City of Cape Town Backpacking and Youth Tourism Investigative Study

1. City of Cape Town Backpacking and Youth Tourism Investigative Study Presented by: Prof Kamilla Swart Date: 19 March 2010

2. Introduction And Methodological Approach

3. Introduction to Study • Commissioned by CoCT to provide City with direction and recommendations into facilitating and developing sector • To gain a better understanding of the backpacking market in Cape Town • To prepare an action plan to further promote, facilitate and develop niche • Develop targeted strategies, initiatives and programmes to unlock potential of market

4. Research Methodology • Define terms and concepts • Review secondary data at all levels • Conduct primary data collection at local level • Analyse data to establish trends, travel patterns & frequencies • Conduct comparative analysis to establish differences and similarities across strata • Conduct importance-performance analysis for those that have visited destination to establish destination’s strengths and weaknesses from tourists’ view point • Conduct an impact analysis and forecasting to establish possible positive and negative impacts of further developing this niche sector • Estimate future direction of the industry among others • Develop an action plan that will be city’s ‘road map’ towards taking full advantage of and optimise returns from this niche sector

5. Research Methodology • Preview • Definition of concepts • Assessment of study requirements & needs • Gathering and review of documents including city TDF, Business plans, tourism white papers etc. • Secondary data • Mainly at global & national levels and to a less extent at the local level to understand demand and supply side trends from already existing research data and information • Demand side trends such as volumes, yield, major origin markets, consumer travel patterns, demands, needs, requirements • Supply side trends such as major backpacking destination competition, availability and adequacy of resource and infrastructure supply

6. Research Methodology Primary data Primary data will be used at both national and local levels • Supply side • Establish databases of suppliers at local level including: accommodation, tour operators, attractions and transport • Divide database into strata by supplier type to get a fair representation of each • Select 30 respondents under each strata • Administer questionnaire by means preferred by respondent (self, face-to-face, e-mail, phone or mail) • Demand side • Establish databases of previous visitors to South Africa and Cape Town • Divide database into two strata (international and domestic) • Further divide strata into two (those that have visited and those that haven’t visited Cape Town) • Select 100 ‘have visited’ and 50 ‘have not visited’ internationals • Select 70 ‘have visited’ and 30 ‘have not visited’ domestics • Administer questionnaire by e-mail or phone

7. Research Methodology Action Plan Develop action plan informed by research findings, including: • Specific and measurable goals and objectives, bound by time • Time and resources that should be committed to be successful • Areas that need improvement in destination to effectively attract and serve this market and responsible parties and individuals • Identify possible problem areas such as negative impacts • Responsible parties and individuals for each component of action plan and expected results • Industry liaison group to regularly monitor, track and evaluate progress regarding performance of the niche sector according to action plan • Action plan to be finalised with industry stakeholders

8. Research MethodologyPartnership with BSA/ SAYTC • BSA (1998) market SA globally as preferred destination • SAYTC (2007) - Backpacking SA - Education Travel - Tours & transport - Volunteering SA

9. Data Collection

10. Data Collection Challenges • Industry buy-in • Low response rates to e-mail surveys • Incorrect e-mail addresses • Considered spam • Low season for backpacking establishments • Very small domestic backpacking market

11. Data Collection Interventions for challenges • Use of Survey Monkey • Banners and links on BSA website • Prizes offered for completion of surveys • Meetings held • Follow up e-mails and phone calls • Surveys left at backpacking establishments

12. Secondary Data – Key Findings

13. Secondary Data – Key Findings Definitions and concepts • Old perceptions changing • Travel alone, young career professional, late 20’s, educated, middle class, single • Concerned with money and budgeting • Increasing disposable income – ‘flashpackers’ • Increased older travellers – ‘denture venturers’ • Prefer budget accommodation • Emphasis on meeting people during travels • Flexible travel schedule

14. Secondary Data – Key Findings Definitions and concepts (cont.) • Prefer longer holidays • Prefer participatory holidays • Working holiday maker • Explorers, looking for a cultural experience • Backpacker plus – older person who is not tied down by responsibility • Travel off the beaten track • Average spend of US$3 000 on main trip • Study abroad • May have inappropriate behaviour that could offend locals

15. Secondary Data – Key Findings Backpackers to South Africa • Most from Western Europe, well travelled, long haul travellers • Most from Germany, UK and Netherlands • Young men and women; ages 21 to 25 • Usually employed in services industry • General budget of R10 000 or less • Main areas of spending: accommodation, restaurants, self-catering food supplies, take-away meals, bar tabs, night clubs and general tourist activities • Websites used: SA Tourism, Lonely Planet, Greyhound, Alternative Route, about Cape Town, Baz Bus and Coast to Coast • Small percentage on a gap year • Internet plays key role in planning for trip • Aim to interact with local South Africans and meet new people • SA seen as gateway to the rest of Africa and as a destination for humanitarian work • Spend much less time in South Africa than in other destinations such as Australia

16. Secondary Data – Key Findings Major source countries for international backpackers visiting South Africa (Rogerson, 2007)

17. Secondary Data – Key Findings Key features of South Africa visit • Average cost of return flight R6 821 • Most common airlines used: British Airways, SAA, Qantas, KLM, Virgin and Lufthansa • Most common entry point is Cape Town, followed by Johannesburg • Average length of stay: 42 days • All nights not spent in backpacker accommodation and volunteers stay in accommodation organised by organisation • Facilities considered essential include clean bathrooms, clean beds, friendly staff, self-catering facilities, Internet, travel information, lockers, laundry and a bar • Highest spend is on accommodation • Most popular activities are visiting natural sites, game viewing, visiting museums, visiting historical sites, night clubbing and township tours

18. Secondary Data – Key Findings Travel patterns within South Africa • Cape Town most popular destination followed by Kruger Park, Durban, Port Elizabeth, Jeffrey’s Bay, Paarl, Stellenbosch, Knysna, Coffee Bay and Plettenberg Bay • Most not able to visit attractions that they would like because of a lack of marketing and cost factors • High concern about safety and security • Most arrive in South Africa with a planned itinerary but often change it • Transport in South Africa is not flexible enough and places constraints on travel • Transportation services most commonly used: rental cars, domestic low cost airlines (especially One Time and Kulula) and intercity busses (especially Greyhound, Inter Cape and Translux)

19. Secondary Data – Key Findings Geographical distribution of suppliers of backpacker accommodation, by province (Rogerson, 2007)

20. Secondary Data – Key Findings General backpacker needs and requirements • Require a developed infrastructure for travelling, especially in the forms of public transport, information while travelling, Internet cafes, laundromats and accommodation • Main information needed to plan a trip is through Internet and word of mouth • Backpacker destinations require fewer infrastructures than high-end tourists as backpackers are less demanding • International Student Identity Card used for access and discounts General backpacker travel motivations • Main motivation is to explore other cultures, followed by excitement and increased knowledge • Like relaxation time • Younger travellers want more social activities

21. Secondary Data – Key Findings Global transport and accommodation trends • Main transport used to reach a destination is air • Younger backpackers make more use of rail, coach, tour busses and hitchhiking and walking • Higher disposable income and therefore often make use of hotel accommodation • Backpackers from Slovenia, UK, Canada and Mexico are more likely to make use of backpacker hostels, while those from Hong Kong and South Africa use them less frequently • South African backpackers are more likely to stay in hotels or with friends and family. Travellers from Czech Republic and Slovenia very rarely stay with friends and family. • Choice of accommodation closely related to motivation for travel • Increase in quality and professionalism in youth travel accommodation due to new markets and peer-to-peer reviews conducted online • Higher star rating means higher profit as higher rates can be charged • Hostels chosen based on location and price

22. Secondary Data – Key Findings Global backpacker accommodation use (Staywyse, 2007)

23. Secondary Data – Key Findings Average spend • Average daily spend generally low and is usually about US$20 a day • Expenditure closely related to income and average trip length • Destination visited and length of trip influences expenditure • Backpackers visiting Australasia, New Zealand, Central/Southern Africa and South America tend to have the highest total budgets for their trip Average spend per backpacker over whole visit to South Africa (EciAfrica Consulting, 2007)

24. Secondary Data – Key Findings Activities • Most popular activities include visiting historical sites and monuments, walking and trekking, sitting in cafes and restaurants and shopping, while the least popular activities are academic study and learning a language. • Undertake a wide range of activities • South African backpackers more likely to undertake academic study • In Cape Town, most popular activities include exploring Table Mountain, Green Market Square, Cape Point, Robben Island and the Castle; a wine tour and a township tour Length of stay • Average length of stay 63.5 days • Longest trips taken to Australasia, North America, Indian sub-continent • Shortest trips taken to Eastern Europe, North Africa, Southern Europe and Central / Southern Africa

25. Secondary Data – Key Findings Backpacking destinations • Europe popular because of availability of good public transport, large numbers of hostels, budget accommodation and variety of work exchange programmes • Australia and New Zealand also popular destinations because of the range of working holidays available • Destinations most popular: Southeast Asia, Australasia and South America • North America popular for older backpackers • Female backpackers more likely to travel to Western Europe, the Middle East and Central/Southern Africa while males are more likely to travel to Eastern Europe, North, Central and South America. • Least experienced backpackers visit more westernised areas of Europe, while seasoned travellers prefer more ‘challenging’ destinations such as South America, China/Japan and the Indian sub-continent • Most backpackers follow popular routes which are set out in guidebooks

26. Secondary Data – Key Findings Backpacker destinations in South Africa • Most establishments: Western Cape, Eastern Cape, Kwa-Zulu Natal, Gauteng and Mpumalanga • Limited accommodation in Free State, Northern Cape, North West and Limpopo • Significant clusters of backpacker accommodation establishments along Garden Route, Wild Coast, Kwa-Zulu Natal coast, Hogsback and Nelspruit • Backpacking plays a large role in the economies of Coffee Bay, Jeffrey’s Bay, Mossel Bay and Oudtshoorn South African backpacker accommodation survey • Key issues are lack of international and domestic marketing of SA as a competitive destination, lack of responsiveness at a provincial and municipal level to backpacking issues, a lack of regulations and new investments • Other issues around linkages with other enterprises, involvement in associations and the effects of government measures on businesses • Most common memberships with BSA, local and provincial tourism organisations and less frequently, organisations such as FTTSA

27. Secondary Data – Key Findings Infrastructure • Needs infrastructure separate to, but parallel with mainstream tourism infrastructure • Requires inexpensive transportation system, low priced hotels, youth hostels, shops, nightclubs and coffee houses Youth travel demand • Decline in demand for 2009 • Increase in demand related to increased marketing and product diversity • New partnerships set to increase demand Volunteer tourism • South Africa most popular destination • Average length of placement: 1-3 months • Usually self-financed • Volunteers mainly drawn from USA

28. Secondary Data – Key Findings Impacts of backpacker tourism • Backpackers may settle down and establish businesses in a region • Contributes to local economy as backpackers purchase local goods and services • Money spread to wider geographical area than with mainstream tourism • Pride and consideration for local communities and local development • May push locals out and gentrify an area Shortcoming for local development • Industry is predominantly white-owned and dominated • Developments continually taking place along already established tourist routes Demand side challenges • Lack of support from national and provincial government • Challenges for entrepreneurs with regard to marketing, financing and attracting new tourists • Problems with zoning and regulations

29. Primary Data – Key Findings

30. Primary Data - Key Findings-Suppliers: Lodging • Overall, business doing great for most: 71 % reported increasing business in past 5 years • All were members of BSA and agree that backpacking associations are required to: • Maintain standards within industry • Assist with marketing • Assist with provision of information • Offer assistance to SMMEs • Provide networking platforms • Government lobbying

31. Primary Data - Key Findings-Suppliers: Lodging Advertising Internet and word of mouth are main advertising channels

32. Primary Data - Key Findings-Suppliers: Lodging Seasonal occupancy rates Summer - most popular backpacking season as shown by occupancy rates However all other seasons are not too bad

33. Primary Data - Key Findings-Suppliers: Lodging Visitor characteristics • Short to medium length of stay 7-14 nights • Domestics have short advance booking times • African tourists book about 3 months in advance • Europeans & Americans about 3-6 months in advance • Europeans bring the most yield/per visit followed by North Americans and domestics

34. Primary Data - Key Findings Suppliers: Lodging Top five source markets with highest yield - 2008 • UK • Germany • Domestic • USA • Netherlands

35. Primary Data - Key Findings-Suppliers: Lodging Importance-performance of lodging facilities • Top most important lodging attributes to backpackers (supply): • Friendly staff, safety and security and clean beds (score 4.71 each out of possible 5) • Clean bathrooms (score 4.57 out of possible 5) • Friendly guests (score 4.43 out of possible 5) • Overall cleanliness (score 4.29) • Staff knowledge of local activities and attractions and advance booking facilities (score 4.14 each)

36. Primary Data - Key Findings-Suppliers: Lodging Challenges for growth and development in Cape Town • Minimal to lacking government commitment, • Lack of marketing domestic and international • Safety and security/crime • Lack of marketing support for SMMEs • Skills development and training • Lack of networking • Negative perceptions towards backpacking • Cape Town winter • Public misconception of industry

37. Primary Data - Key Findings-Suppliers: Lodging What to do going forward • Working on changing perceptions about the sector and improve the image • Provide marketing support to SMMEs • Improve safety and security • Standardise laws and regulations • Sector specific marketing campaigns • Provide government assistance • Establish skills development and training programmes • Improve communication and networking within sector

38. Primary Data - Key Findings-Suppliers: Tour Operators Languages in which services are offered • German • Spanish • Afrikaans • Xhosa

39. Primary Data - Key Findings-Suppliers: Tour Operators Challenges • Need for grading system for shark and whale operators • Strict compliance with standards and high standards for vessels • Assistance to small operators • Funding for trade shows • Sort out department of transport • Financial assistance from government • Reduction in crime and improvement of safety

40. Primary Data - Key Findings-Suppliers: Attractions Language Schools • Mostly operate all year round • Operate at 90+ % capacity in summer • Operate at 70-90% capacity other seasons

41. Primary Data - Key Findings-Suppliers: Attractions Activities offered

42. Primary Data - Key Findings-Suppliers: Attractions Main sources of business Europe seems to be major source market followed by Africa and South America

43. Primary Data - Key findings-Suppliers: Attractions Challenges • Lack of awareness of their sector • Safety and security and crime • Negative South Africa reputation abroad • Competition from other destinations • Lack of government recognition and support • Visa regulations • No standard regulation as they currently self-regulate • Lack of exposure from SAT • Shortage of cheap accommodation options

44. Primary Data - Key Findings-Demand side: Demographics Gender & Age Gender ratio: 40% male and 39% female 25-29 age group was largest followed by 20-24

45. Primary Data - Key Findings-Demand side: Demographics Ethnicity & origin • Predominantly White (68.2%), with a few Asians (4.5%) and Hispanics (3.4%) • Blacks and Pacific Islanders represented a small proportion of 2.3% each • Predominantly from Europe (64.7%), with a few from Asia and Australasia (10.6%), and North and South America (8% each) • Domestics and Africans represented only 4.5% and 3.4% each respectively. • UK was single largest source country (28.2%) followed by Germany and Brazil with 7.1% each

46. Primary Data - Key Findings-Demand side: Demographics Education Largest single group: undergraduate degree group then post graduate degree

47. Primary Data - Key Findings-Demand side: Demographics Monthly Income Largest income group: US$ 1 000-US$2 000

48. Primary Data - Key Findings-Demand side: Travel patterns & characteristics Underlying Motive to Travel Most backpackers driven to take a trip by their desire to explore new places followed by need to learn about other places and cultures

49. Primary Data - Key Findings-Demand side: Travel patterns & characteristics Main purpose of visit • Holiday (69.3%) • Visiting friends and family (11.4%) • volunteerism (10.2%) • Business (6.8%) • Attending a conference (4.5%) • Sport event (4.5%) • Shark diving (2.3%) • Study (4.5%) • Field-work and internship (1.1% each)

50. Primary Data - Key Findings-Demand side: Trip planning Time between destination selection & travel Most people travel 6 months after they decide on destination, a few take 2-3 years planning their trip