Domestic travellers to drive tourism recovery

14 Jan, 2022 - 00:01 0 Views
Domestic travellers to drive tourism recovery Tourism and hospitality is one of the economy’s low hanging fruits, tipped to grow to a US$5 billion sector by 2025

The Herald

Business Reporter

Recovery of the hospitality industry will hinge on the domestic market in the short to medium term as the global markets are still finding their footing after the Covid-19 pandemic.

Tourism and hospitality is one of the economy’s low hanging fruits, tipped to grow to a US$5 billion sector by 2025 given the country is endowed with vast and exquisite attractions, such as the majestic Victoria Falls, one of the Seven Wonders of the World.

However, the outbreak of the Covid-19 pandemic has negatively impacted progress towards the target.

Listed hospitality firms such as Rainbow Tourism Group (RTG), Meikles Limited and African Sun were badly affected, which reflected in their reduced reported earnings performances.

Some of their facilities temporarily closed on unprecedented fall in demand as the pandemic hit the country in 2020 with travel restrictions imposed across the globe.

Now, market watchers say the domestic market should come to the rescue for the sector and lead the recovery in the short to medium term.

“The sector is forecast to remain muted in the short term as demand from major source markets makes the eventual return. Recovery will hinge on uptick in domestic tourism within this period,” said stockbrokers IH Securities.

Whilst overall performance for the first half of 2021 (1H21) remained depressed from renewed national lockdowns, it was not all doom and gloom with aggregate occupancy levels for the listed hoteliers rising to 24 percent for the six months period to June 2021 versus 19 percent industry occupancy in 2020.

Average daily rates were still trailing 2019 at US$91 attributable to the slump in foreign business, which normally pay in premium rates.

At RTG, occupancy marginally rose to 24 percent during the first half of 2021 in comparison to the same period prior year where it closed at 23 percent.

This marginal growth was seen despite the fact that the group operated for only three months due to the Covid-19 pandemic lockdown restrictions during the first quarter of 2021.

During this period inter-city travel and social gatherings were prohibited. Inter-city travel is a major driver for conferencing business which is a key contributor to revenue generation.

Average daily rate grew by 24 percent to close the period at US$8,395, whilst the revenue per available room grew by 31 percent to US$2,014.

Meikles said the hospitality segment’s operations in Victoria Falls continued to be affected by Covid-19 disruptions to international tourism and travel.

Room occupancy for the half year to September 30, 2021 was 12,89 percent.

On the other hand, African Sun recorded occupancy of 24 percent, for the half year period, a 2-percentage point improvement from the 22 percent achieved in the 2020 comparable period.

This was still lower than the 45 percent that was achieved in 2019 (the last normal trading year) for the same period.

Despite the sluggish performance compared to pre-Covid-19 period, IH Securities says long term prospects have been bolstered by major airlines Lufthansa and Qatar Air amongst others, picking up routes to service within the country.

The growth will also be underpinned by the easing of the Covid-19 induced restrictions while the global vaccination programme is also expected to continue driving the re-opening of world travel as well as domestic tourism.

Rollout of the vaccination programmes and partial return to normalcy in key source markets such as the United Kingdom and United States is expected to bring a new dawn in the fight against the virus and subsequently improvements in the travel and hospitality industry.

“We are cautiously optimistic that the accelerated vaccination programmes around the world and the likely easing of restrictions for vaccinated travellers will contribute to the gradual normalisation of travel.

“In the short-term, domestic travel will continue to drive our recovery,” said African Sun chairman Alex Makamure in 1H21 performance update.

Experts in the sector also see recovery hinged on the ability to adapt to the new normal where digitalisation is fast growing supporting remote working.

These argue that technology is one of the key trends to influence the hospitality sector in 2022 and to keep up, technology developments will continue to support hospitality managers in making their properties more efficient.

“The sudden need for a more flexible way of working has shifted our attitudes to how we live.

“Many have realised the benefits of working from wherever they choose, such as travelling and working, leading to the rise of the digital nomad,” reads a report by

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