FNB index records tourism improvements

December 12, 2013, 9:38am

The weakening local currency and the increased occupancy rates in the accommodation segment are the factors behind the improvement of the tourism sector, according to the First National Bank/Federation of Namibian Tourism Association (FENATA) tourism index.
Last year during the same period, the November tourism index report states, measure of touristic activities in the country was back on the front foot, climbing to 10.4% (this year) from 6% during the previous quarter,  despite international arrivals failing by 20% from the same period last year.

The local currency has lost 21% of its value to the Euro and US dollar, which makes travelling cheaper to Namibia for Euro and US dollar economies. However, the weakening of the dollar has not increased international arrivals at all, as they have decreased by 19% while international flights have reduced by a greater margin, hence the load factors that are down by 10%.

“Despite fewer international arrivals; occupancy rates have increased by nine percent year-on-year due to an increased occupancy from local tourists. Bed nights sold to local tourists have increased by 15% year-on-year. There has also been an increased occupancy of conference facilities and a marginal increase in bed nights sold to business travellers.

“Furthermore, the overall business performance within the tourism sector has improved business during the third quarter of this year. The tourism index reports, 66% of the respondents have since indicated improved business performance over the past quarter, up from 55% during the same period last year. Hotel, lodge and tour operators were in fact very upbeat.”

Now in the fourth quarter, business performance is expected to remain the same as the preceding quarter with the number of operators expecting good business, despite the declining performance.
“The increased business performance did not lead to a positive revenue outturn as fewer
businesses experienced higher revenue inflows as a result of the number of tourism operators with poorer revenue inflows increasing during the current quarter. Operating cost has been a major problem and almost half the respondents have complained about high and rising costs.”

However, revenue within the tourism sector is expected to improve during this fourth quarter, with the hotel, lodge and tour operators being the most optimistic for future revenue.

Although the occupancy rates have indicated an elevated number in this quarter, establishment owners have reported fewer tourism numbers, while others such as lodges, hotels and tour operators have reported increased tourist numbers over the same period. However, it is not expected to continue into the coming quarter as tourist arrivals are expected to change from mostly good to fair; a view mostly shared by guest farms, guesthouse and rest camp operators.

In the past three months, employment opportunities have increased, with the hotel, lodges and tour operators reporting higher employment figures and it is expected to remain at slightly improved levels over the next quarter (first quarter of 2014).