WINDHOEK - Tourism is not doing so well with a very slow recovery being recorded in the second quarter of this year.
The operational environment in the sector is difficult and the increase in the number of international flights to Namibia has not led to an increase in the number of international arrivals.

Figures for the second quarter of this year show that tourism expectations from the last quarter did not materialize and businesses may have overestimated tourist demand, which contributed to the weaker business performance along with transparency issues and government bureaucracy.

There is however optimism that the sector will show an improvement in the traditionally peak season that starts in July and ends in October annually.

“While the first half year may have resulted in stable, or even slightly higher occupancies for some, compared to the same period last year, income and turnover figures seem down, due to reduced rates and specials offered to attract more business.  

“It seems evident that consumers around the world are still hesitant to spend their money on travel – they see the price tag in relation to perceived value,” commented Gitta Paetzold, representative of the Federation of Tourism Associations of Namibia (Fenata) Statistics Committee on the FNB Namibia/Fenata Tourism Index.

The index, a second of its nature, is composed of tourism inflation, exchange rates, passenger arrivals at Hosea Kutako Airport, bed occupancy rates and quarterly opinion score on business performance, revenue, investment and employment. The figures are indexed and weighted to approximate the business climate in the tourism sector.

Even though the index for the second quarter is up 2.5 percent when compared to the second quarter of last year, the 2012 second quarter performance is significantly low at 4.2 percent than the 2010 second quarter.

Over the past three years the airlines’ passenger load factor decreased from 126 to 74 international arrivals. Airlines use the passenger load factor or carrying capacity versus efficiency and other operational costs to determine profitability of routes.
Inside the country the accommodation establishments also reported a very low occupancy rate as a result of fewer tourists in the country.

The leisure segment of the tourism sector, which accounts for two-third of the tourism industry, recorded a drop in tourists and has been dropping rates to attract tourists. Accommodation establishments dropped their prices by 0.1 percent month on month according to the inflation statistics, but this had little to no improvement in the demand figures.
Dropping rates weakened the revenue expectations over the past three months, especially for guesthouses and trophy hunting outfits.

“Essentially the industry feels that the second quarter was bad, but remains optimistic for the third quarter,” noted the index.
There are also mixed reactions to third quarter performance.

 “Activity operators were more optimistic than the previous quarter, while bed and breakfast and trophy hunting outfits expect business performance to deteriorate. Capital expenditure is expected to increase slightly in the third quarter, while employment contracts,” said Namene Kalili, the manager for research and competitor intelligence at FNB Namibia.