Recapitalisation of tourism sector to quicken

The decision by the Reserve Bank of Zimbabwe (RBZ) to allow players in the tourism and hospitality industry to retain 100 percent of their foreign currency earnings, is anticipated to speed up recapitalisation of the sector, according to players in the industry.

The measure is a timely intervention as it comes at a time when the tourism and hospitality industry is at its lowest following a serious battering by the Covid-19 pandemic since March 2020.

Covid -19 reduced the country’s international arrivals to 1991 levels as 2020 recorded a 78 percent drop in tourist arrivals while hotel room occupancy levels fell from 44 percent in 2019 to a national average of only 19 percent in 2020.

The plunge was mainly a result of the fall in demand for accommodation from both domestic and foreign clients due to the pandemic.

In a bid to alleviate the menacing challenges in the sector RBZ Governor Dr John Mangudya through the Monetary Policy Statement (MPS) on Monday, indicated that tourism and hospitality industry players were now allowed to retain all of the earned foreign currency.

This is to permit for quick recuperation of this critical sector of the economy.
“In order to respond to the adverse effects of Covid-19 on the tourism sector, which was hard-hit by the pandemic not only in Zimbabwe but the world over, with immediate effect, players in the tourism and hospitality industry shall retain 100 percent of their foreign currency earnings to allow them to quickly recapitalise and procure the necessary goods and services required by tourists and travelers,” said Dr Mangudya.

Tourism and Hospitality Industry Minister Mangaliso Ndlovu, lauded the new policy by RBZ highlighting that hotels, lodges, and restaurant proprietors were elated about the Government interventions this year, starting with the decision to relax Covid 19 lockdown measures.

He said the 100 percent retention policy by the RBZ would bolster the industry particularly in the revival of operations across the sector.

“Industry is appreciating the new policies starting with the lifting of the quarantine because it was affecting the inbound volumes (tourists) quite significantly.

“Tourism industry has always highlighted the need to retain more forex, but it is now more critical because we are entering a phase where they are recapitalising and almost everything that is required to recapitalise is acquired in foreign currency.

“Players are so excited, particularly when they saw that their issue has been presented by the central bank, this is a major boost for the industry and I have spoken to a number of them they are very excited and encouraged by that,” said Minister Ndlovu.

Hospitality Association of Zimbabwe (HAZ) vice president, Brian Nyakutombwa, highlighted that the move avails an opportunity for hotels to bring the business back on feet.
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“We are happy because that move is a direct response to what we have been lobbying for as an industry. Now that the 100 percent policy is now here, we would want to thank the Governor for coming up with that, it is an opportunity to use and attend to some other issues that need attention like to reequip, refurbish, restocking and meet other various obligations, this should create latitude for the industry at large, it is like we have been given a windfall that will create an advantage as far as financial capacity is concerned, it has come in handy for industry players,” said Nyakutombwa.

The UNWTO’s scenario analysis indicates a range of 30-78 percent growth in international tourist arrivals for 2022, which would still register at 50-63 percent below pre-pandemic levels.

According to UNWTO World Tourism Barometer 2022 issue, rising rates of vaccination, combined with easing of travel restrictions due to increased cross-border coordination and protocols, have all helped release pent-up demand.

Africa saw a 12 percent increase in arrivals in 2021 compared to 2020, though this is still 74 percent below 2019 levels.

Worldwide lately, the hospitality industry had turned to rely more on domestic tourism
in order to remain afloat and generate earnings from the domestic market
Domestic tourism has shown positive signs in many markets since people tend to travel
closer as travelers go for ‘staycations’ or vacations close to home.-eBusiness Weekly