22 Jun 2004 :

THE stronger-than-expected performance by the Cape Town International Convention Centre (CTICC) in its first year of operation might trigger further expansion of around R400m at the foreshore edifice.

CTICC CEO Ian Douglas tells Cape Business News expansion planning is already underway and that new development could start within two to four years.

It should be interesting to gauge how the expansion is financed with the current ownership of the CTICC structured as a public/private partnership (PPP). Douglas would not be drawn on the matter at this juncture.

With CTICC already churning impressive revenues the cash flow in the next few years may well be sufficient to fund the major portion of the expansion.

Whether government would pitch in additional funds for the expansion or further private sector participation would be sought is obviously a question the prime movers at CTICC will have to wrestle with in the months ahead.

The state looks the ultimate partner for CTICC – especially since government is more interested in drawing a sentiment driven dividend from the convention centre than a cash dividend. What we mean by that is that government would probably be encouraged by the CTICC’s economic spin offs for increased tourism spend in the Western Cape than receiving a dividend cheque.

But in an era of privatisation, increased government involvement (in terms of equity ownership) in the CTICC may not be politically correct.

With the CTICC looking like a success story there may be more than a few private sector parties keen to join Sun International’s SunWest as a major stakeholder in the business.

Douglas says the primary goal of the envisaged expansion at the CTICC would be the doubling of the exhibition space. The CTICC hosted 11 exhibitions and seven trade fairs, bringing a total of 167 649 visitors to the events. Clearly the potential of the exhibition business, which is highly profitable, remains largely untapped.

What has spurred the expansion plans is CTICC’s flying start as a convention venue. Certainly the operating performance has been surprising and CTICC insiders suggest that the critical break-even point has been reached - a milestone that most convention centers worldwide only achieve after a few years of operation.

Naturally the cynical response would suggest the CTICC is enjoying bumper business levels by virtue of its flavour of the month status, or - to put it more bluntly – a novelty factor.

Douglas contends there are three factors behind a sustained success at CTICC: 1) It’s what people want in terms of a convention destination; 2) the building works and 3) the CTICC has forged good international links (notably the appointment of world renowned RAI as the convention centre managers).

And the figures speak for themselves. CTICC MD Dirk Elzinga says that compared to the centre’s original estimate, the development far exceeded internal expectations by hosting 196 events between June and December last year. “No less than 290 246 visitors and delegates attended events at the centre over the same period. This number comes very close to the originally targeted 300 000 visitors for the first full year.”

Elzinga reckons the results illustrate the CTICC is already firmly entrenched in the minds of both South African and international meeting and event planners as a preferred business destination.

He notes the current mixture and diversity of events lined up for 2004 is well spread over the calendar year with more than 40 of those recurring each year. “This translates to a sustainable stimulation of consumer and business activity and the development of the local business and socio-economic environment.”

This year CTICC will host several international conferences with attendance figures of 1 000 or more delegates – including the annual conference for the International Congress and Convention Association (ICCA) in October. It seems conference space for the ensuing years is also filling up fast.

In 2005 the CTICC hosts the World Print Congress (1200 delegates), the Council of Shopping Centres Conference (3000 delegates), and the International Conference of Principals (1 000 delegates).

In 2006 more than 3 500 delegates from around the world are expected to attend the International Society of Urologists (ISU) Conference, while the second World Autism Congress should attract about 1 600 international delegates.

There are even bookings for as far as 2009 when the CTICC hosts two major international medical conferences, which should attract nearly 20 000 delegates to the Cape.