At a tourism indaba it became clear that Cape Town has become too overpriced.

CAPE TOWN — The strongest message that Cape Town hoteliers and tour operators took away from the recent tourism indaba was that the city had become overpriced, Cape Town Routes Unlimited CE Calvyn Gilfellan said yesterday.

As the marketing organisation for Cape Town and the Western Cape, Routes Unlimited closely monitors trends in the sector — which is struggling, not only from the approaching winter season and the strong rand, but because the city has become uncompetitive compared to other long-haul holiday destinations such as Thailand and Kenya.

Cape Town as a value-for-money destination was under threat, Mr Gilfellan said during a talk at an industry networking breakfast. He urged the industry to take a long- term perspective in reviewing its pricing structure.

European outbound operators had stressed during conversations at the tourism indaba in Durban that the whole package of air fares, accommodation and restaurants in Cape Town had become too costly.

This view was confirmed by the manager of Southern Sun’s Cullinan Hotel, Ravi Nadasen.

Mr Gilfellan highlighted the difficult times that local tourism businesses were experiencing. He reminded industry stakeholders that the recession was not yet over in Europe, which contributed about 60% of Cape Town’s international tourists.

Spain, Portugal, Ireland and Greece are in the grip of a financial crisis and the imposition of austerity measures that will see the contraction of the labour market and of disposable incomes.

Last year saw a 15% increase in international arrivals to SA and 14% for the Western Cape, a rise largely, but not exclusively, driven by the hosting of the Soccer World Cup.

However, since then the industry has been suffering, with five-star hotels in particular burdened with low occupancy rates.

Mr Gilfellan conceded that rising costs — for inputs such as electricity, water, rates and maintenance — had contributed to the rise in prices. While operators were under pressure to reduce prices, the increases in operational costs limited their ability to do so.