Does South Africa Need Two B2B Travel Trade Shows?

Does the tourism in­dus­try in South Africa ben­e­fit from the con­cept of B2B trade shows, and if so, is the pres­ence of two ma­jor travel trade shows in an emerg­ing market like South Africa sus­tain­able?

Tourism Tattler - - EDITORIAL - By Des Langk­ilde.

The Stats

South Africa’s in­ter­na­tional tourist ar­rivals sur­passed 10 mil­lion last year, 13 per­cent more than 2015 (see the stats on page 08).

The rea­son for this growth can be at­trib­uted to a num­ber of fac­tors. South African Tourism’s global mar­ket­ing cam­paigns, aimed at at­tract­ing more for­eign tourists to the coun­try, has no doubt, con­trib­uted to this growth. How­ever, there have been nu­mer­ous ini­tia­tives driven by the pri­vate sec­tor in the tourism in­dus­try that has also con­trib­uted to this growth.

Whilst global mar­ket­ing cam­paigns to pro­mote pos­i­tive brand aware­ness of South Africa is im­por­tant, other tac­ti­cal strate­gies re­sult­ing in ac­tual tourists vis­it­ing South Africa is also im­por­tant. The cur­rent chal­lenges that are neg­a­tively im­pact­ing on South Africa’s brand im­age in­clude is­sues of cor­rup­tion, ed­u­ca­tion cri­sis, and lead­er­ship un­cer­tain­ties, among oth­ers. These is­sues can­not be ad­dressed through ad­ver­tise­ments pro­mot­ing the pos­i­tive ex­pe­ri­ences of the coun­try. Di­rect con­tact with the global trade needs to be made to ed­u­cate and as­sure them that South Africa is still an at­trac­tive des­ti­na­tion to visit.

Trade shows or Busi­ness-to-Busi­ness (B2B) ex­hi­bi­tions, by their very na­ture, en­cour­age di­a­logue be­tween busi­nesses seek­ing opportunities (buy­ers) and busi­nesses pro­mot­ing their prod­ucts and ser­vices (sell­ers). It is well doc­u­mented that for busi­ness to suc­ceed, the need for face-to­face meet­ings is crit­i­cal and B2B trade shows pro­vide the plat­form for busi­nesses to en­gage with each other and more im­por­tantly, to con­clude busi­ness deals.

The Global As­so­ci­a­tion of the Ex­hi­bi­tion In­dus­try (UFI) es­ti­mated that the value of the global ex­hi­bi­tion in­dus­try in 2015 was worth over USD 55 bil­lion, trans­lat­ing to 680,000 full-time jobs. UFI’s Global Barom­e­ter shows that the ex­hi­bi­tion in­dus­try is geared for fur­ther growth in 2017. Ac­cord­ing to UFI, vis­i­tors and ex­hibitors spend around USD 109 bil­lion an­nu­ally at­tend­ing ex­hi­bi­tions. 50% of this ben­e­fits the tourism in­dus­try, which con­sists mainly of the ac­com­mo­da­tion, trans­port, food and bev­er­age and shop­ping sec­tors. Re­search un­der­taken by the As­so­ci­a­tion of African Ex­hi­bi­tion Or­ga­niz­ers (AAXO) es­ti­mates that in 2015 the ex­hi­bi­tion in­dus­try con­trib­uted R74,9 bil­lion to South Africa’s econ­omy, trans­lat­ing to more than 150,000 jobs via di­rect, in­di­rect or in­duced spend.

Clearly, there is am­ple ev­i­dence to show the value of the ex­hi­bi­tion in­dus­try and its im­pact on tourism.

But does South Africa need two ma­jor B2B trade shows to sus­tain growth? Let’s take a look at each.

Ind­aba

The an­nual Tourism Ind­aba, owned by SA Tourism, has been South Africa’s iconic leisure travel trade show. Hosted in Dur­ban over the past 26 years, the Tourism Ind­aba was the only B2B travel trade show held on the African con­ti­nent. Since its in­cep­tion Ind­aba con­tin­ued to ex­pe­ri­ence steady growth in terms of the num­ber of in­ter­na­tional buy­ers and ex­hibitors that the event at­tracted. How­ever, since 2012, there has been a de­cline in par­tic­i­pa­tion with many in the in­dus­try com­plain­ing that “the event’s iconic en­ergy was lack­ing”.

Statis­tics from the Ind­aba web­site re­veal a 27% de­cline in ex­hibitor num­bers be­tween 2012 (1,437) to 2016 (1,049), and a 42.37% de­cline since 2010 (1,820). Dur­ing this pe­riod in­ter­na­tional buyer num­bers also de­clined from 2,518 in 2012 to 1,531 in 2016 rep­re­sent­ing a de­cline of 39%.

These de­clines of­ten re­sult in lost busi­ness opportunities for the tourism in­dus­try. The in­dus­try, there­fore, called on SA Tourism to change the fo­cus of Ind­aba aimed at align­ing its for­mat to global trends and ex­plor­ing part­ner­ships with global play­ers in the travel trade in­dus­try.

WTM Africa

Recog­nis­ing the op­por­tu­nity to take ad­van­tage of the growth in the African tourism in­dus­try and the need to ad­dress in­dus­try con­cerns for a global travel trade show to be launched in Africa, Reed Ex­hi­bi­tions en­tered the South African market. With over 3,700 em­ploy­ees across 40 coun­tries, own­ing over 500 events in 43 eco­nomic sec­tors – Reed’s global travel port­fo­lio of 22 in­ter­na­tional travel trade events – would have ben­e­fited SA Tourism. Var­i­ous at­tempts to forge a part­ner­ship with SA Tourism to grow Ind­aba ap­par­ently failed, and the re­sult was the launch of a new travel trade show fo­cused on the leisure market in Cape Town in April 2014 known as World Travel Market (WTM), Africa.

The WTM brand is a global brand owned by Reed Ex­hi­bi­tions and is strongly as­so­ci­ated with the global travel in­dus­try. Reed’s de­ci­sion to launch this brand in SA reaf­firms the sig­nif­i­cant global in­ter­est in the South African and African tourism mar­kets. Ac­cord­ing to Su­gen Pillay, Com­mer­cial Di­rec­tor at Reed Ex­hi­bi­tions, WTM Africa has grown sig­nif­i­cantly since its launch in 2014 with ex­hibitors in­creas­ing from 370 in 2014 to 646 in 2016 trans­lat­ing to an in­crease of 42%; trade vis­i­tors in­creas­ing from 2,132 in 2014 to 3,050 in 2016 (30% in­crease); and buy­ers’ club mem­bers in­creas­ing from 279 in 2014 to 653 in 2016 (57% in­crease). In 2015 it was es­ti­mated that USD 333 mil­lion worth of busi­ness was signed at WTM Africa, which no doubt con­trib­uted sig­nif­i­cantly to the 10 mil­lion for­eign tourists to South Africa.

Sus­tain­abil­ity

Given the afore­men­tioned stats, one could ar­gue that the com­bined ef­fect of Ind­aba and WTM Africa sus­tained num­bers at 2,184 buy­ers and 1,695 ex­hibitors for 2016 (sim­i­lar to Ind­aba’s 2013 fig­ures, prior to WTM Africa’s 2014 launch), so in ef­fect, there has been very lit­tle change. How­ever, the num­ber of du­pli­cates (who vis­ited as buy­ers or ex­hib­ited at both trade shows) is an un­known fac­tor. The con­cern, though, is that ex­hibitors are rais­ing ques­tions about the af­ford­abil­ity of par­tic­i­pat­ing in both events. Com­par­ing the cost of ex­hibit­ing at the two trade shows, floor space at Ind­aba 2017 is R2,553 per sqm and R3,326 per sqm at WTM-Africa 2017. I doubt that there are many SME tourism busi­ness own­ers who can af­ford nearly R53,000 for a 3x3-me­ter stand at both shows, not to men­tion the cost of trans­port­ing their stand from Cape Town to Dur­ban – a dis­tance of 1,363 km by road – just 3 weeks later.

Re­view

As we op­er­ate in a free market econ­omy, com­pe­ti­tion is healthy and gives the con­sumer more choices. How­ever, as Ind­aba is owned by SA Tourism – a gov­ern­ment con­trolled DMO man­dated to pro­mote South Africa glob­ally – should it be in­volved in the busi­ness of man­ag­ing ex­hi­bi­tions? This ques­tion was ar­tic­u­lated in the SA Tourism Re­view con­ducted by a panel of ex­perts in 2015, and I quote: “SA Tourism should se­ri­ously con­sider hand­ing over the man­age­ment of Ind­aba to an in­de­pen­dent op­er­a­tor, given that in­dus­try is now ac­tively and suc­cess­fully op­er­at­ing in this space (as ev­i­denced by WTM Africa), and the drain that Ind­aba places on SA Tourism re­sources.” Read the ‘SA Tourism Re­view Re­port‘ ar­ti­cle here.

Al­though SA Tourism did invite pro­pos­als for a strate­gic part­ner to grow Ind­aba and Meet­ings Africa, the process ap­pears to lack trans­parency. As far as I am aware, the rea­sons for not go­ing ahead have never been re­leased and there­fore re­quires closer scru­tiny.

Conclusion

The statis­tics from both events show a clear pic­ture – B2B trade shows do make a sig­nif­i­cant con­tri­bu­tion to the coun­try’s tourist ar­rivals, to the econ­omy, and to job cre­ation. But look­ing ahead to 2018, does South Africa still need two trade shows? What are your thoughts? Email editor@tourism­tat­tler.com

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