Opinionista
Ivo Vegter
Who is ripping off whom?

South Africans are being admonished not to gouge tourists. But we're not the real FIFA World Cup profiteers.

South Africans working in the tourism industry have been warned not to engage in "price gouging" during the 2010® FIFA® World Cup® South Africa®.

Remember Athens, they are told. During the 2004 Olympic Games, the Greek capital gained a reputation as a rip-off destination among international tourists. By contrast, Barcelona kept its prices down and has enjoyed a massive tourism boom since its own day in the sun in 1992.

Our tourism fraternity is protesting, and rightly so. It is galling that the South African hospitality industry stands accused, when it is not the real culprit.

The biggest offender of them all is Match Services, the organisation that was granted monopoly rights by FIFA to sell tickets and tour packages to foreign visitors. Match is part-owned by a company run by Phillipe Blatter, the nephew of FIFA president Sepp Blatter. It has been cavalier in its treatment of South African businesses and rapacious in its sales to foreign tourists.

The Kruger National Park recently dumped some 25 000 rooms on the market, after Match, for whom they had been reserved, failed to sell them. It paid no penalties for relinquishing the reservations, so the park now has only a few weeks left to try to sell the empty beds.

The same happened with more than two thirds of the nearly two million rooms Match originally reserved. Many of the hotels, lodges and B&Bs that agreed to Match's harsh terms, because it seemed to be the only chance of participating in the promised World Cup bonanza, are now stuck with tons of unsold inventory and little time to sell it.

Meanwhile, tour operators are expected to pay a whopping $30 000 licence fee to Match for every country in which they wish to sell packages. For a foreign operator serving only its own country, that's bad enough. But for a South African tour operator with clients all over the world, the initial outlay to Match could be crippling. If your company gets two groups each from five countries, that's over a million rand you have to recoup from ten paying customers, just to take care of the Match mafia.

Clearly, only the really big operators can afford such an extortionate shake-down, so smaller businesses are left out in the cold. So much for developing the tourism industry in South Africa.

As if this isn't enough, Match charges massive markups, including 35% on World Cup tickets themselves. Rooms were sold to Match at the kind of knock-down prices only a monopolist can demand: it insisted on paying 2007 rates. Reports vary, but talk in tourism circles suggests that international guests pay anywhere between 50% and 500% more than regular high season rack rates for rooms resold by Match.

Once all these extortionate licence fees and exorbitant markups are recouped from hapless tourists, will they be told how much of their cost is attributable to profiteering by the FIFA cartel? Of course not. They'll merely return home, grumbling that they went to South Africa and got ripped off.

The reality, however, is different. The minister of tourism, Marthinus van Schalkwyk, commissioned auditing firm Grant Thornton to do a price survey, in the hope of getting to the truth behind price-gouging allegations. Turns out is that although some hotels and lodges did charge a modest premium on peak rates, as might be expected in times of high demand, most prices were found to be reasonable.

Who will tell these tourists that they were ripped off not by South Africans, but by FIFA and its nepotistic supplier cartel? Who will tell them that most of our tourism sector – especially the small, emerging companies that are the locus for future growth – failed to benefit at all from the World Cup, thanks to Match's extortionate licence fees? Who will explain the shambles that resulted when thousands upon thousands of unsold rooms reserved by Match were summarily dumped back onto our parks, lodges and hotels?

Our government's mandate is not to sign South Africa's rights away in return for shallow self-aggrandizement. Instead of investigating price-gouging on the part of South Africans, its duty is to defend us against cavalier extortion by rapacious foreign invaders.

It's time we take back the Order of Good Hope which South Africa awarded to Sepp Blatter. There's precious little hope left for the victims of FIFA's crass exploitation.

By all means, support our football team in June and July. Welcome foreign visitors, and show off our beautiful country.

But boycott FIFA. Buy your shirts, footballs, marketing material and beer from companies that didn't sign a nefarious pact with the avaricious football king. If it sports an official logo or FIFA trademark, shun it. Keep your money, and our country's economic future, out of the dirty paws of the Blatter royal family and their venal cohorts. They've done enough damage as it is.

UPDATE: The mention of the "2007 rate" on which Match insisted needs to be qualified: according to a local tour operator, it agreed on 2007 peak season rates, plus inflation of about 7% pa, less 30% commission. This means suppliers certainly did not get paid any more than normal, and if selling prices were inflated, this was done by Match.

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Another interesting point is that MATCH signed the contract for this and the next World Cup in South America-knowing full well that their inadequacies would not have been allowed to happen again. But now it will
Is this a case of FIFA Match Fixing? I think so.
Thank you for spilling the beans. These stories of how SA is being sold out, and there are more, should be the true headlines - not Kiddie Amin.
Ok, as for FIFA and MATCH they can collectively Votsek after the World Cup, but then we will be left with those Stadiums that cost Billions, to us Government and by implication ordinary South Africans are to be blamed, and we @ Township Vibes call for the establishment of The Rural Areas, Informal Settlements and Townships Tax immediately after the world cup, you and the government did manage to build the stadiums, so what you? will have the means to cushion in this tax, Finish and Klaar. We will be able to avoid situations where Cape Town school kids burn their own school, because of their frustration with lack of delivery.
I've argued before (quoting from Soccernomics by Simon Kuper and Stefan Szymanski) that the money invested in World Cup infrastructure would have had far more benefit if it had been spent directly on development needs like housing, sanitation and education.

That said, assuming that because the government could afford R80 billion once, it (and taxpayers) can afford it again, is false logic. Even the first R80 billion was something South Africa could ill afford. Also, don't presume that taxpayers will hang around no matter how much they're taxed. The biggest taxpayers are also the people who can most easily move to a better tax climate, if they feel exploited.

Your anger at the misguided priorities that led our government to invest in fancy new stadiums instead of development for the people, however, is entirely justified.
But wait, there's more! Check out the book review of "FOUL! The secret world of FIFA - Bribes, Vote Rigging and Ticket Scandals" by Andrew Jennings
at http://www.noseweek.co.za/articles/2241/BOOKS-Sepps-blather

So Sepp Bladder isn't that clean either. No wonder Zuma gave him a medal.
Good on yer, boss! Though don't forget the pivotal role the super-cartel of kleptocrats based in Luthuli House had in all this. "After all nothing happens here without the government's approval," as they said in the movie "Body Of Lies". And it was the ANC that first said SA should expect about 800,000 visitors - prompting every oke with a Zozo hut to enter the so-called "hospitality industry". Now it looks as if we'll be lucky if we make it past a quarter of that fantastical figure. There sure are gonna be a lot of street corner kings wearing 2010 regalia for years to come, while you and me pay back the estimated R20-billion loss this fiasco will cost the host nation. Oh what tangled web we weave ...
The government has been complicit from the start, yes. Instead of protecting South African citizens from exploitation, it passed special laws that give FIFA rights no ordinary South African has. I expect to be writing more about this in the near future...
The Minister of Communication General Sphiwe Nyanda is strongly pushing for the establishment of the SABC TAX one percent in your income tax, and we @ Township Vibes hope it goes through as our chances for the establishment of the Informal Settlements, Rural Areas and Township Tax Act of 2012(ideally)will be enhanced.
The SABC tax is about as rational as hosting a major sporting event on the supplier's terms to ensure we make a thumping loss. Oh, we already did that. What should happen is to encode the signal to the new set-top boxes to institute a no pay, no watch environment.

That however would cut the majority of the population off from ANCTV. Far better to soak the aready squeaking 6Million PAYE taxpayers to give the other 44 million a freebie.
When is everybody going to realise that evil persists because good men do nothing? Who the hell makes FIFA the people in charge, if all the supporters of football stood up and boycotted their club, until their club told FIFA to "FIFA off" (and FIFA stands for fit in or --) then there would not be the stranglehold on these events and the normal folk could actually benefit for a change. I feel a strong sense of creativity coming on - yes I have just named myself world chairman of "ICPF" (International Couch Potatos Federation) no-one can goof off without paying me a goof of tax -Yeah!
This is another "arms deal" as it seems that there are very few benefits to ordinary South Africans, but huge payouts to the few and their foreign collaborators.
So at least 5% of SA's GDP has gone into this lemon? Anyone else noticing prices steadily heading up the incline? Inflationism and government interventionism: the paths to prosperity!