Local tourism reels under recession, perception woes

Eric Chiriga



ALTHOUGH major players in the tourism sector recorded profits, the tourism industry remains under pressure from a six-year economic crisis and perception pr

oblems.


Analysts and stakeholders said while domestic tourism had been crippled by an erosion of disposable incomes, most players in the sector, particularly hoteliers, were no longer making significant revenues from tourist visits, but from conferences.


Zimbabwe, once a major tourist destination, has experienced a more than 50% decline in tourist arrivals over the past six years.


Contrary to claims and efforts by government, the country’s tourism industry still survives on traditional source markets, with arrivals from Asian countries making no meaningful contribution.


The government introduced the “Look East Policy”, under which focus was shifted from traditional source markets to the Asian countries.


However, players in the hospitality industry said this dealt a big blow to the tourism industry, which reports that tourist arrivals from the East had not made a big impact on their revenues.


While the decline in the tourism industry has continued unabated over the last five years, neighbouring countries like Zambia and South Africa had extensively benefited from Zimbabwe’s loss.


While South Africa is taking advantage by marketing Victoria Falls and luring potential tourists to Zimbabwe, Zambia is experiencing a boom in its tourism industry.


The number of tourist arrivals in Zambia has increased five-fold, boosting revenue generated by the sector to above US$150 million annually.


Before Zimbabwe’s political and economic crisis, Zambia had tourist arrivals of around 160 000 compared to the 610 109 visits received in 2004, and the figure is expected to increase in response to an aggressive marketing campaign by the country.


Farai Mutseyekwa, president of the Hospitality Association of Zimbabwe (HAZ) admitted that the negative publicity was affecting the tourism industry.


“We need to counter the negative publicity,” he said.


Mutseyekwa confirmed that most of the tourist arrivals were still coming from traditional source markets.


“There is actually a decline in the number of visits from the Asian market,” he said.


He said there was potential in the Asian market but there was need to adopt a proper marketing strategy to capture the Asian market.


Mutseyekwa added that domestic tourism had been negatively affected by the economic crisis.


He admitted that most operators were now pursuing conferencing as an avenue to maintain revenue levels as tourist arrivals continued to dwindle.


“In this environment, the tourism cake is too small; conferencing is contributing significantly to some organisations,” he said.


Shingi Munyeza, CEO of the Zimsun Leisure Group, a Zimbabwe Stock Exchange (ZSE) listed hospitality concern, reported an operating profit of $203,8 billion in the year ended March but expressed concern over the decline in tourist arrivals.


He said although visits to the group’s local hotels from international markets increased by 5%, foreign arrivals into the country as a whole continued on a downward trend with a 39% decline in overseas arrivals and 11% from the African region.


Munyeza said volumes from the domestic market declined by 8% in the period under review compared to the prior year.


Chipo Mtasa, CEO of the ZSE-listed hospitality concern Rainbow Tourism Group (RTG), admitted as much, saying that perceptions were negatively affecting the sector and required immediate attention.


“Perceptions do worry us,” Mtasa said in a recent interview with businessdigest.


In her financial report for the year ended December 2005, Mtasa said the group’s hotel occupancies remained depressed at 38% compared to 43% in the previous year, but recorded an operating profit of $24 billion from a $455 million loss incurred during the same period the previous year.


Besides the negative perception, she also attributed this to low domestic demand.


Mtasa added that they were in the process of introducing an office in Livingstone, Zambia, a move that would see the group tapping into Zambia’s tourism boom.


Economic analyst John Robertson said the tourism sector’s contribution to the economy was now dismal.


“Although the authorities don’t give clear figures, the contribution by the tourism sector is US$30 million which is only 15% of the $200 million it used to contribute,” Robertson said. He said operators in the tourism sector still relied on visitors from traditional markets as the Chinese had made no significant contributions.


“Most of the Chinese do not spend long in the country and are not big spenders. Besides, they now have a lot of relatives living here, whom they can visit,” Robertson said.


Apart from the tainted image, Robertson said the fixed exchange rate coupled with the acute fuel shortages and high prices had become disincentives to the international tourist, who is faced with over 5 000 destinations.


He added that domestic tourism was dying due to the economic crisis, particularly high inflation. According to the Zimbabwe Tourism Authority, a quasi-state body, tourist arrivals declined by 27% in the last quarter of 2005.


A total of 336 971 tourists visited Zimbabwe during the period, compared to 463 471 in the comparative period in 2004.