Fifa meet­ing its match

Higher book­ings show Fifa’s ‘big brother’ at­ti­tude is no key to his­toric World Cup event

Finweek English Edition - - Insight - SIKONATHI MANTSHANTSHA sikonathim@fin­week.co.za

SHINGI MUN­YEZA AD­MITS TO be­ing one of the hap­pi­est busi­ness­men in Zim­babwe. The source of his hap­pi­ness isn’t only re­lated to the sta­bil­i­sa­tion of the coun­try’s econ­omy brought about by its frag­ile pow­er­shar­ing govern­ment and the US dol­lar. The African Sun Ho­tels CE’s hap­pi­ness stems from hav­ing put one over the ar­ro­gance of the Fed­er­a­tion of In­ter­na­tional Foot­ball As­so­ci­a­tions’ (Fifa) hos­pi­tal­ity arm, Match Hos­pi­tal­ity. Late last year Mun­yeza did the un­think­able: by re­fus­ing to out­source his ho­tels to Match, Mun­yeza turned down an op­por­tu­nity to di­rectly par­tic­i­pate in the his­tor­i­cal Soc­cer World Cup, to be held in neigh­bour South Africa in five weeks’ time.

“The one-sid­ed­ness of Match’s can­cel­la­tion clause in the lease con­tract would have dam­aged our busi­ness for years to come with our peren­nial sup­pli­ers [travel agents/tour op­er­a­tors],” says Mun­yeza of the agree­ment that would have handed his 700 Liv­ing­stone ho­tel rooms to the Fifa sub­sidiary. A ma­jor con­tribut­ing is­sue was that Mun­yeza per­son­ally stud­ied the last­minute book­ing and can­cel­la­tion pat­terns in Ger­many dur­ing the 2006 tour­na­ment. “Match wanted to take all our rooms to rent out. But it would be able to can­cel the book­ings un­til up to 60 days be­fore the World Cup, with­out com­pen­sa­tion.”

That meant Match would be ex­posed to all the up­side should de­mand for the rooms stay in the 450 000 for­eign vis­i­tors range it had ex­pected. African Sun had to ac­cept all the risk should a low de­mand sit­u­a­tion arise – as it has since turned out. In the hos­pi­tal­ity in­dus­try a can­cel­la­tion penalty al­ways ap­plies when­ever a pre­vi­ously se­cure book­ing needs to be can­celled. A per­cent­age of the room rate, the penalty serves to pro­tect the ho­tel against the loss of rev­enue dur­ing the time the room was un­avail­able.

“They re­fused to make any pro­vi­sion for can­cel­la­tion. That’s their busi­ness plan,” says Mun­yeza. “But that was a gam­ble we didn’t need for a coun­try with Zim­babwe’s his­tory.” What made the sit­u­a­tion worse was that Match of­fered rates lower than those al­ready of­fered by African Sun’s peren­nial sup­pli­ers.

The Zim­babwe Stock Ex­change-listed ho­tel group had other plans. Says Mun­yeza: “We didn’t need to be pushed into a corner to do busi­ness with the Soc­cer World Cup. We re­fused to ac­cept a con­tract that didn’t make busi­ness sense for us.” Even though Match had gone as far as Mau­ri­tius to se­cure ho­tel rooms, Mun­yeza knew Zim­babwe would be first to be dropped should ho­tel de­mand not match avail­able ca­pac­ity.

This year’s tour­na­ment also co­in­cides with the peak tourism sea­son at Vic­to­ria Falls. “Look­ing at our (Zim­babwe) his­tory and sit­u­a­tion we’d have been tak­ing an un­nec­es­sary chance,” says Mun­yeza.

Af­ter fail­ing to reach agree­ment with Match, African Sun went on to ap­proach the World Cup through its “own nor­mal busi­ness chan­nels”. Book­ings at African Sun Vic­to­ria Falls are now 30% higher than the com­pa­ra­ble peak sea­son last year while Match can­celled 450 000 room nights. “We had to make a busi­ness de­ci­sion for the long term to ben­e­fit our re­la­tions with our peren­nial sup­pli­ers,” says Mun­yeza. How­ever, he ad­mits oc­cu­pancy is only “around 50% and com­ing off a very low base” due to the eco­nomic sit­u­a­tion Zim­babwe is strug­gling to free it­self from.

African Sun Ho­tels isn’t the only com­pany to re­ject Match’s bul­ly­ing tac­tics. State-owned air­line com­pany South African Air­ways re­cently can­celled its con­tract of 45 000 seats due to Match’s in­abil­ity to stick to the agreed num­ber. As the event drew closer Match kept re­duc­ing its ex­po­sure to con­tracted SAA seats as pro­jected vis­i­tor num­bers kept fall­ing.

Tourism op­er­a­tor Tour­vest’s Tommy Ed­mond re­fused to en­gage Match early on, cit­ing the un­ac­cept­abil­ity of its terms of en­gage­ment. Tour­vest even­tu­ally se­cured in ex­cess of 60 000 cor­po­rate and spon­sor­ship guests for the Soc­cer World Cup. Tour­vest has had no can­cel­la­tions.

SHINGI MUN­YEZA Tak­ing no chances

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