27 December 2012

Zimbabwe: Liquidity Challenges Lower Tourism

Victoria Falls Bureau — LIQUIDITY challenges have forced local tourists on holiday in Victoria Falls to cut back on activities amid revelations that while hotels and lodges were performing very well, the activities side was rather sluggish, as locals cut down on extra expenses.

As a result, the majority of locals in Victoria Falls for the festive season have been spending time walking around town or swimming in the swimming pools at the lodges and hotels they are booked in because of the unavailability of cash to spend.

Some tourists have also spent fewer nights in the resort town compared to last year, attributing this to negative financial circumstances.

Zimbabwe's economy is now increasingly reeling from a liquidity crunch, which is deepening even though the multi-currency system has brought exchange stabilisation and macro-economic stability thereby forcing the local tourists to cut back on holiday expenditure such as food and drink and visiting activities and attractions.

In an interview yesterday, Hospitality Association of Zimbabwe president, Mr Tich Hwingwiri said while the hotels were 100 percent full in term of room occupancy, the numbers were not corresponding to figures participating at activities such as bungee jumping, white water rafting and game drives among other attractions offered in the resort town.

"While hotels are full, figures participating at activities are going down. People are mainly focused on accommodation. Some are spending time swimming at the hotels while others are taking walks around town. We also noticed a new trend whereby people have their breakfast at around 10am and they then skip lunch in order to cut on costs," said Mr Hwingwiri.

"Even the night spots are dead because very few people are going out and we understand that the liquidity crunch is affecting them thereby negatively affecting returns in the tourism sector," he said.

Mr Hwingwiri however, said some hotels like Elephant Hills Resort in partnership with some cruise companies were offering lunch cruise between 12 noon and 2pm in a bid to maximise on room occupancy.

"Elephant Hills Resort has been running lunch cruises for its guests. It is one of the innovations that some players in the industry are putting in place to encourage spending from the tourists," he said.

Other players said only sunset boat cruises and tours of the Victoria Falls Rainforest were the two major crowd pullers this festive season.

"We were running full boats from December 23 to today (yesterday). Locals love sun set boat cruises a lot but they have cut back on other activities. On accommodation, our new Deluxe Suite lodge was a hit, even senior Government officials are staying with us," said Mr Ben Tessa, general manager of Khanondo Safaris.

According to white water rafting statistics from Rafting Association of Zimbabwe between December1 and 25, about 1 600 tourists went for the activity last year compared to 961 people this year. Reserve Bank of Zimbabwe governor Dr Gideon Gono last month said the major problem with the country in terms of the liquidity crunch was that the major sources of liquidity and broad money supply in the economy, which comprise export earnings, Diaspora remittances, offshore lines of credit, foreign direct investment and portfolio investments, were not performing well.

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