they are being ripped off when they have to pay R320 PER PERSON to get into Cape Point, and then still have to pay and extra R85 to use the funicular while South Africans pay R80 and SADC Nationals R160. Boulders entry for tourists is R152 and locals pay R38. Table Mountain half price sunset special apply to South Africans only, which mean the poor tourists have to queue for even longer to get up one of the 7 Wonders of the World. Sometimes for up to 4 hours! Many of my guests have said we can keep our mountain, our penguins and our Robben Island. It's embarrassing.
Dear Bruno, while I generally support the idea of dropping prices in some cases to drive increased occupancies and tourism numbers, I am surprised that you don't seem to be aware that our winter (June, July and August) with average daily temperatures that can regularly outstrip European summer ones) is peak time when it comes to game viewing, as the bush is dry, open and game tends to concentrate around water sources. If 90% of your customers come to SA to see wildlife, this is the best time for them to come. So why would we drop our prices by 50% when across the rest of sub-Saharan Africa this is peak season? I agree with you that our prices need to be looked at, especially where airlift and hotel accommodation is concerned, but as Mike Mills says below, so do commission structures and mark-ups. Why should product owners drop their rates when international outbound tour operators often demand 40% commission? Personally, I think there should be more transparency over commission structures and a complete revision of how business is done. New products entering the market are often forced into a position of "take it or leave it" by the big operators and wholesalers who won't look at anything below 30%. How is it fair to beat rates down here in South Africa and then mark them up by sometimes hundreds of percent in Europe? This practice of gouging and ridiculous mark-ups has been a thorn in side of the South African tourism industry for many years. There needs to be parity between the rate paid and the rate charged. And there needs to be a healthy and open discussion across the industry on pricing, price gouging and commission structures. Seasonality, here in a country like South Africa, should not really make that much difference. So that's also something that needs to be reviewed.
Well said Sharon - letter received from big TO demanding 35% effectively more than one third of our turnover before tax! This contributes significantly to inflated Rack rates - we still have to pay our staff, taxes, supplies, fuel etc...where will it end?
All true, especially so as our establishment had kept the same rates for 5 years in a row!
Good evening from Norway.
I dont really think the hotel prices in South Africa is to high for the international market. Instead of lowering prices for a single hotel/resort, maybe make some packages for TOs and DMCs.
Let me use Marriott as an example here, it could have been any hotel chain. Also most independent hotels is doing marketing through some representative company overseas. Lots of hotels have things like stay 4/pay 3, stay 7/pay 5 and so on. Most of these are for stays in one single place. Instead maybe stay 12 nights with us in different properties and get your discount
I cannot say I have seen many offers where you can for instance stay 12 night with a single supplier, maybe in different properties and get f.i 15-20 % on the whole package. Most of my groups and FITs spend 10-12 nights. Maybe it could be possible to tell them if they say an extra night or two they save money?
Suppliers with good packages could get extra turnover, tourists stay longer in South Africa, and in total spending more money.
The price will be no longer be the only factor. We should now think more of sustainability ,value adding and quality services....
Although I agree with most of your points expressed here, I do not agree that European travellers will be reluctant to travel to SA in the colder months. Medical travel minimises the seasonality of a country's tourism industry. A person in desperate need of life-saving treatment (or treatment that significantly improves their quality of life), will travel at any time of the year.
However, decreasing accomodation prices will make SA a more attractive medical travel destination.
There are some valid points in the editorial, however having been a SMME in hospitality for +25 years and having traveled extensively the world ourselves- agree that in certain area's the "value for buck "has reached absurd levels which ultimately will hurt SA tourism . Just cant understand why the market cannot apply SADC pricing to the International rates advertised , to stimulate local travel by south Africans ( Example in namibian case its a 40% reduction in cost to nationals and African travelers Also agree that the value to cost ratio ( in respect to Capex then Opex ) in respect to the booking engines / sites is reaching a bubble - especially when Vat was added for this service last6 year , they could easily have accepted "vat inclusive" rating from their commissions to help hold the supplier overheads , where as rather they merely added on the cost , thus forcing non registered SMME's to raise prices to the customer to cover .
Maybe time is now for a "go getter" to start a solely South African accommodation web portal SADC priced accommodation providers only , for south Africans internal travel and family holidays at a fixed commission of 5% ( vat inclusive) ..thought for the day...
Dear Bruno,I am not sure what your point is? First of all the Rand was 16 to a euro in 2018 (on average) and not much of a difference compared with 2019.Secondly Europe was at its top in terms of economics in 2018 and the years before. For example real estate prices were up to 30-50% in the Netherlands (yes, we are Dutch owning a guest house in Gordon's Bay).
Overall prices in Europe are insane. Parking in Amsterdam will cost you 10 euro for 20 minutes in the major cities and a glass of wine, oh sorry the bottom part of a glass of wine, costs about four (4) euros in a bar or restaurant in the North part of Europe.KLM has a daily flight (KL597 & 598) to Cape Town where a ticket will cost you around 800 to 1200 euro depending the season while I can book a ticket from Amsterdam to New York for under 500 euro or an all inclusive holiday flying from Amsterdam to the Dutch Caribbean or Thailand for under 700 euro.
Booking.com charges between 15 and 18% commission in South Africa. The majority of this amount disappears to Google as you might know. Read https://www.cnbc.com/2018/1...
Due to increasing costs around the globe, prices in South Africa for petrol and commodities go up around 10% per year.
Now make your sums again:- Airline tickets to South Africa are way overpriced;- Booking.com is a slave of Google but a overwhelming percentage of travellers prefer to book via Booking.com because it is so easy.It is a choice to book via an OTA and pay at least 20% more for an accomodation, right?Lucky us, we have 40% direct bookings and still counting.- Touroperators even charge 30% and more for a booking;- Prices for commodities go up with 10% on a annual basis.- Europeans have more than ever to spend because there is no interest on their bank savings.
Your article is about pushing prices down at the end of the value chain. The end of the value chain is where it is all about for our guests.The room, excellent breakfast, stunning views, good infrastructure, 40 things to do in 40km while all other parties involved in the customer journey trying to make a buck while they are sitting behind their desk.
We need something like AirbnB but organised by the accommodation industry. Shake up the market and make parties aware that it is us, the accommodation owners who can make or break a holiday for the guests you are making money on.Booking.com is good example here. Every campaign they run, the risk, work AND the discount has to be paid by the accommodation.
If you think that 90% of the visitors come to South Africa for wild-life, you should read https://www.capetown.travel... and don't miss the quote "Most Affordable Long-haul Destination in the World - Annual UK Post Office Report 2018".
Let us manage the over a million overseas tourists coming to Cape Town and surroundings having the time of their life and you worry about to get costs in control in Europe.Germany narrowly escaped a recession in 2019, read https://www.ft.com/content/...At the end of the article it states:“After 10 years of almost unstoppable economic growth, a shorter period of stagnation is not necessarily a big crisis,”So unstoppable economic growth in Europe but Africa must cut costs?
Succes in 2020!