Zim­babwe - Harare

Tourism Tattler - - BUSINESS & FINANCE - For de­tailed anal­y­sis visit http://hvi.hvs.com/mar­ket/africa/Zim­bab­we_-_Harare

Known as “a world of won­ders” in Southern Africa, Zim­babwe wel­comes more than two mil­lion tourists a year, Al­though tourism con­trib­utes 10.4% to the GDP of the coun­try, the tourism mar­ket re­mains un­der­de­vel­oped. Most of the ma­jor in­fra­struc­tures are out­dated and roads need to be up­graded. Po­lit­i­cal un­rest and vi­o­lent strikes shake the coun­try and many Zim­bab­weans have left their home­land. Ho­tel sup­ply has not grown for the past five years and is mostly made of lo­cal un­branded prop­er­ties that strug­gle to adapt to the needs of in­ter­na­tional tourists. Harare lacks in­ter­na­tional ho­tel brands which would bring qual­ity and ex­per­tise to the cur­rent tourism land­scape. How­ever, the coun­try has a real po­ten­tial to grow its tourism ac­tiv­ity. The level of oc­cu­pancy has been in­creas­ing since 2014, prov­ing a re­bound in demand from in­ter­na­tional tourists. While ADR and REVPAR are down, ow­ing to the com­pet­i­tive­ness of bor­der­ing coun­tries, the picture may change quickly. In­deed, global hos­pi­tal­ity brands have started show­ing in­ter­est in the na­tion. Carl­son Rezi­dor re­cently an­nounced the open­ing of a Radis­son Blu Ho­tel in Harare in 2019, and it will cer­tainly en­cour­age com­pet­i­tive brands to en­ter the mar­ket.

In­vestors are in­creas­ingly con­sid­er­ing Zim­babwe for in­vest­ment. Cap­i­tal in­vest­ments are ex­pected to rise by 4.8% per year over the next ten years. China is be­ing a pre­cious ally: Pres­i­dent Xi Jin­ping con­firmed multi-bil­lion in­vest­ments in en­ergy and in­fra­struc­ture and the can­cel­la­tion of US$40 mil­lion in debt in ex­change of the yuan be­com­ing Zim­babwe's in­ter­na­tional cur­rency. This should push the num­ber of busi­ness tourists from China in need for a ho­tel room. The gov­ern­ment will need to tackle sig­nif­i­cant chal­lenges in the next few years to be able to take ad­van­tage of this in­creas­ing demand, get the ADR back to pre­vi­ous level and boost ho­tels' val­ues on the mar­ket. Harare will be sig­nif­i­cantly im­pacted by the po­lit­i­cal and eco­nom­i­cal cri­sis in 2016. The demand goes pri­mar­ily to Liv­ing­stone and the Vic­to­ria Falls, but the cor­po­rate guests are not keen to visit Harare at the moment bring­ing oc­cu­pancy down. The 6% de­fla­tion sig­nif­i­cantly im­pacts the av­er­age rate. Ho­tels' val­ues are ex­pected to drop to their low­est level since 2010, at US$104,000, rep­re­sent­ing a 17.6% de­crease.

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