19 February 2013

Namibia: Tough Quarter Expected for Tourism in Namibia

AIR Namibia's ongoing struggle with delayed flights is one of several factors cited by tourism operators that might hamper the performance of the tourism industry during the first quarter of 2013.

Air Namibia's lack of communication and customer care in dealing with delayed flights cause the loss of credibility according to 25% of the respondents in FNB and Fenata's latest tourism survey, analyst Namene Kalili said yesterday.

"In addition, there is still concern over the falling load factors on international flights and the cost implications thereof over the medium to long term," Kalili, FNB Namibia's head of research and competitor intelligence, said. Kalili compiles the FNB and Federation of Namibian Tourism Associations (Fenata) Tourism Index.

The current world economic climate is still affecting tourist demand, Kalili said. About 55% of operators surveyed in the latest FNB & Fenata Tourism Index complained about low demand from source markets, he said.

"The sector expects poor business performance for the first quarter of 2013 when compared to the same period last year," he said.

Revenue is expected to drop compared to the first quarter of 2011, when cash cash balances averaged about N$307 million. Fewer tourists and less money spent per tourist will drive weaker revenues, he said.

"FNB bank data shows also shows that the first quarter historically attracts budget tourists that spend 19% less than tourists that come in other quarters," Kalili said.

During the first quarter of 2011, 35 000 international arrivals through Hosea Kutako International Airport were reported. This year, the first quarter should see less arrivals, Kalili said.

"This stems from very weak sentiments from the airlines, who expect very poor passenger numbers during the first quarter from the fewer flights from Europe and credibility issues surrounding the local airline.

This obviously affects operators who depend on foreign tourists such as the accommodation subsectors," Kalili said.

According to the Hospitality Association of Namibia (HAN), about 55% of people who use the services of the hospitality industry during the first quarter of every year, come from abroad.

Kalili said accommodation, hotel and trophy hunting operators normally expect their businesses' performance to dip during the first quarter, as it traditionally is regarded as the "low season".

"Surprisingly, the hunting operators expect the same customer numbers as last year, while activity and car rental operators expect increased customer numbers," he said.

Kalili said activity operators were the only optimistic ones regarding the first quarter.

"And understandably so, given the hype surrounding the Adventure Travel World Summit [in Namibia] later on in October".

He said other factors contributing to operators' pessimistic outlook were unfair competition within the tourism industry, as well as government bureaucracy.

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