Making a plan

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‘Day Zero’ may have been pushed back, but the water crisis in South Africa’s Western Cape has had a significant impact on travel to Cape Town, as Dylan Rogers discovered.

Hope you can see the irony – as I write this – in late May – the South African Weather Service has issued a flood alert for Cape Town, with 29mm of rain expected in the next 24 hours and the possibility of flash floods in urban areas of the metropole.

Ironic, maybe, but actually tragic, as South Africa’s most inviting tourism destination lurches from one extreme to the other – from drought to flood – with many lives affected and a material impact on travel and tourism-related businesses in the city.

The drought in the Western Cape actually began as far back as in 2015 and has resulted in a severe water shortage in the region, most notably affecting the city of Cape Town. With dam levels predicted to decline to critically low levels, the city announced plans for ‘Day Zero’, when if a particular lower limit of water storage was reached, the municipal water supply would largely be shut off, potentially making Cape Town the first major city to run out of water.

Through water-saving measures and water supply augmentation, by March the city had reduced its daily water consumption by more than half to around 500 million litres per day, resulting in the initial forecast of Day Zero in April being re-forecast to 2019. The situation however remains severe, particularly if the run of record dry winters continues through 2018.

Encouragingly, Cape Town’s five main dams were 22.1% full at the same time as the flood alert was issued‚ up 1.4% on their level at the same time in 2017. But the city has a long way to go in bringing overall consumption down, with average daily water usage exceeding the 450 million litre target set by the Department of Water and Sanitation, as Cape Town’s residents battle to keep within the 50 litres per day target set.

IMPACT ON TRAVEL INDUSTRY

So, what has this meant for the travel industry, which has completely different needs to that of the average Cape Town resident?

South African Tourism has gone to great lengths to reassure the world that Cape Town is open for business and that all visitors are welcome, as long as they are willing to play their part in conserving water.

“It’s all still here – as beautiful and appealing as ever,” says John van Rooyen, Tsogo Sun’s Operations Director for the Cape Region. “The mountain hasn’t moved, the beaches and the harbour are spectacular, the Waterfront delivers endless retail and entertainment options, and the city’s restaurants – while adopting innovative water-saving measures – serve the same delicious food and beverages that they are renowned for. The city is wholly open for business.”

It’s that sense of collaboration that Cape Town has been relying on.

“Visitors to the city over the past year have quickly adapted to the water restrictions, embraced them, and gone on to enjoy their stay in our beautiful city, whether on holiday or on business,” says Enver Duminy, CEO of Cape Town Tourism. “It simply requires us all to work together to continue delivering memorable visitor experiences so that they keep returning to our city.”

All of that being said, it’s undeniable – and unavoidable – that the city and its hospitality suppliers have felt the pinch.

An early-2018 survey of 18 hotels and tour operators in Cape Town by Wesgro, the Western Cape’s official tourism, trade and investment promotion agency, found that forward bookings for the period between April and September were down 30% to 50%, and that January and February revenue declined 10% to 15%. The source markets most impacted were, apparently, the UK, Germany and the U.S.

“According to the STR Global Report for our property and our compset, on average, Cape Town properties have seen a decrease in visitor number over the last eight months of between 5% and 12%,” says Darron Moore, aha Hotels & Lodges Operations Director for the Western Cape. “Over the past eight months, we have noticed that our local visitor numbers have decreased by about 7.48% and our international numbers are down by about 3%.” “From December 2017 to March 2018, we noticed a small drop in the domestic market,” says Murray Nell, Managing Director of the Winchester Mansions hotel. “In April, when Day Zero was projected to have happened, we experienced a more significant drop – approximately 20% of our revenue.”

Nell also provides an interesting breakdown of the local and international markets his property services.

“During the December/January holiday period, we noticed a decline of about 5% in South African guests visiting the hotel,” he says. “Locals became more water-conscious and aware of the severity of the drought in Cape Town. They, therefore, chose not to come to the hotel, so as not to overburden the municipal water grid.” “Our international guests often book their stay with us at least three months in advance. This corresponds with the more drastic drop that we experienced in April, as when Day Zero seemed to be imminent and awareness around Cape Town’s dam levels was at an all-time high, they decided not to come to Cape Town at all or stayed for a shorter period of time, as they believed that there would be absolutely no water.”

Cape Town certainly hasn’t benefitted from the amount of exposure the water crisis has received across the world and on some of the biggest media platforms.

“Negative international media has had a big impact on certain international markets,” says a spokesperson on behalf of Newmark Hotels, Reserves & Lodges. “Travel from the UK has declined the most, as has some travel from the US. Other markets are showing some growth – like Germany and Brazil – but these are markets that tend to spend less on accommodation. The local market is down in general. We’ve seen few local visitors over the school holidays and have noticed an increase in travel to Durban instead of Cape Town.”

All of that being said, there has been one dissenting voice in the travel and tourism sector, and whilst it may not be a hotel or hotel group, Avis is arguably South Africa’s biggest car rental brand and a serious player in both the leisure and business travel sectors.

It’s for this reason that the views of Lance Smith, Avis Budget Rent a Car, South Africa’s Executive: Sales cannot be ignored, as they provide an interesting take on the impact of the water crisis, particularly in terms of the numbers that he reviews on a weekly basis, and what he’s seen with regards the South African inbound market and arrivals in Cape Town over the past year or so.

“You’ll hear a lot in the media about this (inbound) market being down, but I think the formal industry is losing a lot to the online business, and that’s not being measured or reflected anywhere,” says Smith. “Our international forward order book suggests otherwise. I’m not seeing what others are seeing. In fact, I’m saying to my board that I might put pricing up to supress a tiny bit of demand.”

Smith goes on to say that the inbound market has been the “star of the show” – up 13% in 2016, up 17% in 2017, and showing high single digit growth in 2018.

That’s as it relates to the inbound or ‘international market’, whilst domestically, Smith concedes that Cape Town was ‘down’ in the first few months of 2018. He believes the water crisis has had a greater impact on South African conferencing and corporate travel, whilst admitting that he doesn’t have proof to back up this assertion.

As a whole, though, Smith doesn’t believe the water crisis has affected Avis Budget as much as perhaps some of the hotel operators polled.

“We haven’t seen an impact,” he says. “The impact has been on our business – washing cars, not washing cars, what’s happened to our customer satisfaction index etc. We’re not washing cars, unless we can truck in reclaimed water to our recycling plants or use what little rain there is. Fortunately, the customers understand and we’re not seeing any impact on our forward reservation book, nor the customer satisfaction index.”

Smith doesn’t take this situation for granted.

“We are surprised and when Day Zero was announced, we checked with all our international operators to see if there had been cancellations,” he says. “That’s quite contrary to what other players in the market were saying. Even today’s (in April) numbers are backing it up.”

WATER-SAVING MEASURES

Smith may be bullish, but he still references the fact that Avis Budget has had to make some significant operational changes to its business, to adjust to the water situation in Cape Town. Fortunately, for the group, these changes have paid off in spades – not just in Cape Town.

“We started not washing cars in 2016 and have actually had recycling plants since 2010,” he says. “We initially put the recycling plant in Johannesburg as a CSI initiative, but the return on investment has been less than three years, from the water-saving cost. So, it’s been good business. On all the roofs we had gutters feeding tanks underneath, and in certain areas we actually had underground water. We have dropped our water bill dramatically. The water is mainly used for operations and now we’re looking at things like solar panels. I predict in the next three years – subject to rain cycles and weather etc – we’ll be off the grid when it comes to water and power.”

Cape Town’s hotels have also had to step up and look at ways of saving water.

“Our hotels have reduced water consumption by 40% by introducing measures like monitoring water consumption per bed night, removing bath plugs, adding water-saving shower heads and tap restrictors, removing table linen, and introducing good-quality paper serviettes, and reducing linen changes,” says Van Rooyen. “We have also introduced measures to augment our water supply, by installing boreholes at Southern Sun Newlands, SunSquare Cape Town Gardens, and Garden Court Nelson Mandela Boulevard, and have installed a private desalination plant at The Westin hotel, which uses seawater already being pumped from its basements to supplement water usage. This has enabled us to take some of our largest properties off the water grid.”

Legacy Hotels & Resorts operates the Commodore and PortsWood hotels near the Cape Town Waterfront and have adopted a similar approach, putting in place restrictions such as removing all bath plugs and promoting a ‘bath-free’ offering until water restrictions are lifted.

Legacy have also made minor adjustments to the plumbing systems to ensure maximum water conservation. The hotels have also lowered overall water pressure, reducing the water volume per toilet flush by 500ml without inconveniencing guests. Hourglass shower timers have been added to all bathrooms, and linen is being changed every third day instead of every second day, in long-stay rooms. In addition, all available grey water is being recycled and pools at the hotels have been covered until further notice.

“Some guests notice the measures implemented, but a small percentage will in fact make the effort to save water,” says Moore of aha Hotels & Lodges. “All bath plugs have been removed, but you still find some guests wanting the bath plug so that they can run the bath. Interestingly, our top water-saving guest did not want to use a drop of water while he visited Cape Town over the Cycle Tour weekend. He requested that all linen and towels be removed from his room, and he made use of wet wipes, sanitizer and bottled water throughout his stay. He also didn’t want to have meals in the restaurant, to save on the washing of dishes etc.”

CONCLUSION

It’s been a tumultuous year for Cape Town’s travel industry, with the water crisis front and centre of that.

Nonetheless, it has forged on, with significant development, despite the limitations placed on it.

In the hotel sector, Radisson Hotels opened the first Radisson Red on the African continent in Cape Town, whilst Tsogo Sun unveiled its new dual-brand property in the City Bowl, around the same time. These two openings followed on that of the upmarket Silo Hotel – a luxury 28-room boutique property built in the grain elevator portion of the historic Grain Silo Complex above the Zeitz Museum of Contemporary Art Africa at the V&A Waterfront – earlier in the year.

From an air access point of view, news routes into the city were added by the likes of RwandAir, Ethiopian Airlines, Joon, Singapore Airlines, Lufthansa and Austrian Airways, whilst for the 10th consecutive year, Cape Town claimed top spot as the number one city in Africa for hosting international association meetings, by the International Congress & Convention Association (ICCA).

All the city needs now, is some rain.

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