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A marketing analysis and economic impact of the Cape Epic event


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A marketing analysis and economic impact of the Cape Epic event

  1. 1. ACKNOWLEDGEMENTSThe authors would like to thank the following people and institutions:1. Mr. Richard McMartin and Ms. Sarah Harrop for all their support prior to and during the event, and for allowing the research to be conducted.2. The following fieldworkers from the North-West University for the distribution of the questionnaires: • Dr. Martinette Kruger • Ms. Bianca Manners3. The participants for their positive attitude and participation in the survey.4. Mr. M. Scholtz for technical editing and front page design.5. Ms. E. Myburgh for the data capturing.6. Mr. Malcolm Ellis for the language editing. i
  2. 2. TABLE OF CONTENTS1. INTRODUCTION 12. RESEARCH AIMS 13. METHOD OF RESEARCH 24. PROFILE OF THE ABSA CAPE EPIC PARTICIPANT 34.1 Gender 34.2 Age 34.3 Marital status 44.4 Language 44.5 Province of residence 54.6 Country of residence 64.7 Level of education 64.8 Occupation 7ECONOMIC PROFILE 84.9 Number of people in travelling group 84.10 Number of people paid for 84.11 Length of stay in the vicinity of Cape Town 94.12 Expenditure 10CYCLISTS’ BEHAVIOUR 104.13 Type of accommodation 104.14 Times participated 114.15 Number of times event was completed 124.16 Heard about the event 124.17 Initiator of participation 134.18 Decision to participate 134.19 Other tourism attractions visited during the event 144.20 Participated in other sporting events 144.21 Number of cycling events per year 154.22 Length of stay in town/city where cycling events are held 154.23 Motivation to participate 164.24 Sport participation influence on holiday choice 174.25 Television viewership of race 195. ECONOMIC IMPACT 20 ii
  3. 3. 6. CONCLUSIONS AND RECOMMENDATIONS 256.1 Profile of the cyclists 256.2 Conclusions 266.3 Recommendations 26 iii
  4. 4. LIST OF TABLES4. PROFILE OF THE ABSA CAPE EPIC PARTICIPANT 3Table 4.1: Province of residence 5Table 4.2: Country of residence 6Table 4.3: Number of people in travelling group 8Table 4.4: Number of people paid for 9Table 4.5: Length of stay in Cape Town area 9Table 4.6: Expenditure per group 10Table 4.7: Type of accommodation 11Table 4.8: Times participated 11Table 4.9: Times completed 12Table 4.10: Heard about the event 12Table 4.11: Initiator of participation 13Table 4.12: When decision was made 13Table 4.13: Other events 14Table 4.14 Number of events 15Table 4.15 Length of stay in city/town 15Table 4.16 Motivation to participate 17Table 4.17 Sport as influence on holiday choice 185. ECONOMIC VALUE 35Table 5.1 Expenditure per cyclist 20Table 5.2 Total expenditure 21Table 5.3 Adjusted Total Expenditure of Cyclists 22Table 5.4 Total impact on provincial production 23Table 5.5 Total impact on household income 23Table 5.6 Total impact of spending on employment 246. CONCLUSIONS AND RECOMMENDATIONS 25Table 6.1: Overview of the cyclists at the ABSA Cape Epic 2012 25 iv
  5. 5. LIST OF FIGURES4. PROFILE OF THE ABSA CAPE EPIC PARTICIPANT 3Figure 4.1: Gender 3Figure 4.2: Age 4Figure 4.3: Marital status 4Figure 4.4: Home language 5Figure 4.5: Level of education 7Figure 4.6: Occupation 7Figure 4.7: Attractions visited during the event 11Figure 4.8: Television viewership 14 v
  6. 6. 1 INTRODUCTIONThe Cape Epic, under current sponsorship as the "ABSA Cape Epic", is an annualmountain bike team race held in the Western Cape, South Africa. First staged in 2004, therace covers more than 700 kilometers and, typically, lasts eight days. As the best knownand most prestigious mountain bike stage race, the ABSA Cape Epic attracts top ridersfrom around the world, who compete in teams of two. The race is also open to amateurs,who enter a lottery in order to gain a place in the race. The race is broken into day-longsegments, called stages. Times to finish each stage are aggregated to determine theoverall winning team at the end of the race. The team with the lowest aggregate time atthe end of each day wears the yellow leaders’ jerseys. The course changes every year,but the race has always finished in the winelands of the Western Cape. Since 2007, theclimax of the final stage has been at the Lourensford Wine Estate. The ABSA Cape Epicwas once described by Bart Brentjens, 1996 Olympic gold medalist in mountain biking, asthe "Tour de France of mountain biking”.The Tourism Research Focus Area at the North West University, TREES (TourismResearch in Economic Environs and Society) conducted research at the ABSA Cape Epicfor the first time in 2012 in order to determine the profile and economic impact of the race.2 RESEARCH AIMSThis research project had the following primary aims: To determine the profile of participants in the ABSA Cape Epic. To determine the spending patterns of participants participating in the ABSA Cape Epic. To determine what motivates mountain bikers to participate in the ABSA Cape Epic.3 METHOD OF RESEARCH 1
  7. 7. In order to achieve these aims, the following approach was implemented: A questionnairewas developed by TREES in cooperation with the event organisers, focusing on thefollowing aspects: Demographic data; Expenditure patterns; Consumer behaviour; Travel motivations; and the Impact of sport behaviour on tourism.For the mountain bikers participating in the ABSA Cape Epic, the following approach wasimplemented: Based on availability sampling, 205 respondents formed part of this survey.The registration area at the Forum at the VNA Waterfront was used to distributequestionnaires amongst participants after they had registered. The survey took place onSaturday, 24 March 2012. The information gained by this research will be used to developa holistic picture of the mountain bikers participating in the ABSA Cape Epic. Theeconomic impact of the ABSA Cape Epic will be calculated based on the expenditureinformation obtained from the survey. By using the Sectoral Accounting Matrix (SAM) forthe Western Cape, the effect of this spending on production and labour will then bedetermined. 2
  8. 8. 4 PROFILE OF THE ABSA CAPE EPIC PARTICIPANTS SOCIO-DEMOGRAPHIC PROFILE4.1 GENDER 89% 11% Male FemaleFigure 4.1: GenderAs shown in Figure 4.1, 89% of the participants in the ABSA Cape Epic who formed part ofthe survey was male, while 11% were female cyclists.4.2 AGEThe largest category of participants (59%) was those between 35 and 49 years of age.The second highest age category was mountain bikers in the age group 25 to 34 years(23%), followed by the older participants between the ages of 50 and 64 years (13%).Younger participants between the ages of 20 and 24 years accounted for 6% of therespondents, while 1% of participants were older than 65 years. The average age of theparticipants in 2012 was 39 years. 3
  9. 9. 59% 23% 13% 6% 1% 20 - 24 25 - 34 35 - 49 50 - 64 65 +Figure 4.2: Age4.3 MARITAL STATUS Living together In a Divorced 4%relationship 5% 16% Married 58% Not Married 17%Figure 4.3: Marital statusFigure 4.3 indicates that the majority of respondents was married (58%), while 17% werenot married and 16% were in a relationship. Five percent (5%) were divorced and 4% wereliving together.4.4 LANGUAGEForty-four percent (44%) of the respondents participating in the Cape Epic were English-speaking, while 31% were foreign language participants who spoke Danish, Dutch,French, German, Italian, Portuguese, Swiss or Spanish. Afrikaans-speaking cyclistsaccounted for 25% of the respondents (Figure 4.4). 4
  10. 10. 44% 31% 25% Afrikaans English OtherFigure 4.4: Home language4.5 PROVINCE OF RESIDENCEForty-four percent (44%) of the respondents were foreign participants with the secondhighest number of cyclists travelling from Gauteng Province. These groups were followedby 20% of cyclists who were from the Western Cape (see Table 4.1). Although thepercentages are not high, the Cape Epic attracts small numbers of participants fromacross South Africa.Table 4.1: Province of residence PROVINCE PERCENTAGE 2012 Western Cape 20% Gauteng 25% Eastern Cape 2% Free State 1% KwaZulu-Natal 4% Mpumalanga 1% Northern Cape 1% North West 1% Limpopo 1% Outside RSA 44% 5
  11. 11. 4.6 COUNTRY OF RESIDENCEThe majority of cyclists (56%) were from South Africa (Table 4.2). Foreign cyclists werefrom Australia, Belgium, The Netherlands (4% each), Brazil, the Reunion Islands,Switzerland and the UK (3% each) as well as from Austria, France, Germany, USA,Singapore and Denmark (2% each). Other countries with a 1% representation (not listedin the Table below) included countries such as Canada, Croatia, Holland, Hong Kong,Italy, Namibia, Nigeria and Puerto Rico.Table 4.2: Country of residence PROVINCE PERCENTAGE 2012 RSA 56% Australia 4% Belgium 4% The Netherlands 4% Brazil 3% Reunion Island 3% Switzerland 3% United Kingdom 3% Austria 2% France 2% Germany 2% USA 2% Singapore 2% Denmark 2%4.7 LEVEL OF EDUCATIONFigure 4.5 indicates that a significant percentage (88%) of the cyclists were well educatedwith either a post-graduate qualification (31%), diploma or a degree (28%) or aprofessional qualification (29%). Nine percent (9%) of respondents had a matric certificatewhile 2% and 1%, respectively, had not attended school or had other forms ofqualifications. 6
  12. 12. Other 1% No School Matric Professional 2% 9% 29% Diploma, Degree 28% Post Graduate 31%Figure 4.5: Level of education4.8 OCCUPATIONAccording to Figure 4.6, the majority of respondents were employed in a professionaloccupation (40%), followed by 20% who were self-employed and 12% who were inmanagerial positions. Six percent (6%) of the respondents had other occupations thatincluded financial advisor, medical nurse, civil engineer, physician or “reverend”. Other 6% Unemployed 3% Student 5% Pensioner 2% Professional athlete 2% Education 2% Civil service 2% Administrative 3% Sales 2% Technical 1% Self-employed Management 20% 12% Professional 40%Figure 4.6: Occupation 7
  13. 13. ECONOMIC PROFILE4.9 NUMBER OF PEOPLE IN TRAVELLING GROUPThe majority of respondents participating in the Cape Epic travelled in a group of twopeople (44%), followed by persons who travelled in groups of four people (18%) or in agroup of three people (12%). Six percent (6%) of the respondents travelled with only oneperson while 5% respectively travelled in groups of five or six people. Respondentstravelled in groups with an average size of 3.3 persons.Table 4.3: Number of people in travelling group PEOPLE IN GROUP PERCENTAGE 2012 No persons 1% 1 person 6% 2 people 44% 3 people 12% 4 people 18% 5 people 5% 6 people 5% 7 people 1% 8 people 3% 10 people 3% 12 people 1% 15 people 1%4.10 NUMBER OF PEOPLE PAID FORAccording to Table 4.4, the majority of respondents (54%) paid for just one person. Payingfor two persons accounted for 26% of the respondents, while 10% were not financiallyresponsible for anyone. Four percent (4%) were financially responsible for five or morepersons. These groups were followed by respondents who paid for, respectively, three orfour persons (3%, each). The average number of people that respondents were financiallyresponsible for in 2012 was 1.5 persons. 8
  14. 14. Table 4.4: Number of people paid for NUMBER OF PEOPLE PERCENTAGE 2012 None 10% 1 person 54% 2 persons 26% 3 persons 3% 4 persons 3% 5+ persons 4%4.11 LENGTH OF STAY IN THE VICINITY OF CAPE TOWNAs shown in Table 4.5, 20% of the cyclists stayed in Cape Town for 10 nights, followed bythe 12% and 11% who, respectively, stayed four nights. Eight percent (8%) of the cyclistsindicated that they stayed two nights and 6% stayed, respectively, twelve or sixteen ormore nights. The average length of stay in Cape Town was 8.2 nights.Table 4.5: Length of stay in Cape Town area LENGTH OF STAY PERCENTAGE 2012 0 nights 1% 1 night 1% 2 nights 8% 3 nights 12% 4 nights 11% 5 nights 4% 6 nights 5% 7 nights 3% 8 nights 4% 9 nights 3% 10 nights 20% 11 nights 3% 12 nights 6% 13 nights 3% 14 nights 6% 9
  15. 15. 15 nights 4% 16+ nights 6%4.12 EXPENDITUREThe average spending of the cyclists per group was R25 728.00 (Table 4.6). The highestspending categories were those of sport equipment (R9 456.40), registration fees(R7 679.00), accommodation (R2 789.00) and transport (return) (R2 263.00).Table 4.6: Expenditure per group ITEMS AVERAGE SPENT PER ITEM 2012 Registration fee R 7 679.00 Accommodation R 2 789.00 Transport (return) R 2 263.00 Sport equipment R 9 456.40 Food and restaurants R 1 196.00 Beverages R 654.80 Medicine R 368.00 Souvenirs R 493.70 Entertainment R 364.00 Other R 464.40 TOTAL R 25 728.00 CYCLISTS’ BEHAVIOUR4.13 TYPE OF ACCOMMODATIONIt is clear from the information reflected in Table 4.7 that 34% of the cyclist in the eventchose to stay in guesthouses or B&B’s and 31% opted to stay in hotels. Fourteen percent(14%) were local residents of the area and therefore did not make use of paidaccommodation while 13% of respondents preferred to stay with family and friends. 10
  16. 16. Table 4.7: Type of accommodation TYPE OF ACCOMMODATION PERCENTAGE 2012 Local resident 14% Family or friends 13% Guesthouse or B&B 34% Hotel 31% Camping 12% Rent entire house 2% Self-catering 6% Other 1%4.14 TIMES PARTICIPATEDForty-five percent (45%) of respondents had participated in the race at least once before.These respondents were followed by 22% who were participating for the first time in 2012(Table 4.8). Fifteen percent (15%) had taken part in the Cape Epic twice before while 7%and 6%, respectively, had competed three or four times previously. Only 1% of therespondents had participated in the race on every occasion since it had started in 2004.The average number of times respondents had previously taken part in the Argus CycleTour was 1.5 times.Table 4.8: Times participated TIMES PARTICIPATED PERCENTAGE 2012Never (first time 2012) 22%Once 45%Twice 15%3 times 7%4 times 6%5 times 1%6 times 1%7 times 2%9 times 1% 11
  17. 17. 4.15 NUMBER OF TIMES EVENT WAS COMPLETEDTable 4.9 shows that 58% of respondents had not completed the race previously, while23% had completed it at least once, followed by the 6% who, respectively, had completedthe race two and three times. The average number of times the race had been completedby respondents was 0.9 times.Table 4.9: Times completed TIMES PARTICIPATED PERCENTAGE 2012Never 58%Once 23%Twice 6%3 times 6%4 times 2%5 times 3%7 times 1%9 times 1%4.16 HEARD ABOUT THE EVENTAccording to Table 4.9, 57% percent of respondents had heard of the Cape Epic throughword-of-mouth, followed by those being made aware of theeven through television (44%),magazines (35%) and the Cape Epic website (32%). Email accounted for 19% of theresponses of the respondents, followed by radio, newspapers and Facebook (at 14%each, respectively). Eleven percent (11%) of respondents had heard about the event frominternet blogs, 10% from their club, 9% through Twitter and 12% through other means thatincluded the event organisers and team partners.Table 4.10: Heard about the event MEDIA 2012 YES NOTelevision 44% 56%Radio 14% 86%Website 32% 68%Email 19% 81%Magazine 35% 65%Newspapers 14% 86%Word-of-mouth 57% 43% 12
  18. 18. Club 10% 90%Facebook 14% 86%Twitter 9% 91%Internet-blogs 11% 89%Other 12% 88%4.17 INITIATOR OF PARTICIPATIONMost of the trips to the event had been initiated by respondents themselves (55%) or byrespondents’ friends (37%) (Table 4.10). Only 7% of the participations were initiated by therespondents’ spouses, and just 5% by the respondents’ family.Table 4.11: Initiator of participation INITIATOR OF PARTICIPATION 2012 YES NOSelf 55% 45%Spouse 7% 93%Media 1% 99%Friends 37% 63%Children 1% 99%Family 5% 95%Club 1% 99%Organisation 4% 96%Other 2% 98%4.18 DECISION TO PARTICIPATETable 4.11 indicates that 52% of the respondents had decided to take part in the eventabout a year previously. This group was followed by 19% who had decide to take partmore than a month before the race and the 17% who had made a spontaneous decision totake part. For 9% of the respondents, the Cape Epic was an annual commitment andothers (3%) had decided two or three years prior to the 2012 event.Table 4.12: When decision was madeDECISION PERCENTAGESpontaneously 17%More than a month ago 19%A year ago 52%Annual commitment 9% 13
  19. 19. Other 3%4.19 OTHER TOURISM ATTRACTIONS VISITED DURING THE EVENTFigure 4.8 shows that more than half of the respondents (60%) had visited, or planned tovisit, other attractions in the Cape Town area during their stay in Cape Town. These otherattractions included Table Mountain, the V&A Waterfront, Robben Island, Cape Point, TheTwo Oceans Aquarium, Stellenbosch and the wine farms. Yes 60% No 40%Figure 4.7: Attractions visited during the event4.20 PARTICIPATION IN OTHER SPORTING EVENTSWhen looking at Table 4.12, it is clear that respondents had participate in other sportingevents (30%) including such events as Amashova, Desert Dash, Sani2c, as well as otherinternational mountain biking events. The 94.7 Cycle Challenge is a South Africa eventthat many (23%) respondents had also taken part in.Table 4.13: Other events SPORTING EVENTS YES NOComrades 4% 96%Two Oceans Marathon 8% 92%Midmar Mile 3% 97%94.7 Cycle Challenge 23% 77%Pick n Pay Cape Argus Cycle Tour 30% 70%Ironman 9% 91%Other 30% 70% 14
  20. 20. 4.21 NUMBER OF CYCLING EVENTS PER YEARRespondents chose to take part in at least 10 cycling events (22%) per year, followed by thoseopting to take part in 20 or more events (17%) (Table 4.13). Nine percent (9%) of the participants,respectively, took part in two or three events, and 8% each in four, five and six events. Theaverage number of events that respondents took part in per year was 8.9 events.Table 4.14: Number of events TIMES PARTICIPATED PERCENTAGE 2012No events 1%1 event 4%2 events 9%3 events 9%4 events 8%5 events 8%6 events 8%7 events 1%8 events 3%10 events 22%12 events 3%14 events 1%15 events 6%20+ events 17%4.22 LENGTH OF STAY IN TOWN/CITY WHERE CYCLING EVENTS ARE HELDAs shown in Table 4.14, 29% of the cyclists stayed at least two nights in the city/townwhere the cycling events in which they participate are held, followed by the 21% and 14%who, respectively, stay three nights or only for one night. The average length of stay in thecity/towns is 3.8 nights.Table 4.15: Length of stay in city/town LENGTH OF STAY PERCENTAGE 2012 0 nights 2% 1 night 14% 2 nights 29% 15
  21. 21. 3 nights 21% 4 nights 8% 5 nights 9% 6 nights 2% 7 nights 5% 8 nights 1% 10 nights 3% 11 nights 1% 14 nights 1% 15 nights 3% 16 nights 1%4.23 MOTIVATION TO PARTICIPATETable 4.16 shows that cyclist at the Cape Epic considered the following motives to partakein the event as important to extremely important: Because I enjoy cycling 87% The Cape Epic is a huge challenge 86% To feel proud of myself and to feel a sense of achievement 84% The Cape Epic tests my levels of fitness and endurance 73% It is a “must do” event 72%The following motives were considered as less important to not important at all: Because I am a professional cyclist 79% Because I am participating as part of a club 76% I do it annually 60% Because this race allows me to train, qualify or prepare for 52% other events such as the Ironman, etc. 16
  22. 22. Table 4.16: Motivation to participate MOTIVATION Not at all Less Important Very Extremely important important important importantTo get away from routine 17% 19% 26% 21% 16%To relax 19% 22% 22% 22% 15%To spend time with family and friends 25% 22% 22% 23% 8%To meet new people 12% 27% 25% 23% 13%It is a sociable event 11% 20% 25% 28% 16%Because I enjoy cycling 2% 1% 10% 26% 61%Because the event is well organised 1% 6% 24% 36% 33%I do it annually 44% 16% 19% 9% 14%The Cape Epic tests my levels of fitness 5% 6% 16% 33% 40%and enduranceIt is an international event 8% 12% 23% 27% 30%I am participating as part of a team 5% 8% 26% 30% 31%The Cape Epic is a huge challenge 1% 1% 12% 28% 58%To feel proud of myself and to feel a sense 1% 2% 13% 30% 54%of achievementIt is a “must do” event 3% 8% 17% 30% 42%To share group identity with other cyclists 11% 17% 34% 19% 19%To improve my health 13% 14% 30% 28% 15%I am pursuing a personal goal of 28% 15% 24% 16% 17%participating in a determined number ofcycling eventsBecause I am participating as part of a club 56% 20% 12% 7% 5%Because I am a professional cyclist 67% 12% 8% 6% 7%I am addicted to training and this event sets 24% 11% 24% 24% 17%training targets for meBecause this race allows me to train, qualify 41% 11% 21% 17% 10%or prepare for other events such as theIronman etc.4.24 SPORT PARTICIPATION INFLUENCE ON HOLIDAY CHOICESTable 4.16 shows the influence of sport participation on the holiday choices of respondents. To thefollowing statements, most respondents indicated that sport participation sometimes, regularly oralways influenced their holiday choices: Participation in sport gives me the opportunity to travel 64% 17
  23. 23. My sport participation provides the opportunity to explore the country 63% My sport participation and holiday destination(s) differ 42% I plan my sport participation in order to see different places and destinationsThe following never or almost never influenced their holiday choices: I prefer to not spend a lot of time at the destination where I participate in a 37% particular sport. My sport participation provides the opportunity to travel overseas 26% Participation in sport allows me to take family and friends along on the trip 23%Table 4.17: Sport as influence on holiday choices STATEMENT Never Almost Sometimes Regularly Always neverParticipation in sport gives me the 3% 4% 29% 39% 25%opportunity to travelMy sport participation and holiday 6% 14% 38% 31% 11%destination(s) differI do take a holiday in the town or area 3% 13% 48% 29% 7%where I have participated inI prefer to go on holiday at a different 8% 14% 39% 27% 12%destination than where I have participated– at least once a yearMy holiday destination needs to provide 4% 10% 28% 44% 14%the opportunity to trainMy sport participation provides the 15% 12% 26% 35% 12%opportunity to travel overseasMy sport participation provides the 3% 4% 30% 44% 19%opportunity to explore the countryI plan my sport participation in order to see 5% 13% 24% 43% 15%different places and destinationsI take a holiday during my participation in 7% 11% 37% 35% 10%cycling eventsParticipation in sport allows me to take 10% 13% 22% 32% 13%family and friends along on the tripI prefer to not spend a lot of time at the 20% 17% 36% 19% 8%destination where I participate in aparticular sport. 18
  24. 24. 4.25 TELEVISION VIEWERSHIP OF RACEThe majority of respondents (72%) indicated that their families would be watching the Cape Epicon television, while 28% said that their families would not be watching. Yes 72% No 28%Figure 4.8: Television viewership 19
  25. 25. 5. ECONOMIC IMPACTThe main items that influence the magnitude of the impact that visitors to an event have on theeconomy are:(i) The number of visitors;(ii) The magnitude of their spending; and(iii) The multiplier effect of their spending.(i) The number of visitorsAccording to the organisers, 1 200 cyclists completed the 2012 ABSA Cape Epic Cycle Event. Thequestionnaire results revealed that South African participants travelled in groups of 1.4 people,while international participants travelled in groups of 1.63 persons. To determine the number ofcyclists per group, the entrance fees paid were scrutinised. This research only includes thosespectators who travelled with cyclists to the event, as their spending is included in the spendingcaptured by cyclists.(ii) Magnitude of spendingThe spending of a typical visitor group is indicated in Table 4.6 above. However, these groupsmay include more than one cyclist and the groups can be further broken down into the origin of thecyclist – South African and or international cyclists. Table 5.1 below indicates the averageexpenditure per cyclist broken down into these groups. It can be seen that spending is quite similarbetween the cyclists from different places of origin, although, somewhat unexpectedly, cyclistsfrom South Africa spend slightly more than do their international counterparts.Table 5.1: Expenditure per cyclist (in ZAR) RSA InternationalRegistration Fee 17,700 17,700Accommodation 2,174 3,192Transport 1,317 3,174Sport equipment 11,013 6,075Food 1,179 1,047Beverages 455 822Medicine 407 264Souvenirs 264 723Entertainment 276 426Other 761 11Total 35,548 33,433 20
  26. 26. The total expenditure per cyclist can then be multiplied by the number of cyclists who took part inthe Cape Epic in order to calculate the total expenditure of participants. The organisers indicatedthat 66% of the participants were from South Africa, while the remaining 34% were internationalparticipants. Accordingly, this amounted to approximately R41.8 million that was spent byparticipants and their travel groups when participating in the Cape Epic. Table 5.2 provides thebreakdown of total spending according to origin.Table 5.2: Total Expenditure (in ZAR million) South Africa Foreign TotalRegistration Fee 14.018 7.222 21.240Accommodation 1.722 1.302 3.024Transport 1.043 1.295 2.338Sport equipment 8.722 2.479 11.201Food 0.934 0.427 1.361Beverages 0.360 0.335 0.696Medicine 0.323 0.108 0.430Souvenirs 0.209 0.295 0.504Entertainment 0.219 0.174 0.393Other 0.603 0.004 0.607Total 28.154 13.641 41.795The visitors were, however, not the only persons who spent money in the Cape Town area due tothe event – the organisers also incurred various, quite considerable, expenses. To obtain a clearerpicture of the size of spending due to the Cape Epic, these amounts must be accounted for. TheABSA Cape Epic organisers indicated that approximately R26.5 million was spent in hosting theevent – some of it funded by registration fees (R21.2 million) and some by sponsorships received.Thus, total expenditure by cyclists and organisers, due to the Cape Epic cycle event, wasestimated as R47.1 million.A third party, who also spent money due to the Cape Epic, was the exhibitors. Unfortunately, nodefinitive information was available to determine the magnitude of their expenditures in the localeconomy. Therefore, the estimates of the economic impact of the Cape Epic Cycle event givenhere excludes spending by the exhibitors. 21
  27. 27. (iii) Multiplier effect of spendingGiven the information above, it is estimated that total spending by cyclists amounts to R41.8million, and together with organiser spending, total spending amounted to R47.1 million. Note thatregistration fees (R21.1 million) can only be counted once and, from this point onwards, it is ratherincluded in organiser spending on various items. The spending of the cyclists has therefore beenadjusted to exclude registration fees. In addition, an adjustment has been made to exclude thecycling equipment bought, since most of the equipment was bought prior to the event. Only 10%of spending on equipment is therefore included in the remainder of the analysis. Table 5.3therefore shows the adjusted spending by the participants in the event, according to origin.Table 5.3: Adjusted Total Expenditure of Cyclists (in ZAR million) South Africa Foreign TotalAccommodation 1.722 1.302 3.024Transport 1.043 1.295 2.338Sport equipment 0.872 0.248 1.120Food 0.934 0.427 1.361Beverages 0.360 0.335 0.696Medicine 0.323 0.108 0.430Souvenirs 0.209 0.295 0.504Entertainment 0.219 0.174 0.393Other 0.603 0.004 0.607Total 6.286 4.188 10.474From the Table, it can be seen that cyclist spending amounts to R10.474 million and, together withorganiser spending of R26.550 million, total spending in the Western Cape due to the eventamounted to R37.024 million. This is, therefore, the direct impact that the ABSA Cape Epic has onthe local economy.Once money is spent in an economy, it ripples through the economy as businesses buy stock fromother businesses and pay their employees. These businesses and employees then spend themoney in the economy, creating even more spending, and so it continues. These processes arereferred to as the indirect and induced effects created by the initial spending.To determine the indirect and induced effects of visitor spending, the Western Cape SocialAccounting Matrix (SAM) was used. The SAM shows the increase in production of each sector in 22
  28. 28. the economy because of the increase in spending. Since a breakdown of organiser spending wasnot provided, the indirect and induced effects are only determined for visitor spending (that is,spending by cyclists).Table 5.4 shows that the total economic impact of visitor spending on production in the WesternCape region due to the Cape Epic was R20.347 million. Note that this excluded the R26.550million spent by organisers.Table 5.4: Total impact on provincial production (in ZAR millions, 2006 prices) Foreign RSA Direct 1Sectors Total Percentage spending spending impactAgriculture 0.009 0.011 0.020 0.043 0.2%Mining 0.001 0.002 0.003 0.005 0.0%Manufacturing 0.253 0.330 0.583 1.328 6.5%Electricity & water 0.022 0.027 0.049 0.095 0.5%Construction 0.007 0.010 0.017 0.044 0.2%Trade & accommodation 1.953 2.882 4.835 10.269 50.5%Transport & communication 0.842 0.835 1.678 3.697 18.2%Financial & business services 0.661 0.910 1.571 3.354 16.5%Community services 0.099 0.711 0.811 1.512 7.4%Total (in ZAR million) 3.848 5.719 9.567 20.347 100.0%Secondly, the impact on household income can also be determined. Based on the above analysis,it is estimated that households in the Western Cape region received an income of R8.400 millionthat would not have been realised had the Cape Epic not taken place.Table 5.5: Total impact on household income (in ZAR millions, 2006 prices) Total impact Indirect and induced impacts PercentageSector Low-income Other Total households households householdsAgriculture 0.043 0.00 0.01 0.02 0.2%Mining 0.005 0.00 0.00 0.00 0.0%Manufacturing 1.328 0.03 0.46 0.48 5.8%Electricity & water 0.095 0.00 0.03 0.03 0.4%Construction 0.044 0.00 0.01 0.02 0.2%Trade & accommodation 10.269 0.22 4.00 4.22 50.2%1 The direct plus indirect plus induced effects equal the total effect. 23
  29. 29. Transport & communication 3.697 0.06 1.51 1.58 18.8%Financial & business services 3.354 0.05 1.33 1.38 16.4%Community services 1.512 0.06 0.62 0.68 8.1%Total (in ZAR million) 20.347 0.42 7.98 8.40 100.0%Finally, the influence on employment can also be estimated. Table 5.6 shows that approximately81 jobs were affected by the Cape Epic taking place. Most of these job opportunities are in thetrade and accommodation, community services and in the financial and business services sectors.This is over and above the jobs of direct management of the event.Table 5.6: Total impact of spending on employment Labour Number of PercentageSector Total impact multiplier jobs (total)Agriculture 0.043 20.93 1 1.1%Mining 0.005 4.82 0 0.0%Manufacturing 1.328 3.63 4 5.2%Electricity & water 0.095 4.91 0 0.3%Construction 0.044 11.26 0 0.3%Trade & accommodation 10.269 11.12 57 70.6%Transport & communication 3.697 1.67 4 4.8%Financial & business services 3.354 5.89 7 8.1%Community services 1.512 15.54 8 9.6%Total 20.347 81 100% #Notes: in ZAR million, 2006 prices 24
  30. 30. 6. CONCLUSIONS AND RECOMMENDATIONS6.1 PROFILE OF THE CYCLISTSThe following table (Table 6.1) provides an overview of the cyclists participating in the ABSA CapeEpic in 2012.Table 6.1: Overview of the cyclists in the ABSA Cape Epic 2012 DEMOGRAPHIC PROFILE CYCLISTS 2012 Gender 89% Male; 11% Female Age Average age of 39 years Marital status Married (58%) Language English speaking (44%), Foreign participants (31%) Country of residence outside RSA Australia, Belgium and the Netherlands Province of residence Outside RSA (44%), Gauteng (25%), Western Cape (20%) Level of education Post-graduate qualification (31%) Occupation Professional (40%), Self-employed (20%) ECONOMIC PROFILE Number of people in travelling group Average of 3 persons Number of people paid for Average of 2 persons Length of stay in Cape Town Average of 8 nights Type of accommodation Guesthouse or B&B (34%), Hotel (31%) Expenditure per group Average of R25 728.00 CONSUMER BEHAVIOUR Initiator of trip Self (55%), Friends (37%) Times participated Average of 2 times Times finished Average of 1 time Heard about event Word-of-mouth (57%), Television (44%), Website (32%) Decision made to participate A year ago (52%) Motivation to participate Because I enjoy cycling (87%), The Cape Epic is a huge challenge (86%), To feel proud of myself and to feel a sense of achievement (84%) 25
  31. 31. Other tourism attractions visited Yes (60%) Cycling events participating in per year Average of 9 events6.2 CONCLUSIONSThe following conclusions can now be drawn from the study: The main participant market to the ABSA Cape Epic in 2012 are English-speaking or foreign language participants, male cyclists, predominantly from countries outside South African borders or from Gauteng Province (25%). Foreign cyclists were mainly from Australia, Belgium or the Netherlands. Cyclists were well educated, married professionals with an average age of 39 years. Cyclists travelled predominantly in groups of three persons, were financially responsible for two persons, spent eight nights in Cape Town and spent R25 728.00 during their trip. Many of the cyclists participated in the Cape Epic for the second time in 2012, and had previously finished the race once before. The decision to participate in the event was self-initiated and the media through which they had heard about the race were either word-of-mouth, television or the website. Cyclists participated in an average of nine races per year. Their main motives to participate included: because I enjoy cycling, the Cape Epic is a huge challenge, to feel proud of myself and to feel a sense of achievement, the Cape Epic tests my level of fitness and endurance and because it is a “must do” event. The event generated approximately R20.347 million and 81 jobs were affected by this event.6.3 RECOMMENDATIONSThe following recommendations are made by the cyclists: Reduce entry fees; Make the route more accessible to amateurs; and Have a doctor at race registration for the medical form. 26