Namibia marks tourism day
While still strong, tourism figures have not performed as well as expected and indications are that no real job growth will take place in the short-term.
Namibia will join the rest of the world in celebrating tourism today at the Zoo Park in Windhoek.
Prominent speakers are expected to address the public on Namibia's flourishing tourism industry which has grown to be one of the biggest contributors to the economy.
Among them will be Founding President Sam Nujoma, who is expected to deliver the keynote address.
Celebrations to mark World Tourism Day in Namibia have already taken place with several activities during the past month after an initial kick-off event at the Hosea Kutako International Airport at the end of August.
The theme for this year's celebration in Namibia is 'Tourism begins at home'.
This is mainly to sensitise and create awareness about the issues affecting the tourism sector in the country.
Over the past three months, the tourism industry performed below expectation, but almost doubled when compared to the same period last year.
This is according to the just-released FNB/Fenata Travel Index that added the rise in business performance was largely attributed to an increase in the number of international arrivals during that period.
According to the index, fluctuating economic and political conditions, coupled with limited accommodation for larger groups, were highlighted as drawbacks to demand in the tourism sector.
Other challenges impacting the growth of the tourism industry are escalating operational costs, particularly the cost of electricity and food.
FNB analyst Josephat Nambashu says although on average there were more tourists during the second quarter, they spent a lot less money at tourism establishments, as they opted for self-drive holidays and camping.
“While this may be good news to car rental and campsite operators, it disadvantages hotel and lodge operators who have much larger fixed overheads to carry.”
According to Nambashu, during the second quarter, the index dipped by 16.2% quarter on quarter in real terms as rising costs continue to dampen growth.
“Despite bed occupancy rates improving from the previous quarter, lower than expected load factor numbers have been recorded causing the overall index to slide.”
Inflation in the sector remains upwardly sticky at 11.4% year to year (June 2017) on the back of a relatively stronger South African rand, said Nambashu.
“The currency index declined by 13.4% quarter on quarter, which could potentially further worsen the performance of the sector.”
He said performance is estimated to remain mixed for the next three months with only about 28% of the respondents in the index stating that business will be very good.
According to the index financially, tour operators were better off during the second quarter compared to other tourist vendors. Revenue expectations for the next quarter were also lowered, mainly on the back of increased operational costs and a strong currency. However, workforce numbers in the sector remained flat according to the survey with nearly 56% of the respondents expecting no change in their staff capacity over the next three months.
While the increasing operational input costs were the main driver of higher prices in the sector, this is also making it more difficult for locals, whose income does not increase proportionately, to enjoy the sector's hospitality.
According to the index this can also result in dominance by outsiders in the sector and erode economic opportunities for the locals.
“Overall, respondents feel that given the current performance, the sector will continue to struggle, at least for the next subsequent quarter,” according to the index.
ELLANIE SMIT
Prominent speakers are expected to address the public on Namibia's flourishing tourism industry which has grown to be one of the biggest contributors to the economy.
Among them will be Founding President Sam Nujoma, who is expected to deliver the keynote address.
Celebrations to mark World Tourism Day in Namibia have already taken place with several activities during the past month after an initial kick-off event at the Hosea Kutako International Airport at the end of August.
The theme for this year's celebration in Namibia is 'Tourism begins at home'.
This is mainly to sensitise and create awareness about the issues affecting the tourism sector in the country.
Over the past three months, the tourism industry performed below expectation, but almost doubled when compared to the same period last year.
This is according to the just-released FNB/Fenata Travel Index that added the rise in business performance was largely attributed to an increase in the number of international arrivals during that period.
According to the index, fluctuating economic and political conditions, coupled with limited accommodation for larger groups, were highlighted as drawbacks to demand in the tourism sector.
Other challenges impacting the growth of the tourism industry are escalating operational costs, particularly the cost of electricity and food.
FNB analyst Josephat Nambashu says although on average there were more tourists during the second quarter, they spent a lot less money at tourism establishments, as they opted for self-drive holidays and camping.
“While this may be good news to car rental and campsite operators, it disadvantages hotel and lodge operators who have much larger fixed overheads to carry.”
According to Nambashu, during the second quarter, the index dipped by 16.2% quarter on quarter in real terms as rising costs continue to dampen growth.
“Despite bed occupancy rates improving from the previous quarter, lower than expected load factor numbers have been recorded causing the overall index to slide.”
Inflation in the sector remains upwardly sticky at 11.4% year to year (June 2017) on the back of a relatively stronger South African rand, said Nambashu.
“The currency index declined by 13.4% quarter on quarter, which could potentially further worsen the performance of the sector.”
He said performance is estimated to remain mixed for the next three months with only about 28% of the respondents in the index stating that business will be very good.
According to the index financially, tour operators were better off during the second quarter compared to other tourist vendors. Revenue expectations for the next quarter were also lowered, mainly on the back of increased operational costs and a strong currency. However, workforce numbers in the sector remained flat according to the survey with nearly 56% of the respondents expecting no change in their staff capacity over the next three months.
While the increasing operational input costs were the main driver of higher prices in the sector, this is also making it more difficult for locals, whose income does not increase proportionately, to enjoy the sector's hospitality.
According to the index this can also result in dominance by outsiders in the sector and erode economic opportunities for the locals.
“Overall, respondents feel that given the current performance, the sector will continue to struggle, at least for the next subsequent quarter,” according to the index.
ELLANIE SMIT
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