Cape Town Tourism dealt budget-cut blow

2012-10-19 11:10
Cape Town - The role of Cape Town Tourism (CTT) has been called into question following the announcement that the City of Cape Town would be reducing its budget by an estimated R10-million as well as redirecting CTT’s mandate, in terms of destination marketing for the city.

In what could be perceived as a vote of no confidence, despite posting improved figures on the 2010/2011 financial year - as revealed at its Annual General Meeting held at the Cape Town International Convention Centre on Thursday - the City of Cape Town appears to be reverting Cape Town Tourism back to being primarily visitor-services centric in its mandate.

On the eve of its AGM Cape Town Tourism sent internal communication to its members informing them that it is now at risk of a qualified audit and not being able to fulfill its marketing objectives after confirmed budgets for the upcoming financial year were cut. Confirmation of the City’s grant funding allocation for the year was received in September, two months post Cape Town Tourism’s new financial year which is aligned with the City’s, i.e. July –June.

It indicated budgeted grant funding of R42 million to R36 million. In effect, reducing CTT’s operating budget from R48million to R39million for 2012/2013.

A delay in the implementation of the new directorate and budget finalisation subsequently resulted in a delay in the confirmation of Cape Town Tourism’s funding and mandate – yet CTT continued to deliver on its visitor and tourism marketing mandate, which is why it now finds itself in this position. 

CTT receives about 80% of its funding from the City, while the remainder is made up of membership fees and own-generated funds. 

Cape Town Tourism took over the destination marketing for the city of Cape Town when funding was withdrawn from Cape Town Routes Unlimited back in 2004. Cape Town Routes Unlimited has since been incorporated into Wesgrow - the official Destination Marketing, Investment and Trade Promotion Agency for the Western Cape.

At the end of 2011, the City of Cape Town established a new directorate called Tourism, Events and Marketing. Headed up by the Executive Director for Tourism, Events and Marketing, Anton Groenewald, the Directorate consists of the following Departments: Tourism, Place Marketing, Events, Arts and Culture and Strategic Assets.

A new Service Level Agreement was received from the City of Cape Town on 12 October 2012, specifying that CTT would now be responsible for tourism marketing in conjunction with the City and no longer destination marketing – a role that will now be managed internally by the City of Cape Town as part of its Place Marketing directorate.

Despite electing three new board members at its AGM, key questions such as "What is the difference between Destination Marketing and Tourism Marketing?" and "Why had the City created this directorate in competition with CTT?” needed answering.

According to Cape Town Mayor Patricia de Lille, emphasis needs to extend beyond Cape Town as a leisure destination, focusing on its appeal for business, events and academia.

“This strategic policy direction has been agreed to by the Mayoral Committee, the relevant Portfolio Committee and the full Council, as well as being contained in our five-year Integrated Development Plan, which was the product of consultation with over 1.5 million Capetonians.” De Lille said.

According to Anton Groenewald, the differentiation is an unfolding debate between the City and CTT.  He confirmed that “Cape Town Tourism would be responsible for any specific tourism mandate on an international stage,” referring to high-profile trade shows such as WTM London and ITB Berlin. 

Groenewald said in response to the issue of the two organizations potentially performing the same function, “We’ve shifted our strategy and will no longer simply be handing out funds. We’d like the focus in this change of strategy to be less about what’s being reduced and more about what the City will be doing to promote Cape Town.”

Some successes mentioned included the recent Manchester United match at the Cape Town stadium and the fact that the stadium is sold out for the Lincoln Park, Lady Gaga and Red Hot Chilli Peppers concerts in the coming months.

According to Mariette Du Toit-Helmbold, CEO at Cape Town Tourism, CTT is readjusting its marketing commitments to avoid posting a loss at the end of the financial year, taking into consideration that the organization used R9-million on its marketing costs and that the rest of the budget was used for running costs.

Du Toit-Helmbold stressed that the Board of Cape Town Tourism is in discussion with the City to clarify the impact on the organisation’s budget and programmes delivered but in the meantime CTT was committed to a “continued positive partnership” with the City.

"Its Board was working with the City leadership to resolve the impact of these changes on the organisation and the tourism industry in the short-term, while hoping to negotiate a new long-term agreement between the City and CTT," Du Toit-Helmbold said.

The new board members elected at the AGM were:

Craig Kensley, who serves as a sector Chairperson on the executive committee of the South African Youth Travel Confederation.

Enver Mally, Director of African Eagle DayTours  and founding member of the Community Development Trust as well as Executive Committee member of the Skal International Cape Town.

Jonathan Jacobs, currently the Provincial Manager of Tourism Enterprise Partnership in the Western Cape and Director of Skylar Investment Holdings.

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Read more on:    cape town tourism  |  city of cape town  |  travel south africa  |  tourism

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