South Africa’s forgotten tourist goldmine

his is according to Daneel Rossouw, Head of Sales for Agriculture at Nedbank Commercial Banking, who said that what South African wine tourism has to offer is nothing short of remarkable.

“South Africa’s wine industry is in an outstanding position to reach new heights by making wine tourism its superstar attraction,” Rossouw said.

With 522 wine cellars stretched across 23 wine routes in the Western Cape, Northern Cape, and KwaZulu-Natal, the country offers a rich and easily accessible wine experience.

South African wineries serve up world-class wines, paired with excellent cuisine, all without requiring deep pockets by international standards.

The United Nations World Tourism Organisation (UNWTO) recognised South Africa as one of only two principal wine tourism locations alongside the celebrated Napa Valley in the United States.

According to the UNWTO, these locations offer an exceptional experience that connects travellers with the destination’s history and tradition, enhances their gastronomy offerings, and provides abundant information for tourists to appreciate their surroundings.

High-calibre service, a strong narrative, and a range of activities enable wineries to appeal even to non-wine lovers, creating a well-rounded experience.

According to research done by South Africa Wine in 2022, wine tourism contributed R9.3 billion to South Africa’s GDP.

It also formed 17.3% of total winery turnover and generated employment for up to 40,000 people, depending on the season.

Wine tourism provides much-needed income and superior profitability to businesses built on notably low margins, Rossouw added.

In 2022, micro wine cellars, which generate a total turnover of less than R10 million per year, benefited the most from wine tourism, with 36% of their total turnover derived from wine tourism activities.

This was followed closely by small cellars, which generate R10 million to R50 million, at 35%.

Wine tourism contributed 22% of large wineries’, which make between R170 million and R300 million, total income in 2022. For medium cellars, which generate R50 million to R170 million a year, wine tourism made up 19% of their revenue.

Importantly, all these contributions have increased considerably since 2019, when the first wine tourism study was conducted.

Wasted opportunities

“Customers don’t remember what you tell them,” Rossouw said. “What they do remember is how you make them feel.” Prosperous wine tourism requires smart investment in experiences that create unique and lasting memories.

To craft these memorable moments, wineries must first understand their visitors – who they are, why they come, and what captivates them. Only then can they develop and deliver tailored offerings that truly resonate and exceed expectations.

The Great Big Wine report conducted in 2021 by Vintelligence revealed that farm visits and in-person attendance of wine tastings and food-and-wine-pairing events were the most impactful engagement methods to drive up the average price paid for a bottle of wine.

These tactics also had the most significant impact on the number of bottles purchased in a month.

The report also revealed that special promotions were the most effective motivator for wine farm visits, influencing 72% of consumers. Special occasions followed closely, inspiring 67% of visits.

Yet, Rossouw said far too many wineries are missing a golden opportunity by letting a captive audience walk out the door.

Visitors arrive for a tasting, possibly make a purchase, and then leave, often without the winery capturing any of their details.

This results in wineries constantly chasing new customers while letting potentially high-value guests slip through the cracks.

By not collecting visitor information, wineries are losing valuable data and the chance to build lasting customer relationships and loyalty.

According to Rossouw, these insights are crucial for driving repeat visits and boosting future sales.

Tools like wifi analytics and customer relationship management systems can help wineries track visitor behaviour and convert one-time guests into loyal patrons.

The impact of this data-driven approach is clear. Beau Constantia reported that just 5% of guests who shared their contact details went on to buy an extra bottle of wine at an on-site event, generating nearly R275,000 in additional annual revenue.

He stressed that in a competitive market, this can be the difference between breaking even and turning a profit.

Local tourists

South Africa wine tourism data for 2023 revealed that the United Kingdom, the United States, and Germany were the top three source nations for international wine tourists.

However, Rossouw said that wine cellars disregarded the local tourism sector at their peril. According to the same data, 66% of wine tourists were domestic travellers, of whom 37% lived within 40 kilometres of the wine cellar.

In addition, 58% of overnight guests on wine farms were domestic travellers. This number increased in winter, with 81% of overnight guests in July being domestic tourists.

As expected, it also showed that Western Cape residents visited the Cape Winelands significantly more frequently than South African consumers residing elsewhere.

Over 60% of Western Cape residents said they visited wine farms more than five times, compared to 27% of South Africans living in different provinces.

While not as common for consumers living outside of the Western Cape, day trips from Cape Town or elsewhere within the province were still the most cited length of trip for all consumers.

“This indicates that wineries don’t even need to invest in costly accommodation options to cash in on the wine tourism trend,” Rossouw said.

Adding daytime experiences like inviting restaurants, farm stalls, and family-friendly events and activities to their wine tastings can attract visitors, boost sales and profits, and build a direct marketing database.

As an example, Babylonstoren, one of South Africa’s most popular wine farms, offers a wide range of daytime activities, including cellar, garden and olive oil tours.

The farm also has restaurants, a spa, and an interactive farmyard set in the late 19th century. Guests can also participate in events and workshops, learning to do things like make butter, craft soaps and harvest chamomile.

Additionally, Babylonstoren has an online shop, allowing South Africans from all provinces to purchase wine and other goods from the farm.

Rossouw said that securing funding to develop these facilities, train skilled teams, adopt the latest technology, and implement strategic marketing initiatives is essential to growing wine tourism.

“However, this forward-thinking approach empowers wineries to connect with present and future customers, foster loyalty, and build their brand,” he said.

This will ultimately increase profitability and resilience, laying the foundation for sustained growth and long-term renewal across the industry.

Issued on Daily Investor by Kirsten Minnaar | https://dailyinvestor.com/business/96215/south-africas-forgotten-tourist-goldmine/