Tourism revival: Don’t pop champagne yet
ADVISORS at Inter Horizon Securities (IH) have given the first cautious view of tourism industry prospects yet, saying it could be premature for sector players to celebrate.
IH said short-term prospects remained somewhat bleak, although in the mediumto-long term, recovery would be possible.
IH’s report titled IH Zimbabwe 2022 Equity Strategy became the first to warn haemorrhaging players to brace for continued headwinds in the coming months, as the sector works to ride out the Covid–19 crisis, which in 2020 saw arrivals dropping by the widest margins in four decades.
Before IH’s frank report, Zimbabwe had received wide-ranging positive reviews by a string of agencies, which projected aggressive bounce backs in response to relaxation of pandemic induced restrictions.
The IH projection appeared to track global developments, where recovery signs have been emerging, albeit at an uneven scale.
Destinations with significant vaccine uptakes would recover at a faster pace than those with uptake apathy, experts have warned.
“Performance locally remained depressed from renewed national lockdowns but green shoots were evident in the industry with aggregate occupancy levels for the listed hoteliers rising to 24% for the six months period to June 2021 versus 19% industry occupancy as at CY20,” IH said.
“Government incentives to support the industry including the introduction of the Value Added Tax waiver on domestic tourism have been somewhat successful with a noticeable uptick in local tourism.
“Average daily rates are still trailing normalised averages attributable to the slump in foreign business that pays premium rates. The sector is forecasted to remain muted in the short term dependent on evolution of the pandemic,” the report added.
However, it said the tourism sector's long term prospects had been bolstered by a steady pipeline of new investments in the past year, in addition to renewed interest by airlines to introduce flights into Zimbabwe’s destinations.
Last week, the tourism sector campaign,
“We are Victoria Falls” said confidence in Victoria Falls had ticked up, underpinned by improved global sentiment and rigorous efforts towards combating the Covid–19 scourge.
The “We are Victoria Falls” survey, which said 74% of global booking agents were projecting inbound traffic to rise, said this rise was ahead of 50% positive global sentiment in 2020, but still short of 85% in 2019.
The pandemic turned the industry upside down from 2020, when Zimbabwe’s arrivals plummeted by 90% as infections grounded global source markets, forcing airlines to stop flights.
Last month, the Tourism Business Council of Zimbabwe said Victoria Falls could turn into a ghost town unless travel restrictions were lifted.
Restrictions have been relaxed and, in contrast to IH, We are Victoria Falls sees tourists trooping back to one of southern Africa’s biggest destinations.
“Confidence in booking destination Victoria Falls has risen to 74% in 2021, according to the annual Future Traveller Sentiment Survey for 2021,” We are Victoria Falls said.
“This figure compares to 85% during the pre-pandemic year of 2019, and the slump of just 50% in 2020. Seventy three per cent of respondents to the survey believe it is now safe to travel to Victoria Falls and that robust rules on entry, pricing awareness, flexibility of terms and conditions and ease of access, including direct flights are key priority areas to accelerate recovery of tourism to the destination.
“According to international agents who responded to the survey, the future traveller to Victoria Falls will be motivated by nature and travel in smaller groups.
“Travellers will be mainly older couples, multi-gen families and families with older children. Compared to the previous survey agents predict growing preference for boutique hotels over safari-camps, and a move away from branded properties.
“The most marked developments from the previous year are an expected uptick in demand for wellness and gastronomy experiences,” We are Victoria Falls added.
The said 100% of surveyed agents reported that connecting with nature would be most in demand; 80% predicted a wilderness setting would be in demand, and 60% predicted urban areas will be too, up from 45% in 2020.
“The newly formed air access development committee has facilitated four new routes or frequencies to Victoria Falls in the last few months, including Lufthansa’s Eurowings Discover with its inaugural flight from Frankfurt touching down on 30th March 2022,” the report reads.