Rand decline affected Zimbabwe tourism in 2014

South African Rand

AN aggressive growth of the country’s tourism industry reported in Zimbabwe since dollarisation in 2009 ebbed during the first half of 2014, with arrivals from South Africa, the main source market, retreating by a massive 49 percent, dragged by a rand that has battled to gain traction against the greenback. The US dollar is the main medium of exchange among a basket of multi-currencies introduced by Harare in 2009.

During a period when total arrivals fell by one percent to 860 000 from 867 995 at the same time last year, arrivals from South Africa declined, as the South African rand, on losing streak for a long time, continued on a downward spiral. About 86 percent of tourists into Zimbabwe come from Africa, the bulk of them from South Africa. “It is now costing South Africans more to come for holidays in Zimbabwe,” said independent economist, John Robertson.

south african rand

“The rand has weakened by 30 percent,” he told the Financial Gazette’s Companies & Markets (C&M). The flow of South African tourists into Zimbabwe has also been dealt a blow by disturbances in wildlife rich conservancies, where top ruling ZANU-PF chefs have controversially allocated themselves vast tracts of land and turned to game poaching.

Some ranches and conservancies have been destroyed,” said Robertson.“It is now difficult to attract bookings in those that are still remaining, such as the Save Valley Conservancy. We spoiled our own tourism industry.” About 239 000 South African tourists arrived in Zimbabwe during the first half of 2014 from 357 00 last year, according to the Zimbabwe Tourism Authority (ZTA). The South African Rand, which traded at about 10:1 against the greenback most of 2009, has been failing to keep its value against the US dollar. It has traded at between US$1 to R11 and US$1 R13 for much of this year, with the rate declining to as low as US$1 to R14 in some cases. As a result, a growing number of supermarkets, clothing shops, transport operators and other businesses have been avoiding the Rand, which reached a five year low this year, preferring the greenback.

And for those customers and consumers who often only have access to the South African rand, it has been a nightmare. The tourism industry has been equally affected. “In a turn of trends from the four percent decline in the first quarter of 2014, the first half of 2014 registered a one percent increase in arrivals,” the ZTA said in its trends and analysis of the industry released recently.

“The slight positive growth was mostly driven by the increase in arrivals from Europe and the Americas, with a significant pulling down effect by Africa and Asia. The structure of the market shares has remained the same with mainland Africa dominating. Arrivals from mainland Africa registered 745 566, down from 750 301 in 2013 representing a one percent decline. It should be noted that in terms of market share, the region still commands the bulk of arrivals (86 percent) into Zimbabwe, therefore a marginal decline from it triggers a huge slow-down in the overall arrival figure.”

“The decline in Africa largely hinges on South Africa which has lost a total of 118 228 arrivals in 2014. Generally, the market share for South Africa has been on a downward trend, having dropped from 70 percent in 2010, 64 percent in 2011, 46 percent in 2012 and 30 percent 2014,” said the ZTA.

Arrivals from the Americas increased by 18 percent, while Asia declined by 61 percent. Europe registered one of the strongest growths at 13 percent, although in government, authorities still felt that without travel warnings, this figure could be higher. “Travel warnings are still there but in a subtle form,” said Walter Kanhanga, deputy minister at the Ministry of Tourism and Hospitality Industry. “However, we have seen some very positive steps. Some of these travel warnings are falling away,” he told C&M.