FALLING disposable incomes due to currency volatility have weighed on hotel occupancies. But, in this interview with Hospitality Association of Zimbabwe president, Brian Nyakutombwa (BN), our business reporter, Julia Ndlela (JN), found out how Zimbabwe’s currency, Zimbabwe Gold (ZiG) has inflicted “lots of pain” on operators since coming into circulation in April. Below are excerpts of the interview.
JN: What is the state of Zimbabwe’s hospitality industry?
BN: Tourism in Zimbabwe has been on an upward trend since the post Covid-19 period. Since 2022, we have been on an upward trend if you look at occupancies. On average, we have been doing very well. Comparing the first half of 2023 and 2024, you can see there has been some commendable traction, an increase in terms of performance. We are talking of 47% occupancy rates against 36% during the same period last year. This rise is being driven by an increase in international arrivals. Domestic tourists are also a significant factor in the contribution to occupancy. There has been an 8% increase in domestic tourists. So, what it shows you is that efforts being applied towards promoting tourism by the Ministry of Tourism, and the Zimbabwe Tourism Authority are bearing fruit. They have been on a very deliberate drive to market Zimbabwe domestically and internationally.
JN: What else is driving this growth in occupancy rates?
BN: That scenario is being assisted by developments that have happened as far as our international arrivals are concerned, and at the airports which handle arrivals. There have been developments there.
If you look at Robert Gabriel Mugabe International Airport, it has received some huge upgrades, so has Victoria Falls International Airport. That is assisting in attracting airlines regionally and internationally that are now bringing in international tourists.
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We have also seen some improvements in the road network. That is also facilitating visitations through the road network. People can now drive to various destinations around Zimbabwe.
JN: What have been the major challenges affecting the tourism sector?
BN: Because of low disposable incomes due to economic challenges, you find that we do not get as much traction as we would.
Also, for locals still, there is a challenge with the pricing models. These models have inhibited domestic tourists from travelling and enjoying, utilising the facilities that are available across the country.
If those challenges were to be mitigated, I can foresee domestic tourism coming in really on a strong note in terms of contributing to occupancy and the tourism industry at large.
JN: Tell us about foreign tourists
BN: In terms of international tourists, I think what they need is more awareness. I think the visa regime is very friendly to a certain extent.
But there is more that could be done in terms of relaxing. Everything has to be very quick, just like what you experience when you go to other countries.
JN: What can you say are the policy gaps in the tourism sector?
BN: When you talk to players across the field, the major area is the tax regime.
JN: Have there been dialogue with regard to taxation?
BN: More dialogue is required with the desire that dialogue will lead to conviction to the parties' consent that certain things need to be reviewed so that there is development.
You also need to see a lot of formalisation of industries in the economy. That will lead to more players contributing to revenue generation from a tax perspective.
JN: How big is the informal sector in the tourism industry?
BN: Right now, we have got a high percentage of informal businesses, which are escaping the tax net. What happens is that those who are formal and in the full glare of the tax net, are the ones who bear the brunt and yet the economy is ticking because of a large informal sector.
For the informal traders, that is their way of living.
They are also earning a living, but there is a need for balance there so that the tax burden is reduced on those who are already in business.
JN: What has been the impact of currency devaluation on the industry?
BN: It has been huge. It has caused a lot of chaos. This is one of the reasons why we end up with a pricing regime that is much distorted and very painful to deal with.
And we are also dealing with multi-currencies. What you buy in US dollars you want to sell it in the local currency.
There is already a disparity there in terms of us as service providers against suppliers of our inputs.
There is a huge gap, yet at the same time, we are required to be trading using the official exchange rate. But reality on the ground is that the official exchange rate only exists on paper.
That is causing a lot of pain to businesses and how we interact and transact with the general public.
JN: What should be done?
BN: There is a lot of dynamics that are being done to try and mitigate that gap between the exchange rates. The continued devaluation of the local currency is really the elephant in the country.
If I were to have a word with authorities or the Minister of Finance, I believe that the panacea is for us to have the most critical product, which is fuel being sold in local currency. To me, that is the ultimate.
But for as long as that precious commodity is not being accessed in local currency, it is a challenge because what it means is that it sustains the black market.
JN: Tell us about developments during the fourth quarter of the year
BN: Talking to my colleagues across the industry, this particular quarter — the fourth quarter (Q4) — has witnessed increased traffic.
I would say occupancy levels are above 50% on a national average.
It is typical of Q4 to be producing such occupancy rates. But it is against the background where, looking back, the rest of the year has not been so good because of so many challenges. When we started the year, we had people not transacting.
Because of this, occupancies were being held at a low level because of people wanting to see what was happening with the currency.
Then when the (new) currency came, people wanted to adjust — to see where we were going. Time was moving. So, you find that occupancies were depressed pretty much for the first half of the year.
There is always a glimmer of hope. With the efforts that are being put to promote domestic and international tourism, we remain positive.
JN: What is your target for the festive season and what are your plans to maximise occupancy rates?
BN: As you will be aware, ZTA and the Minister of Tourism and Hospitality Industry have started on a domestic tourism drive for the festive season, which is something that they started last year and we hope that is going to see improved domestic arrivals in various destinations.
We also have the diaspora market, which we classify under domestic tourism, as one of the drivers of domestic tourism, especially now when people are coming for holidays.
So, you see that domestic tourism will continue to increase and internationally, we will continue to see some positive reaction or response in terms of interest in Zimbabwe. If you look at your local statistics, tourism has been the highest contributor in 2024 to gross domestic product.
So, what that means is this is a really potential sector to drive the growth of the overall gross domestic product.