Covid-19 costs tourism US$1bn
Farirai Machivenyika and Ishemunyoro Chingwere
The country’s tourism sector could lose up to US$1,1 billion due to Covid-19 travel restrictions that have crippled the travel industry.
The projection was spelt out by Environment, Climate, Tourism and Hospitality Industry Minister Mangaliso Ndlovu when he addressed a news conference after meeting tourism players in Harare yesterday.
The meeting with tourism players was meant to discuss modalities of the $500 million Bank Guarantee Facility that Government has provided to help the sector recover. The facility is meant to assist the tourism sector access working capital loans from banks and insulate their businesses from the effects of the pandemic.
Covid-19 came at a time when the local tourism sector was already in a spot of bother as evidenced by a 11 percent decline in tourists arrivals for 2019 compared to the same period in 2018.
Detailing the projection, Minister Ndlovu said Zimbabwe stands to lose up to US$1,1 billion if the current global travel restrictions persist up to year-end.
The worst case scenario is based on the assumption of an 85 percent decline in arrivals to close the year at 350 000 tourist arrivals.
The best case scenario could see Zimbabwe losing 30 percent in tourist arrivals and end the year with 1,6 million arrivals. This scenario works on the assumption that the pandemic will soon be contained and travel restrictions lifted by second half of the year.
“The second is the best case (optimistic) scenario which assumes a 30 percent decline in arrivals and is based on the assumption that the outbreak will be contained by the second half of the year,” said Minister Ndlovu.
“This may see us registering 1,6 million arrivals by year-end. The middle of the road scenario assumes a 60 percent decline in arrivals resulting from Covid-19 and this may see us registering approximately 920 000 tourist arrivals by year end.
“The last is obviously the worst case scenario which assumes an 85 percent decline in arrivals to close the year at 350 000 tourist arrivals.
“This is predicated on the assumption that the current status of restrictions on International travel persists until year end especially in our major source markets of Europe and the US.
“Overally, we also anticipate a consequent fall in tourism business, with the country set to lose between US$500 million to US$1,1 billion in potential tourism revenue in 2020 from the projected revenue of US$1,4 billion,” he said.
In addition to the Government guarantee bank facility, Government has approved the establishment of a Tourism Revolving Fund and has injected seed capital of $20 million for tourism businesses.
With international tourism expected to be slow to recover, Minister Ndlovu also announced a waiver of Value Added Tax payable by domestic tourist for accommodation and services.
This, he said, “. . . is envisaged to significantly lower the cost accessing tourism facilities by locals,” and thus increase tourism products uptake.
Government has also approved the deferment of the liquidation of foreign currency paid by international clients as well as making an undertaking to settle all its overdue bills with the tourism sector players.
Association of Zimbabwe Travel Agents chairman Mr Ignatius Matungamire, thanked Government for the $500 million but urged Government to provide a grant for their members.
“We acknowledge and appreciate what Government has agreed to give us, this $500 million as a guarantee but the travel sector is at a standstill right now and it hasn’t been operating well before Covid-19 because airlines withdrew from the market so what we are saying is that the travel industry and the travel agencies are not operating at all and there is no revenue coming in so besides what the minister has offered we would have been in a better position if part of this money had come in the form of a grant like what has happened in the South African market,” he said.
Zimbabwe youth in tourism’s director general of Mr Stewart Mutizwa said: “Given the contagious nature of the virus it is crucial that we have appropriate health and safety policy in place especially for hotel business that rely on person-to-person interaction.
“In this context hoteliers should promote proper health and safety policy measures, which may include the following, self-service payment systems, orders through mobile applications, non-contact service and order delivery and lastly can you set us a certain percentage for youths in this tourism recovery plan.”
Safari Operators Association of Zimbabwe president Mr Emmanuel Fundira also welcomed the Government guarantee facility.
“The $500 million is a welcome development. My observation is that Government has to work closely with financial institutions to ensure that the terms and conditions of these facilities are accessible,” Mr Fundira said.
He added that they have been engaging international partners like the Safari Club International where
members properly registered can prove that they are involved in conservation so that they could get a US$5 000 grant.
“On top of that the Americans themselves, our clients and our main source market have gone even further to mobilise US$100 million to support conservation to ensure that we can continue maintaining our facilities and we can continue paying our staff,” he added.
Mr Kumbi Chiweshe, who represents the Zimbabwe Tour Operators Association, called on Government to come up with policies that would improve disposable for ordinary citizens to boost domestic tourism.
“If you are thinking of a stimulus for the industry there is need for a thought to be given to financially relieve all households . . . so that they have disposable income to spend out there. In our rush to survive as an industry there might be need to capacitate the market so that they can have something to spend out there,” Mr Chiweshe said.