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2010 overpricing undermines tourism business - SA Tourism

Airline companies selling flight tickets to the highest bidder, B&B and ‘second-class' hotels charging up to R1000 a night for a standard room and one meal at restaurants costing an arm and a leg. Metered-taxi drivers increasing ten-fold the fare of a short distance trip and car rental outlets not budging if you don't cough up.
This is how South Africa will look like during the 2010 World Cup as business owners' expectations to enrich themselves mount with 139 days to go.

“I don't know why people are blowing the issue of overpricing out of proportion,” a B&B manager, who declined to be named, told Bizcommunity.com this week.

“We were told to work hard to improve the quality of our products and services to meet FIFA requirements, which is what we did.

'What is wrong?'


“What it is wrong if we increase our prices a little bit to recover what we invested. This is not the PSL competition for God's sake, it is the World Cup!”

Downtown Johannesburg, metered-taxi driver Albert Mashashe seemed to echo the B&B manager's sentiments, saying: “Yes, from April the fare will go up, up, up.

“The people from overseas are coming - people with lot of money who don't mind paying up. Who knows, some might even pay us in dollars or pounds.

“It is normal to charge them a lot because the government said the World Cup is an opportunity for small businesses to make big money. What is the problem?”

However, this ‘greedy' and ‘irrational' practice continues to irritate soccer and tourism authorities who are calling on businesses to exercise restraint, saying their overpricing move could scare potential visitors away and undermine tourism in the long run.

An estimated 500 000 visitors (200 000 from Africa) are expected come to SA and spend about R10 billion.

Always those out to make a quick buck


Thandiwe Mathibela, SA Tourism communications manager, told Bizcommunity.com yesterday, 21 January 2010: “It is hard to generalise, but in all major events there will always be people trying to make a quick buck.

“This is why we encourage people to make sure that they use tourism products that have quality assurance.

“The people who are committed to building the tourism sector are aware that exploiting people during large events undermines their own business as it discourages repeat business.”

Local Organising Committee CEO Danny Jordaan said last week: “We already have close to 9.5 million visiting our shores every year because they like our good values, fair prices and service of high quality.

“It will be sad if we were to lose that because of overpricing.”

Pleas seem to fall on deaf ears


Both the SA Tourism and the minister of tourism minister have reportedly discussed the overpricing issue several times at many tourism forums.

But their pleas seem to be falling on deaf ears, as all business-minded people in SA, including sex workers, hawkers and criminals, are said to be ‘preparing well' to get a slice of the World Cup's proceedings, regardless of the unintended consequences.

Regarding the 2010 accommodation sector, Mathibela said: “As of October 2009, over 40 000 rooms had been contracted by MATCH.

“Some 30221 of these are hotel rooms, 10274 are non-hotel rooms and 631 are available through SA National Parks facilities. The Department of Tourism has provided an amount of R200 million to assist with the grading of small, medium and micro enterprise (SMME) accommodation.”

It is the first time in the history of the World Cup that FIFA is using non-hotel accommodations such as B&Bs, backpackers and hostelling, caravans and camping, country houses, guest-houses, lodges, self-catering and national parks, she pointed out.
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About Issa Sikiti da Silva

Issa Sikiti da Silva is a winner of the 2010 SADC Media Awards (print category). He freelances for various media outlets, local and foreign, and has travelled extensively across Africa. His work has been published both in French and English. He used to contribute to Bizcommunity.com as a senior news writer.
Comment
Anonymous
What is wrong?-
“What it is wrong if we increase our prices a little bit?" Is this 'manager' on this planet? Tripling and quadrupling prices is not "a little bit". It’s obscene. It is sheer, unadulterated greed - and it is going to come back and bite you. Barcelona's hospitality and tourism industries ripped off visitors when they had the Olympics there many years ago; they are still trying to recover. There are other examples as well… A Cape Town restaurant was reported on Cape Talk some time back as charging R7 for a glass of TAP WATER. I will NEVER go there. The owner justified the price because he had to supply the glass and labour to turn the tap and deliver the glass to the table. Take a closer look: R7 for a glass (say 300cc) works out at 7 x 3333 = R23331 for a kilolitre of tap water - for which the restaurant is paying something like R10- R15, max. Nice profit. Cape Town's film industry - ad productions etc – meant locals used to find roads being closed on a regular basis for shoots, such was the volume of production companies coming out here. So the locals gave the visitors the finger and became greedy, and the visitors in turn said cheers. Yes, some still come out here to do shoot, but I doubt in the previous volumes; now I can commute for months - and never see a shoot in progress. If businesses hike their prices and hence go out of business afterwards, tough luck - you have only yourselves to blame. Any business is built on repeat business - the customers who return again and again, thanks to good service at a fair price. That's Business 101. The hospitality and tourism industries in this country will suffer for years if operators are not careful.
Posted on 22 Jan 2010 09:59
Anonymous
Too much expectations from SA - Concerned Citizen-
Blame the govt for putting too mcuh hope into poor people's minds that the WC will change their lives. I mean, listen to the taxi driver. Shame on the govt. But take my word: they will be disappointed and then have a go the politicians. So much for better life for all! This is killing the country.
Posted on 22 Jan 2010 11:31
Anonymous
Lack of marketing is the real problem-
Apart from inevitable overpricing and exploitation, we have a much bigger problem. I am currently living in England, but I am following news about S.A. and especially all World Cup related stories on a daily basis. Virtually nothing can be found about South Africa's host cities. Unless SA Tourism urgently get their act together, business owners in S.A. will miss out. The World Cup 2010 presents our country with a golden opportunity to market our country to the world. Act now before its too late!
Posted on 22 Jan 2010 16:25
brett
good business-
at every world cup held prices skyrocket, called supply and demand, or capitilism
Posted on 22 Jan 2010 22:26
Anonymous
Not new - overpricing has been become the SA norm-
While I hate to think how prices will continue to increase as we head towards the 2010 FIFA World Cup, overpricing is already rife in the tourism industry. For example, a trip up Table Mountain in Cape Town last night revealed ridiculous prices of R14 for a cool drink, and R45 for the worst-cooked, adult-priced but kiddies-sized (hate to think how small the children's portions are!) meal I have ever eaten. Or rather NOT eaten as it was inedible. The consensus from our entire group of 24 guests was thank goodness for the view - that's obviously what you're paying for. I will advise all future visitors to 'bring their own' when going up the Mountain!
Posted on 23 Jan 2010 10:40
Anonymous
And also makes local consumers irate-
I was terribly disappointed with what our local providers are doing when we went for drinks at the Radisson hotel in Greenpoint over the weekend. Having gone there very frequently recently, we were disgusted to see that they have almost doubled the cost of their beers. Warning South Africans - before ordering, ask the price, otherwise beware of the bill you get stuck with!!
Posted on 25 Jan 2010 12:24
Anonymous
Marketing our country-
Generally I agree, I haven't seen the focus on marketing the host cities that one would expect. I found this information on this site pretty good though: http://www.getaway.co.za/page/2010. I like the way that the site is packaging their travel info and think it will be a good tool for visitors.
Posted on 25 Jan 2010 17:04
khami
cars,electricity,water ...etc OVERPRICED nobody comment-
People must not be fooled by greedy WC orginisers and match[fifa], they must up their prices ,it happened every where during festive holidays or big competitions.It happened in germany and rest of world ,south africa is not an ireland. We should be complaining about water,electricity and cars ..etc which cost times 3 compared to US, ASIA and the world.Salary gab of about 10 thousand rand compared to overseas employees.Dont you thing that is exploitation we should talk about because we experience it everyday and our people are unemployed ,most of them live on pension.I work abroad ,i know people of the world can afford min R2000/ppn......This is an opportunity of our people.Look Match take 30% from profit made by property owners ,why and for what contribution.South africa should not allow opportunist to take advantage of them , world is for africa to rise and shine.
Posted on 26 Jan 2010 08:43
Roxy Maqache
It is very wrong-
It is very wrong, and gives the worst impression of South Africans to outsiders. We just appear to be greedy, ignorant and completely 'clueless" to the more positive ways in which this opportunity could be utilised - ripping people off is never anything to be proud of! - Roxy Maqache
Posted on 1 Feb 2010 16:19

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