By Jeremy Evans
In the last twenty two years South Africa’s sports tourism and events industry has successfully delivered some of the most iconic moments in world sport starting with the 1995 Rugby World Cup, the 1996 African Cup of Nations, the 2003 Cricket World Cup, the 2010 FIFA World Cup, the 2014 World Mountain Bike Marathon Championships and the 2016 Ironman African Championships Triathlon Series. Each one has played a central role in raising the international profile of the country on the world stage while at the same time attracting millions of tourists to enjoy its wonderful climate, culture and people. They have inspired a new generation of entrepreneurs like Energy Events and Jozi Urban Adventures to come into the market and expand its scope by introducing mass participation events featuring cycling, swimming and trail running for grass roots and elite athletes.
These new entrants are challenging the market dominance of more established players such as those running the Absa Cape Epic, the Cape Town Cycle Tour, the Comrades Marathon, the Midmar Mile, the Two Oceans Marathon, the Dusi Canoe Marathon and the Nedbank Golf Challenge. They are forcing them to sharpen up their technical and commercial operations and the way they communicate with their customers and add value to their sponsors and suppliers. With so much competition and in the market, it would be easy to assume it is in a very healthy state of equilibrium. Where the dominance of established players is being disrupted by the arrival of these new entrants.
In reality this is not the case and it continues to be in a highly fragmented state because of a lack of consensus among all participants about its structure and future value to the economy. The market is currently divided into three sectors, public, private and voluntary or not for profit. In the public sector, the Government is the dominant player through the political and financial support it provides to the Ministry of Sport, the Ministry of Tourism and their agencies such as, SASCOC, SRSA, and sporting federations bidding for mega or hallmark events like the FIFA World Cup, the Cricket and Rugby World Cups and the Commonwealth Games. The private sector is dominated by established event companies, new entrants and their supply chains such as banks, television and media companies, sponsors, hospitality, ticketing and marketing companies, insurance and logistics companies, retailers, hotel chains, travel and tour operators. They are the main engines for growth in the market through the levels of demand they generate from their customers and suppliers. The existing levels of concentration among established operators like the Absa Cape Epic, Nedbank Golf and Red Bull South Africa are comparatively low when compared with other sectors of the economy such as banking, insurance and finance. This means it is relatively easy for new entrants like Energy Events and Jozi Urban Adventures to quickly establish themselves, build their brands and form lasting relationships with their customers and suppliers. The voluntary or not for profit sector is equally vibrant in its character and composition, as the private sector. It is dominated by a group of well- established operators such as those organising The Comrades Marathon, The Two Oceans Marathon, The Duzi and The Midmar Mile, who use their knowledge and experience to build their brands and form long term relationships with their customers, sponsors and suppliers. While their business models may have a completely different focus to those in the private sector. They are all professionally managed and marketed and set high operational standards for new entrants like universities, colleges, charities and churches to aim at when planning and delivering their events.
All three sectors are interconnected through the collective impact they have all had upon developing SA’s reputation as a world class destination for sports tourism and events in the last twenty three years. A fact recognised by President Ramaphosa in his State of the Nation Address in February when he identified tourism as one of the ‘Sun Rise’ industries for the future growth of the SA economy, through its ability to attract inward investment, generate employment and skills development. With GDP only predicted to grow by 1.7% this year, the economy needs all of the help it can get from tourism, if it is to have any meaningful impact on bringing down the country’s high employment levels of 27%! Statistics SA in its 2016 survey of domestic and international consumer spending on tourism, estimated its gross value to be in the region of R375b (€24.67b) per annum. It also estimated more than 1.6m people are employed on a part time or full time basis in tourism. This is more than other etablished sectors of the economy like mining and agriculture.
Despite all of this good news, 2017 was a ‘watershed moment’ for the sports tourism and the events market. After twenty two years of unprecedented growth, it suffered a series of set-backs that started with Durban’s loss of the Commonwealth Games in March and was followed by the collapse of cricket’s T20 Global League in October and rugby’s failure to win the bid to host the 2023 World Cup in November. The unfortunate timing of these setbacks coming one after another in quick succession conveyed a very negative message to the rest of world that South Africa had lost its ‘Madiba Magic’ over the planning and delivery of major events. The flipside of all of these disappointments for the market are the opportunities they create for all three sectors to take a fresh look at the way it researches, plans, bids, organises, manages and delivers, all types of events in the future.
This paper suggests there needs to be much more joined up thinking and collaboration between all three sectors of the sports tourism and events industry, if it is going to retain its competitive advantage and potential for growth in the next ten years. It argues the knowledge and experience gained from the last twenty two years should be used as the starting point to map out a new vision for its future. To support this hypothesis, it puts forward a series of practical recommendations for achieving these objectives. The first one is the setting up of a Not for Profit Independent Advisory Board, to create a strategic framework and action plan shaping the market’s future direction in the next ten years from 2018 to 2028.
- It proposes the panel consists of two representatives from the public, private and voluntary sectors of the market with an independent chairman who has a casting vote. It feels this type of format is essential for obtaining the level of support it needs from each sector to support the policies and recommendations, it makes to Government about the future direction of the market. It also means each sector has a representative voice at the highest levels of decision making over the policies and recommendations, it makes to Government.
- It proposes the panel only reports to Government and the Ministers for Tourism and Sports to give added weight to its policies and recommendations and bring about the necessary changes to its structure and regain its competitive edge in the global market place.
- It proposes the scope of the panel’s mandate should be to review and advise Government and the Ministries on all forms of legislation, regulation, strategy, planning, bidding, finance, marketing, commercial rights, service delivery, education & skills training, legacy and impact assessments that affect its current structure, competitive balance, barriers to entry and levels of concentration. It believes the panel needs a broad scope of responsibility like this if its policies and recommendations are going to have any significant impact on the future success of the market at a local and global level in the years ahead.
- It proposes the panel should be tasked to produce a ten year action plan identifying the key links and value drivers connecting tourism, sport and events to each other in the market. It believes the plan should also have a clearly defined a set of KPI’s to measure the outcomes of the policies and recommendations it makes to government and the ministries, so everyone can be held accountable for their decisions.
- It proposes the panel should be a knowledge bank providing independent advice and guidance to event owners and operators in all sectors of the market to help them develop the future potential of their brands for the collective benefit of their customers, sponsors, suppliers and investors.
In summary, the panel should create an action plan to shape the future direction of the sports, tourism and events market in the next ten years. The plan should be based around the market’s core value drivers of knowledge, innovation, entrepreneurship and customer relationship management, to create more growth, more jobs and more opportunities for all participants and their supply chains at the local and global level.
