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Local tourism might be limited in the future: Experts

Staff Writer

Economists at Simonis Storm have cautioned that local tourism might be limited in the near future as local travellersbattle with expensive food, fuel and accommodation prices.

So far, the brokerage firm has observed that hotels, cafés and restaurants category has recorded high single digit inflation rates in recent months – averaging 9.0% Year-To-Date.

Disaggregating this main category, we see that accommodation services have only recorded double digit inflation rates and averages 15.1% YTD. This is evident that local hospitality establishments have little capacity in absorbing a rise in input costs (e.g. electricity tariffs, food, fuel, wages, etc.),” said Theo Klein in the latest hospitality report.

Namibia recently followed common international practice of opening borders to foreign travellers without the need of a negative PCR test result or covid vaccination certificate.

According to Bloomberg Intelligence, unvaccinated and untested travellers can visit 85 countries across the globe and only 21 countries still have closed borders.

With Namibia joining this group of countries, we are optimistic on witnessing a further improvement in our tourist flows going forward,” said Klein.

Namibia ranks low in terms of overall covid regulation stringency.

Besides Switzerland, Namibia has the lowest stringency index amongst her main tourist markets and Simonis Storm submits that this bodes well for Namibia’s marketing initiatives in attracting.

The virus has become something countries have learnt to live with and we see continued potential for Namibia’s tourist arrivals to rise further. This could realise despite Namibia having a low vaccination rate, as consumers globally have switched consumption spending from merchandise goods to services and demand for tourism remains high.

Namibia has not recorded a new covid case since 4 July 2022 and the last time a covid related death was recorded was on 31 August 2022. About 19.8% of the total population is now fully vaccinated, about a third of the government’s target of 60%,” said Klein.

The latest annual National Accounts data show an expansion of 8.8% in the Hotels and restaurants sector of the economy.

While the hotels and restaurants sector only accounts for 2% of GDP, this is only a proxy for the tourism sector and excludes the spill over or indirect benefits to other sectors of the economy.

Past studies (conducted by GIZ and the Tourism Board) have shown the tourism sector’s share of GDP to be as high as 15%.

According to Klein, being able to absorb unskilled workers in the sector, a continued expansion in tourism activities will be beneficial in replacing lost jobs following the lockdown induced recession.

A national occupancy rate of 51.0% was recorded during July 2022, compared to 32.1% in the prior month and 11.9% in July 2021 according to the Hospitality Association of Namibia (HAN).

This is the highest occupancy rate recorded since December 2019.

YTD, the national occupancy rate averages 32.7%, compared to 20.2% for the same period in 2021, showing an improvement in tourist inflows.

The proportion of Namibian guests at local hospitality establishments continues to decline as more foreigners visit, decreased from 34.0% in June 2022 to 17.9% in July 2022.

Central Europe remains Namibia’s key tourist market (57% of total guests), with 31.3% of guests in July 2022 travelling from Germany, Switzerland and Austria combined, South Africa (12.2%), Benelux (10.9%), France (7.3%) and the US and Canada combined (4.3%).

Regarding purpose of travel into Namibia, 95.4% came for leisure, 2.7% for business and 1.8% for conferences.

Hospitality establishments in the central area recorded the highest occupancy rate (58.1%), followed by the northern area (51.3%), southern area (50.3%) and coastal area (45.9%) in July 2022.

Staff Writer

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