HomeOpinion & AnalysisColumnistsGovt in tourism policy inconsistency

Govt in tourism policy inconsistency

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BY TATIRA ZWINOIRA

GOVERNMENT has grossly exaggerated the tourism gross domestic product (GDP) projection for 2025 by about US$4,4 billion revealing policy inconsistency, Weekly Digest can reveal.

In November 2020, the government, in the 2021 budget, detailed plans to create a US$5 billion tourism industry by 2025 anchored on domestic tourism, regional promotion, destination branding and image transformation, and international tourism promotion.

“As the country is gearing for post-COVID-19 recovery, the tourism industry has been proactive in formulating the Tourism Recovery and Growth Strategy to guide the process,” Finance minister Mthuli Ncube said in the 2021 National Budget.

“The strategy, which was launched by President Emmerson Mnangagwa on August 6 2020, seeks to revive and grow the industry while overcoming challenges relating to destination image, connectivity and quality of products and services.

“Revival of the tourism industry is set to achieve a US$5 billion by 2025, anchored on the country’s abundant natural resources, rich cultural heritage and diverse scenery.”

However, in the National Tourism Recovery and Growth Strategy document released three months earlier by the responsible ministry, it projected a 3% contribution to the GDP by 2025 which works out to be significantly lower than US$5 billion.

This is because Ncube during a Parliament pre-budget seminar on November 21, 2020 stated that the GDP for 2020 was just over $1,1 trillion.

“We have a limited budget which is constrained by what we can collect through taxes as revenues and what we can borrow from the market without destabilising the economy.

“Therefore, while it is desirable to allocate resources to almost all areas, it is not easy and you may find that the allocated resources may not be enough to meet your requests,” Ncube said.

“I added up all the requests from the various ministries and departments, and they add up to $1,1 trillion.

“The GDP (gross domestic product) of Zimbabwe right now in 2020 is just over $1,1 trillion and so the budget requests and the size of the economy are equal and therein lies the constraint.”

So, adding the GDP growth rates found in the National Development Strategy One document also released in November of 7,4% for 2021, 5,5% (2022), 5,2% (2023), 5,2% (2024), and 5% (2025), the economy will be worth $1,41 trillion by 2025.

As such, converting 3% of $1,41 trillion to United States dollars at the exchange rate of US$1:81,82 when the 2021 National Budget was released gives us US$517 68 million.

This is noticeably US$4,5 billion less than the 2025 projection for the tourism sector by Treasury.

According to the National Tourism Recovery and Growth Strategy document total tourism export receipts are expected to be just US$571 million this year and US$1,5 billion by 2025.

A projection of US$5 billion was always going to be a tall order considering the effect COVID-19 has had on Zimbabwe’s biggest source markets.

These are the United States from the Americas, South Africa and China all of which are confronted by a second wave of the coronavirus.

Further, those countries have issued travel warnings on Zimbabwe restricting their people wanting to visit the southern African country in light of the COVID-19 second wave. The move will limit foreign currency earnings locally.

“Travellers should avoid all travel to Zimbabwe. If you must travel, talk to your doctor ahead of travel, especially if you are at increased risk for severe illness from COVID-19.

“Get tested with a viral test 1–3 days before your trip, keep a copy of your results with you during travel. Do not travel if your test result is positive; immediately isolate yourself, and follow public health recommendations,” the Centers for Disease Control and Prevention (CDC) wrote on its website concerning Zimbabwe.

The CDC is a globally respected national public health institute in the United States.

The decrease in international travel and the reluctance to travel internationally is also highlighted by the World Tourism Organisation (WTO).

“International tourist arrivals (overnight visitors) fell by 72% in January-October 2020 over the same period last year, curbed by slow virus containment, low traveller confidence and important restrictions on travel still in place, due to the COVID-19 pandemic,” WTO said in its December 2020 World Tourism Barometer.

“The decline in the first ten months of the year represents 900 million fewer international tourist arrivals compared to the same period in 2019, and translates to a loss of US$ 935 billion in export revenues from international tourism, more than 10 times the loss in 2009 under the impact of the global economic crisis.”

WTO added that “data on international tourism expenditure continues to reflect very weak demand for outbound travel. However, some large markets such as the United States, Germany and France have shown some shy signs of recovery in the recent months”.

Zimbabwe Tourism Authority spokesperson Godfrey Koti said Zimbabwe lost US$1 billion as a result of the drop in global tourism.

“In the first eight month of last year there was no activity in the tourism sector and we lost about US$1 billion from the sector,” Koti told Weekly Digest in an interview.

While demand for international travel remains subdued, WTO says domestic tourism continues to grow in several large markets such as China and Russia, where domestic air travel demand has mostly returned to pre-COVID-19 levels.

This shows Zimbabwe’s potential to recover in the tourism sector hinges on domestic tourism at a time prices remain expensive due to taxes and inflationary pressures.

“Locals are very keen to travel, very much willing, however, they meet one challenge, the cost issue.

“Most of the feedback we have received is that it is too expensive to travel in Zimbabwe, especially in comparison with our neighbouring countries which are competitive destinations like South Africa,” travel consultant Pablo Tinashe Chimusoro said recently.

“Going back to the issue of cost, people have given examples of hotels in Victoria Falls pricing over US$$70 per person per night for bread and breakfast. A couple spending two nights, would have to part with US$280 on accommodation alone, this is before we factor in other costs like meals, and activities.”

He said at one point, a price list for a local hotel was charging US$11 for breakfast; a few slices of bread, an egg and a cup of tea.

“The Zimbabwe Parks and Wildlife Management charges around US$5 for conservation fees for each individual entering into the parks, and another fee if you are using a vehicle, US$5 for ordinary vehicles. This is already a US$10 cost that’s being built up to the travel cost,” Chimusoro said.

“If you will be visiting a park like Nyanga National Park, where it’s definite that you can’t exhaust all its main features in one day, then you would have to double the cost.”

The consultant also reported that activities at resorts come at a cost. I will again give an example, a local going to Mtarazi Falls would have to part with US$40 to do a skywalk or US$60 to do the zipline which are offered by Far and Wide.

“Many locals have questioned if it is not possible to lower the prices to encourage more people to participate in such activities.

Most local tourists just visit the site to see the features, and can only cheer those who have deeper pockets,” Chimusoro said.

“We cannot ask operators to lower their prices, without asking government to assist at policy and regulatory level. Taxes, levies, licence fees which government and regulatory authorities charge are a cost which operators bear, and end up passing on to consumers.

“If these costs are high, then a high cost is passed on to the local tourist, who may not afford a bigger travel budget. Government has to help the tourism sector by making considerations on licence fees, taxes and levies.”

Koti said that since domestic tourism would be the lifeline of the sector as a whole going forward for the short term due to international events it was important to review the cost structures.

“What we are trying to come up with is a sustainable method in the pricing issue but there are also issues that are beyond our control which are macroeconomic issues. We talk of just the general disposable income it has to be in tandem with the growth of the economy,” he said.

“Right now, there is no economy that is growing; all the economies across the world are shrinking because of this virus.”

He said thanks to negotiations with government in the last quarter of last year to reduce some taxes in the tourism sector prices within the hospitality and parks industries went down leading to an uptick in domestic travel.

Another challenge in promoting domestic tourism is shrinking disposable incomes.

Consumer bodies such as Consumer Council of Zimbabwe and National Consumer Rights Association have bemoaned the depressed disposable incomes.

Just recently, ZimStat reported that the total consumption poverty line (TCPL) for one person stood at $4 670 in December 2020 translating to $23 350 for a family of five.

Yet, civil servants earn monthly salaries of between $14 000 and $20 000 showing that the majority of Zimbabweans are barely making ends meet to afford luxuries such as domestic tourism.

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