Zimbabwe Zimbabwe Zimbabwe-A W Zimbabwe-A World of Wonders 1 Presentation by Hon Rtd Brig. General....

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Zimbabwe Zimbabwe Zimbabwe-A Zimbabwe-A W World of Wonders 1 Presentation by Hon Rtd Brig. General. W. E. Kanhanga (MP) Deputy Minister of Tourism and Hospitality Industry Contribution of the Tourism Sector to Economic Development

Transcript of Zimbabwe Zimbabwe Zimbabwe-A W Zimbabwe-A World of Wonders 1 Presentation by Hon Rtd Brig. General....

Page 1: Zimbabwe Zimbabwe Zimbabwe-A W Zimbabwe-A World of Wonders 1 Presentation by Hon Rtd Brig. General. W. E. Kanhanga (MP) Deputy Minister of Tourism and.

ZimbabweZimbabwe

Zimbabwe-AZimbabwe-A W World of Wonders

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Presentation by Hon Rtd Brig. General. W. E. Kanhanga (MP)

Deputy Minister of Tourism and

Hospitality Industry

Contribution of the Tourism Sector to Economic Development

Page 2: Zimbabwe Zimbabwe Zimbabwe-A W Zimbabwe-A World of Wonders 1 Presentation by Hon Rtd Brig. General. W. E. Kanhanga (MP) Deputy Minister of Tourism and.

The Context of Tourism • Tourism is classified under Value Addition and

Beneficiation Cluster in Zim Asset.

• Tourism has great potential as a quick-win to fix economic challenges we are experiencing.

• Indeed, Tourism is an economic ranked third pillar from Mining and Agriculture sectors.

• It has great potential to contribute immensely to:

A) Revenue generation, B) Employment creation and (currently at 300 000 but we

want to increase to 400 000 by 2015)C) Poverty alleviation (Through Community Based Tourism

Enterprises (CBTEs)-Targeting women and youth).2

Page 3: Zimbabwe Zimbabwe Zimbabwe-A W Zimbabwe-A World of Wonders 1 Presentation by Hon Rtd Brig. General. W. E. Kanhanga (MP) Deputy Minister of Tourism and.

• I will tackle my presentation starting with our potential to contribute to the economy and take you through the pertinent roles that enabler sectors play to ensure that tourism performs effectively as a low-hanging fruit in its contribution as a sector to economic development in Zimbabwe.

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Page 4: Zimbabwe Zimbabwe Zimbabwe-A W Zimbabwe-A World of Wonders 1 Presentation by Hon Rtd Brig. General. W. E. Kanhanga (MP) Deputy Minister of Tourism and.

Tourism Contribution in Perspective• Results of 2013 indicate that Zimbabwe recorded a 2%

growth in tourist arrivals having risen from 1 794 230 in 2012 to 1 832 570 in 2013.

• Although arrivals increased marginally, we are yet to reach the peak period of tourism, which was realized in the year 1999 of 27% in Overseas arrivals and compared to the current 14% in 2014 as shown in the next slide.

• Let me mention that the Overseas arrivals are high-spenders as compared to the high-volume and Low spenders from Mainland Africa. Hence, a slight increase in the Overseas bracket, can have a huge economic impact in actual receipts to the economy.

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2013 tourist arrivals 1999 tourist

arrivals

Tourism Contribution

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Comment

• The majority of arrivals from Mainland Africa amount to 1 570 799 are low value tourists with transit tourists constituting a significant number of these arrivals (592 303).

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KEY POINTS TO NOTE

• Average Expenditure by visitors from Mainland Africa is estimated to be around $ 250 per trip based on the 2004 Visitor Exit Survey.

• On average these people spend at least 1,5 to 2 nights, either in their vehicles, public transport, collective commercial accommodation or in private homes.

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• However, it is critical to note that the expenditure from this bracket is small as the spending power of these transit tourists is severely depressed.

• As much as possible tourists want to spend money on goods for trade in the shopping destination.

• Unfortunately for us, our economy which in essence is a net importer itself, has failed to address the shopping needs of this big transit tourism market.

• The country used to be a shopping hub for the region up until the year 1999 when the economy benefited a lot. After 1999, the economic downturn set in and the country has not quite recovered to reclaim that space as a competitive shopping destination in the region. We need to develop more shopping business and leisure activities so that this big we can capture the imaginations of this market group.

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• Our ideal contribution to the economy in terms of tourism receipts, is to reach 3 billion dollars by 2015 and subsequently attain 5 billion dollars by 2018.

• However, there will be a number of variables that we need to address going forward.

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Tourism Receipts: The Ideal and Real Growth Rates

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Tourism Receipts Growth Targets

• Currently, we capture the amount of revenue generated by the sector using a manual system, which has several loop-holes and therefore not the best method for compiling tourism related revenue.

• Due to its limitations, the system can only capture direct receipts

from major tourism sources (hotels, restaurants etc) and money generated through indirect sources is not accounted for under tourism since there is no Tourism Satellite Account. This is being addressed in the Zim Asset policy documents with the financial support from international cooperating partners such as the African Development Bank, we will be starting to address this issue in 2014.

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• Currently, Tourism receipts are projected to have reached US$ 851 million in 2013.

• With the current business as usual mode, tourism receipts are only expected to reach US$1.65 billion by 2018.

• However, if the country is serious about tapping into this lucrative tourism sector and compete aggressively, the intended target growth projection of US$5 billion contribution to the economy by the tourism sector in 2018 will be achieved.

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Page 12: Zimbabwe Zimbabwe Zimbabwe-A W Zimbabwe-A World of Wonders 1 Presentation by Hon Rtd Brig. General. W. E. Kanhanga (MP) Deputy Minister of Tourism and.

• In order to contribute significantly to Zim Asset objectives, we have set key targets such as:

1. VISA liberalization-We are working closely with other Government Departments on implementing the UNIVISA system to increase arrivals-The UNIVISA Pilot Project consultations in the SADC region are underway between Zimbabwe and Zambia to establish a UNIVISA system that we envisage to impact positively on our sector’s performance.

2. Market syndication-We are also syndicating our marketing of the country collectively with the support from the Private sector who have teamed with Government to ensure that we participate at all travel-shows and sell our tourism products. 12

Our Economic Policy Targets

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• Statutory Instruments Renewal-We managed to lobby Treasury to have Statutory Instruments for duty exemption reviewed for a year in the 2014 budget to enable our tourism operators to re-tool, re-kit and refurbish tourism infrastructure that had almost lost its competitiveness due to economic challenges we have been facing..

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Our Policy Targets-Continued

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• Support Domestic tourism development-We are currently working on the Civil Servants Visitor Scheme and lobbying the tourism sector to offer attractive packages to the local market e.g. Visit-Now-Pay later scheme that is being offered by Rainbow Tourism Group.

• As a Ministry, we have planned to:

(i) To increase tourism's contribution to GDP from the current 10% to 15% by 2015.

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POLICY TARGETS-CONTINUED

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(ii) To increase tourism earnings from the current US$ 851 million in 2013 to USD 3 billion by 2015.

(iii) To increase tourist arrivals from the current 2,2 million per annum to 3,2 million tourists per annum by 2015.

(iv) To increase employment from the current 300 000 to 400 000 employees by 2015.

(v) To increase the Tourism sector's contribution to net exports from 19% to 25% by 2015

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How Do we get there?

• It is recommended that the following measures and programmes be implemented to achieve the projected revenue generation of 3 billion by 2015 and USD$5 billion by 2018.

• Plugging leakages- There are potential leakages of tourism receipts through under declaration of offshore payments, undercutting arrivals, parallel banking and offshore accounting, among many others.

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• A holistic approach is required to easily pick up leakage mischief and plug out potential revenue loses. Hence, a close working relationship among ZTA, ZIMRA and RBZ is imperative.

• A clampdown on unregistered operators is also critical since there is a growing trend whereby non-registered operators who are generally mushrooming and not compliant to other fiscal expectations.

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• Review of 15% VAT-The proposed 15% Vat on Non-Resident Tourist is an undeniable cost driver, which may make Zimbabwe a less competitive destination going forward. This maybe a single most dangerous disincentive for the growth of the sector since it tend to make the destination too expensive and we price ourselves out of business in the SADC region.

• Improving the Destination Image – as long as tourists continue to have negative perceptions about Zimbabwe as a tourist destination, the performance of tourism, especially pertaining to overseas arrivals, will remain depressed. This calls us to ensure that we project a good image of the country in which case the media play a big role in every sense be it politics, social issues and others.

• Aggressive marketing campaigns in order to correct the image of the country that has been tainted for a long time. Adequate resources should be availed for the country’s tourism marketing authority, ZTA to implement its initiatives.

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Page 19: Zimbabwe Zimbabwe Zimbabwe-A W Zimbabwe-A World of Wonders 1 Presentation by Hon Rtd Brig. General. W. E. Kanhanga (MP) Deputy Minister of Tourism and.

• Targeting High Value Markets – as shown previously in this presentation.

• Developing Zimbabwe as a Shopping Hub – considering the fact that Zimbabwe receives a lot of transit visitors, most of whom will be on shopping trips within the region, it is ideal that Zimbabwe be developed to capture that transit traffic.

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Page 20: Zimbabwe Zimbabwe Zimbabwe-A W Zimbabwe-A World of Wonders 1 Presentation by Hon Rtd Brig. General. W. E. Kanhanga (MP) Deputy Minister of Tourism and.

• Developing a Well Defined Diaspora Policy – The country’s immense Diaspora market present an opportunity for the growth of the country’s tourism sector. We are working on a Diaspora Strategy in this regard for a massive ‘Holiday Home Campaign’ targeting few millions of Zimbabweans in the diaspora.

• Developing Domestic Tourism – As is the case with diaspora tourism, domestic tourism is important for the growth of the tourism sector as a whole. Several countries like China have realised that domestic tourism provide most of their tourism revenue.

• As such we are putting in place incentives to promote domestic tourism as mentioned above.

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Page 21: Zimbabwe Zimbabwe Zimbabwe-A W Zimbabwe-A World of Wonders 1 Presentation by Hon Rtd Brig. General. W. E. Kanhanga (MP) Deputy Minister of Tourism and.

• Developing Better Methods to Measure Revenue– There is need for the development of better methods of measurement and accounting for revenue including putting in place the Tourism Satellite Account (TSA).

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Page 22: Zimbabwe Zimbabwe Zimbabwe-A W Zimbabwe-A World of Wonders 1 Presentation by Hon Rtd Brig. General. W. E. Kanhanga (MP) Deputy Minister of Tourism and.

Aviation and Transport systems

Immigration & Visa facilitation Immigration &

Visa facilitation

Destination connectivity & accessibility

Destination image building & marketing

Communication,& research

IMPACT ON THE PERFORMANCE OF THE TOURISM BAND

Zimbabwe-A World of Wonders

Easy access

•Media•Information and communication Technology

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Page 23: Zimbabwe Zimbabwe Zimbabwe-A W Zimbabwe-A World of Wonders 1 Presentation by Hon Rtd Brig. General. W. E. Kanhanga (MP) Deputy Minister of Tourism and.

• For tourism to perform and contribute meaningfully to economic development under Zim Asset, enablers should support us and play their part.

• Tourism is indeed a low-hanging fruit with great potential to contribute to overall high economic performance in this country.

• The success of tourism is the success of the nation in development and upliftment of the lives of our people.

• The relationship with other key enabler sectors, must therefore be smooth at all times.

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