14 December 2012

Namibia: The Tourism Challenge

THE Ministry of Environment and Tourism (MET) has finally released the 2011 Statistical Report on tourist arrivals in Namibia. Statistics are indicators and not necessarily definitive.

The tourism industry has always been particularly sensitive on how these statistics are interpreted. At times, the raw numbers tend to indicate more success than is actually realised at the till. Nevertheless, the 2011 report adds important information to guide business choices regarding marketing, investment, expansion plans, and product design.

According to the report, Namibia has surpassed the psychological one million tourists mark with a record 1,027,229 arrivals in 2011; with more than 784,500 of these from Africa. This is an overall increase of 4.4 percent over arrivals in 2010.

While overall arrivals to Namibia are up, the higher-spending overseas tourism arrivals are down for 2011. The global economic crisis has taken its toll on overseas tourism arrivals and tourism revenues in Namibia. The increase in 2011 arrivals is due to an increase in arrivals from Africa by 9.8 percent, fuelled in particular by Angolans who arrived 22 percent more than in 2010. Consider this: 361,480 Angolans arrived in Namibia in 2011 and the population of Windhoek in that same year was 322,500.

In general, the bulk of the tourists in 2011 did not use Namibian tourism industry products while on 'holiday' in Namibia. It follows, therefore, that while the 2011 overall arrivals are up 4.4 percent, tourism receipts and foreign exchange generated will likely not reflect an increase.

The 2011 results are not a disaster for tourism in Namibia. Namibian product offerings and standards are still world class and the potential for tourism growth remains high. With the global recession biting in 2008, Namibia recorded a respectable 5.3 percent increase in arrivals. According to the UN World Tourism Organisation (UNWTO), most other countries recorded double-digit decreases in overall tourism arrivals in 2008, while sub-Saharan Africa was the only region in the world to mark a 5 percent increase.

Over 242,000 overseas tourists arrived in 2011. This number is down from a high of over 269,000 in 2010. Arrivals from Germany in 2011 are still the highest of overseas tourists, but this figure is in decline. German arrivals topped 79,721 which is 8.4 percent less than their arrivals in 2010. Tourists from the UK dipped considerably by 16.1 percent, to a bit more than 21,000 arrivals from roughly 25,000 in 2010. Tourists from Spain took the largest dip of European arrivals at 29.8 percent lower.

Arrivals from the USA reflected a 0.7 percent increase over 2010; this increase is statistically irrelevant. But this figure represents the arrival of 17,946 Americans, down from a high in 2008 of 20,856. The significant NTB investment via MCA-Namibia donor funding for increased destination marketing, road shows and other programs in the North American market, as well as the upcoming Adventure Travel World Summit (ATWS) in October 2013, could augur well for notable increases in arrivals from North America (Canadian arrivals in 2011 were 4,844, a decline of 2.5 percent) in the next three seasons.

The financial impact of the South African arrivals must not be overlooked. In 2009, over 285,000 South Africans arrived in Namibia. By 2011, that number declined to nearly 273,000. Many tourism enterprises in Namibia benefit significantly from South African tourists who largely arrive by road. Though our South African big brothers tend be lower-spending, self-contained travellers (they bring everything with them except for the kitchen sink!), they come repeatedly and over generations.

The tell-tale signs of negative impacts of decreased tourism from higher-spending source countries are already visible in Namibia. The private sector has been keenly aware of this negative trend. Lacklustre marketing results at overseas trade fairs have heralded the current situation. The quiet 'restructuring' of several steadfast tourism businesses and tour operators, the delay of expansion plans of various tourism facilities, decreases in pre-bookings of tourism activities are all indicators of pressure on profit margins due to the decline in the higher-spending overseas tourist arrivals.

The NTB reported that annual average occupancy rates dropped in 2011, from 32 percent in 2008 to 29 percent in 2011. Again, statistics can be misleading. The peak tourism season is when nearly half of all tourism revenue in Namibia is generated (July - September). Higher peak season occupancy figures are averaged out by 12 month calculations. Tourists arriving to 'visit friends and relatives' (the largest category of tourist arrivals) tend to make less use of traditional tourism accommodation and activity providers.

Outside-of-the-box strategies and aggressive marketing ideas are needed to increase tourism revenues. Successful tactics can increase occupancies in accommodation facilities, position the Namibian tourism product strategically when Eurozone financial pressures ease, and increase domestic tourism incentives and opportunities.

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