Tourists take a breather in third quarter
Bed occupancy rate and passenger arrivals declined by just over 10% in July, August and September last year, the period which is generally regarded as peak season for northern hemisphere travellers.
FNB Namibia and Fenata this week released the latest tourism index, showing that bed occupancy rates and passenger arrivals declined by 10.5% compared to the third quarter in 2014.
Daniel Kavishe, Market Research Manager at FNB Namibia said the performance, albeit expected, would not continue into the fourth quarter as pass through effects of the weakened Rand supported businesses within the industry. He added: “The currency index improved (weakened) by 9.1% at the end of September 2015 which could potentially aid the lackluster performance of the first semester of 2015.”
Kavishe stated that FNB further introduced a Tourism Sentiment Index which tracks overall responses within the market regarding current and future expectations. He elaborated: “According to the index, sentiment grew to 1.85 at the end of the third quarter compared to 0.68 in the same period last year. 47.0% of tourism vendors cited acceleration in overall business performance as they recorded higher sales numbers. Tourist activity further increased by 43.3% during the period under review according to various tour operators. The reverse in trend will likely lift the slump within the sector.”
In the index it is also mentioned that with an increase in demand, prices at lodges and restaurants were adjusted upwards by 17%. This further ushered an increase in capital expenditure by 47.1% of respondents. 24.7% of the respondents further increased their staff capacity in order to meet the demand in the market. The view in the market was that the weakening currency spiked interest of several tourists from the Unites States and Europe who were keen to enjoy the various tourist packages that were on offer at both lodges and game reserves.
Looking forward FNB and Fenata advised that the final quarter of 2015 was expected to record positive numbers. Said Kavishe: “According to 61.0% of the vendor’s interviewed, tourist numbers are expected to increase across the board which will have a ripple effect on sales and revenue. 26.1% of the businesses are confident that the fourth quarter would prove to be the best quarter of the year in terms of business performance. Overall improvement in service delivery in the sector is expected to aid the outcome of the December tourism season as well.” Further, a recent international report on tourism indicated that most of the global tourists come from Asian countries. This bodes well for several African countries which continue to offer superior experiences for the global tourists.
However, the index also shows that the tourism sector continued to face challenges which unfortunately derailed the operations of several tourism vendors in the third quarter. According to several reports, flights from the local airline were grounded due to technical difficulties. One respondent stated that numerous flights were mostly empty with Air Namibia having to offer up to 50% discount to fill up their seats. Some vendors responded by saying that this damaged the airline’s reputation.