HomeBusiness DigestCash Economy Hampering Tourism –– Munyeza

Cash Economy Hampering Tourism –– Munyeza

THE dollarisation of the economy without the use of international credit cards has become a nightmare for the tourism sector as it makes the billing system rather cumbersome.

This has discouraged international tourists from visiting the country and it has also limited “spend per guest” for those who come to Zimbabwe.

Zimbabwe’s tourism sector, like almost all other sectors of the economy, is operating on a cash basis and most international tourists are not used to this as they a prefer to use plastic money. In most cases, up to 99% of international tourists rely on plastic money.

Chief executive officer of African Sun Shingi Munyeza confirmed the complications which the use of cash was causing for the tourism sector.

“The rest of the world has gone plastic while we are using cash with a currency which is not even our own and this has caused some complications,” said Munyeza.

“This goes back to the confidence levels. International debit cards institutions would like to know if they would get their money if they use the local banks as intermediaries.

“At African Sun we will soon be rolling out the use of credit cards and this will increase the spend per guest as well as the visitor’s comfort as they would not be required to move around with lots of cash.”

It would have been proper if the cash system in the country was fully operational, that is with local currency being used.

As it is now, Zimbabwe is operating like it is an appendage of the US or South Africa but there is no control of how much money is in circulation. With the introduction of debit cards, the tourists will feel secure and do not have limits on expenditure as is the case with cash.

Players in the tourism industry have started adopting strategies to increase domestic tourism in response to the limitations which are being caused by the cash economy.

Domestic tourism is possible now that Zimbabweans earn in hard currency and they can now afford to go on holiday within the country.

A number of promotions have been launched by players in the tourism industry including African Sun and Rainbow Tourism Group and these are aimed specifically at Zimbabweans.

There have been a number of changes to the country’s tourism sector in the last nine years with new players coming in.

This has seen  traditional players losing ground to  emerging players especially those in the touring business.

Traditionally dominant players such as the United Touring Company (UTc) used to control around 40% of the market  10 years ago but this has dropped to between 10 and 15%.

This drop has been attributed to the macro-economic factors which hit the bigger players harder than it did to smaller operators.

Using multiple currencies, though the US dollar is the most widely used unit, has brought stability to the economy but there are a number of challenges which still have to be overcome.

There are liquidity problems which have affected all sectors of the economy and at the same time, attempts to promote domestic tourism may not yield much as there is very little disposable income.

 

Makombe Leonard

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