Africa The effect of the economic crisis. Economic Crisis hits Africa Private capital flow is down...
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![Page 1: Africa The effect of the economic crisis. Economic Crisis hits Africa Private capital flow is down by 40% in second half 2008 Private capital flow is.](https://reader036.fdocuments.net/reader036/viewer/2022082614/5697bfa21a28abf838c963fb/html5/thumbnails/1.jpg)
AfricaAfrica
The effect of the economic crisisThe effect of the economic crisis
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Economic Crisis hits Economic Crisis hits AfricaAfrica Private capital flow is down by 40% in Private capital flow is down by 40% in
second half 2008second half 2008 Remittances are declining (contribute Remittances are declining (contribute
appr. $ 40 bn to African economies)appr. $ 40 bn to African economies) Reduction of Official Development Reduction of Official Development
Assistance (development aid) – already Assistance (development aid) – already $ 20 bn short of Gleneagles 2005 (Life $ 20 bn short of Gleneagles 2005 (Life threatening: HIV/AIDS)threatening: HIV/AIDS)
Export revenues down e.g. oil and Export revenues down e.g. oil and tourism tourism
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Economic Crisis hits Economic Crisis hits Developing Countries - Developing Countries - World bank statisticsWorld bank statistics
GDP growth of developing countries GDP growth of developing countries will further slow downwill further slow down
2007: 8.1%; 2008: 5.9%2007: 8.1%; 2008: 5.9% 2009 growth prediction in March still 2009 growth prediction in March still
2%; April: 1.2%2%; April: 1.2% When China and India are excluded When China and India are excluded
effectively a negative growth of 1.6%effectively a negative growth of 1.6%
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Economic Crisis hits Economic Crisis hits Developing Countries - Developing Countries - World bank statisticsWorld bank statistics
Good news for coming years!Good news for coming years! 2% expected global GDP growth in 2% expected global GDP growth in
20102010 3.7% expected GDP growth in Africa in 3.7% expected GDP growth in Africa in
20102010 4.4% expected GDP growth in all 4.4% expected GDP growth in all
developing countriesdeveloping countries And…now already, innovation all And…now already, innovation all
over!over!
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Africa and South AfricaAfrica and South Africa
ICCA statistics 2008: 189 events in Africa ICCA statistics 2008: 189 events in Africa (Market share of 3% only!)(Market share of 3% only!)
UIA statistics 2008: 536 events in Africa UIA statistics 2008: 536 events in Africa (Market share of 4.7%)(Market share of 4.7%)
40% of all international meetings in Africa 40% of all international meetings in Africa take place in South Africa take place in South Africa (ICCA)(ICCA)
60% of all international meetings in South 60% of all international meetings in South Africa take place in Cape Town Africa take place in Cape Town (ICCA)(ICCA)
Only 58 international organisations based Only 58 international organisations based in Africa in Africa (ICCA)(ICCA)
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Recession affects Recession affects meeting industry in meeting industry in AfricaAfrica (South) Africa has been relatively (South) Africa has been relatively
protected; effect of recession only protected; effect of recession only noticeable from 2noticeable from 2ndnd part 2008 part 2008
Most Convention Centres will still make Most Convention Centres will still make their 08/09 budgets. Others experience their 08/09 budgets. Others experience revenue drops of up to 50%revenue drops of up to 50%
Cancellations and postponements of Cancellations and postponements of corporate meetings and incentivescorporate meetings and incentives
Association meetings attract up to 20% Association meetings attract up to 20% lower delegate numbers than expected, lower delegate numbers than expected, but no cancellationsbut no cancellations
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Recession affects Recession affects meeting industry in meeting industry in AfricaAfrica Exhibitions and trade fairs 10-30% Exhibitions and trade fairs 10-30%
down in visitors, 10-12% down in down in visitors, 10-12% down in spacespace
Organizers are aiming for qualityOrganizers are aiming for quality Venues are expected to become Venues are expected to become
creative and come to the partycreative and come to the party
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Side effectsSide effects
Strong reduction of sponsor budgets -> Strong reduction of sponsor budgets -> (medical) congresses under pressure and (medical) congresses under pressure and less cultural and sport eventsless cultural and sport events
(PCO) clients become more cost focussed(PCO) clients become more cost focussed Less delegates -> substantial reduction Less delegates -> substantial reduction
in F&B incomein F&B income Less independently organised banquetsLess independently organised banquets Swine flu related travel warning did not Swine flu related travel warning did not
really helpreally help
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Immediate reliefImmediate relief
Review of expense budgetsReview of expense budgets Cost reductions of up to 10%Cost reductions of up to 10% Freezing of personnel costFreezing of personnel cost In sourcing services and temp. staffIn sourcing services and temp. staff Increasing marketing budgetsIncreasing marketing budgets
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How to counter the How to counter the trend?trend? Nurturing increased interest in trade fairsNurturing increased interest in trade fairs Partnerships with event organizersPartnerships with event organizers Organizing own eventsOrganizing own events More flexibility in pricingMore flexibility in pricing Packages in stead of discountsPackages in stead of discounts Invest in qualityInvest in quality Create new business (e.g. religious Create new business (e.g. religious
meetings)meetings) Concentrate more on government Concentrate more on government
businessbusiness
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Wake up call for hotelsWake up call for hotels
Occupancy levels and revenues 10-Occupancy levels and revenues 10-20% down20% down
Less than 10% retrenches staffLess than 10% retrenches staff 100% prepared to ‘fight’ for the 100% prepared to ‘fight’ for the
business (in all categories)business (in all categories) More interest in packages and More interest in packages and
partnerships sacrificing ratespartnerships sacrificing rates High expectations of 2010High expectations of 2010
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In the interim: make a plan!In the interim: make a plan! If the wheels come off, ……If the wheels come off, ……