Tourism sector feels heat of strong dollar

Minister Mzembi

Minister Mzembi

Golden Sibanda Senior Business Reporter
The Zimbabwe Council for Tourism will approach Government to propose incentives and initiatives meant to mitigate the negative impact of the dollar-rand exchange rate disparity on the tourism sector.

ZCT president Mr Francis Ngwenya said yesterday that continued weakening of the South African rand has made Zimbabwe a more expensive destination, resulting in a loss of visitors from that market.

This adds another significant cost to an industry battling to contain or limit the effect of the 15 percent value added tax on accommodation sales to visitors, absorbed fully or partially by operators to avoid passing on the cost, as this would drive away the tourists.

He said Tourism and Hospitality Industry Minister Walter Mzembi has given ZCT audience over the issue and another round table discussion had been set with him to present their multi-pronged strategy, which in the main seeks to address the negative impact of the rand.

The Tourism minister is on record saying appreciation of the greenback against the rand, while not the sole reason for loss of visitors from SA, has made Zimbabwe uncompetitive as a destination.

“For us South Africa used to be and continues to be a big market. We need to find ways of getting that market to come back into Zimbabwe; whether it is by pricing in rand or whether by coming up with packages suitable for that region specifically,” Mr Ngwenya said.

The ZCT president said from a SADC perspective, Zimbabwe was already more expensive due to the predominant use of the green back, part of a wide basket of legal tender used in the country.

Mr Ngwenya said this while addressing media briefing on a number key resolutions made at ZCT’s convention in Victoria Falls last month, including the need to address bad state of roads, duty on tourism vehicles, reducing road blocks, VAT on foreign visitors accommodation and measures to mitigate effect drought on wildlife.

The rand has lost more than 50 percent of its value against the dollar over the last three years on weakening of emerging markets commodity linked currencies and general structural weakness in the economy.

Apart from the strong greenback, there also are logistical bottlenecks at the market’s road port of entry.

“More importantly, the South African market is also a self-drive market and the bottlenecks created at Beitbridge and the quality of roads between Beitbridge, Masvingo and Harare are key in discouraging that market,” he said.

The ZCT president would not divulge the details of what industry sought to propose to Government to ensure competitiveness of the local tourism industry and Zimbabwe in general, as a destination.

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