Tourism sector faces strong headwinds

23 Feb, 2020 - 00:02 0 Views
Tourism sector faces strong headwinds

The Sunday Mail

Enacy Mapakame
Business Reporter

Tourism is one of the sectors expected to drive economic growth going forward while the country moves towards becoming an upper middle income economy by 2030 as espoused in the Transitional Stabilisation Programme (TSP).

But the sector faces threats in the form of climate change, waning consumer spending due to inflationary pressures and the coronavirus that is currently causing havoc in China and globally.

Due to these factors and others affecting the economy, the tourism sector is expected to remain subdued this year.

Climate change has been a big threat to the economy, as agriculture production declined due to effects of droughts while other natural disasters such as tropical cyclones have destroyed crops and severely damaged infrastructure, further compounding the challenges.

For tourism, the sector is heavily affected by climate change and Africa has been identified as one of the most vulnerable parts of the world. The country’s flagship tourist destination, the majestic Victoria Falls, has experienced the worst during the 2019/20 season as water flowing over the falls recorded its lowest since 1986 due to the prevalence of droughts in the sub-Saharna African region.

This affected its allure, together with bad publicity as Western media propagated a negative picture of the situation, far from the truth on the ground. The sector has not been spared from inflationary pressures, which significantly eroded local consumer spending.

“Therefore, it is our view that in the short to medium term local tourism will remain subdued as consumers are likely to remain under pressure and continue to migrate to value offerings,” said Harare brokerage firm IH Securities in their Zimbabwe Equity Strategy 2020 report.

Already, diversified hospitality group Meikles Limited says its hospitality division’s room occupancy retreated by 9,32 and 6,18 percentage points for the quarter and nine months to December 31, 2019 against the comparative period for the operation in Victoria Falls.

In Harare, room occupancy declined by 4,86 and 6,74 percentage points for the quarter and nine months respectively compared to the same period last year as the domestic market battled falling disposable incomes.

The tourism sector is identified as one of the low hanging fruits and has been on a growth trajectory with tourist arrivals growing from 1,8 million in 2013 to 2,6 million in 2018.

However, the sector suffered a 2,9 decline to 1,1 million during the first half of 2019 compared to 1,2 million recorded during the same period in the prior year  due to low performance by the country’s source markets.

“Zimbabwe’s worsening economic situation coupled with a volatile exchange rate have been the major reasons for the decline in arrivals, especially from Europe and America, which have also classified Zimbabwe as a risky tourist destination following the January 2019 shutdown,” said IH.

Annual arrivals are, however, expected to marginally improve. While regional tourists have been key markets to Zimbabwe, Asian and European tourists have also increased.

As part of efforts to grow the Asian market, Zimbabwe entered into an agreement with China in a strategic partnership that saw the commencement of a five-year plan expected to see over 10 000 Chinese tourists visiting Zimbabwe.

But the outbreak of coronavirus in China puts a poser to this and is likely to affect arrivals from other markets as well as tourists even from other countries shy away from travelling for fear of contracting the virus at airports and other ports of entry.

Already the global airline industry is facing significant financial losses after dozens of carriers cancelled or reduced flights to Asia because of the coronavirus outbreak.

The economic damage will likely be worse than the US$7 billion hit airlines took from the 2003 SARS epidemic, according to analysts.

Tourism Business Council of Zimbabwe past president and Rhodes Nyanga Hotel managing director Mr Francis Ngwenya said it was imperative for the country to be alert and on the lookout of the virus and the effects it may have on the economy.

He said, while international tourist arrivals in the Eastern Highlands was only five percent, the impact of the virus would be felt more prevalent at national level and areas like the Victoria Falls and Hwange making it a concern.

“It is a concern because some travellers will be wary, even if they are not passing through Asian countries.

“The impact is still great because some travellers even from the region want to avoid airports fearing for their health. So it should be contained,” said Mr Ngwenya.

It’s, however, not all doom and gloom. Growth in the sector is also hinged on improved connectivity and efforts are being made to create direct linkages with tourist markets as well as attract more airlines into the country.

This will help increase tourist arrivals.

 

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