HomeBusiness DigestCresta column - Information vital for tourism to realise benefits

Cresta column – Information vital for tourism to realise benefits

By Norman Moyo

STAKEHOLDERS in the tourism industry continue to receive conflicting reports on the state of our tourism industry in Zimbabwe.


Tourism stakeholders make fundamental business decisions based on information and insight from tourism players. These decisions are so critical they impact on the ability of the industry to see a turnaround.

Correct and unadulterated information on industry trends and conditions is critical for stakeholders, particularly government, to come up with correct and reliable policy frameworks to support the industry. The question of whether or not the tourism industry is showing any signs of an upturn has received varying views with industry analysts having a propensity to send very positive vibes.

There is nothing wrong with being positive about the industry’s revival potential but it is always critical for stakeholders to always work with facts when giving opinions to stakeholders as they solicit for support and an enabling policy framework. Equally important to clearly illustrate is the current contribution of the tourism industry to national economy in terms of foreign currency and employment creation and productivity.

The industry continues to shoot from the hip when it concerns these important matters and is not communicating in a coherent and consistent manner with emphasis on sticking to the facts. This incoherence in our communication strategy has had far reaching implications on the plight of the industry and policy frameworks that are crafted to support it.

One classic case in point is in the formulation of the monetary policy by the Reserve Bank of Zimbabwe governor Gideon Gono.

I believe the governor had all but good intentions for the industry when he included it among the deserving sectors to benefit from the productive sector facility. I believe that the governor did consult the industry leaders and one hopes that he was fed with the correct information on how the policy can positively influence growth in the tourism industry.

I have reservations however on the relevance of the current productive sector facility that has been proposed by the monetary authorities vis-à-vis the tourism sector in particular. Zimbabwe’s tourism is currently facing challenges that can not be overcome in a period of six to 12 months. The policy currently allows the tourism sector to access resources from the central bank as working capital for a period of six months and for capital expenditure for a period of 12 months.

I believe there is a need to educate the authorities on the complexity of the tourism industry in general. The tourism industry has a different cycle from the agricultural sector.

The agricultural sector can easily enjoy a six-month cycle where a new farmer can purchase seed today and align his/her produce to the six-month period required by the facility. The challenge facing the tourism industry is to develop and grow new markets and none of these initiatives have a cycle of six to 12 months.

A safari operator who sells hunts will incur huge travelling and promotional costs to bring in international hunters and normally this process takes between one and a half to two years before the operators begin to see inflows from the hunting activities. By then the Reserve Bank would have called back their loan.

In six months’ time the farmer would have harvested his produce and realised his profits enabling him to pay back the money owed to the Reserve Bank.

The tourism industry is capital-intensive and apart from the restaurants industry most of the projects that need to be undertaken will not have a six to 12-month cycle. Any investment apart from financing non-productive acquisitions or overdraft facilities in the tourism industry will not produce any of the desired objectives stipulated in the monetary policy framework.

Any capital expenditure in the industry will yield very minimal if any returns at all within a 12-month window period allowed by the central bank. There is a deliberate need to align the facility to tourism-related activities and to advise the authorities of the correct cycle for the industry.

While the manufacturing sector for example can use such a facility to purchase stock and increase their working capital, the tourism sector has very little to work on. I believe if the industry had engaged the authorities and highlighted their case for either a longer period of repayment or a revolving facility this would have benefited the industry.

The tourism product in general is tired and needs to be refurbished and I believe the productive sector funding had come at the opportune time to revamp our product outlook.

I still think there is room to engage the Reserve Bank and plead our case for a more favourable facility for our sector.

The unfavourable conditions could explain for the low applications and interest by the tourism sector in the facility compared to other sectors. In future when critical industry issues as these are discussed the industry should learn to put their sectoral interests aside and speak with one voice.

I also hope that only those operators that are declaring and religiously submitting their TR1 forms are benefiting from this facility.

Anyone not declaring their foreign currency to the Reserve Bank through the TR1 system is not only breaking the law but is also depriving the industry of the correct information which can be used for decision-making and policy formulation.

-Norman Moyo, Cresta Hospitality’s group sales and marketing manager, compiled this article. To send feedback e-mail mar-keting@cresta.co.zw

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