THE Tourism Business Council of Zimbabwe (TBCZ) has warned that soaring fuel prices are already putting pressure on the country’s tourism industry, with workers likely to demand higher wages amid a rising cost of living.
Last week, the government raised fuel prices to US$2,17 per litre for petrol and US$2,05 for diesel, up from US$1,77 and US$1,71, respectively, citing global supply pressures linked to geopolitical tensions in the Middle East. The sharp increases have made Zimbabwe’s fuel among the most expensive in the Southern African region.The fuel price increase has already triggered immediate adjustments, including a 10% rise in bread prices, while other essential goods have remained stable for the time being.
TBCZ president Clive Chinwada said the tourism sector “remains highly price-sensitive and internationally competitive”, and warned that rising fuel costs are cascading into broader operational and employment expenses.
“The increase in fuel prices is already cascading into broader cost-of-living pressures for employees. This is expected to drive increased demands for salary adjustments,” he told NewsDay Business.
Chinwada said fuel is a significant cost driver, adding that the tourism value chain will not be spared by the recent price hikes of fuel.
“So, like all economic sectors, we anticipate and are beginning to see changes and increases in the cost of inputs. This presents a dual cost burden on operators, who must now absorb both rising operational costs and growing employment-related expenses,” he said.
“Operators are often locked into forward bookings priced months in advance, limiting their ability to adjust rates without risking cancellations or loss of market share to regional competitors.”
Chinwada further warned that margins will be squeezed, as some costs cannot be immediately passed on to customers.
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“For instance, the bulk of business into Victoria Falls is on contracted rates, which contracts cannot be renegotiated immediately,” he said.
“Safari and tour operators are experiencing immediate cost increases across all mobility-related activities, including guest transfers, supply chains and field operations. These costs were not provisioned for in existing pricing structures.”
Chinwada requested short-term stabilisation or relief measures to cushion the tourism sector from fuel price shocks.
These include targeted support mechanisms for tourism operators to preserve competitiveness and sector viability, like special duty-free rebated fuel supplies at identified locations.
“It is, therefore, critical that emerging cost pressures are addressed in a coordinated and timely manner.”
On Tuesday, Cabinet considered the option of increasing the ethanol blending of petrol from the current E5 to E20 level with a view to reducing the pump price of petrol in the local market.
It said appropriate refinements of the options are underway, “and the necessary fuel price adjustments will be communicated in due course.”
