What does it take to create a frictionless experience for visitors? How do you make the destination not just a great place to visit, but also a great place to live? In this interview, we talked to Enver Duminy, the CEO of Cape Town tourism, on how they are planning to reopen Cape Town, not just for international tourists, but most importantly, for domestic tourists.
It was bad. Tourism was one of the first sectors impacted by our national lockdown. The presidency declared a national state of disaster around the 15th of March (Sunday). Then we were advised by that Thursday that all international travel would cease. A week later, all domestic travel was stopped. Within that space of literally ten days, there was a national lockdown of all forms of travel and tourism.
The tourism sector was quite okay to go into a 21-day lockdown. We understood that we needed to flatten the curve. We needed to give the government enough time to put in the necessary health and safety protocols, making sure there is adequate availability of beds and hospital services in the event we get to a spike in the infections. However, after 30 to 45 days, we began to feel the impact with no revenue coming in.
And as you know, tourism appears to be a luxury business, but they are very small margins if you look at the entire value chain. A lot of the costs are also on people because we are in the hospitality sector. Because of that, when you've got no income, you've got pressure on costs. We started engaging with the industry to determine the size of this impact. The study we conducted revealed quite a few things. The first thing it showed was that our sector generates about 18 billion Rand annually (USD B 1.05). It employs over 100,000 people, which is significant.
What we then figured out was that if the lockdown continued beyond, let's say 90 days, at least 80% of those businesses and jobs would be gone. That for us was the biggest shocker.
Another revelation was that, because we have a lot of small to medium enterprises coming into the sector, they were the ones that were hardest hit because of cash flow issues. What we started seeing is that small businesses that we've been investing in, over the last two decades, are the ones beginning to have job losses. So we started seeing the impact immediately. A lot of the smaller businesses also did not have contingency plans or recovery plans to deal with such situations. Because if you are a travel operator; you are the operator, you the secretary, you are the tea person, you do everything. You never have time to think of what if something terrible happens.
It has been a wake-up call for us. As the tourism body, we need to make sure that we learn from the impact of COVID-19 on small businesses and put mechanisms in place to assist them in the future. But yes, it has been quite significant in its implications.
The approach from a Cape Town perspective is similar to other regions around the world. And it's all based on the propensity of the traveller, how the traveller wants to visit the destination. That comes down your consumer. As much as we want to attract people, it's about making sure we provide consumer confidence.
Right now, consumer confidence around travel is very low as we've been in lockdown, and we are yearning to travel. That is one of the critical factors that require whoever wants to travel to take that first leap. What we see is that COVID-19 has reset tourism. It almost takes us back to the very inklings of where tourism started; you ventured out of your door, you ventured into your neighbourhood, you ventured around your city, then in your province or your region, you would go nationally, then internationally. And that's how you built confidence. And it's no different now. What people do is that when they are so used to the safety protocols within the city, it will give them comfort. As that starts improving, we will see a rise in the staycations.
A lot more domestic travellers will stay in their city and around the city. They are going to have shorter time because a lot of people's annual leave or vacation time has been reduced during this time as mitigation to save costs for companies, which means they've got less time to travel. So we need to do bear that in mind.
I think, more importantly, it's about safety. How do you provide visitor confidence around safety? And that's what we focus in our TravelWise brand. We've had the TravelWise brand for the last three years. It's focusing on all aspects of safety and also responsible tourism. What's vital for us in our strategy is not just about understanding what the consumer wants, but also understanding the communities that the visitor is going to. The communities have been affected, and we also need to educate the community to be being ready to welcome a visitor.
From an industry perspective, we focus on health and safety as a priority of doing good business. What we need to do is, of course, ramp it up to make sure that our employees also feel safe in their places of work.
We've been fortunate enough that Cape Town, over the last couple of decades, has been an attractive destination for international tourists. To some extent, we've probably excluded the domestic market. They feel a little bit alienated.
We mustn't forget about what the locals want and need, and making sure that we also cater to them. Make sure that it is a place to visit and experience for locals as much as we love to attract international tourists.
It is not necessarily how we sell the destination. We do attract probably five times more domestic tourists to our destination. But because of the exchange rate, it has a significant influence on the yield.
When an international tourist goes to a destination, there's much planning that goes into it. Many people save for a long time to plan a visit to the destination. And it could be the only trip in their lifetime.
A lot of the local people forget about that, they almost assume that their monthly paycheck will be able to afford x, y, and z and therefore the context and the view of international tourists compared to the domestic is slightly different. Even though something could be in your backyard, you likely put off your visit to another date. We need to change perceptions and the barriers to that.
For us at Cape Town tourism, it has always been about listening to the domestic market. As a marketing organization, our job is to always talk about the destination, to sing its praises and to share all that's great about it. But importantly, to do so, we also need to be able to listen. Something my mother has always instilled in me growing up was you have two ears and one mouth, use the one better than the other. That's the same approach we have in domestic tourism. We need to listen, but not listen to respond quickly and say yes, here are the packages and offers. But to get a proper in-depth analysis around what the domestic travellers want. And not also from a perception of myself as a domestic traveller. I think sometimes that's where the bias comes in. So it is about allowing for an independent view and an understanding of that market.
What we have picked up so far is price sensitivity. We are in a global financial crisis as we're coming out of COVID, as well as a local economic crisis. So price sensitivity is going to be a huge determinant for everyone. Secondly, it is going to be also fewer people employed. So where travel ranks on the hierarchy of needs are probably going to be far lower down the order. So it's about understanding those things and making sure we have mechanisms where people could put some money away towards a holiday at a particular time of the year, that allows them to plan. But it also becomes affordable enough that they can look forward to something.
For us, it's also about making sure that it is not just about pricing, but also how do we make sure that it is welcoming to locals. Because sometimes I think as locals we may see a restaurant, hotel and an attraction as being for tourists. We need to work with communities to understand and not just tell them the value of tourism for the community. If you want to travel within your city, what are the barriers, what are the perceptions? What are your frustrations and how can we then address that not just as a tourism sector, but also as the local government to make sure that we can provide those forms of support.
One of the things we wanted to do was to make sure that at this time, during the lockdown, Cape Town remains top of the mind of travellers. You've got captive audiences sitting on the devices in their homes, looking for content and dreaming of that next vacation. And what the team came up within a few days was putting together a campaign called "We are worth waiting for! Love Cape Town". And the simple idea is it's a long-distance love affair. What we did is we reminded the reasons why people have fallen in love with the destination. There's an old expression as well; absence makes the heart grow fonder.
Before that person gets fond of a different destination, let's remind you of why you fell in love with us, and that we are missing you. Hopefully, soon after lockdown, we can connect again and rekindle that love. It's mostly a play on being authentic as a destination and speaking through an emotive lens. It's about reminding Capetonians of why people save for such a long time and travel such great distances, that it could be the only trip in their lifetime. And they've chosen our destination.
We've got a short, medium and long term scenario planning that we've put together around specific timing. We need to make sure that we have the industry ready, and we have a prepared community and understand what the visitor wants. Even though those dates may be a lot more imminent, we need to be ready, because we're only going to get one shot at making sure that the visitor is safe and that the employees are safe without taking away the overall experience.
A good example is what travel was before 911 in New York and post 911. All of a sudden, you've got every single protocol of safety and security that you have to add to your travel experience. That means you need to add that into your transfers of flights if you need to catch another flight. If you need to get to a destination, need to budget into your time, which means it takes away time from the destination or the overall experience and increases stress levels.
It's also essential to understand the entire value chain in the journey and if we are going to put in safety protocols, how do we make sure that it doesn't become a burden for the traveller. So much so that he or she feels that they spent so much time worrying and feeling insecure, and didn't have time to enjoy and experience this in a more meaningful way. And that's important for us in being able to understand that and making sure we create a frictionless visitor experience from beginning to the end.
We are hoping in our conversations with the airlines that they are ready to fly. It's always going to depend on the commercial sustainability for them. How many people need to be separated between seats, how they want to make their flight patterns and all the other stuff. But I think it's no different from any other place in the world. We are going to start crawling before we start walking and before we start running. However, I am confident that as a resilient sector, we've gone through a lot more difficult challenges, and we will rise to through this again collectively, and that's the beauty of tourism. It's like a phoenix, will always rise from the ashes.
It's about understanding what is practical within the business, because each attraction, theme park, a shopping centre is different. And the consumers are different. It's about making sure that locals feel safe. Once you give that level of comfort for the locals, the tourists will also feel safe. If you do it in reverse, by focusing on the tourist, then you're also not being authentic as a destination. Our firm belief has always been that it is a great place to visit but also a great place to live.
What we have seen is that attractions, for example, are using dynamic pricing, online queuing systems, to make sure that they can at least manage social distancing and timing of visits to attractions. Making sure additional time for the screening of visitors is in place. But requesting they also respect other visitors. As much as the industry wants to do stuff, it is also going to depend on the traveller respecting the cultures and expectation of the place they're going to visit. Which means that as a tourism organization, we also need to do more in increasing awareness of what those things are for the tourist before they get here. I think a simple thing like attractions providing masks to the tourist, for free, without an additional cost. All those little things that sometimes we might overlook.
What we are doing now is to get the domestic market to experience the destination first. We can test all these protocols before international travellers come. Get the locals, staff and the family to go and experience the attraction and give feedback, which will also be part of the community feedback and readiness we are looking for. It's great in theory when you got it on a piece of paper when you're lobbying the government, you've got all this fantastic theory, but we need to test it in practice. That's what we are doing and learning every single day. We are also looking at international best practices, the United Nations and what other sectors are doing.
We have got a set of criteria to evaluate markets. That evaluation happens daily, because we've seen shifts, and I think that's the uncertainty with COVID-19. Before you could plan for the next year but right now you struggle to prepare for the next quarter because things keep changing.
The one thing we are clear on is the domestic market. That is an excellent opportunity to test all the protocols, make sure it works, and the locals enjoy the experience. We know our locals also visit overseas. It's competitive, so what we also want to do is make sure that instead of our locals going to a foreign destination, we can get them to do staycations and grow the local economy. We need to make sure that we can attract the locals with the spending power to spend that money here rather than anywhere else.
We also work quite closely with the airlines through an initiative that has been running for the last four or five years. It's called the Cape Town Air Access initiative. It is a consortium of government and private sector that does the route stimulation. Before the lockdown, we grew by about 19 new routes, just under a million additional seats to the destination. We also got our first direct flights to the US in more than two decades. So for us, that was a winning formula. It has allowed us to continue to keep the relationships with the airlines, who are also under financial pressure.
One thing that's great about the destination is that it's still a sought after destination. It doesn't mean that we're going to rest on our laurels and not to market it. But we are a lot more fortunate than other destinations that are just coming out where people are beginning to know about them and then having to go into lockdown. And I think for them, it's going to be a bigger struggle.
The one thing that always stands out is what we call our big six attractions. If you're a first time visitor, it's to see what has made Cape Town world famous. Where I'm sitting right now, in front of me is a clear view of Robben Island, where Madiba (Nelson Mandela) spent most of his time in prison, fighting for freedom and having to go through that emotional experience. One thing that COVID-19 has taught us is about connecting with our humanity. There was a definite lockdown for 27 years for Madiba. He could see Table Mountain from his prison cell and wish for a better South Africa. That's the same thing that we were hoping. So one of the definite places to visit would be Robben Island, where you actually go into a bit of lockdown. It is a moving story that gives you hope that the future is possible no matter what situation you find yourself in. So it's quite a reflective space as well.
Of course, at our biggest shopping centre, the V&A Waterfront, you can shop to your heart's desire. For anybody that's from Singapore, it kind of fails in comparison to some of your malls. But if you have that shopping bug, I think maybe Waterfront will probably quench your thirst to some extent.
I also think that we've got lots of open spaces. So from a social distancing perspective, we've got Kirstenbosch Gardens, which is probably one of the most beautiful gardens with most of the fauna and flora that you won't find anywhere else in the world.
Here within the city, we have got the Table Mountain with its aerial cableway. With a short five-minute ride, you can go up to the top of the mountain, and you've got probably the most gorgeous views of Cape Town. It also allows you to stand on that summit and appreciate the world from a vantage point, instead of just looking up at the mountain. And for me, it's sometimes that solace, even though there are people around you. If you are one of the first travellers to come to the destination, you also will not be standing in those long queues that we are so famous for.
I think something that that's really precious is the Bo-Kaap. Cape Town has got a long history of and connection with Malaysia. A lot of the Muslims who are here, that's almost a million, nearly a quarter of our population is Muslim. Their heritage comes from Malaysia, so we have what we call the Cape Malay. So if you're feeling a little bit homesick and nostalgic, you know that you can connect with it here.
If you are a cricket lover, you can come and watch a local game. There's also one of the oldest cricket clubs, the Ottoman club with a Turkish origin in Cape Town.
For anybody who wants to immerse and still feel like home, we've got lots of Muslim restaurants across Capetown, a lot of the attractions cater for Muslims and you won't feel out of place. And I think it's that understanding sensitivity, even prayer room facilities, which we have for staff, a traveller can come and use.
That's the beauty, that once you come and visit Cape Town you almost feel like you've stepped into a world where it's a mixture of where Africa meets Malaysia meets Europe. You'll see a lot of that melting pot stuff here. And you'll say, Oh, that looks a little bit familiar. But I'm not quite sure that looks like a different place. And I think that's the beauty of Cape Town. It connects a lot of these parts of the world.
In the study, we conducted people were looking at the end of 2021 optimistically, or pessimistically at the end of 2022. That all dependents on when we come out of lockdown, and where the world finds itself at that time. So I think the more we understand about the virus and how we can protect ourselves, I think the more confident people will become in venturing further beyond their four walls and the door of the house.