Windhoek
The second quarter tourism Index by FNB Namibia and the Federation of Namibian Tourism Associations (FENETA) report reveals that the tourism sector is still facing some headwinds as tourist numbers decline within the Namibian market.
The Travel Index declined, as indicated by airplane plane load factor, which declined by 11.6 percent and bed occupancy rate, which only increased by 3.2 percent, lower than the average quarterly growth of 13.8 percent. The third proponent of the Travel Index, the exchange rate index, had shown a 1.3 percent strength during the quarter, but seemed to have little to no bearing on overall Travel Index.
Figures released from the industry survey were discomforting. Business performance during the second quarter was down, with most of the responses indicating that business was at best fair with 35.3 percent mentioning that business was poor to very poor, as compared to the same period in 2014. This was largely due to the drop in tourist numbers of which 55.3 percent of the respondents stated was dismally poor compared to the market expectations.
Revenue received by the industry has been dwindling according to the survey. Of the respondents 36.2 percent stated that the overall revenue was positive, but more respondents stated that the results were unsatisfactory.
Employment numbers during the second quarter edged slightly higher to cater for the additional conferences and the tourism expo that took place during the period. Of the managers within the sector 27.0 percent had to employ workers to cater for the market at the time, but additionally to prepare for the third quarter activities.
Growth in capital expenditure has been on a decline, with most managers quoting “cost control” for the period to ensure that maximum possible returns given declining revenue. Revenue over the past quarter was very poor, according to 27.0 percent of the managers surveyed. Only 3.2 percent of the market stated that revenue had increased beyond their actual expectations.
Future expectations within the market are slightly positive. In terms of overall business sentiment, 31.5 percent of the managers expect business in the third quarter to be good. This is 11 percent lower than expectations within the market during the same period last year. Revenue projection indicates improvements as well for the year, with 40.95 percent expecting revenue to increase during the third quarter. This is 53 percent lower than market sentiment during the same period last year.
The new smoking legislature has had an impact on the tourist numbers within various centres across the country. According to information from a few gambling houses, lower customers have been recorded, as clients look for alternative venues where they can smoke and gamble. Surveyed results further indicate that there is an anticipated growth in services offered to the high end, higher spenders of the market, as opposed to the lower to middle income segments. According to the lodges and games reserves managers, high spenders – although few – offer more value per customer than trying to meet the demands of the masses.
Still an area of concern is the Ebola pandemic. Despite Ebola having a zero incidence rate in Namibia and concerted efforts for the various tourist associations to ensure the rest of the world that there is no Ebola in Namibia, tourist bookings declined, citing fears of the disease’s proximity to the region.
Coupled with the hunting season, another factor could bring about good performance in the third quarter, namely Fly Africa. Despite their flights being brought to a halt due to matters of licensing, their presence could lead to an improvement of international arrivals, specifically within the region. If the cheap flights are packaged properly, international arrivals could possibly increase, thus improving tourism numbers.