Justicia Shipena
Financial research experts at Simonis Stormsbelieve the tourism sector continues to play a key role in the Namibian economy with its strong links to other sectors.
In its latest quarterly gross domestic figures analysis, Simonis Storms noted that the tourism sector is not only an important enabler of job creation but that it also has room for double-digit growth in 2022.
The research agency added that the sector uses Namibia’s abundant unskilled labour and should be seen as a solution to high unemployment rates in certain rural areas.
“We continue to see favourable developments in the sector, for example nomad visas, green hydrogen projects at the coast, a growing number of flights servicing local airports, and no Covid-19 restrictions being in place,” the economists pointed out.
As a result, they said, Namibia expects its tourism sector to support local economic activity in 2023.
The October report however also shows that the hospitality sector’s value has not recovered from its pre-pandemic levels. In this light, they state that the recovery in the tourism sector is understated when observing economic growth rates in the hotels and restaurants sector.
“The sector’s real value has not recovered back to pre-pandemic levels, but currently accounts for 78.5% of the pre-pandemic’s actual value,”the report said.
The hotels and restaurants category in the consumer price basket has recorded 9.4% in annual inflation on average, compared to a long-run average of 6.2%.
This, Simonis Storms says, is driven by a significant increase in the accommodation services sub-category which has risen 16.2% on average year-to-date, compared to a long-run average of 5.3%.
Meanwhile, catering inflation has remained stagnant, averaging 4.0% year-to-date.
“An increase in operating costs such as electricity, diesel, wages, food, and interest rates have justified increasing accommodation rates. On the other hand, it can be that local hospitality establishments have increased rates to take advantage of improved tourist inflows,” the report stated.
The report stated that the stronger than expected demand also created important operational and workforce challenges in tourism companies and infrastructure.
According to the Hospitality Association of Namibia (HAN), Namibia recorded a national occupancy rate of 54.6% compared to 52.9% in the prior month and 33.8% in October 2021.
In this regard, the Simoni Storms’ report shows that the proportion of Namibian guests at local hospitality establishments increased from 16% in September 2022 to 22.2% in October 2022, marking the second consecutive month of increased locals making up total guests.
“Signalling that Namibia’s peak tourist season has come to an end. Most guests at nationwide hospitality establishments came from Germany, Switzerland and Austria (39.7%), France (7.4%), South Africa (5.5%), UK and Ireland (3.9%) and Italy (2.7%).”
HAN CEO Gitta Paetzold says Namibia sells itself best for its natural untouched and authentic experiences, so man-made attractions thus far have focused on providing services for travellers to view and experience our natural beauty.
Paetzold added that there have been ideas floating around about entertainment or amusement parks, but the tourism sector is not very keen on this as it contradicts the Namibian image of authentic, rugged, naturaland untouched beauty.
“A safari may provide the opportunity for game viewing in wide open spaces, but not the guarantee of seeing it all in man-made zoos and parks,” she said.
Hospitality establishments in the northern area recorded the highest occupancy rate standing at 62.3% followed by the coastal area at 56.8%, the central area at 53.9 % and the southern area at 46.1% in October 2022.
According to the UN World Tourism Organisation (UNWTO), the international tourism industry continues to show strong signs of recovery.
UNWTO has said international arrivals almost tripled in the January to July 2022 period compared to the same period in 2021.
In addition, it implies that the global tourism industry has recovered to about 60% of pre-pandemic levels, according to UNWTO’s latest World Tourism Barometer.
“About 86 countries had no Covid related restrictions as of mid-September 2022. However, challenges in the global tourism sector remain and include elevated fuel and airfare costs, as well as a deteriorating global economic outlook.”
Despite these challenges, 65% of respondents remain optimistic about the global tourism industry in 2023 from the UNWTO’s latest survey conducted in October 2022.
