Alarm bells over room occupancy

31 January 2019 | Tourism

Namibian tourism accommodation establishments recorded an average room occupancy rate of 53% during 2018, down 4% from 2017, and over 6% lower than in 2016.

According to Hospitality Association of Namibia (HAN) CEO Gitta Paetzold this revelation is cause for concern.

The results emanate from the regular tourism room occupancy statistical reports processed by HAN, after submissions by its members across Namibia. The sharpest declines were experienced in the first half of the year, with -8% and -9% declines during the first two quarters respectively, compared to the same period in 2017.

“Luckily, the tourism high-season during the second half of 2018 seems to have picked up with 1% and 4% (increases) for the third and fourth quarters (respectively), enabling the industry to balance out at a 4% decline overall,” said Paetzold.

She said a concerted effort is urgently needed by other tourism stakeholders, apart from the formally registered accommodation industry.

This includes car rental companies, tour operations, airlines and other service providers providing statistics to determine where the business is shifting to. Paetzold said with regulated hotels, lodges, guesthouses and farms just over half full throughout 2018, alarm bells must be sounded early.

“Although tourism is still a well-performing industry the market currently does not call for ever-increasing infrastructure and the endless construction of additional accommodation without thorough feasibility studies.” According to Paetzold proper recordkeeping of tourism flows and intensified market research and marketing efforts are needed, while service providers need to focus on erasing stumbling blocks in reservation systems. Also, more flexibility in reservation procedures and building on relationships with tourism partners and the opening up of new markets are needed, she said.

Paetzold said they have been informed by various sources that while Namibia still seems to rank high in terms of best destinations to travel to in 2019, this does not seem to convert into sales and requests, and actual forward-bookings for the coming year seem noticeably down.

She said especially bigger operators that are responsible for the bulk number of bona fide tourists travelling to Namibia seem to be on the decrease.

“Individual and smaller operators still seem to enjoy a good flow of incoming requests, but in general there is concern that the booking process for Namibia has become a stumbling block, with a number of foreign agents terming Namibia too difficult to book and are therefore choosing other destinations in Africa.”

Paetzold said Namibia is a long-haul destination, especially from its main source markets, with the bulk of bona fide tourists making use of air travel.

“These are the high-spending people who visit Namibia purely for tourism purposes, making use of commercial accommodation, car rentals or tour operator services.”

Paetzold said concerns have thus been raised by some operators, who noted that while flights to Namibia during the 2017 high-season were about 700 euro (about N$10 900), the same flights for the coming high-season were quoted at over 1 200 euro

(about N$18 700)

According to Paetzold this increase effectively adds an extra daily cost of over N$1 000 per guest for a 12- to 14-day trip and is possibly one of the deciding factors not to consider Namibia as a destination for now.

She said the increasing prevalence of Airbnb is also a concern, as their offerings are clearly diluting the market. “It is worrying, that most of the properties listed on that platform are still not formally registered, as per the legal requirements here in Namibia, and thus do not pay general taxes or tourism levies, hence presenting unfair competition, while not contributing to overall tourism promotion activities, or the national tax base, which would allow for general infrastructure development.”