Microeconomics And Tourism In South Africa Tourism Essay

Micro economicals And Tourism In entropy Africa Tourism Essay southeasterly africa is a state of matter that a has a famous history of racial divisiveness and diversity, but today the rainbow nation is ace of the most public touring car destinations in Africa and in the world as a whole.In the following report we leave fail the microeconomic situation in southeast Africa. This pass on help us decide prevail the hotel we take a leak chosen is, in fact, the best one.In order to achieve our goal, we go forth look at the history of the inelegant and talk about south-central Afri piece of tail political sympathies and politics. We will excessively analyze the countries economic situation by looking at the economic growth since 1980, the principal trading partners, the mend of the 2010 World Cup and finally the Gross Domestic Product (GDP) as healthy as the causa of the securities industry scrimping.Furthermore we will analyze the local preservation of the city of d rapery town where the Hotel is located. gum olibanum looking at the lodging Industry and analyze weather the economic strategy is successful or not. We will achieve this by identifying its Strengths, Weaknesses, Opportunities and Threats of the touristry fabrication as well as for the Arabella horse opera mantle Hotel and Spa. Finally we will identify the competitors of the Hotel.With this in mind we will begin to define what argon our criteria to ramify the best hotel and identify weather this Hotel is indeed the best one or not.In the end we will present our conclusions that prove that Hotel can be classified as the best one in randomness Africa.History of the Country southeasterly Africa is located at the southernmost point of the African continent. It has a large 2798 km coastline on the Atlantic and Indian oceans. It is one of the largest and most big businessmanful states in Africa with a universe of discourse of over 50 million inhabitants.The African awkward has been inhabited for more than triplet million years. This arena is also k flatn as the cradle of mankind. Diversity in southwestward Africa began very early with the San and the Khoekhoe stacks in the 6th century BC and evolved ever since make it one of the most ethnical diverse country in the world. This diversity is a thumping part of the rainbow nations conflictual history. In 1487 white settlers set foot for the archetypical time with the portuguese explorer Bartolomeo Dias Today. Later in 1961 it became a republic, but apartheid rules did not leave with the British retreat. Apartheid gave a bad image of southeastern Africa in the world, and other wealthy nations of the world began to boycott its economy because of its racial policies and oppression.But when Nelson Mandela was freed in 1991 the situation started to change, he was elected as president on the graduation non-racial elections on 27th of April 1994. Since and so southwesterly Africa came a long way, a black man Jacob Zuma is shortly at the head of the state since he was elected in May of 2009. The country has been given the deposit and privilege to host last summertimes biggest event worldwide the FIFA World Cup which showed the world what South Africa has achieved.They nurture 11 official languages, the main ones are Zulu, Xhosa and Afrikaans followed by English. It is a member of the African Union, the unite Nations, the World Trade Organization, the Common Wealth of Nations, the International Monitory Fund and the NEPAD (New Partnership of Africas Development).Mandelas nation has three caps, ness township which is the legislative capital, Pretoria which is the executive capital and Bloemfontein which is the judicial capital. Johannesburg is not a capital although it is the largest city.It is a middle income emerging country that has a large amount of supplies thanks to their natural resources. The country has a very parted finance, communication, energy and transportation se ctors and is ranked as 17th largest stock alternate in the world by the WTO and is in the top 30 in the world in conformation to its GDP.Economy in South AfricaThe South African economy is ranked as a upper-middle income economy by the World Bank. About a quarter of the population is unemployed and lives on less than US $1.25 a day.This table shows the economy growth from 1980 to 2010 YearGross Domestic Product(bln USD)US horse Exchange(early January)Unemployment ratePer Capita Income(as% of USA)198080.5470.8267 Rand9.222.56198557.2732.0052 Rand15.59.811990111.9982.5419 Rand18.813.101995151.1173.5486 Rand16.713.242000132.9646.1188 Rand25.68.472005246.9565.6497 Rand26.712.342010354.4147.462 Rand24.815.06The majority of economical transactions occur around 4 areas mantlepiece Town, appearance Elizabeth, Durban and Pretoria. They are the economical heart of the country and the hubs to the rest of the world. Although these megalopolis can be compared to those of the western world, disparity amongst the countrys neighborhood remains. The development is marginal and poverty and HIV are still prevalent.The brass demonstrated its commitment to point-blank up market place, privatization and a favorable investment climate with its introduction of the Growth, Employment and Redistribution (GEAR) strategy which is a South African neoliberal macroeconomic strategy implemented in 1996. As its name says the GEAR strategy has quartette more objectives that are embedded on this strategy namely economic growth, full employment, price stability and balance payment stability.The Rand is the most actively trended emerging market currency in the world. The Rand was the best performing currency against the US dollar between 2002 and 2005, according to the Bloomberg Currency Scorecard.Principal international trading partners of South Africa include Germany, the United States, China, Japan, The United Kingdom and Spain. Chief exports include corn, diamonds, fruits, gold, met als and minerals, sugar and wool. Machinery and transportation equipment make up more than 1/3 of the value of the countrys imports. Other imports are chemicals, manufactured goods and petroleum.Also, South Africa has a big agricultural sector and an exporter of farming products. There are almost a thousand agricultural cooperatives and billetes throughout the country. Agricultural exports constituted 8 % of the countrys exports for the last 5 years and it contributes that 10% of formal employment to the country.Finally, South Africas economy depends largely on the tourism effort which has been identified as one of the key economic sectors with excellent potential for growth. Directly and indirectly, tourism constitutes approximately 7% of employment in South Africa.To develop and exploit the countrys tourism potential, base of operations and support facilities of which hotels, like the one we chose, are an integral part. The cordial reception industry in South Africa has experi enced a steady growth during the past years. Different issues in the government really viewed the hospitality sector of the country, but in that respect is a reason now to be optimistic.By hosting the FIFA World Cup it was a great opportunity to boost their economy and especially the tourism sector. A total of 309.554 foreign tourists arrived in South Africa for the primary purpose of attending the event. The continent counted 34% of the worlds foreign tourists, followed by atomic number 63 with 24% and Central and South America with 13%The total use in South Africa by tourists who came specifically for the 2010 FIFA World Cup amounted to 3.7 million euros.The sightly length of stick by of tourists during this period was 10.3 nights.Total awareness of South Africa as a empty and tourism destination join ond by 9% following the event. The intention to lecture South Africa in the Short term annexd by 35% following the event.The industry is creating jobs and wealth, it could a lso play a crucial role in making the countrys economy to be a better one. However, fragmentation remained some serious impediments to South Africas hospitality industry growth. The industry revolved in different types of businesses, such as airlines, boats, bus companies, hotels, car hire, festivals and events, tour guides, sell and sightseeing destinations. Therefore the South Africans must be proactive and take responsibility to continue to advertise change.After the positive market sentiment recorded last September 2010, the tourism industry is in a very good shape especially since 2009 was a particularly bad year also due to the world economy crisis. South Africas tourism boom has had a predictable effect on the performance of the countrys hotels.South Africa GDP per capitaThe GDP has grown by more than 4 times in 30 years, that is due to the political and social development since 1980 and especially the abolition of the apartheid which lead to more open economical choices.Ac cording to the World Bank, South Africas GDP per capita is currently U$D 3,764 (South Africas GDP correct by inflation, divided by the total population). From 1960 until 2008 this figure was U$D 3096.02, with a historical posting of U$D 3764 in December 2008 and a historical low of U$D 2207 in 1960.Although the GDP seems to be increasingly rising, the unemployment rate has reached a dramatical number, 24.8% of the South Africans population is unemployed the rate go by 15 points since 1980.DemandAccording to the Horwath Worldwide Hotel Industry Study (2001) South Africa remained the most normal African destination in terms of arrivals in 2000.South Africa is also increasingly be approach a popular international conference destination attracting a large amount of customers from the MICE market. In addition, South Africas hospitality industry continues to attract international investors especially once it was set to host the FIFA world cup and since then investors absorb been flow ing in. In 2010 South Africa recorded 5.5 million arrivals.There was growth in tourist arrivals to South Africa from all regions, with the highest growth coming from the Americas at 91.3% (74,545). Asia and Australasia grew by 41.0% (30,216) and the Africa air markets grew by 30.8% (20,611), while Europe and the Africa land markets grew by 19.1% (43,672) and 5.3% (63,770) respectively.The demand in the tourism industry in South Africa is growing exponentially and the government, investors and hospitality professionals are working together so that the supply meets the constantly rising demand.Supply increase maximizationProfit maximisation is the process by which a hotel determines the price and output level that returns the great profit.There are 2 typical ways to achieve profit maximisationFocus on minimising and control expensesFocus on maximising revenueThe Leisure and Tourism IndustrySouth AfricaSouth Africa is known as one of the most sophisticated and promising countries in t he whole African continent, and has shown as we have seen it, a strong and consistent improvement in the economy. Its scenic beauty, cultural diversity and paper for delivering value for money have made it one of the worlds fastest growing leisure and business go away destinations (BRICS countries).Being highly diverse in terms of its, culture, tourist activities and infrastructure. It adapts to every tourism niche, from business, eco- and cultural tourism through to adventure and sport tourism.Its tourism sector began growing significantly since 1994, and due to the importance government gives to tourism in the country. Tourism also generates more than of South Africas tax revenue as much as $655 billion in 2005 and influences government spending in infrastructure such as highways, airports, etceteraGrowing three times faster then the world average. It has hold out a really serious sector, which is creating millions of jobs, employing 212 millions of people.South Africa is becoming more popular among tourist destinations, with 860 000 arrivals per month (statistics from 2008) from which over 10% come from after-school(prenominal) of the African continent. The tourism industry has generated a revenue of $3.4 trillion, which represents around 3% GDP.The hosting of the 2010 FIFA World Cup in June and July 2010 remarkably contributed to the countrys economy and development of hundreds of hotels and other hospitality establishmentsSuth fri is therefore trgting legion(predicate) different segments of tourism industry. Such as the afore mentioned domestic tourism, business tourism, eco tourism, cultural tourism but also the adventure tourism.Business TourismThe award of the 2010 FIFA World Cup was just one sign that South Africa was seenas a stable and modern country compared to other African countries. It proved that it posses first-class infrastructure and is an pattern location for intrntinl ngrsss nd nvntins.Th untry hs wll vr 1 000 wrld-lss nfrn nd xhibitin ntrs.Suth fri is trgting businss trvllrs for the main reason that they spnd n vrg thr to four tims mr thn the lisur travellers. This thrugh turs and leisure activities such as experiencing the African culture and safari, but also luxury golf courses, shopping and relaxation- bfr r ftr thir businss tivitis nd thrugh rturn trips.n stimtd 6-7% f Suth fris frign findrs in 2007 wr businss turists. Ttl dirt spnding by businss turists t $ 2.4 billin that year. Suth fris nfrn industry mvd up t 3oth pl in th Intrntinl ngrss nd nvntin ssitins lstst tp-40 list f lding dstintins in th wrld.Domestic TourismIn 2006 domestic travel grew by 2.7%, more or less 12 million South Africans inhabitants took 37 million internal trips. In those trips 29 million tourists were tour their family and friends, 2.8 million were traveling for holiday and 1.9 million for business reasons.The issue the tourism department is dealing with, is the quarrel to turn the domestic tourism market from visiting family to leisure tourism and thus optimize the increase in the market.Furthermore, the tourism department is running a program called Shot Left, which works on the pattern that encourages South African population to travel inside of the country. This is achieved by providing information about tourist attractions, inlet to tour operators, reasonable prices and tour packages.Eco TourismEco tourism is the fastest growing segment of tourism in South Africa thanks to its divrs limts rng frm trpil in th suth-st t dsrt in th ntrl rgin. Th untrys wildlif is vrid , nd is supprtd by n xtrrdinry bilgil divrsity. It creates opportunities for tourists which include bird-watching, nature photography, hiking and mountaineering, botanical studies and snorkeling.National and provincial parks in South Africa the world famous Kruger National Park as well private reserves, involve local communities in the concern and conservation of natural resources. These communities are becoming aware of thei r responsibility to the environment, and with that they are also financially benefiting from ecotourism. The countrys prttd rs increased to 8%, nd its mrin prttd rs grew up t 20%, in 2010.Adventure TourismBing t th suthrn tip f lrg ntinnt, Suth fri ffrs 3 000 kilmtrs f stlin lng with the muntins. Th untrys divrs trrin, tgthr with limt suitd t utdr tivitis mk it n idl hunting grund fr drnlin skrs.Suth fri ffrs wrld-lss limbing, surfing, diving, hiking, hrsbk riding, sfri, muntin biking, rivr rfting nd just but ny thr xtrm tivity. blanket townCape Town is the most popular tourism destination for international arrivals as well as locals. Approximately 1.6 million tourists visited Cape Town in year 2006 and their total spending resulted in $10 billion of revenue.Cape town has recently expanded their International Convention center and now hosts 10% of all conferences and meeting of Africa for international and local business tourists. Also real estate business and construction market has hit its peak, when during the 2010 World Cup many people started to buy summer houses in the city or relocating there permanently.As we can see, there is a tendency for international tourists to visit South Africa more from year to year, which results in overnight stays and demand for accommodation and FB.Furthermore, the Cape Town beaches are very popular for their uniqueness and layout because of the difference in the water temperature. The Atlantic Coast average water temperature is around 13 Celsius, and the False Bay has an average temperature between 16 and 17 Celsius. though colder, the Atlantic Coast is famous for its big waves and hosts different events including the Red Bull Big Wave Africa.IssuesUnemploymentHas an entire unemployment rate, which interacts with other social and economic problems( education, crime and poor health outcomes) over 60% of unemployed have been without jobs more than a year. In second quarter of 2010 a number of people with work fierce from 61.000 to 12.700 million.Income inequalityThe country is ranked in the top 10 countries in the world for income inequality. Black people are poorer than colored people Indians and Asians who are poorer than Whites.Public sector strikesIn August and September 2010 SA unions nonionic a 4 week national strike involving 1.3 million public sector workers, demanding a 8.6% occupy increase. The strike ended when the government had raised its 5.2% wage increased to 7.5%.Illegal immigrationMany South African employers have employed migrants from poorer neighboring countries( Mozambique, Zimbabwe, Malawi and others) for a lower pay than South African citizens. electricity crisisAfter unsuccessful attempts by the government to encourage private construction of power generation content, the state-owned power supplier Eskom started experiencing deficiency in capacity in the electrical generating infrastructure in 2007. The lack of capacity was triggered by a failure at Koeberg nuclear powe r stake. The supplier has been criticized for failing to adequately envision for and construct sufficient electrical generating capacity. The crisis was resolved in few month, but the margin between usable capacity and national demand is still low. The government and Eskom are planning new power station (in 2025).SWOT analysis of the Tourism IndustryStrengths WeaknessesEmerging economy Union strikesLow assiduity and restore costs High poverty levelLow tax Lack of skilled labor break off infrastructure and increased destination Unstable currencyawareness since FIFA 2010 High rates of HIV/ aidOpportunities ThreatsGrowth of tourism from USA and European countries High crime levelLow cost airlines companies (domestic market growth) Economic recessionGovernment spending in tourism Unstable US DollarHosting of the 2020 summer Olympics Racial differencesArabella occidental Cape Hotel and SpaDescriptionCreated in 1998, the Arabella occidental Cape Hotel and Spa is rigid on the South western coast of South Africa 45 minutes, by car, from Cape Town.The hotel is embraced by the Kogelberg Mountains and bordered by the Bot River Lagoon. The Hotel is near the Cape Wine Route in the the souther tip of Africa near Cape Agulhas, and entirely if 15-minute engage from Hermanus. Perfectly suitable for those who want to relax from the hectic life but dont want to go far away from civilization, the region where the hotel is located is rich in bird life, exquisite mountain landscapes and timeless recreational activities. For guests on business there are special conference facilities that deliver standards of professionalism and comfort. command handlerRob Kucera has been promoted to GM of the Arabella western sandwich Cape Hotel and Spa after three years as a hotel manager at the Westin Grand in Cape Town. Rob joined The Westin Grand Cape Town Arabella Quays as an experienced hotelier, his most notable achievement is the establishment of an extremely focused and effectiv e management team. His business acumen and leadership skills will undoubtedly add tremendous value to the Arabella Western Cape Hotel and Spa and its employees. Rob Kucera has extensive experience, impeccable values and immense dedication added to a huge warmth for the industry. These mentioned qualities have definitely earned him the respect from his seniors, peers, employees and guests alike.Rob Kucera has made a tremendous impact on the hotel industry this far in his career and we look forward to his continued success, says Friedrich Schaefer, COO and Area General Manager of Arabella Starwood SA.FacilitiesApart from the standard facilities and supporters as business center, shopping mall, valet and car rental service, airport transportation service (pick up and drop off), beauty salon, 24 hours Front Desk and Concierge service, childrens playground and baby sitting service, restaurants with classic or traditional food, an wireless high internet access coverage on the premisse s. The Arabella Western Cape Hotel and Spa provides its guests with Chapters LibraryArabella Spa with indoor and outdoor pools and jacuzzis and massage treatmentsThe African Rainforest Experience- a world first sauna treatment developed in South Africa using African products and excite by African rainsThe Sport club with a fitness center, tennis courts, horseback riding, fishing and kayakingThe droll golf course, recently voted the Number Two golf Course in South Africa and the Top Golf Course in the Western Cape by The Complete Golfer magazineRooms and orderThe Hotel has 265 rooms in total and bringsDeluxe Rooms ( cast is 1.672 ZAR)These large rooms are absolutely arranged for utmost comfort. Each Deluxe Room has a private balcony or terrace that overlooks garden or swimming pool. Most of 46 rooms are furnished with king size beds or twin single beds. The room can accommodate 2 adults and 1 child under deuce in a camping cot.Grand Deluxe Rooms (Rate is 1.950 ZAR Around 213 Eur o)Offer the same carriage and comfort as Deluxe Room but has the additional benefit of a munificent panorama of the Bot River Lagoon and Arabella Golf Course.Deluxe Suites (Rate is 2.850ZAR around 310 Euro)The room has a separate bedroom and lounge, divided by wooden sliding doors for additional privacy. The bathroom is large and for extra luxury equipped with TV set. A large balcony with loungers offers view of the perfectly manicured grounds and swimming pool. The Deluxe Suites can accommodate 2 adults and 2 children under the age of 12 and one child under the age of 2.Grand Deluxe Suites (The Rate is 3.500 ZAR around 380 Euro)The Grand Deluxe Suite provides the exceptional luxury and comfort of the Deluxe Room, with the addition of magnificent views of the Bot River Lagoon and Golf Course.Presidential Suites (The Rate is 6.500 ZAR around 705 Euro)The room offer luxury and comfort in a superbly appointed private setting complete with a 24 hours butler service to attend to your requirements. The entrance lobby affords access to the guest bathroom and beautiful lounge furnished with a fireplace. A study, accessible through the lounge, ensures a quite area to work or conduct business.AwardsArabella Western Cape Hotel and Spa is the Winner ofAfricas spark advance Luxury HotelAfricas Leading Spa Resort SouthAfricas Leading Spa ResortStarwood Hotels and Resorts Worldwide Inc allianceThe Arabella Western Cape Hotel and Spa is part of the Starwood Hotels and Resorts Worldwide Inc. Founded by Barry Sternlicht, it is one of the leading hotel and leisure companies in the world, with 1000 properties in nearly 100 countries with over 145,000 employees. They have a variety of snitchs include Le Mridien, ElementSM Hotels, AloftSM Hotels, Sheraton Hotels Resorts, The Luxury Collection, St. Regis Hotels Resorts, Westin Hotels Resorts, W Hotels and Four Points by Sheraton.In 1993 Starwood Capital buys its first hotels and by 1994 owns interests in more than 30 proper ties.Nowadays Starwood celebrates the opening of its thousandth hotel in China named The Sheraton Qiandao Lake hotel.Environmental sustainabilityStarwood aims to conserve energy and water, reduce waste and enhance indoor environmental quality for Starwood guests.This year, in more than 90,000 rooms, guests staying in Starwood properties will be encouraged to turn off the lights. Properties will participate by dimming or turning off non-essential interior lighting, using candlelight in fascinate public areas such as restaurants and bars. Starwoods trailblazing eco-chic boutique Element Hotels brand was launched as the first major hotel brand to mandate that all U.S. properties pursue the U.S. Green Building Councils (USGBC) Leadership in Energy and Environmental envision (LEED) certificate.Globally, Starwood is increasingly focused on integrating environmental sustainability into its operations and it was important to create a union with a world-class organization like CI to conti nue to move that work forward in the most inpactful way, said Sandy Swider, Vice President of Global Citizenship for Starwood.SWOT analysis of the Arabella Western Cape Hotel and SpaStrengthsLocation The Arabella Western Cape Hotel and Spa is situated only 45 minutes from Cape Town offering all the benefits of the city but, at the same time, giving its guests the tranquility and privacy of a remote location.Upscale hotel Rated a 5 star hotel The Arabella offers only the highest quality serviceWeb summon Very interactive and beautifully designedStarwood alliance High quality standards and strength of the brand name, the Arabella Western Cape Hotel and Spa profits of the Starwoods achieved awards and new projects such as the Green policyHistory of the country Rich historical heritage monuments and architectureMulticultural surroundingDeveloped infrastructure and superstructureWeaknessesLocation The hotel is external of the city area thus the hotel guests have some trouble getting t ransportation to it, even though the local transportation has improved, the regional transportation is not used at its fullestLack of skilled labor All though the school enrollment percentage has grown, this mainly concerns the primary education level. Skilled hoteliers are therefore still foreigners, such as Hotel School students like ourselves.OpportunitiesSports tourism As we have seen in 2010, South Africa has been given the FIFA World Cup and presented an important economical growth, increasing the potential of their tourism sector. Having this experience, South Africa qualifies for the 2020 summer Olympic Games. We think that The Arabella Western Hotel and Spa should prepare its facilities to accommodate not only the visitors there to watch the games but also the athletes and their needs.Going green policy Cape Town is ranked thirtieth greenest city in the world, plus the Arabella is following Starwoods Green Project and by incorporating the ideas and start attracting an eco f riendly market segment.ThreatsUnemployment rate With the recession the unemployment rate has increased over the years. making the recovery harder. Furthermore the growth in the South African tourism will feel the crisis if the unemployment rate doesnt decrease, directly influencing the hotel.Seasonality and Occupancy levelSouth Africa is rarely affected by seasonality issues because being situated at the most southern tip of Africa it has an ideal climate whole year round.During high seasons November January, March April, June July and September October the occupancy level at the Arabella Western Cape Hotel and Spa is situated, in average, between 85%-95%For the rest of the year, on few occasions that we can call a low season, the occupancy level at the Arabella Western Cape Hotel and Spa is in average 60%-65%.CompetitorsWithin South Africa there are a lot of hotels and up and coming hotels. There is also a necessity for hotel rooms as there is a continuous increase of various tourists.The Marine Hotel charge 200 for standard roomNo of rooms6440 minutes beat up to city centerFacilities Spa, small conference room for 80 people and The accrual boutiqueAuberge Provence GuesthousePrice 390 for standard roomNo of rooms901 hour drive to city centerFacilities 3 restaurants, Spa and Wellness center, conference rooms max 50 people.Mosselberg On Grotto BeachPrice 190 No of rooms 1101 hour ride to city centerFacilities Swimming pool, Lounge area, Games center, Free Wireless.One and only Cape townPrice 550 EurosNo of rooms 131 set in the city centerFacilities OneOnly Spa Cape Town, Beauty Center, one Michelin star restaurant (chef Noby Matsuhisa), Conference room for 112 guests maximum.The Vendome Hotel Cape TownPrice 260 EurosNo of rooms 143Located in the city centerFacilities outside pool, Conference facilities for approximately 220 guests, classic lounge, airport transfer.Based on the research, all the nearest 5 star hotels are very similar when it comes t o location. However the prices are different. We detect that Arabella Western Cape Hotel and Spa is larger than all the nearest hotels. Our hotel is the best place and offers the most, not only for leisure travelers but also for business ones.Long term sustainabilityFinally we are looking at the actions and ideas that the Arabella Western Cape Hotel and Spa can implement in order to continue to develop and become what we call sustainable in long term. An effective sustainable plan will help and perhaps even ensure long life span for the hotel. By thinking about the environment and how our actions affect it we can predict issues that we will have to deal with in the near future. Therefore we can telephone the loses and c