Economic Impact of Convention Centre

Posted On Friday, 07 September 2001 03:01 Published by
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THE final results of the economic impact assessment of the Cape Town International Convention Centre show that the CTICC is to have a phenomenal impact on the provincial and national economy.

THE final results of the economic impact assessment of the Cape Town International Convention Centre show that the CTICC is to have a phenomenal impact on the provincial and national economy.
Early results were provisional and thus conservative, with the final results showing a far greater
impact than originally reported on. It is forecast that the Centre will provide a cumulative
contribution to Gross Domestic Product (GDP) of R25-billion over ten years, and create 47 000 new
direct and indirect jobs within the same period.
Announcing the final results of the economic impact study commissioned by Convenco, the company's
chairman, Finance Minister Leon Markovitz, said that the report substantiated the view that the
Cape Town International Convention Centre is the one piece of missing tourism infrastructure the
province can no longer do without.
Minister Markovitz said that in its first year, the international convention centre would make a
direct and indirect contribution to GDP of R709-million, increasing to R4,175-billion in 2012, the
tenth year after opening.
"By then, the Centre will have made a total contribution to GDP of R25-billion, emphasising the
potential of our tourism industry to drive real and robust economic growth in the province. Added
to other recent investments in local tourism infrastructure, the convention centre takes Cape Town
onto another level where it can compete in asset terms with New Orleans, Sydney, Berlin, Rome and
other leading destinations in the world".
Minister Markovitz said that the construction phase of the convention centre would add an estimated
R400-million to provincial GGP and result in over 4 000 jobs within the province.
"In the first year of operation the Centre will add a further R270-million to GGP and this rises to
R1,5-billion by the year 2012. At the same time, over 3000 jobs will be created in the province in
the first year after opening. This increases to well over 19 000 by 2012. Moreover, the
convention centre will generate over 1,8-million new foreign visitor bed-nights by 2012 and this
has the capacity to generate significant increases in foreign exchange. By 2012, the Centre will
generate annual foreign exchange earnings of R1,5-billion with a cumulative total of R7,4-billion.
This is indicative of the Centre's ability to attract dollar-spending foreign tourists to our
province."
The City of Cape Town's Executive Member responsible for Economic Development, Tourism and Property
Management, Councillor Kent Morkel, said that the city's investment in the international convention
centre, with its significant economic multipliers, was an outstanding opportunity to "leverage the
public interest" through appropriate development.
"Just during the two-year development period, the convention centre will create 4 000 direct new
jobs in the city, as well as 14 000 indirect employment opportunities. This is a major windfall for
Cape Town's construction industry, as it is for thousands of local workers. In the first ten years
in which it is operating, 19 000 direct and indirect jobs will be established in our tourism and
leisure industry."
Councillor Morkel said he was pleased that Convenco had adopted the Targeted Access Programme (TAP)
protocols which stipulated that Cape businesses and people, in particular the previously-disadvantaged,
should be targeted where possible in terms of professional services, outsourcing, procurement,
supply arrangements and recruiting.
"One can appreciate, then, the huge potential in this project to create and re-distribute new
wealth and opportunity. In this way, the City Council is delivering on its promise to grow Cape
Town's economy, and enhance quality of life, to the advantage of all its people".
CEO of Convenco, Ian Douglas, noted that the final results of the economic impact assessment
demonstrated the important and beneficial impact of the convention centre development on emerging
business, and in fostering Cape Town's comparative economic advantages.
"While the most obvious immediate beneficiary is the tourism industry, from restaurateurs to bus
operators, just as important is the new economic activity which will be stimulated within a wide
variety of established and growing local industries. A good example are those new groupings of
businesses that operate in, and provide support to, the predominantly high-technology and
knowledge-based economic sectors. These industries, relatively still in their infancy in Cape Town,
will be a major beneficiary, fuelling their potential to become increasingly important p layers in
the Cape economy."
Douglas said that while construction only began in April, contractors were ahead of schedule and
the Principal Contractor, WHBO/Rainbow Joint Venture had been handed the 6,1 hectare site on June
13th. Douglas said the "dirty" building work would be completed by the first quarter of 2003, with
the first conventions to be held at the new facility likely to be no later than the last quarter of
that year.
The economic impact study was undertaken by a consortium of economists drawn from the Graduate
School of Business at the University of Cape Town, in partnership with Peninsula Technikon. Its
forecasts are based on the current business plan prepared by Dutch operators RAI, which makes
provision for a substantial new hotel development and office block, and a convention centre
comprising:
two raked seating auditoria catering for 1 500 and 620 people respectively one roof terrace
meeting room seating 400 people with independent foyer 33 more breakout rooms varying in size from
25 to 125 people each spacious and deluxe banqueting and function rooms of varying sizes including
2000 square metre ballroom state of the art 10 000 square metre exhibition and trade show space
three different restaurant facilities, one of which will be open 365 days a year
The study does not include contiguous development such as the Roggebaai Canal Tourism Precinct,
or any future increases in the size and number of conventions and exhibitions.


Publisher: Cape Business News
Source: Cape Business News

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