Demand for corporate packages slumps

JOHANNESBURG - The global economic crisis and alarmist reporting about South African crime have damaged World Cup sales with thousands of hotel rooms unsold and a collapse in foreign demand for corporate hospitality packages.

FIFA's official travel agent MATCH has been unable to sell 35 percent of the rooms it reserved in World Cup host cities and has abandoned plans to house fans in Mauritius and other neighbouring countries, the company's boss said on Friday.

In an interview with Reuters, Jaime Byrom said sales of lucrative luxury hospitality packages to foreign financial services companies, who dominated this market at the last World Cup in Germany, had collapsed.

But the losses had been compensated for by South African firms.

Speaking of demand from the financial services sector, he added: "With the exception of South African banks, we have had very little if any business from overseas."

Byrom could not give the figure for overall unsold rooms across South Africa but said MATCH had retained 65 percent of the original inventory in host cities during the tournament. The rest had been returned to the open market.

Officials have recently adjusted the number of foreigners expected for the World Cup from 450,000 to 370,000 or fewer. They blame the global economic crisis and alarmist reporting about violent crime, which Byrom repeatedly attacked.

Byrom said most fans had opted to stay close to matches and a "significant" number of the rooms released back onto the market were in periods before and after the tournament or in more distant locations.

He said a controversial plan to fly fans from neighbouring countries and from non-tournament venues like South Africa's scenic Garden Route, had been abandoned.

There was insufficient demand to justify housing fans in the luxury hotels of Mauritius and South Africa's immediate neighbours did not have enough suitable hotels.

"We needed a critical mass to make it logistically sound, we couldn't get that critical mass in the neighbouring countries so that we could make it logistically feasible," Byrom said.

AFRICAN HOPES DASHED

Hopes of a windfall of World Cup revenue for South Africa's neighbours have been dashed in recent months.

Critics have always questioned the viability of the Mauritius plan, that would have involved fans in return journeys of up to 17 hours to watch a match.

Byrom said that even long haul non-venue locations in South Africa had proved unviable. "Because of the economic situation around the world, the burden of having to fly to every single match proved too big for people."

Byrom said MATCH would use about 48,000 accommodation rooms compared to the original estimate of 55,000, which at one time raised fears that South Africa would be unable to handle demand. He could not give figures for room nights sold, which is a more accurate indicator of demand.

But he said more had been sold for this World Cup than Germany in 2006, despite the deterrent of a long haul and expensive tournament location.

Byrom said South African companies had stepped into to rescue corporate hospitality packages, which account for around four percent of FIFA's World Cup revenue.