Hospitality Partners Association

STBB Smith Tabata Buchanan Boyes has expertise in all aspects of commercial and corporate law, and are renowned for their technical business skills, know how, and open business style.

STBB Smith Tabata Buchanan Boyes` vision is evident from its excellence and track record and its solid commitment to its clients and associates. Creating opportunities to engage with its business partners, their focus is the creation of business solutions to suit their client’s needs.

SATIB Risk Solutions offers a wide range of insurance solutions to meet the intrinsic requirements of the tourism industry.

The company provides expert risk management and insurance advice, prompt claims settlement and efficient service, backed by its knowledge of your business.

SATIB Risk Solutions are leaders in tourism insurance and risk management services with over 20 years of dedicated service to the tourism, hospitality and wildlife industries in Africa.

IBN Consulting & Immigration offers integrated, comprehensive, multi-sector assistance and practical advice for any business activity in Southern Africa. Efficiency, integrity and transparency compliment the international experience of many years.

For more than 10 years IBN is among one of the leading consultancy agencies concerning corporate and private investments in Southern Africa.

Exceed, in cooperation with Tenk Loubser & Associates, offers specialised, integrated, corporate tax, financial and fiduciary services. They have offices in South Africa and the United Kingdom.

The Group’s vision is to be a sustainable, consistent, reliable and successful fiduciary and financial services practice. At Exceed we base our business practices on integrity and reliability. In a business that is all about service, we believe that people are the key to success. For us, service is ultimately about building a relationship – and then maintaining and nurturing it.

Our operations are organised in departments dealing with auditing and accounting, tax and financial services, asset and risk management, management consulting services, trust management and administration, as well as human resource consulting services.

A Leisure Tourism Stakeholder Meeting was held on 28 June 2011, when around 70 senior tourism stakeholders met informally to discuss the current crisis in the leisure tourism industry and to come up with solutions.

Chaired by Malcolm McCulloch of SATIB Insurance Broker’s client Wilderness Safaris and presented by Colin Bell (Wilderness Safaris founder) and Peter Anderson (SATIB client & strategic partner, Livingstones Group), the meeting confirmed that there is a crisis in the tourism industry and that many establishments have closed down resulting in job losses.

The key points agreed upon at the meeting were (in no particular order of importance):-

1. 1. That all tourism stakeholders familiarise themselves with the National Tourism Sector Strategy (NTSS) document.
   
2. 2. To motivate operators to contribute to the TOMSA levy to
3. (a) to put more money into marketing SA and
4. (b) to increase the influence that TBCSA has on SAT.
   
5. 3. Change the method of tourism arrival statistics data collection to take place on the tourist’s departure from SA rather than on arrival;
   
6. 4. SAT needs to take a number of steps to market SA more effectively, by;
7. a) Focusing its efforts on the best producing markets - primarily the top 10 or 12 markets;
8. b) Lobby Government to increase the SAT budget in this time of job crisis; .
9. c) Increase SAT spend of its budget closer to 50% and less on admin, overheads, research and outsourcing;
10. d) Ensure that each of the key SAT offices are given revised targets and budgets to double their “overseas leisure tourist” arrival numbers;
11. e) Measure the effectiveness of SAT’s PR companies around the world and end agreements with those that are ineffective or inefficient;
12. f) Eliminate negative tag lines and commit to consistent, positive long term branding of SA;
13. g) Keep the TBCSA regularly informed of marketing campaigns launched by SAT.
14. h) Involve the TBCSA in headhunting a competent candidate to fill SAT’s currently vacant position of CEO.
    
15. 5. Provide benchmarking statistics to serve as a guideline to ensure that we charge our tourists at competitive rates in relation to the rest of the world.
    
16. 6. Encourage the trade to better react to the TBCSA quarterly business index surveys.
    
17. 7. Not ignore the domestic tourism market, which is inadvertently called on to sustain the industry when downturns take place.
    
18. 8. The trade and TBCSA must hold SAT and their boards accountable for their performance and delivery.
    
19. 9. SAA and SAT should combine budgets and campaigns to aggressively market SA.
    
20. 10. Address the visa issue with Home Affairs.

Subsequent to the above meeting, the resolutions were discussed at a meeting between the TBCSA and SA Tourism held on 11 July.

As a result of this meeting, the TBCSA invited all stakeholders who attended the Tourism Stakeholder Meeting to attend the TBCSA AGM, which took place on 04 August, where SA Tourism presented their business plan for 2012/2013.

We all know that marketing is a crucial element of most successful businesses. But how, now that the new Consumer Protection Act (CPA) places substantial limitations on what is termed 'direct marketing'?

What it is all about?

In its effort to protect consumers who, when faced with a very persuasive marketer, finds it hard to say 'no', the Act places limitations on direct marketing.

Direct marketing occurs when a consumer is approached - either in person, by mail or via electronic communication (for example, using telephone, fax, SMS or e-mail) for the direct or indirect purpose of:

• • promoting or offering to supply goods or services in the ordinary course of business to the person; or
• • requesting the person to make a donation.

In turn, "promote" is defined to include the following activities, all typical to marketing in the ordinary course of one's business:

• • To advertise, display or offer to supply goods or services;
• • To make any representation that could reasonably be inferred as a willingness to supply goods or services; and
• • To engage in conduct that may reasonably be construed as an inducement to a person to engage in a transaction.

What to do now?

Remember that the CPA does not forbid direct marketing to potential clients, but merely regulates it. One can therefore continue to do direct marketing, provided the safety mechanisms built into the CPA are complied with.

These are the following:

• • Adhere to a consumer's request not to receive any more direct marketing from you. This will require you to clean your databases and to capture all requests to 'unsubscribe' diligently.
• 
  
• • Refrain from doing any direct marketing on Sundays and public holidays, between 20h00 and 08h00 on weekdays, and outside of 09h00 and 13h00 on Saturdays.
• 
  
• • When a transaction is concluded as a result of your direct marketing efforts, you need to advise the consumer that he/she may cancel the transaction - provided he/she gives you notice in writing within 5 days after the transaction was concluded, or within 5 days after the consumer received the goods that was delivered in terms of the transaction.

A number of Employers have, for several years, been contributing towards either an employee death or an employee disability policy on behalf of their employees (long-term insurance policies). The aforementioned policies were provided either by means of ‘approved’ plans or ‘unapproved’ plans, as defined by the South African Revenue Service (SARS).

These policies can be structured in the following ways:

1. 1. The proceeds can be paid directly to the employees
2. 2. The proceeds can be paid directly to the employer, with a side arrangement existing between
3. 3. The employer and employee whereby the employer will pay proceeds over to the employee

   For many years, these contributions to policies on behalf of employees were allowed as a deduction for the employer, with no matching accounting for a fringe benefit in the hands of the employee.

   With effect 1 JANUARY 2011, these rules have however changed.

   • • If an employer enters into a group life or group disability plan for the direct or indirect benefit of the employees or their beneficiaries (the employees are the beneficiaries of the policies), the employer will only be allowed a deduction of said contributions if these premiums give rise to a simultaneous fringe benefit inclusion for the employees.
   • 
     
   • • If the employer is the beneficiary of the said policy and there is a side arrangement to repay the proceeds to the employee, the tax treatment will be similar to the aforementioned paragraph. The value of the said fringe benefit in both options will be equal to the premiums paid by the employer.

The three month compulsory registration period for Estate Agents to register with FICA has recently ended on 28 February 2011. Since that date the requirements of the Financial Intelligence Centre Act 38 of 2001 is applicable to all estate agents.

In short The Act prescribes certain duties to all accountable institutions (including estate agents).

The areas that will mainly affect the operations of estate agents are the following:

1. 1. Duty to identify clients.
2. 2. Duty to keep records.
3. 3. Period for which records must be kept.
4. 4. Duty to report suspicious and unusual transactions.
5. 5. Duty to report cash transactions above the prescribed limit (Currently R25,000).
6. 6. Duty to report transfers of money to and from the Republic.
7. 7. Formulation and implementation of internal rules.

Non-Compliance An accountable institution that fails to comply with the provisions of the act is guilty of an offence. A person convicted of an offence is liable to imprisonment not exceeding 15 years or to a fine not exceeding R10,000,000.

Named as the World’s Top Travel Destination by global travel site, TripAdvisor, Cape Town has once again been hailed as a prime tourist destination. Regardless, the Mother City’s 5-Star hotel market has been the subject of negative speculation lately. Joop Demes, CEO of Pam Golding Hospitality, points out how unfortunate this is, as the wrong perceptions can be created by the hospitality industry.

“What is true is that despite the fact that over the past three years the 5-Star room inventory in Cape Town has increased by in excess of 50%, a number of prominent 5-Star hotels have increased occupancies during 2010 as well as for the six-month period ended 31 March 2011,” he says. This increase stands to reason that Cape Town tourism is still thriving and the hotel management for these 5-Star establishments must be doing something right.

Hospitality Industry Sees Dilution In Occupancies

Joop Demes continues to note how Cape Town tourism continues to flourish despite general hospitality industry trends, “Anywhere in the world, hotel markets seeing such a significant increase in room inventory will experience a dilution in overall occupancies and Cape Town has been no exception. This has been exacerbated by the global and local economic slowdown, however, overall the Cape Town 5-Star hotel market has performed remarkably well and is in a far better shape compared to that in many international cities and destinations.”

Cape Town Hotel Management Sees Good Results

“Many hotels in global destinations would have been pleased to maintain overall occupancies during the past six months compared to the previous year, and with the available 5-Star room inventory increasing by over 50% in the last few years, one would have expected occupancies to have halved for quite a few hotels, and yet the contrary has occurred.” There are certain hospitality industry trend influences that could have had an impact on the Cape Town tourism.

“In fact, the increase in room inventory coupled with the major exposure afforded us through the World Cup 2010 has led to a significant increase in bed nights sold in the 5-Star market in Cape Town during the last couple of months in 2010. This trend is continuing, and despite the strong rand this market is being further boosted by the redirection of some international traffic as a result of the unrest in North Africa and certain pockets of the Middle East.”

Positive Growth In Cape Town’s 5-Star Hotels

Using the following 5-Star hotels as examples, one can note how the Cape Town tourism afforded the local hospitality industry with a profitable boost.

* Cape Grace Hotel at the V&A Waterfront grew its occupancy for the six months ending on 31 March 2011 by 15% compared to the same period last year. This translates to an additional 6 500 guests over the same six months last year.

* The One & Only, also at the V&A Waterfront, achieved average occupancies in excess of 75% for the period ending 31 March 2011, reflecting an increase of 24% compared to the same period last year. This brought in over 6 000 additional guests compared to the same six months in the year prior.

* The Radisson Blu Hotel at the V&A Waterfront also reports significant growth with an increase of almost 17% in occupancy; representing well in excess of 8 000 guests. This was also captured over the six month period ended 31 March 2011 compared to the same period the previous year.

* The Cape Royale Hotel is a new hotel that is well-positioned opposite the new stadium. It’s only 5-Star all-suite hotel in Cape Town and has achieved an average occupancy well above 70% for the six months ending on 31 March 2011. “This ‘new kid on the block’ has really got it perfectly right in terms of location and product and has proven that a hotel in Cape Town does not have to be located in the V&A Waterfront to run high occupancies,” says Joop Demes.

He went on to add, “The additional bed nights or guests who visited Cape Town in these hotels add up to a substantial amount, and if you include the additional guests who have been staying at brand new hotels such as the Taj, 15 on Orange, the Pepper Club and Crystal Towers, you can appreciate the overall and significant increase in bed nights sold in Cape Town’s 5-Star hotel market. There are, of course some 5-Star hotels in Cape Town which have seen a decline, however as a percentage this has really been minor compared to the 50% increase in room inventory.”

Substantial Growth For The Hospitality Industry

“There is absolutely no doubt that the growth of quality supply and competition in Cape Town - a destination that competes with the world’s best - has resulted in a substantial growth in bed nights sold in the 5-Star hotel market.

Regrettably, however, there are some stakeholders in the hotel industry, including financial institutions, which have not taken into account the above facts and when commenting, quote an overall, diluted occupancy as opposed to an overall increase in the number of bed nights sold,” says Demes.

He adds that when reports refer to a hotel in distress, this does not necessarily mean that they are about to close down. “Distress in the hotel industry is generally caused by one or a combination of the following factors: the hotel is the wrong product for the location; it is over-capitalised; it is has taken on too much debt; or it is not well branded and/or has no proven operator. Financial institutions with concerns are encouraged to first of all engage with industry experts to understand the dynamics of the specific hotel and the market in which it competes and then diagnose the real issues that might cause the distress. The good news is that in most cases there are remedies that can be applied.” he says.

In the following paragraph, we’ll be asking you three questions. For each of them, answer either ‘yes’ or ‘no’. When you set out to buy new shoes, do you generally tend to browse around and compare the options at different stores before making a purchase? When you buy a new car, do you compare the costs of various models before taking the plunge? When you order food at a restaurant, do you check the price of a meal first before telling the waitress what you want?

Trick Question
Now here’s the trick question: Do you apply the same principles in terms of banking? Because whether you answered yes once, twice or three times in the above paragraph, the principle stays the same – banking is part of your monthly expenses and only by comparing costs and shopping around for the best deals will you really be able to save on those nagging fees.

Here are ten expert tips to get you started:

1. If you own a business, however small it may be, for which you need a credit card machine, make sure you have the best possible deal on that credit card facility.
      
According to Suzette Van Niekerk from Exceed Asset Management, you can halve your monthly fees by being smart about your choice. “Bear in mind that a monthly rental fee comes into play, that there is a contract fee and that you also pay an amount (up to 5%) on every transaction. These costs differ from bank to bank so compare prices before committing to one which may be pricier than most.”

Many businesses add these bank fees to the total invoices of their clients, which can also be avoided by getting the best possible deal. “Whether you run a guesthouse or own a panel-beating shop, you can save a lot and also offer your clients the best possible service with some shrewd planning,” says Van Niekerk.
       
2. It doesn’t matter whether you’re a dab hand with the internet or not, it’s definitely worth your while to start using online banking, as you can make great savings on various transactions this way.
     
For example, says Van Niekerk, “an internet transfer is often far cheaper than making a deposit at the nearest branch of your bank, and also a lot more affordable than paying by cheque”. She adds that cash is not necessarily king either, as fees are involved with first drawing the money and secondly with paying it into an account – whereas one online transfer could streamline the process, without costing an arm and a leg.
       
3. Debit orders are wonderfully simple and easy as they allow you to forget about lots of paperwork and payments, and ensure that payments are made on time.
     
However, different banks charge different amounts for debit orders so find out what you are currently paying and start comparing it with other banks’ fees.
       
4. Save, save, save – it’s the first thing any banker will advise you to do, even when times are tough.
     
Actually, financial experts strongly advise saving especially when times are tough. “The fact that the world is emerging from the economic downturn is good news – but most of us have had a tough couple of years, financially, and would welcome a breather,” says Sugendhree Reddy, director of banking products at Standard Bank. She adds that a good way to free money up to clear debt – and hopefully eventually save – is to re-examine your insurance policies.

“You’re probably still paying premiums on assets you no longer have or are still insured for more than the market value of your car. Once you’ve adjusted the premiums, use the money you’ve saved to either bolster your savings account or pay off debt. And just keeping working towards having more savings than debt,” she says.
       
5. If you’re a pensioner, be sure to investigate the perks available to you, and insist on making use of them.
     
Many banks offer incentives such as low or no bank fees on certain fixed amounts in a bank account, and it’s a good idea to find out if your bank adjusts these numbers when interest rates go up or down.
       
6. Make sure you understand the difference between the various types of accounts.
     
“Many people still don’t understand that you don’t get any interest on money in a cheque account, so when it comes to funds which are not part of your monthly deductions, it would be far better to put it in a savings or money market account,” says Van Niekerk.
       
7. To support your medium-term goals, like buying a car or putting a deposit down on a property, it’s a good idea to put your money into either a fixed deposit or a money market call account.
     
“A fixed deposit gives you a good interest rate and you have to give notice when you want to take your money out – making it ideal for medium-term savings,” says Reddy, adding that, “a money market account can have an even higher rate, but it still allows you to access your money quickly. This is a good option for saving, but you have to be honest with yourself about how disciplined you will be about leaving your savings to mature.”
       
8. Be vigilant when you open new accounts and, even though it may seem boring, take the time to read the fine print.
     
“Often fees are involved, such as a starting fee and on-going fees on accounts like a money market account, and these are collected automatically,” says van Niekerk. If you’re unsure, ask your banker to explain in detail what all the relevant fees are which will be deducted directly and decide on the back of that whether the account is worth your while.
       
9. When you draw cash from an ATM, do you know what the charge is for every withdrawal?
     
You may think you’re saving money by drawing (and subsequently spending) only small amounts at a time, but once you’ve considered that you actually pay anything from R5 to R11 per withdrawal, it suddenly would make a lot more sense to rather draw one larger amount weekly instead of small amounts every other day.

However, things do get more complicated the more you draw too, and at some banks, the charges for drawing R600 can be double that of drawing R500. This is just yet another incentive to spend some time finding out exactly what deal your bank is offering you, and what every single transaction – even an ATM withdrawal – costs.
       
10. Children of bankers and financial experts tend to be well versed in the art of shrewd money management, but there’s no reason why your kids can’t enjoy the same benefits.
     
“The lessons of money management are best learnt when young,” says Reddy. Most banks accommodate youngsters and their specific banking needs (such as the Standard Bank Sum1 account), allowing them to graduate from piggy-bank savings to formal banking.

Having an account teaches children the basics of transacting on an electronic account – and accounts like these involve little or no banking fees. It’s also a great way to teach children about savings, and seeing how they earn even small amounts of interest can be a huge incentive for smart money management.

The business of banking has changed dramatically over the last few decades, and long gone are the days of hiding your hard-earned cash under the mattress. It seems that more often than not, electronic transfers are the way to go (and far cheaper to boot), and in the absence of conformity when it comes to various banking fees, shopping around for the best deals definitely pays off in the long run.

The article was originally written by Riekie Human - RCS Lifestyle, March 2011, who interviewed Suzette van Niekerk.