By Thandisizwe Mgudlwa
Cape Town is well on its way to becoming the events capital of the world.
Event and business tourism are two major drivers of tourism growth in the Western Cape, according to Calvyn Gilfellan, CEO of Cape Town Routes Unlimited.
“Most of the Cape’s iconic events take place between January and April. These events are major catalysts in drawing visitors to the province and are invaluable as they add significantly to the provincial coffers.”
Seven of these events namely the Klein Karoo Nasionale Kunstefees (R95.9 million), the Absa Cape Epic (R199 million), the J&B Met (R39.9 million) the Cape Argus Pick and Pay Cycle Tour (R450 million), the Old Mutual Two Oceans Marathon (R80 million), the Cape Town International Jazz Festival (R498.6 million) and the Wacky Wine Weekend in Robertson (R30 million) collectively attracts 467 700 participants and spectators, and contributes a whopping R1.39 billion to the Western Cape’s economy.
And these are just some of the many events that are part of the city’s cultural and social fabric.
“The conference, meetings and incentive industry plays a crucial role in fuelling this growth. Whilst summer season figures were boosted by holiday visitors, CTRU’s Convention Bureau and its partners went quietly along with their business by securing no less than nine conferences in the past couple of months.
On the list are the prestigious European Systems Engineering Conference (2014), the International Travel Partnership Global Conference (2012) and the International Gynaecologic Cancer Society Regional Meeting on Gynaecologic Cancers (2014).
The collective estimated economic impact of these nine conferences is R70 million.
Meanwhile, the Bureau for Economic Research (BER), in its second quarterly economic report on the Western Cape economy as commissioned by the Western Cape Government, found that after contracting by 1.3 per cent during 2009, economic activity in the Western Cape grew by of 3.1 per cent during 2010.
This is higher than the national economy which only grew at 2.9 per cent during the same period.
This trend is expected to continue with the Western Cape’s GDP growth for 2011 likely to be higher than that recorded nationally.
Estimates for 2011 suggest that the Western Cape should continue to outperform the national economy with growth likely coming from the retail and financial services sectors.
Growth in the Western Cape economy was boosted by increased activity in the manufacturing (5 per cent), finance (3.6 per cent) and retail (3.3 per cent) sectors.
Business confidence in the Western Cape fell to 45 index points from 49 during the first quarter of 2012, in line with national trends.
However, the drop Western Cape confidence was less pronounced, resulting in confidence in the Province being higher than that of South Africa.
Much of this difference can be explained by significantly higher confidence amongst Western Cape manufacturers than is the case nationally.
National manufacturing confidence fell sharply during the first quarter of 2012, as domestic demand disappointed. However, confidence amongst Western Cape manufacturers rose to 58 per cent in the second quarter of 2012, from 47 during the first quarter of 2012.
The main reason for the increase in provincial manufacturing confidence is as a result of domestic demand and production which accelerated during the quarter while foreign demand slowed.
Wholesaler confidence in the Western Cape registered a significant increase, rising by 20 index points to reach 58 during the second quarter of 2012.
The Western Cape economy created 5 000 jobs during the first quarter of 2012. The recorded gains in employment remain modest when compared to the growth in the labour force (those willing to participant in employment).
Unemployment in the Western Cape therefore remains too high at 22.8 per cent, but is still significantly lower than the national unemployment rate of 25.2 per cent.
Looking forward continued uncertainty in the Eurozone is likely to exacerbate the current economic situation of slowing local demand.
The forecast of a mild recession in the Eurozone for 2012 will impact on Western Cape exports as this remains an important destination for Western Cape produced goods with around 40 per cent of the province’s exports going to the European Union.
This will likely mean that the Western Cape’s GDP for 2012 is likely to be lower than what was recorded during 2011 with significant downside risks stemming from adverse global economic conditions.
Further, the review of our economy shows that we are moving in the right direction. We have made many gains – we have significantly higher business, wholesale and manufacturing confidence than has been recorded nationally. The same goes for our economic growth. However, we still have some way to go. We will also have to weather the storms of international financial crises.
The Western Cape Government believes that the creation of growth and jobs is central to ensuring that citizens of our province are able to live better lives. We remain steadfastly committed to achieving this objective in partnership with all sectors of our society.