TAKING TOURISM INVESTMENT TO NEW HEIGHTS

Transcription

1 TAKING TOURISM INVESTMENT TO NEW HEIGHTS The view from the proposed top station of the cablewa y of the Drakensberg escarpment looking south-east towards Champagne Ca stle. Technical Document On The Mnweni Cableway Compiled For The Uthukela District Municipality

2 TOURISM INVESTMENT OPPORTUNITY Page 2 of 13 THE MNWENI VALLEY & CABLE WAY 1. INVITATION TO INVESTORS The Uthukela District Municipality is facilitating the development of a new and unique tourist attraction for KwaZulu-Natal s well-es tablished Drakensberg tourist route the Mnweni V alley and Cable Way. The cable way s base is to be located in the Mnweni Valley, the last undeveloped valley in the northern Drakensberg, and its summit will be between the Drakensberg landm arks of the Amphitheatre and Cathedral Peak. The summ it will afford views of KwaZulu-Natal, the Free State and Lesotho. The location of the Mnw eni Valley in respect of the N3 (only 70 km), the busiest transport corridor in South Africa, makes it a very attractive proposition. The Amphitheatre which hosts the 2 nd highest waterfall in the world The s cenic Drakensberg, or the Berg as it is popularly referred to, has a long es tablished reputation as a naturebased holiday des tination, offering a wide range of accommodation establishments and nature- and sport-based outdoor activities. The Berg is popular with the domestic tourist market and is the second most popular foreign tourist destination in KwaZulu-Natal. This area s inspiring natural attractions and the established tourist traffic, provide significant comm ercial tourism development potential. The Uthukela District Municipality, is offering investors, developers and others a unique opportunity to take part in the development of a living cultural valley, incorporating four cultures : the S an culture;

3 Page 3 of 13 the ancient Zulu culture; the transitional Zulu culture; and the modern Zulu culture. Covering ± 400 km², the valley can accommodate a wide range of tourism development in type as well as size. The Uthukela District Municipality will consider all development proposals and is not placing any limitations or prescription on the type and range of development within the Valley. The cable way, which will extend 3,5 kilometres and climb m to a top elevation of m, is proposed as the core element of a larger development, which could include: A tourist resort/hotel on top and/or at the bottom of the mountain. A resort on top of the mountain would understandably be limited in scale, whils t a resort at the bottom of the mountain has limitless possibilities; A tourist restaurant facility on top or at the bottom of the mountain; A day visitor resort at the bottom of the mountain; Self-catering holiday units throughout the Valley to be developed in partnership with the local com munity; Outdoor activities such as: Hiking; Horseback and pony trekking trails; Mountain clim bing; Mountain biking; Paragliding; Canoeing; Zulu cultural activities; Tour guiding by local comm unity San rock art interpretation; Fishing including trout; and Birding. Resort activities such as : Water related activities; Golfing; and Tockle bahn. The M nweni Valley

4 2. THE TOURISM INDUSTRY Page 4 of 13 Worldw ide Tourism Tourism is the world's largest industry. The World Travel and Tourism Council estimates that Travel & Tourism will generate US$3,5 trillion in 1999 (or 11,7% of the world GDP) and em ploy almost 200 m illion people (or 8,2% of world employment). International tourist traffic grew by 2,5% in 1998 to reach 635 million arrivals and is expected to reach 1,6 billion international arrivals annually by the year 2020, growing by 4,3% per annum. Worldw ide Tourism in the 21st C entury Millions Source: WTO South African Tourism Overseas arrivals totaled 1,4 million in 1998, representing annual growth of 12% Marks the twelfth successive year of increases in the number of overseas arrivals to South Africa. South Africa's O verseas Tourist Arrivals Annual Arrivals (millions) Source: StatsSA

5 Page 5 of 13 The latest s urvey by S atour on the South African domestic tourism market (conducted in 1996) indicates that 63% of South Africa's adult population take at leas t one holiday trip a year - yielding som e 16 million domestic tourists. The m ost preferred destinations for domestic tourists are KwaZulu-Natal, Gauteng, the Eastern Cape and the Wes tern Cape. The potential for South Africa to increase both arrivals and expenditures from the overseas, regional and domestic markets is considerable. Projected grow th rates for South African tourism are presented in the Table below. Foreign Tourist Arrivals : Overseas Africa Proje cted Growth of South African Tourist Markets % pa 5%-10% 7,5% Dom estic Tourists 2%-3% Source: Grant Thornton Kessel Feinstein, KwaZulu-Natal Tourism KwaZulu-Natal receives the third highes t percentage of foreign visitors to South Africa. The province has a lower proportion of visitors spending time within, or passing through its borders in the summ er compared to the winter. 27,5% of foreign visitors to South Africa in 1998 visited KwaZulu-Natal; this translated into approximately overseas tourists. Foreign Visitors to South African Provinces % That Visited the Province Province Visited Summ er 1996 Winter 1996 Summ er 1997 Winter 1997 Summer 1998 Winter 1998 Gauteng 65% 68% 59% 63% 56% 62% Western Cape 55% 48% 56% 50% 59% 46% KwaZulu-Natal 27% 30% 25% 33% 24% 31% Mpumalanga 19% 22% 17% 25% 20% 23% Eastern Cape 17% 15% 15% 16% 16% 12% Northern Province 4% 5% 7% 8% 5% 8% North West 7% 8% 8% 7% 5% 6% Free State 5% 5% 5% 6% 5% 5% Northern Cape 4% 5% 4% 6% 5% 4% Source: Satour Surveys of South Africa s International TourismMarket Attracting around 30% of total dom estic leisure trips (9,1 million trips), KwaZulu-Natal is the most popular destination for dom estic tourists, followed by Gauteng and the Eastern Cape. Most Popular Destinations for All Domestic Leisure Trips 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 1996 Kw azulu-natal Gauteng Western Cape North West Eastern Cape Northern Province Mpumalanga Free State Northern Cape

6 Drakensberg Tourism Page 6 of 13 10,1% Of all foreign touris ts visited the Drakensberg in winter 1998, slightly higher than the S um mer 1999 figure of 9,5%. Assuming that on average 10% of foreign tourists visit the Berg, the area attracted around overseas visitors in The Table below gives a breakdown of destinations visited by dom estic tourists to KwaZulu-Natal. 4% Of all holiday trips to KwaZulu-Natal are to the Drakensberg region. This equates to approximately dom estic tourists per annum. 38% Of all dom estic visits to the Drakensberg is to the Southern Berg, 43% is to the Central Berg and the remainder (19%) is to the Northern Berg. The Berg generally attracts visitors from bordering provinces and areas, ie KwaZulu-Natal, Gauteng and the Eastern Cape. 55% O f all domestic visitors to the Berg are from KwaZulu-Natal. In total, the Northern and Central Berg attracted around overnight tourists in 1998 as well as an estimated day visitors. The Berg is more popular with older visitors, drawing the m ajority of its dom estic tourists (81%) from the 35+ age group, and with the higher incom e visitors, 84% of its visitors are from the top incom e brackets. Domestic tourists stay on average 4,4 nights in the Drakensberg. Accommodation Destinations Visited by Domestic Tourists Durban South Coast North Coast PMB/Midlands Zululand Battlefields Drakensberg Maputaland Source: KwaZulu-Natal Tourism Authority, KwaZulu-Natal s Domestic TourismMarket 1998 KwaZulu-Natal 52% 23% 14% 14% 4% 10% 4% 2% Cathedral P eak Hotel The Berg comprises a large number of m id- and upmarket tourist hotels, resorts, guesthouses and bed-and-breakfast facilities. A total of beds are offered in the Northern and Central Berg. It also offers limited caravaning and camping facilities. Each of the resorts offer a wide variety of indoor and outdoor sport, nature and recreation activities, such as hiking trails, golfing, mountain biking, canoeing, horseback trails, gym nasiums, swim ming pools, saunas, etc. Although many of the res orts are selfcatering, most also offer restaurant facilities. The resort facilities are primarily used by resort guests and most establishments do not cater for day visitors. Although activities are offered outside the resorts, such as pottery studios, crafts shops, restaurants, tea gardens, etc. the local authority and tourism officials indicate that tourists to the Berg arrive at their resort destination and seldom travel wider throughout the area. It is the view that the Drakensberg lacks variety in attractions that would encourage and lead to the

7 Page 7 of 13 wider m ovem ent of tourists. The proposed M nweni Cable Way is regarded as such an attraction that will stimulate travelling within the Berg and will also serve a largely untapped day visitor market. 3. THE PROPOSED M NWEN I VALLEY DEVELO PMENT The Site The Mnweni Valley is located in the northern Drakensberg and is situated approximately 30 kilometres west of the town of Bergville and adjacent to the well-known Royal Natal National Park.

8 Page 8 of 13 Infrastructure The Valley is reached by travelling on the Woodstock Dam Road from the town of Bergville for ±12 km on a tarred road. At the Dam turn off to Isandlwana, this is a 26 km gravel road, which ends approximately 3 kilom etres from the proposed base site for the Cable way. The 26 km gravel road would require significant upgrading the KwaZulu-Natal Department of Roads will undertake this im provement. A road would need to be constructed in respect of the final 3 kilometres to the site. It is expected that this will form part of the proposed developm ent cost to be borne by a potential investor. The nearest electricity connection is located 3 kilometres from the site. The cos t of connection to the electricity supply will form part of the proposed development cos t to be borne by a potential investor. Adequate water infras tructure exists, but provision should be made for the cost of sewerage and water purification infrastructure. The nearest telecomm unication connection is located 21 kilometres from the proposed site. Cellular communication can also be installed. The cos t of telecomm unication connection would need to be included in the development cost to be borne by a potential investor. Land & Legal S tatus The area proposed for developm ent is tribal land, which falls under the control of the Am angwane Tribal Authority and is adm inistered according to traditional procedures by the headmen and the chief of the area. Tenure of the operational land is held by the Ingonyam a Trust. The investment is to be structured as a joint venture between a private sector investor, the local community (the Amangwane Tribe) and the Ingonyam a Trust. The joint venture is to be facilitated by the Uthukela District Municipality. The inves tm ent initiative carries the full support of all effected parties. The head of the Am angwane Tribe is Inkosi M Hlongwane who has expressed his support for the project and has already proposed satellite developments associated with tourism. The Chairman of the Ingonyam a Trust Mr Owen G reen has indicated the positiveness of the Trust towards development that sim ulates economic growth amongst the communities residing on Trust land. Given this legal status the Trust will be empowered to lease land rites to both the public and the private sectors, be they for management, infrastructural or developm ent purposes and the benefits derived from developments on its land will in turn be distributed among all participating communities.

9 Page 9 of 13 The rugged inspiring valley that awaits the touri st The fangs that touri st will see close up in the valley

10 Page 10 of 13 The topography on the escarpment looking south-ea st towards Cathedral Peak View on top of the Drakensberg M ountains looking in a westerly direction towards Lesotho. The M okhotlong Oxbow tar road i s just beyond the horizon.

11 Preliminary Demand Indications Page 11 of 13 Cable Way: No form al feasibility studies have been carried out in respect of the project and the demand indications are therefore only indicative in nature. The cable way would attract dem and from foreign and dom estic tourists staying overnight in the central and northern Berg (the distance from the southern Berg is believed to be too far for a day visit excursion) as well as the day visitor market which incorporates the local population residing within the Thukela District Municipality jurisdiction. Around foreign and dom estic tourists overnighted in the central and northern Berg in If at least 25% of these tourists could be attracted to the cableway, it would equate to tourist cableway users. The current day visitor m arket is estimated at around Given the lack of day visitor facilities in the area, if at least 35% of this m arket could be attracted to the cableway in a year, it would equate to day visitor cableway users. Rough calculations indicate that the cableway could attract around users per annum. This is regarded as the core demand. The further possibility exists to divert passing tourist traffic on the N3 Highway (70 km from the site) and the R74 (40 km from the site) to use the cable way. Given the high level of traffic on these routes, the N3 is the busies t transport corridor in S outh Africa, this could be a vast source market and requires serious investigation. Given that the proposed cable way w ould comprise cabins with seating capacity for 6 passengers, that it would take around 30 minutes to com plete a round trip up and down the mountain and that with prevailing weather conditions the cable way would probably operate for 80% of the year, eight cabins are required to satis fy the core demand. The planned cable s ystem can accommodate 46 cabins, and therefore sufficient capacity exis ts for significant growth in demand. The Les otho authorities have indicated interest in the proposed development and have advised that a m arket exists for trans porting goods up the cable way at night to high lying areas in Lesotho that would easier be reached by the cable way than by the currently utilised pony and horse trails. This market requires further inves tigation. The Lesotho authorities also indicated that a development at the top of the Cable way could be used as the base from where hiking trails can originate, including a spectacular day walk to the 2 nd highes t waterfall in the world, the Tugela Falls, (946 m in height). The Les otho Government will in all probability link the top station to the existing Mokhotlong Road. This would provide road access to the skiing facilities at O xbow in Lesotho. Due to the close proximity of the border, agreement will have to be reached between the South African and Lesotho governm ents on customs regulations. The suggested price per round trip per adult is R30, including taxes. This is significantly less than the prices charged at Table Mountain but higher than the Hartebeespoort Dam cable way charge. The Drakensberg is not yet as popular a des tination as Cape Town - which is a destination in its own right, and has far higher visitor numbers than the Berg. Table Mountain is also an internationally recognised landm ark and has a great attraction for many people. The C ape Town cable way can therefore charge higher prices (currently R 60 for a round trip). Other Developm ent: Given that sufficient demand exists for the cable way, support facilities s uch as res taurants, shopping, etc would be required. If we assume that a reasonable 5% of the current central and northern Berg domestic and foreign touris ts would prefer to overnight in the Mnweni Valley, that the average length of stay is 3 nights and that the double occupancy

12 Page 12 of 13 is 80%, then approximately 100 to 150 tourist rooms could be developed in the Mnweni Valley to satisfy this demand. Preliminary Costing Indications The ins tallation cost of the cable way is projected at around R30 million (excluding civil work costs). Mid-sized restaurant and day visitor facilities would cost in the region of R5 to R10 million. Working on an average 4-s tar hotel room cost of R (including significant public areas, ie foyers, restaurants, bar, etc), a 100-room resort development would cost in the region of R50 million to R80 million. The Uthukela District Municipality envisage the total development cost of the Valley to be in the region of R120 million. 4. TOURISM INITIATIVES A number of tourism initiatives within the Drakensberg and surrounding areas are of im portance and will positively influence this investment opportunity. 1. Drakensberg World Heritage Site The Drakensberg has been declared a World Heritage Site. It is one of only 23 sites world-wide that com prise both natural and cultural World Heritage status. A range of facilities in and around the Ukhahlamba Drakens Park is being developed. 2. The Roof of Africa Scenic Route The ongoing development forms part of a recently launched tourist route, The Roof of Africa Scenic Route. This route covers Lesotho, the Eastern Free State and the Kingdom of the Zulu and is actively being m arketed through the affected tourism authorities. 3. Big 5 Reserve The Uthukela District Municipality is spearheading the development of a Big 5 Gam e Reserve in their jurisdiction to further increase the tourism potential of the area. This reserve will cover 1600 km², linking the existing Tugela Biosphere along the Tugela River and G ongolo Reserve between the Mooi and Bushman Rivers with the Spioenkop Nature Reserve. The area already com prise four of the big five, only lions are still to be incorporated, and includes four of the major battle sites fought during the Anglo B oer War, including the very famous Spioenkop battle site. The proposed building of the Jana and Mielietuin dam s on thetugela and Boesmans rivers respectively will further enhance the competitive edge of this gam e reserve as the water related tourism activities will greatly contribute to the critical mass. 4. Dinosaurs Valley A recent discovery of fossils in a Drakensberg valley has prompted the development of a tourist establishment with palaeontological attractions. This valley offers both scientific and tourism potential.

13 5. Gatew ay Project Page 13 of 13 The proposed project is built on and around a flyover on the busies t road, the N3, in South Africa. Initial proposals for the project include : Com mercial Zone; a gateway tourism information centre, factory shop outlets, service station and allied motoring services, res taurants and fast food outlets at the flyover. The tourism zone will include a Hotel and conference facilities, the African Art School, a wine farm and winery and a game park with hunting facilitation. 6. Existing Tourism Routes & Facilities This area includes numerous existing facilities on established tourism routes, including the Battlefield Route, the Midlands Meander and the Drakensberg Drive. 5. UTHUKELA DIST RICT MUN IC IPALIT Y The Uthukela District Municipality is com mitted to this project and will make m anpower available for its execution and assist with all the necessary approvals. 6. CONT ACT DETAILS For further information please contact: Sne Madondo Senior Tourism Officer Uthukela District Municipality PO Box 116 Ladysmith 3370 KwaZulu-Natal South Africa Tel: (036) Fax: (036) sne@uthukeladm.co.za This document w as compiled by Grant Thornton Kessel Feinstein with inputs from the Uthukela District Municipality