Tourism sees up to US$1bn losses

THE tourism sector could lose up to US$1 billion in potential revenue due to the Covid-19 pandemic which has brought the industry to its knees amid fears that the impact on companies will be far-reaching, the Zimbabwe Independent has leant.

Nyasha Chingono

Players in the industry say the sector, which relies on foreign tourists, hotel business and air travel, will take long to recover as many people will be hesitant to travel in fear of contracting the disease.

Tourism is one of the worst-affected industries around the world as hotels are on lockdown amid global travel bans. Many countries have closed their borders to prevent the spread of the deadly disease.

Hospitality Association of Zimbabwe (HAZ) president Clive Chimwanda told the Independent that the tourism industry is bracing up for a long, difficult road to recovery.

“The industry estimates revenue losses of between US$500 million to US$1 billion by the time we get to year end as the impact of Covid-19 are likely to be felt for a long time,” Chimwanda said.

Zimbabwe commenced a 21-day lockdown on March 30 to control the spread of the virus that has killed three people and infected 23. Globally, almost 2,1 million cases have been reported.

While hotel doors could re-open after the lockdown, business is expected to remain low as tourist traffic will continue to suffer the impact of the pandemic.
Chimwanda says most tourism players have indicated they would re-open three months after the lockdown is lifted.

“Measures that have been taken such as lockdowns, which measures are good measures to all intents and purposes if we are to break the transmission of the pandemic, have not spared hotels and related leisure activities, ” he said.

“As a result, currently all the major hotel groups in the country have closed their hotels in compliance with the lockdown measures.

“Hotel doors will only open after the lockdown and depending on whether the situation will improve, otherwise a vast number of major players in the industry have indicated that they will open after a minimum of three months.”

Zimbabwe received more than 2,29 million tourists in 2019, mostly from Africa, Europe and America. The arrivals brought just under US$1 billion in foreign currency, while supporting thousands of livelihoods in tourist destinations such as Victoria Falls and Kariba.

The tourism and hospitality sector contributes 6,3% of Zimbabwe’s gross domestic product, while supporting fresh produce farmers, wildlife, transport and skin care product manufacturers, among other industries.

The cancellation of flights by Emirates Airlines, South African Airways and Kenyan Airways, among other major carriers, has compounded the dire situation where 100% of hotel bookings and functions have been cancelled.

With the impact of the coronavirus-induced travel restrictions and lockdowns expected to last months, the recovery of the tourism sector is expected to take longer than expected.

“Even when eventually a solution to Covid-19 is found, the travel and tourism industry will be the last sector of the economy to recover because travel for leisure especially requires planning well ahead. It is, therefore, important for government to work with the industry on coming up with a stimulus package to protect jobs and incomes as well as ensure the sustainability of businesses for the economic wellbeing of the nation,” Chimwanda said.

“I would not be prescriptive in terms of the amounts, but would recommend a cocktail of measures including tax holidays, deferrals on Pay-As-You-Earn for individual incomes, elongation of the time that entities can hold onto forex earnings to at least 12 months as well as the facilitation of access to affordable sources of finance.”

The tourism sector has already shed off thousands of jobs for contract workers.
Players are assessing the impact of the pandemic but have raised fears over the heightened uncertainty and economic dislocation.