Gloomy prospects for tourism

Source: Gloomy prospects for tourism | The Financial Gazette February 16, 2017

By Shame Makoshori, Senior Business Reporter

ANALYSTS have warned that Zimbabwe’s tourism industry is unlikely to grow this year, with a number of factors combining to undermine growth.
The sector is one of the industries projected to support the recovery of the country’s struggling economy.
Following a decade of decline, precipitated largely by price controls and flawed exchange rates until December 2008, the country’s wildlife reserves, still bustling with beasts, are failing to attract high-spending international tourists.
This signifies what can best be described as a tragedy for the tourism industry.
Difficulties in the payments system, inefficient connectivity both by air and roads, which are now unpopular for many roadblocks, flight delays, poor service in many outlets and a weak rail transportation system were the weaknesses identified as impeding development in the sector.
These factors have been compounded by an epidemic scare that gripped Zimbabwe following a typhoid outbreak early this month.
Epidemic outbreaks could scare foreign tourists away at a time when Zimbabwe is working to improve foreign currency earnings through increased international tourist arrivals.
This fact becomes even more important considering the threats of an economic implosion due to foreign currency shortages that have already started affecting sectors like manufacturing and agriculture.
These are struggling to import raw materials due to a deteriorating liquidity situation.
Also affected is the mining sector, which contributes about 40 percent of the country’s export receipts.
Economists said urgent interventions were required to stop the crisis.
“Tourist arrivals are a result of sentiment,” said Kingstone Kanyile, chief executive officer at the advisory firm, Mtilikwe Financial Services.
“We must let tourists move without roadblocks. We must also improve our digital payment platforms because when tourists travel, they don’t carry cash. They want to use their Visa Cards. All service providers must have access to point of sale machines,” he added.
A key factor that has undermined the industry is the 15 percent Value Added Tax (VAT) charged on foreign tourists, which came into force in 2015 despite even opposition from Tourism Minister, Walter Mzembi.
This has been blamed for increasing prices, which have made the destination unattractive.
The effect of this has been reduced revenue and diminished profits for tourism industry operators.
Zimbabwe is now one of the most expensive destinations in the region.
The situation is compounded by the fact that the country and its regional neighbours have a ubiquitous visa regime that is cumbersome, discouraging to tourists and expensive.
While many say strict visa regimes are implemented in the interests of national security, Zimbabwe continues to lose potential revenue through restriction on tourists.
“If you added 15 percent VAT on the United States dollar, you make the destination uncompetitive. But that VAT will not go away soon because the Zimbabwe Revenue Authority is failing to meet its revenue targets,” Kanyile added.
Captains of Zimbabwe’s tourism industry say for a sector smarting from the effects of crisis that affected arrivals, every dollar earned adds immense value to the sector and consequently the economy.
“We need 100 000 tourists from the United States of America but the United States of America does not need 100 000 tourists from Zimbabwe,” Ross Kennedy, chief executive officer of Africa Albida Tourism, once said.
International tourists started warming up to Zimbabwe, a regional tourism hub that rides on its majestic landmarks such as the Great Zimbabwe Ruins, a medieval metropolitan building constructed in the 15th century, the mighty Zambezi River, Africa’s fourth longest stream, the eastern Highlands and Victoria Falls from 2009 when political hostilities ended following a peace deal between the main political parties.
But numbers started dwindling, and some operators also shut down because of lack of viability.
Access to Victoria Falls and the lakeside resort of Kariba has been limited by high air fares and a poor road network.
Recent heavy rains have caused the development of potholes.

Given the central role airlines play in connecting domestic and international tourist attractions, high fares also affect domestic tourism.
Government has been trying to build a tourism industry around domestic travel.
“Domestic tourists have a challenge of disposable incomes,” said media analyst and tourism industry consultant, Henry Makova.
He said authorities must also address the liquidity crisis.
“It affects people’s ability to travel. Because of the liquidity crunch, people who can afford to travel won’t travel due to problems in accessing cash. There are some things that tourists cannot buy using credit cards. The cost of flying also affects the growth of the tourism industry,” he said.
Poor connectivity is also affecting the travel of tourists between countries in the region.
In 2013, Zimbabwe proposed that southern African countries must establish a regional airline, as part of measures to solve the connectivity problems.
The Southern African Development Community, a resource rich destination endowed with world wonders, including the Victoria Falls shared by Zambia and Zimbabwe, is significantly dependent on income from the travel industry where arrivals have been affected by connectivity hitches.
A regional airline may not withstand the storms that have forced privately-held 1 Time, Air Tanzania, Zambezi Airlines, Fly Kumba and others to collapse.
“Tourism will be affected by perception,” said economic analyst, Trust Chikohora.
He also raised concerns over the spread of epidemics.
“They don’t want to contract typhoid. But they also have alternatives. If they are not happy with Zimbabwe they can go to Tanzania to see the big five because for them it must be experience of a lifetime. They don’t want any disturbances and it makes us uncompetitive. The VAT adds another 15 percent to their costs. Our prices are much higher than those charged in the West. That is why tourism is not performing. We need to create a positive perception,” said Chikohora, a former president of the Zimbabwe National Chamber of Commerce.
If stakeholders fail to act on these handicaps, arrivals will remain subdued, or even take the industry back to crisis years when government violently drove out over 3 000 white commercial farmers off their farms, triggering an unprecedented economic crisis that ruined the tourism sector.
Workers lost jobs away from the glare of publicity that highlights similar developments in metropolitan corporations.
The luxury cruising sector slipped into a comma, and has remained paralysed.
At Andora Habour in Kariba, it is easy to enjoy the breathtaking views offered by a fleet of white vessels as they innocently line up the eastern front shores of the world’s second largest man-made lake.
One is struck by reality when experts mention that these monumental assets, hallmarks of man’s engineering ingenuity, are grounded due to declining business.
Some have been docked for many months.
While exploring lakeside resorts in Binga three years ago, far more discouraging scenes awaited this reporter.
The slowdown has forced lodges to scale down operations.
Binga District’s 139 000 residents, mostly peasant farmers, have traditionally depended on fishing, tourism and crocodile farming.
As one descends a range of arid mountains into the spot once popular with Western tourists spending their money in one of Africa’s best kept secrets, the view is breathtaking.
But like the troubled cruise ships of Kariba 300 kilometres to the east, what has kept Binga’s tourism industry afloat is hope of a turn in fortunes.
The world renowned Mlibizi Resort is a pale shadow of its former status.
The scale of closures spans from Hwange, the country’s largest wildlife park, to the eastern highlands.
It is one of the worst tourism crises that have been glossed over.
What is important to note is that it is a list of despair brought by economic mismanagement and sour relations with international tourist markets.
The outlook points to a far more serious crisis exposed by the continued closure of some significant operators.
Last year, United Touring Company (UTC) was liquidated after battling to navigate the country’s harsh economic terrain, characterised by a slump in high quality Western tourists and a liquidity crisis, an increasingly weak middle class and harsh taxes being piled on tourists.
Of significance is the fact that UTC closed only five months after the collapse of its neighbour Beitbridge Express, owned by African Sun Limited.
Many things that have gone wrong came to the fore.
For instance, government has moved to impose the additional taxes on foreign tourists, and this has had dire implications on arrivals.
Roadblocks confront tourists at every inch of our pothole ridden roads.
Over-policing might look like a small issue, but it is certainly eating into State coffers.
Who can explain why a country that so desperately needs foreign revenues charges extortionist rates in largely second rate hotels and resorts?
Who can explain why Zimbabwean airports are among southern Africa’s most expensive, charging landing and departure fees double that of neighbouring countries?
On the positive side, however, some analysts said if Mzembi wins the United National World Tourism Organisation secretary general’s post later this year, Zimbabwe would return to global limelight.
“Walter (Mzembi) is a calm and collected politician whose greatest strengths are a combination of sound intellectual gravitas and a stout persona filled with public diplomacy and charisma, traits that are key in navigating past the dicey waters of international electoral politics,” said Makova.
“His victory will embolden the global status of Zimbabwe; indeed boost and trigger tourism to Zimbabwe, as the country will once again go on the world stage for its uniqueness in producing great human resource talent. That he faces opposition from different candidates from advanced economies is neither here nor there, for winning in politics is the art of polishing your brains than the figures in your bank account,” he added.