SIGNIFICANT inroads registered by the tourism industry since emerging out of pandemic lockdowns could be under threat as delayed payments by government trigger fresh write-downs, tourism players have disclosed.
A huge part of domestic tourism registered in Zimbabwe comes through strategic planning sessions by government agencies and conferences hosted by ministries in resorts.
Domestic tourism contributed 95% of arrivals during the third quarter ended September 30, 2022, according to tourism minister, Mangaliso Ndhlovu.
Government business constituted a big part of this figure, according to various hotel executives who spoke to Standardbusiness.
They said travellers were trooping back, but revenues were held in government coffers following a Ministry of Finance mid-year order directing state agencies to halt payments to suppliers and save a haemorrhaging currency.Government has also been desperate to contain rampaging inflation within safe territory.
Inflation has been kept under control, while extensive currency decimation suffered by the Zimbabwe dollar throughout the year has fizzled out.
However, government suppliers including hotels, have been suffocated as revenue pipelines run dry.
Last week, Ndlovu cast an optimistic view of the industry, telling Standardbusiness that arrivals surged by 165% during the nine months to September, hitting 693 498.This figure was 261 415 during the comparable period in 2021.
Hospitality Association of Zimbabwe (HAZ) bosses, however, disclosed that working capital war chests were unravelling, with operators retrenching staff to remain afloat.
Their troubles have been compounded by Zimbabwe Revenue Authority (Zimra) raids, which have exerted fresh pressures on operations.
“We have had to cut down staff,” one hotel manager told Standardbusiness.
During HAZ’s annual congress on Thursday, industry executives implored government to take immediate action, or see the industry relapse into turmoil.
“If you are not paid today and you get the payment a few months down the line, you lose what you could have done with that money,” Brian Nyakutombwa, the HAZ deputy president told Standardbusiness.
“We really appreciate the volume of business that government provides us, but we also want to be paid on time so that we can finance our operations efficiently.
“If today the Zimbabwe dollar’s exchange rate to the US dollar was $600, next week it will be $650.
“It means by the time you get your Zimbabwe dollars six months down the line the money would have lost value.
“This needs to be paid attention to by the government as our customer.
“People pay cash upfront or the customer doesn’t pay immediately.
They become debtors, but in our books, we record this as revenue.
Nyakutombwa added: “Zimra’s mandate is to collect tax on revenue. It would be within Zimra’s mandate to do that.
“But from our end it’s a point of concern. (With debtors) we would not have received the money.
“It is something that is between us and Zimra.
“We will need to table our concerns regarding how things are done.
“The bulk of business comes from government institutions and others, who do not always pay immediately.”
The government said it was also concerned by the level of backstage businesses taking place in the tourism industry.
Officially opening the congress, Vice-President Constantino Chiwenga said the government hadnoted speculative practice by players in the industry.
“The government was left with no choice, but to tame the potential of runaway inflation and crippling pressures on the local currency by putting in place measures that are at price correction and upholding ethical procurement practices in the market,” Chiwenga said.
“Let me urge you all to be good corporate citizens who adhere to good ethical conduct for us to achieve our developmental aspirations.”