World Economy

Economic Crisis Hits Zimbabwe Tourism

Economic Crisis Hits Zimbabwe Tourism Economic Crisis Hits Zimbabwe Tourism

Zimbabwe’s punitive tax regime, coupled with de-industrialization that has forced the economy to rely on imports and devaluation of regional currencies against the US dollar, have rendered the country an expensive and uncompetitive tourist destination, latest figures show.

Despite various attempts by the country’s leading hospitality groups to lure clients through African and Rainbow Tourism Group promotions and discounts that even topped 69%, latest Zimbabwe Tourism Authority figures for the first quarter of 2016 show national hotel room occupancy has slid by two percentage points in the period under review, with people preferring cheaper lodges or to sleep across the borders, Yahoo Finance reported.

The national average hotel room occupancy rate, ZTA said, decreased from 38% in the period January to March 2015 to 36% during the same period in 2016.

RTG’s highest discount was cost reduction on its New Ambassador Hotel’s double rooms by 56%, while the Cresta Group gave a 63% discount on its Cresta Oasis double rooms. Meikles Hotel was rather modest at a peak discount of 35%, while African Sun gave a 70% discount on its Crown Plaza rooms for bookings of at least three nights.

“These promotions resulted in increased utilization of accommodation facilities by domestic tourists in Harare more than in other regions. Even with such promotions, Harare experienced a 1 % decline in the first quarter of 2016 compared to the same period in 2015,” read the report.

 Reducing Costs

“This was attributed to the current harsh economic climate which has resulted in government, private sector and NGOs implementing austerity measures to reduce operating costs. For example, government banned the Harare municipality from holding meetings in hotels as a cost-cutting measure.”

This comes as Zimbabwe’s Tourism Minister Walter Mzembi is having a tough time convincing government to scrap a 15% tax on accommodation for foreign visitors, which he says makes the country a more expensive and less competitive tourism destination.

The country’s political situation characterized by spontaneous protests has worsened the problem and is mainly responsible for Zimbabwe’s poor ranking in the 2015 World Economic Forum Travel and Tourism Competitive Report. The travel and tourism report ranked Zimbabwe in May among the worst tourism destinations in the world at number 115 out of 141 countries.

Furthermore, an impractical pricing system with high hotel and transport rates is also a setback to Zimbabwe’s tourism at a time the sector battles to deal with other challenges such as heavy police presence on the highways and rampant corruption.