Players in the local tourism industry have resolved to adopt a "rand-based" pricing system to cushion their businesses from the prevailing cash crisis. In the context of weakening regional currencies, the use of the strong United States dollar has negatively affected tourist arrivals as the country is viewed as an expensive destination. Recent reports indicate that some tourists wanting to visit Victoria Falls, for instance, now prefer flying into Livingstone in Zambia from where they undertake tourism activities and only cross to Zimbabwe as Zambian clients - prejudicing the country of the precious earnings.
Last week Finance and Economic Development Minister Patrick Chinamasa revealed that the approach (rand-based pricing system) has been agreed upon by the Government, players in the hospitality sector and the Reserve Bank of Zimbabwe.
"In order for tourism industry to cushion itself from the current liquidity and cash crisis, it is highly recommended that the sector commences the use of the Rand Based Pricing System as agreed upon between the tourism ministry, the hospitality industry, and the Reserve Bank," said Minister Chinamasa in his mid-term fiscal policy review statement on Thursday.
In an interview yesterday, the Catering Employers' Association of Zimbabwe immediate past president Mr Joe Kahwema said what Minister Chinamasa announced was something that was already obtaining in the hospitality sector.
"Anybody is allowed to charge in any of the allowable currencies. If they (tourists) have the rand, for example, I cannot turn them away, I will simply collect the rand and rate it using the prevailing daily exchange rate against the US dollar.
"The reason why hotels in Zimbabwe are not competitive is not about the currency issue but the input costs. The input costs in Zimbabwe are higher compared to South Africa and that has made hotels here uncompetitive," he said, adding that this was also the reason why Rainbow Tourism Group's Beitbridge hotel closed down because it could not compete with the rand rate hotels in Musina.
Minister Chinamasa said Zimbabwe's tourism receipts were averaging over $700 million per annum and the sector has potential to contribute to alleviating the liquidity challenges in the economy. He said the first quarter of 2016 recorded an estimated 450 572 tourist arrivals, up from 387 557 during the same period last year, representing a 16 percent growth.
"All source regions recorded growth except for Oceania. On the downward side, during the first half of 2016, two key Beitbridge hotels — Holiday Inn Express and Rainbow hotel — were closed down in the border town. These two hotels accounted for about 57 percent of rooms in Beitbridge."
Minister Chinamasa also announced that for Zimbabwe to fully exploit its natural resources and tourism sites for the benefit of the economy, the Government was already implementing the National Tourism Policy promulgated in 2014 with the National Tourism Master Plan expected to be completed this month.
"The Master Plan provides an organised and structured framework for tourism development and promotion. Benchmarking exercises were carried out in February and June 2015 in South Africa and Tanzania, respectively. "Field visits to identify Tourism Development Zones were finalised and identification of provincial projects was undertaken during July 2016," he said.
Minister Chinamasa also highlighted that the Special Economic Zones Bill, which has been approved by Parliament and is awaiting Presidential assent, would boost tourism through implementation of the designation of Victoria Falls-Hwange-Binga-Kariba tourism corridor as a special economic zone.
Zimbabwe participated in some "must attend" tourism fairs that provide an opportunity to market the country as a safe tourist destination, endowed with natural wonders, a rich cultural heritage, and investment opportunities. With the rise of globalisation, he noted, every country faces stiff competition from others as they compete for tourist arrivals, and investment.
"The competitive edge that different tourism markets struggle for is a function of how positively or negatively, as the case may be, a nation's brand is perceived both at home and in the international community. "Consequently, the Government in collaboration with the relevant stakeholders is crafting a Nation Branding Concept," he said.
Source: Zimbabwe adopts rand (13/09/16)