In the lap of luxury
As the fastest-growing industry in South Africa, tourism is playing a major role in many industries, including transportation. Will the upcoming 2010 FIFA Soccer World Cup create a market for luxury coaches that will be unsustainable after this global event, or will local tourism absorb the influx of these coaches without batting an eye?
“South Africa may only have about 2% of the international tourism market, but in terms of the number of international visitors this represents each year, providing them with transport is a mammoth task for any emerging country,” explains Shirle Greig, media product specialist: Mercedes-Benz South Africa Group of Companies.“South Africa played host to more than nine million visitors in 2007, which represents a growth rate of 8.3% over the previous year. Most of 2008 remained a buoyant year for the local tourism industry as well.”
And, of course, 2009 is the precursor for the 2010 FIFA Soccer World Cup – from the Confederations Cup and the Indian Premier League, to interested tourists and corporations scouting out South Africa’s potential prior to the big event.
According to Lisa Hood, client relations manager: Springbok Atlas, South Africa is fast becoming one of the destinations of choice for foreign nationals. “Meetings, incentive packages, conferences and corporate events are bringing more visitors to our lovely country each year,” she explains. “Not to mention tourists who have chosen South Africa as their vacation destination of choice.
“The World Cup will only serve to increase these numbers,” she continues. “Historically, international events bring a large amount of attention and publicity to their host cities and countries, which naturally translates into a healthy tourist industry – before, during and after the event.
“This means an increased demand in the accommodation and transport sectors that cater for these industries.” One such sector is the luxury coach division of what can loosely be termed the public transport sector. Luxury buses are about far more than simply reaching one’s destination – they are about reaching that destination in style and comfort. In fact, as anyone who has undertaken a long coach trip as part of their vacation portfolio can attest to, the actual journey can be one of the most enjoyable aspects of a trip.
However, while local tourism is already doing particularly well, the needs created by the 2010 World Cup far exceed current demands – or do they? FIFA’s team and VIP requirements amount to approximately 175 buses, with hundreds more needed to cater for the tourists and fans expected to flock to South Africa in June and July next year. The real question is not whether the demands of 2010 will result in a far larger parc of luxury buses than ever before, but whether there will be a demand for these buses once the World Cup is over and the fans return home.
A LOCAL LUXURY MARKET
The luxury coach market is currently based on existing operators either growing or replenishing their fleets every few years, as well as new entries into the market. The expected demands of the World Cup however offer an opportunity for much larger growth for existing operators as well as the entrance of smaller operators into the market.
Can such a substantially increased luxury bus parc be sustained after the World Cup, though? Luxury buses in particular cannot be integrated into the normal public transport system, but are specific to a particular market.
In fact, it is possible that the demand for a larger luxury bus parc already exists, and 2010 should provide an added stimulus to more than sustain this burgeoning industry. “There is a huge demand for luxury coaches in South Africa,” reveals Hook. “We’re getting busier each day.” This indicates that the hosting of the World Cup is not the only factor influencing the growth of this market, but is rather the excuse and surety many operators will use to either grow their fleets or as an opportunity to enter the market.
Paul Nel, regional manager: Irizar SA, concurs with this general trend in the market. “While luxury coaches are expensive and many operators are either currently faced with difficulties in securing finance or are waiting for tenders to be awarded, there is a definite interest in the luxury coach market.”
So much so that Irizar continues to increase its stock of the new PB, its premium luxury coach range, in anticipation of orders later this year and early next year.
“Up until mid-2009 we were unable to offer our premium luxury coach range as we only had access to the PB through Spain,” explains Nel. “The Rand-Euro exchange rate placed this premium coach beyond local affordability.
“Working closely with Irizar in Spain and Brazil, however, the PB is now being manufactured in Brazil, which has allowed us to launch it locally as well. Given the current influx in interest in luxury coaches, the timing couldn’t have been better.” Ettienne du Preez, a manager at Hyundai Automotive South Africa, believes the World Cup will do a lot towards creating awareness of South Africa within the international tourism industry, and that the increased capacity of luxury buses will naturally result in more tours. “The demand is already there,” he says. “We simply need the buses on the road to cater for this demand. The World Cup provides the perfect opportunity to do so, particularly for smaller operators.”
It is not only tour operators who will benefit from an increased luxury bus market, but local coach manufacturers and importers as well. According to Mercedes-Benz Bus & Coach, the World Cup and bus rapid transit (BRT) requirements together total some 3000 buses and coaches that will need to be built during 2009 and 2010. No single manufacturer has the capacity to fill these orders alone. Joint efforts will be necessary, which will benefit the industry as a whole.
Many companies have invested heavily in order to meet these requirements – and all are expecting the growth to continue post-2010. “Transporting passengers in comfort and safety is always key to success for tourism operators,” confirms Greig. “Of course, the World Cup serves to highlight the need for reliable, safe and comfortable public transport, but the initiative should not stop there.”
The international focus on South Africa during the World Cup is a fantastic tourism opportunity, but it is far from the be-all and end-all of interest in this country. In fact, South Africa is already on the map. An extended carrying capacity able to cater for international needs – both corporate and private – will ensure this industry continues to grow and remain sustainable long after the 2010 FIFA World Cup champions have returned home.