Tourism industry receives stimulus package
Government has committed to provide a stimulus package to the tourism sector as one of Zimbabwe’s key economic sectors that was hardest hit by the COVID-19 Pandemic.
This comes as 2020 is projected to be a very difficult year for the tourism business as countries including Zimbabwe have gone into lockdown, whilst numerous business events have either been cancelled or postponed and flights have been suspended for a lengthy period of time.
The stimulus package is a package of economic measures put together by a government to stimulate the floundering economy with the objective to reinvigorate the economy and prevent or reverse a recession by boosting employment and spending.
Tourism minister Mangaliso Ndluvo held a meeting on the tourism stimulus package with the country’s tourism industry players at the ministry of Environment, Tourism and Hospitality at Kaguvi building in Harare yesterday.
The purpose of the meeting was to update the sector on a raft of stimulus measures from the government to the tourism sector is a culmination of the various consultations which were held with the industry.
“Whilst for Zimbabwe an upturn in arrivals was expected in 2020, anchored on aggressive destination image promotion and marketing, the COVID-19 pandemic outbreak which started in November 2019 is expected to further dampen travel and tourism in Zimbabwe and indeed globally,” Ndlovu said at the meeting.
Zimbabwe experienced a dip in tourism arrivals in 2019 which saw the sector experiencing an 11% decline in tourist arrivals from 2,579,974 received in 2018 to 2,294,259.
These were largely due to destination image issues driven in part by a concerted deliberate negative messaging about Zimbabwe and its key destinations.
However, the tourism ministry has projected a three-point scenario for tourist’s arrivals.
“The first is the best case (optimistic) scenario which assumes a 30% decline in arrivals and is based on the assumption that the outbreak will be contained by the second half of the year.
“The Middle of the Road Scenario assumes a 60% decline in arrivals resulting from COVID-19 and this may see us registering approximately 920 000 tourist arrivals by year end.
“The last is obviously the Worst-Case Scenario which assumes an 85% decline in arrivals to close the year at 350 000 tourist arrivals,” Ndlovu said.
Ndlovu expressed that this was predicated on the assumption that the current status of restrictions on International travel persists until year end especially in Zimbabwe’s major source markets of Europe and the USA.
“We also anticipate a consequent fall in tourism business, with the country set to lose between US$500 million – US$1.1 billion in potential tourism revenue in 2020 from the projected revenue of US$1.4 billion,” Ndlovu said further.
The government is currently tasked by the critical role to contain the COVID-19 pandemic and Ndlovu was grateful for the support shown through the provision of the stimulus package.
“I am pleased to advise the tourism sector stakeholders that following their detailed submissions to Government, the President and Cabinet have approved the Tourism Sector Support Scheme,” Ndlovu said at the meeting.
The support scheme includes six key things which are, a Government Guarantee Facility of ZWL $500 000 000 to assist the Tourism Sector to access working Capital Loans from banks.
The Tourism Revolving Fund to see increased investment in tourism facilities. A seed capital of ZWL $ 20 000 000 was extended towards the Fund.
Waiver of Value Added Tax on Domestic Tourism. The government has therefore approved a waiver of Value Added Tax payable by domestic tourist for accommodation and services.
Deferment of Liquidation of Foreign Currency paid by International Clients. The government has approved the deferment of the liquidation of foreign currency paid by international clients who could not travel due to the pandemic.
Support for Zimbabwe Tourism Authority. Currently the ZTA is funded largely from the 2% Levy charged on tourists travelling into the country. ZTA will be afforded substantial support to ensure that the organization is capacitated to fully discharge its mandate.
Payment of Money owed to Tourism Operators by Various Government Institutions. In addition, government has also undertaken to settle all long overdue bills with the Tourism Sector players for services already rendered.
Ndlovu highlighted that opportunities are evidently abundant in the sector and have to be unlocked by innovative and enterprising youths to create the competitive edge.
” We are working to conclude our tourism recovery and growth strategy and we have no doubt that our renewed focus on domestic tourism driven by improved domestic connectivity (road, rail and air) and enhanced competitiveness; international arrivals driven by robust destination marketing and promotions; and massive tourism infrastructure development driven by domestic and international investment to plug the infrastructure gap in the sector,” Ndlovu said.