Namibian tourism up 13.2 percent from 2013

Home Business Namibian tourism up 13.2 percent from 2013

WINDHOEK – The latest FNB/Federation of Namibian Tourism Associations (FENATA) Travel Index states that Namibia’s tourism activities increased by 1.5 percent from the previous quarter on the back of higher seasonal demand as the industry moved towards its peak season in August.

FNB Namibia’s Namene Kalili issued the FNB/FENATA Travel Index, which measures tourism activity in the country.

“The annualized growth was 13.2 percent higher than last year’s figure and although the industry continues to grow through 2014, the growth rate has begun decelerating. This coincided with a drop-off in tourists from Europe and America.

“But fortunately for the industry, the increase in tourist numbers from Asia and Africa more than made up for the drop-off in American and European tourist numbers,” said Kalili.

The FNB/FENATA Tourism Index also indicated that the local currency recovered some lost ground through the second quarter and thus travels from America and Europe were 3 percent more expensive due to foreign currency translation and a further 1 percent on account of tourism inflation.

The local tourism sector continued to adjust to an increasing competitive environment and thus elevated capital expenditure to remain competitive and ward off new entrants from international operators looking to enter the Namibian tourism market.

On the topic of business performance it was said that this moved sideways during the quarter and although there were more tourists, they did not spend as much as the previous quarter.

“However it was a whole lot better than the same time last year,” noted Kalili.

Looking forward, Kalili advised that business performance was expected to strengthen by 10 percent as the industry moved into its peak season with tour, activity and bed and breakfast operators very optimistic about third quarter business performance, which is underpinned by strong increase in tourist numbers during the third quarter.

He added that tourist numbers continued to increase through the second quarter, after a rather disappointing first quarter and also an improvement from the same period last year.

Revenues are expected to improve slightly in the third quarter on account of higher tourists numbers dampened by lower tourists spend. “Hotel, lodge and activity operators pencilled in improved revenue expectations during the third quarter, while revenue expectations in the air charter and vehicle rental space was neutral on account of rising operational costs that compressed margins during the second quarter.

Capital expenditure peaked during the first quarter and has subsequently tapered off in the second quarter and is expected to move sideways in the third,” continued Kalili, who pointed out that demand side issues dominated the second quarter, with fluctuating economic conditions and fewer group tours dampening demand for local tourism.

“Rising input costs were also prominent on the agenda with almost a quarter of the respondents highlighting this as an impediment to the industry’s growth. Of particular concern is the rising electricity, fuel and food costs.

“The industry did express concern about the negative effects that the Ebola outbreak could have on tourism as the international market tends to generalize when contemplating “dangers” in Africa”, concluded Kalili.