Can Burgernomics be applied to wine tourism?

The Big Mac index was invented by The Economist in 1986 as a lighthearted guide to whether currencies are at their “correct” level. It’s based on the theory of purchasing-power parity (PPP) and the notion that in the long run exchange rates should move towards the rate that would equalise the prices of an identical basket of goods and services (in this case, a burger) in any two countries.

A recent article in Wine Searcher said that a day in Napa Valley would cost a couple who stay in an average hotel room, go to lunch and dinner in restaurants, visit two tasting rooms and buy one bottle of Cabernet to take home around $ 1 000 - which is about R 18 000. The same would cost R 35 000 a day in Yountville, a town in Napa Valley. Well, I guess that’s off my bucket list!

If you just want to do a wine tasting, $40 is entry-level in Napa and Sonoma and many tastings cost more than $100 - this would be between R715 - R 1 800 per tasting.

Rob McMillan, Executive Vice President of Silicon Valley Bank's wine division says: ‘On my first visits to Napa Valley, I stayed at mudbaths, I stayed in a converted train car, I ate at bistro-type restaurants. Importantly, I tasted at dozens of wineries in my journey to becoming the wine lover I am now. That is not possible today for young visitors unless you have a trust fund.’

Luckily it’s not the same in South Africa and you certainly don’t need a trust fund to visit our wine routes. Using the same criteria, viz, a stay in average accommodation, lunch and dinner in restaurants, visiting two tasting rooms and buying one bottle of good wine to take home, what would the cost be for a day trip to Stellenbosch, Franschhoek, Elgin or Robertson? If you spent three days in Hermanus, what would R 54 000 get you vs three days in Napa Valley?

Why is this important? 65% of the 528 wineries in South Africa are micro enterprises with an annual turnover of under R10 million they are reliant on wine tourism for 41% of their revenue so why not apply Burgernomics to promote and grow wine tourism?

We’re putting some itineraries together to present to wine lovers internationally. As an example, here’s a one-night staycation to Elgin. The total cost is R 4 420.00 - $246.00 so they could spend four days exploring Elgin for the cost of one day in Napa Valley.

To help promote and market this trip, we’ve created a demo virtual reality tour so travelers can see exactly where they’d going what they’d be getting - giving them more confidence to book. They’d also guided by voice notes from two travellers.?

Click on the link to view the interactive VR Tour: https://storage.net-fs.com/hosting/7601433/2/

The Elgin Staycation Experience consisted of:

After leaving Cape Town, the first stop is Peregrine Farm Stall where you can enjoy their famous homemade pies served with fries or a side-salad and a freshly brewed cuppacino. Two pies, two cuppacinos and tip will come to R 225.00 ($13.00).

Next stop is Charles Fox Wine Estate who make award winning Cap Classique. A premium tasting for two and a takeaway bottle of Charles Fox Reserve Brut MCC would be R 300.00 ($17.00).

We’re then off to South Hill Vineyards for a wine tasting and lunch. The cost for a wine tasting for two, a selection of eight taps dishes, two desserts and a bottle of their Sauvignon Blanc, including tip is R 825.00 ($46.00).

Our accommodation for the night is at Old Mac Daddy in one of their unique themed vintage Airstream Trailer Suites. We’ll also be enjoying a meal at their restaurant, The Barn and a full house breakfast in the morning. Supper included a craft beer, gin & tonic, two main courses, two desserts and a bottle of wine. The total bill, including tip was R 3 070.00 ($170.00)

The total cost for the trip is R 4 420.00 ($246.00) - that’s a quarter of the cost for the same experience in Napa Valley!

Burgernomics was never intended as a precise gauge of currency misalignment, merely a tool to make exchange-rate theory more digestible. It’s a fun way to showcase trips to our wine regions and using virtual reality is a true show and tell where nothing is hidden - turning lookers into bookers!