The ‘Shopper Sector’ of Visitors to KZN Tourism KwaZulu-Natal Occasional Paper No. 18 March 2004 1. Introduction The management of Tourism KwaZulu-Natal have decided to issue occasional papers to the tourism trade on the core findings of its research and other projects. The purpose of these papers is to stimulate more debate regarding the findings or progress of such projects as well as to ensure wider awareness of key research findings. The purpose of this paper is to provide an overview of that sector of the tourism market which comprises people who make use of shopping centres, malls, bazaars, fairs and flea markets – amenities for which KwaZulu-Natal has become well known. You can download an electronic version of this paper at http://www.kzn.org.za/invest/shopper.pdf or as an MS Word document at http://www.kzn.org.za/invest.shopper.doc . Please note that you will need an Adobe Acrobat reader to download .pdf files. These readers can be downloaded free of charge at http://www.adobe.com/products/acrobat/readerstep2.html . 2. Background Through time, it has become increasingly obvious that KwaZulu-Natal has become one of the foremost shopping destinations in the country. More and more visitors to the province are noting ‘shopping’ as one of their primary activities and one upon which they spend an increasing amount of money. Durban’s shopping malls have long been places not just of shops, but also of fashion, activities, elaborate architecture, and places in which to spend time for entertainment. Long gone are the days when such places were simply where one went to buy groceries, clothes or the odd present. Now days, they create and uphold entire cultures and visits to them account for increasing amounts of time. Indeed, they are rarely called shopping centers any more, but rather places for ‘shoppertainment’, or ‘shopping experiences’, even ‘shopping worlds’. They combine any number of retail outlets, restaurants or coffee shops, and frequently offer an even wider range of activities from movies to live theatre, from indoor golf and wall climbing to outdoor surfing and 4X4 driving. The concept of grouping together shops, restaurants and entertainment activities has spread rapidly through the province and the most recently built Midlands Mall at Pietermaritzburg offers a range of these to those further inland. __________________________________________________________________________________________________________ The ‘Shopper Sector’ of Visitors to KZN - Occasional Paper No. 18 1 Figure 1: Visitor Use of KZN Facilities Visitor Use of KZN Facilities 90% 80% Shopping 70% Restaurants 60% Telephone Services % 50% 40% Banking Facilities 30% Public Transport 20% 10% 0% Oct’00 - Jan’01 Oct’01 - Jan '02 Feb’01 - May’01 Feb’02 - May’02 Jun’02 - Sep '02 Oct ’97– Jan ‘98 Oct’99 – Jan ‘00 Feb’00 - May ‘00 Jun’00 – Sept’00 Jun’01 – Sep’01 Feb’98 – May ‘98 Jun ’98 – Sept Or, to underline just the shopping component of the above graph: Table 1: Visitor Use of Shopping Facilities in KZN Date Shopping Oct ’97– Jan ‘98 73% Feb’98 – May ‘98 61% Jun ’98 – Sept ’98 63% Oct’99 – Jan ‘00 69% Feb’00 - May ‘00 66% Jun’00 – Sept’00 68% Oct’00 - Jan’01 66% Feb’01 - May’01 64% Jun’01 – Sep’01 58% Oct’01 - Jan '02 73% Feb’02 - May’02 77% Jun’02 - Sep '02 77% Oct’02 - Jan '03 75% Feb’03 - May’03 69% Jun’03 - Sep '03 73% The table above illustrates just how important and attractive the shopping component of any visit to KwaZulu-Natal is. With almost three quarters of the visitors to the province making use of some or other kind of shopping facility, it is critically important to ensure that such facilities more than meet their needs – in terms of quality, variety, price, accessibility and service. __________________________________________________________________________________________________________ The ‘Shopper Sector’ of Visitors to KZN - Occasional Paper No. 18 2 3. KwaZulu-Natal – Shoppers’ Mecca What are these facilities and where does one find them? What do they add to tourism and what are they worth? Although not an exhaustive list of all shopping centres in the Durban area, those such as the Pavilion, Musgrave Centre, Windermere Centre and the massive Gateway ‘Theatre of Shopping’ are surely the best known to date. Further afield, the Midlands Mall in Pietermaritzburg, the new ones at Ballito, Phoenix, and La Lucia all add to the shopping attractions of the province. Investment into such infrastructure is similarly impressive. The Gateway complex cost some R1.4 billion, was going to offer some 375 shops, but at present just over 280 are open and sits on a 28 hectare site. The inside offers 110 000m2 of retail space and an outdoor entertainment area of 8 000m2 to cater for extreme sports plus 7 500 parking bays. The Pavilion, near Westville, offers over 230 shops. The New Phoenix mall provided new shopping infrastructure at a cost of R67 million with 8 000m2 of shopping space for the 50 shops. The two major shopping centres in Hillcrest cost some R170 million. Another recent addition is the shopping boardwalk located at uShaka Marine World on Durban’s Point with 87 shops. Malls and shopping centres are not the only attractions enticing visitors and locals alike to part with their money. The province abounds with markets also – flea markets, second-hand markets, lifestyle markets, fresh produce markets, Indian markets, Saturday markets, heritage markets, park markets and even evening markets such as the Stables. A second determinant of the value of shopping for the KZN region is spend. Visitors, both foreign and domestic, both from overseas and from the rest of Africa, spend substantial amounts on their trips to and from the province as well as while they are in KZN. As this paper concerns shopping, it will concentrate on the spend involved in that sector alone. Overall visitor spend has shown a healthy increase through the years as is illustrated in the table below: Table 2: Average Spend per Trip by Year Average Spend 2002 2003* Shopping R 572.90 R 415.23 Total Spend per Person per Trip R 1492.00 R 1675.47 Value of Shopping Component R3.6 billion R3.9 billion *Estimates If the size of the KwaZulu-Natal domestic tourism market for each year is taken into account, the total value of the shopping component can be estimated, as is indicated in the last row of Table 2. Even though these are fairly conservative estimates, they represent highly significant income from this sector of the tourism industry. What needs to added to this, however, is the somewhat greater spend of foreign visitors, and also of cruise tourists to the Durban and Richards Bay ports as their spend is considerably higher than either of the other two visitor types. __________________________________________________________________________________________________________ The ‘Shopper Sector’ of Visitors to KZN - Occasional Paper No. 18 3 4. Conclusion The shopping component of the domestic tourism industry plays a highly significant role in terms of earnings for the region. KwaZulu-Natal is becoming increasingly well-known and attractive for its shopping facilities, attractions and infrastructure, not only by the domestic tourism market, but also by the African and overseas sectors. There is serious competition from other South African destinations, however, such as Cape Town and, to some extent, Johannesburg, but the combination of the shopping attractions with the strong influences of KwaZulu-Natal’s beaches, game reserves, heritage sites and cultural draw- cards, has enabled KwaZulu-Natal to remain a popular shopping destination. Shopping should also be seen in its widest sense in terms of the tourism industry – shopping is not only done for souvenirs, but also in bulk for re-selling in the home countries. This is particularly so in terms of the African markets. There are some further threats to the shopping sector in KwaZulu-Natal besides that of other competing destinations, and amongst the strongest of these are crime, and poor quality goods, fake imports, cheap replicas of quality local offerings and the like. Measures need to be put into place to curb the proliferation of such goods as well as to control crime in the popular and much- visited shopping centres. A further threat, both perceived and, in some cases, real, is that of overpricing of good during holiday periods by some unscrupulous operators in the hopes of making extra profit in the short term. However, the net result of such practices is rather like killing the goose that lays the golden egg – no one benefits. Such overpricing needs to be reported to the appropriate authorities when noticed, and certainly to Tourism KZN’s Customer Care executive at the offices of TKZN. With shopping contributing significantly to the positive economic impacts of tourism in the province, all care needs to be taken to ensure that acceptable practices and pricing are adhered to at all times and that the shopping visitors are encouraged to return. -o0o- Please forward any comments regarding this paper to: Karen Kohler Research Manager TIS [email protected] Fax : (031) 301 1763 __________________________________________________________________________________________________________ The ‘Shopper Sector’ of Visitors to KZN - Occasional Paper No. 18 4 .