Luxury tourism - Cape Town

May 12, 2014

Ex-banker Paul Harris added a R50 000 a night villa to his Cape Town hotel as the city Nelson Mandela gazed at from his island prison lures an increasing number of millionaire tourists.

Harris, 64, who quit as chief executive of FirstRand Ltd five years ago, opened the extension with a 7 500-bottle wine cellar and whiskey lounge in November. About 95% of his guests are from outside South Africa and have included Kim Kardashian and Oprah Winfrey, he said.

"We had our dark times, we had apartheid," said Harris, who uses the Ellerman House hotel, once the home of a shipping magnate, to display his art collection. "Tourism could be the best thing going for South Africa."

Cape Town, where the Atlantic coast mansions of Clifton and Camps Bay contrast with the sprawling shacks of Khayelitsha township, received a boost in January when the New York Times and London's Guardian newspapers ranked it their top place to visit in 2014.

While strikes shutter South African platinum mines and the poor protest about access to water and housing, the city's 22 five-star hotels are enjoying their best season since the boom that accompanied the hosting of the 2010 soccer World Cup.

International arrivals to Cape Town, where tourists can ride the cable car up Table Mountain or take a boat to Robben Island where Mandela was imprisoned for 18 years, rose 6.7% to almost 160 000 in the peak month of December from a year earlier, official data shows. Arrivals over the whole of 2012 were 667 814, up 5.6% on 2010.

Growth potentialWhile South Africa's economic growth rate fell to 1.9% last year, the lowest since a 2009 recession, Alan Winde, the Western Cape Province minister of finance, economic development and tourism, said the Cape Town region has the potential to double the size of its tourism industry over the next five years.

"Growth is definitely led by the luxury travel market," Winde said in a February 12 phone interview. "You speak to anyone in that space, especially a first-time visitor, and they are blown away."

Tourism in Cape Town, which was chosen ahead of Bilbao and Dublin as the World Design Capital for 2014, generates more than R15-billion a year and employs about 150 000 people, Winde said. The industry accounts for 10% of the regional economy, more than agriculture and textiles, he said.

Amazing qualityThe rand's 26% drop against the pound and 19% fall against the dollar last year, the biggest declines among 16 major currencies tracked by Bloomberg, has made luxury accommodation in Cape Town more attractive, said Katie Fewkes, Africa product manager at Audley Travel Group. The UK tour operator's South African business grew 23% in 2013 and the first two months of this year have been "really busy," she said by phone from London.

"The product in Cape Town is amazing and the kind of quality you get for your money, even in the good four-star accommodation, is fantastic compared to other parts of the world," said Fewkes, who highlights the city's ability to lure tourists back for return visits. "There are fantastic lodges, luxury hotels and boutique properties."

Demanding clients

"Our clients are generally people who have achieved something and so they are demanding," Harris said in an interview at his hotel. "Exceeding their expectations can get a bit difficult."

In 1977, Harris co-founded the bank that became FirstRand and helped build it into South Africa's second-biggest financial services company. Now he manages investments from social- networking sites to property and energy in between fortnightly visits to Cape Town from his home in Johannesburg.

"I had enough of banking," he said. "The hotel is a passion, an indulgence. It's like having an original painting. I like the concept of sharing it." – Bloomberg


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