4 December 2012

Namibia: 'Mild' Christmas for Tourism Industry

OVERALL, the local tourism industry expects business to only pick up mildly in the last three months of the year as it continues to be plagued low demand, especially from US and European visitors.

Although self-catering establishments, hotels and guesthouses at the coast and in the Khomas regions have high expectations for the festive season, tour operators display a weak sentiment, the latest Tourism Index by FNB Namibia and the Federation of Namibian Tourism Associations (Fenata) indicates.

The index, released yesterday, said revenue is expected to drop in the fourth quarter of 2012.

“The tour operators sentiment are significant, since they have downstream implications on the accommodation sub-sector, which needs to spend a lot more money on marketing to fill the gap. Therefore the accommodation sub-sector was equally pessimistic about business revenue, particularly lodges and hotels which showed signs of weak sentiments and therefore reason for caution remains within these sub-sectors.”

Overall tourist numbers are expected to increase slightly during the fourth quarter, FNB/Fenata said.

“But these are mainly cost sensitive local and South African travellers and therefore B&B [bed and breakfast establishments] and self-catering establishments expect to cash in on this influx. This was more evident at the coast.”

Tour operators, lodges and hotels expected fewer tourists, particularly those from European source markets and who typically spend a lot more cash than the local and regional tourists.

“Although leisure travel from European markets continues to improve, very little is expected to filter down to the local market as Namibia is not a popular Christmas holiday destination. The American market continues to under perform, with austerity measures suggesting increasingly uncertain US economic recovery, and hence less leisure travel from the US source market,” FNB/Fenata said.

Low demand continues to plague the industry, with 50% of the respondents complaining about low demand from the source markets, FNB/Fenata said. Escalating operational cost was also cited as a major issue, particularly the cost of fuel.

“Looking forward, many businesses expect a mild improvement in business performance for the fourth quarter,” FNB/Fenata concluded.

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