The tourism sector is the shining star in a dimming economy and should re-introduce the two-tier pricing system to promote domestic tourism, a leading research firm has recommended.
BY VICTORIA MTOMBA
In its weekly update, MMC Capital said the sector should re-introduce a two-tier pricing system to promote local individual and family visits, thereby promoting domestic tourism, a buffer in the event of dwindling foreign arrivals.
“In our view, the tourism sector remains attractive as it is proving to be a shining star in a dimming economy. The high-spending patterns which are a characteristic of the tourism industry, are a boon to national income, hence essential for the country to continue luring high-spending markets as a strategy to maintain high rewards in the sector,” MMC said.
It said the sector should also consider charging South Africa, the major market, in rands without referencing the dollar pricing system and the facilitation of tourists’ easy access at border posts.
The tourism sector has the quickest turnaround ahead of other pillars of the economy such as agriculture and manufacturing.
The sector is projected to have contributed 10% of the country’s Gross Domestic Product (GDP) in 2014. It is projected to contribute 15% of GDP this year.
Tourist arrivals are expected to be 2,1 million up from 2 million last year.
The sector employs 300 000 directly and indirectly. Receipts collected were at $856 million in 2013, up from $749 million in 2012, attributed to the marginal growth of the overseas market.
The ministry of Tourism and Hospitality Industry projects the tourism sector would grow to $5 billion by 2020 aided by the opening up of the skies and flexible visa regimes.
MMC said the local bourse will remain under pressure due to the difficult economic conditions in the economy.
“On the local economy, we maintain our view that the upside potential of the Zimbabwe Stock Exchange remains under pressure on the back of poor macro-economic conditions besetting the economy.
Tenacious liquidity challenges coupled with low industrial capacity utilisation, low international commodity prices, low aggregate demand, shrinking tax base and company closures are the major impediments,” it said.