Air fares and recession blamed for low World Cup numbers

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Tourism organisations have blamed the global recession and high airfares for the lower than expected turnout of Soccer World Cup tourists. The opposition Democratic Alliance party added that state airline South African Airways is – to its mind – still overcharging.

The Federated Hospitality Association of Southern Africa (FEDHASA) and the Southern Africa Tourism Services Association (SATSA) in a joint statement said high prices and the 2008/9 global recession have led to lower than expected numbers at South African tourism venues. “We believe that under a different economic climate, demand would have extended to areas outside the host cities and to the wide variety of non-hotel accommodation options available in South Africa,” they said.
“Had it not been for the global recession we have faced during the critical reservation periods of the 2010 FIFA World Cup, South Africa would have secured a significantly higher level of visitors, which in turn would have necessitated the full use of all room inventory.” The two tourism bodies also said there were other contributing factors. These included “the high airfares that temporarily prevailed at the time of the final draw and the inflexibility from service providers looking to secure contracts for 33 days”.

Match, which was officially mandated by soccer’s governing body Fifa to provide accommodation during the tournament, initially contracted accommodation for 450 000 visitors. But the latest figures indicate more than 150 000 fewer visitors than estimated. Critics say many hotels have boosted prices 5000 to 8000%, making them and SA unattractive to visitors over the next two months.

The DA meanwhile,is rubbishing assurances by SAA’s owner, the Ministry of Public Enterprises that the airline has not hiked prices during the World Cup. The party says in a written answer to a question about why prices of SAA were two to three times higher than those of any other airline during the World Cup period, the Minister of Public Enterprises replied that “SAA is not increasing all of its domestic fares for the World Cup” and that “there is no marked difference between fares offered during the World Cup and outside the World Cup period” The answer added that “when SAA’s published fares are compared with other airlines, it becomes evident that SAA is cheaper as compared to other domestic carriers”.

The party’s Greg Krumbock says this “is a startlingly incorrect statement.”

He says airline prices published on their websites show an SAA economy ticket between Johannesburg and Cape Town will cost R740 from today up until June 9. This is lower than 1time, SAA low-cost line Mango and British Airways (BA), but higher than kulula. Prices then spike up substantially, rising 386% to R3598 for an economy seat on both July 1, the day before the quarter final in Johannesburg, and July 10, the day before the World Cup final itself.



Krumbock says SAA’s fare on this day is between 45% and 314% more expensive than other domestic carriers. His figures show that Comair’s BA franchise, which is currently charging slightly more than other airlines on the Johannesburg-Cape Town route, will offer the lowest fares during the soccer event, not increasing its prices at all. Comair’s other brand, kulula, will spike from a present R500 to R1000 for the July 5 semi final to just shy of R2000 for the final.
“It is clear that SAA have increased their prices during the tournament, presumably because they are hoping to capitalise on foreign travelers who tend to check the prices of SAA first,” Krumbock says. “This means that SAA’s charging higher prices is probably turning many potential World Cup visitors away, who check up on SAA airfares, and then decide that they cannot afford to visit South Africa!
“In short, SAA is damaging our desired brand image as a value for money destination. One of the supposed rationales of state-owned entities is that they deliver important services to the public at rates that ensure that the private sector does not unreasonably price people out of a market.” He asks how the government reconciles this with the fact that SAA is charging far more than any private airline in this country.
“There is intense competition between countries who bid for the right to host the FIFA World Cup, not just because of any expected short term benefits during the tournament, but also to enhance the host country’s brand image for the foreseeable future and use this to spur economic growth through meaningful increases in tourist numbers,” the DA MP says. “While many tourists will hunt for the most competitively priced flights during the tournament, there will be significant numbers who will be scared off by SAA’s prices, particularly on the Cape Town to Johannesburg route around the quarter and semi-finals. In this sense, SAA is undermining one of our key World Cup objectives, which is to brand our country not only as a safe destination, but also a value for money one.