Leveraging Tourism Revenue for Cultural Sustainability: What if Cape Town's Musicians Shared in the Rewards of Tourism?

 

written by idkblanco | 9 min read

After publishing Across the Tracks, which examined the complex interdependence between South Africa’s music industry and the transport sector, I felt a compulsion to investigate further mechanisms by which Cape Town might channel its growing tourism revenues back into the very musicians who serve as the very foundation of its cultural vitality. Through studying the feasibility of introducing a modest, visitor-facing tourism tax in Cape Town earmarked explicitly to support local musicians and creatives, this article draws comparative lessons from Liverpool’s newly instituted levy, critically examines the design and limitations of South Africa’s existing Tourism Marketing Levy, assesses the disruptive economic impact of digital nomads, and considers the strategic importance of the night-time economy.

The Mother City's cultural vitality

Cape Town’s continuous rise as one of South Africa’s cultural capitals comes as no surprise. Since the turn of the decade, internationally renowned festivals, notably the Cape Town International Jazz Festival and Ultra South Africa, have solidified the city’s status internationally, attracting an influx of headline acts and tourists. Concurrently, thriving creative precincts such as the Old Biscuit Mill in Woodstock have showcased the depth of local talent across music, cuisine, design, and visual arts. Yet, despite this flourishing ecosystem, the financial flows from visitor spending make me ponder whether they ever reach local talent – whose performances and creative output play an ever-increasing role in the rise of the aforementioned festivals and Cape Town’s global brand appeal.

Liverpool’s “City Visitor Charge” as a template

In a recent article for the BBC, Lynette Horsburgh reported that Liverpool hoteliers voted to introduce a £2 “City Visitor Charge” per overnight stay, projected to raise approximately £9.2 million over two years, of which £6.7 million will be earmarked for marketing, transport improvements, and cultural attractions under the governance of the Liverpool BID Company. This initiative secured 59% support among 83 balloted hotels, demonstrating that industry buy-in is attainable when levy proceeds are transparently stipulated to enhance the local visitor economy. For Cape Town, the Liverpool experience suggests that even a nominal per-night charge – if coupled with clear reinvestment plans and accountable governance – could generate increased funding for local musicians and infrastructure.

South Africa’s Tourism Marketing levy

By contrast, Tourism Levy South Africa (TOMSA) currently imposes a 1% charge on selected tourism services, namely: accommodation, car rentals, tour operators, and agency fees. This is collected by operators and sent to South African Tourism for national destination marketing. While this levy contributes significantly to the economy, it suffers from three critical shortcomings: (1) the levy is invisible to tourists, diluting public awareness, (2) proceeds are pooled nationally, preventing targeted local investment, and (3) there is no formal role for city-level cultural stakeholders in allocation decisions. These design features leave Cape Town’s musicians and venues outside the direct benefits of tourism-generated revenues.

Digital nomads: A double-edged sword?

An additional dimension concerns the rapid influx of digital nomads – remote workers from Europe and North America who, under current visa arrangements, reside in Cape Town for up to 90 days while earning in foreign currencies. Drawing insight from a 2oceansvibe article, it was found that rental prices in the Mother City rose nearly 4% between 2022 and 2023, with rent averaging R10 000 (I may not be the target market),  a trend directly attributed to increased demand from digital nomads. In an article by Kupemba for BBC, a fellow Capetonian by the name of Dyubeni was directly quoted stating how “digital nomads are making Cape Town unliveable.” While these high-spending visitors bolster retail establishments, co-working spaces, and boutique accommodations, they also exacerbate housing pressures on local musicians and creatives alike, as well as support staff. I am of the notion that incorporating digital nomads into a ‘tourist tax’ legislative framework could therefore serve the dual purpose of capturing a share of their imposing spending power and mitigating displacement effects by channelling funds back into the creative community.

Unpacking the night-time economy

Central to this proposition is the recognition of Cape Town’s night-time economy as both an economic driver and a platform for cultural expression. The city’s publication of the Local Spatial Development Framework (LSDF) which outlines the plans to promote a thriving night-time economy underpins this section. In the case of Woodstock Salt River as a designated study area, one of the spatial central ideas is a ‘vibrant and connected public realm’ – alluding to the impression that “the area has a network of high-quality public spaces that are well-connected, safe, and accessible for all.” As Sean Dayton observes, “Public life at night is important. It’s more than just having a place to go for food or entertainment. It’s about the freedom to engage with your city on your own terms, to feel safe and connected, even when most of the city is sleeping.” Yet Cape Town’s night-time offerings remain fragmented by safety concerns, noise control regulations, and public transport challenges. In Across The Tracks I touched on the importance of having proper infrastructure in place to enable the vitality of the music sector; a dedicated levy could underwrite late-night transport services, sound-proofing grants for small and independent venues, and micro-grants for township musicians, thereby fostering a more cohesive and accessible night-time cultural circuit.

Conceptualising a Cape Town tourism levy

Designing a Cape Town ‘tourist’ tax raises several policy considerations. First, a rate calibration exercise must balance revenue generation with tourism competitiveness without deterring budget-conscious travellers. Second, leveraging existing hotel-property management and booking platforms could alleviate administrative burdens, while establishing a “Night-Time Economy Board” – comprising municipal representatives, music industry representatives, festival organisers, venue owners, and transport authorities – would ensure transparent, accountable allocation; of which I believe 50% should be ring-fenced towards the direct support of creatives and the rest split between transport subsidies and cultural infrastructure. The economic rationale for this position is to boost disposable income for local musicians, thus increasing talent retention and enabling local spending, fostering a more accessible night-time economy which will attract more visitors, and ultimately, counterbalance the ongoing housing inflation.

Towards a pilot and further inquiry

Much remains to be explored. A pilot in a single precinct – perhaps a Bo-Kaap Stoep or De Waterkant – could test levy levels, governance structures, and disbursement models and generate real-time data before a city-wide rollout. Simultaneously, a focus group composed of different stakeholders could illuminate potential pitfalls and refine my approach through the design of clear reinvestment mandates, inclusive governance, and adaptive frameworks. This idea offers a promising avenue to channel tourism revenues directly into the creatives who animate Kaapstad’s cultural economy.

By learning from Liverpool’s model, policymakers can forge a sustainable, equitable framework that nurtures the Mother City’s status as one of South Africa’s pinnacle cultural capitals.