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Kaseke warns steep prices may drive tourists away

 Zimbabwe Tourism Authority (ZTA) chief executive officer Karikoga Kaseke has read the riot act to tourism sector players after they sharply increased their prices in a move that risks driving customers away.

Karikoga Kaseke
Karikoga Kaseke

Kaseke — who had a fierce run-in with the management of a local hotel last week over their pricing regime — met with the Tourism Business Council, tourism operators and other sector players in Harare on Wednesday and warned them that if tourism is hurt, it will have a knock-on effect on the economy, causing a recessionary spiral, and hurt President Emmerson Mnangagwa’s drive to revive the economy.

This comes as the tourism industry has remained the only bright spot for Zimbabwe’s struggling economy.

A tough-talking Kaseke said the new prices of tourism products were bordering on the margins of obscene and risked affecting tourist arrivals by making Zimbabwean products non-competitive in comparison to regional players.

Apart from discussing the pricing of the tourism product, the meeting also focused on the state of tourism and also sought to find ways of manoeuvring the prevailing economic challenges within the sector.

“It was a very successful and very fruitful meeting and we discussed everything. It was no-holds-barred and everybody was very clear on the issues discussed,” Kaseke told the Daily News.

“I am very happy that they (operators) will rein each other and in particular the Tourism Business Council will make sure that they don’t put charges that are ridiculous especially when we are talking about foreign international tourists, it’s bad.

“That was now basically chasing away tourists and I would like to think we have intervened at the right time. I am certain that it (pricing challenges) will be resolved by the end of this week.”

Zimbabwe’s upmarket hotels have since increased prices across board with a double bed now costing anything in the region of $120 to $200.

Breakfast buffet is costing $35 up from $25 less than a month go, a pie $9 up from $4, 500 ml coke $3 up from $1,50, a slice of cake $9 up from $4.

In Zimbabwe, the tourism sector is an acknowledged economic pillar that has registered significant growth from being a mere $200 million industry in 2009 to an estimated $1billion dollar industry today.

Equally, the volume of tourism traffic into Zimbabwe has improved from 1,7 million in 2012 to 2,1 million in 2016, and by the end of 2018 Zimbabwe is set to scale 2,5 million tourist arrivals

Tourism Business Council president Paul Matamisa said while tourism plays a major role in the economic well-being of Zimbabwe, there is often no co-ordination of policies across sectors to enable growth.

“The meeting came very fruitful in that we managed to bridge the gap of understanding of the market forces that are currently prevailing in our markets,” he said.

“In particular how we deal with the US dollar. We also spoke about issues of the FCA (foreign currency) accounts, Nostro accounts and so on, how they’re going to be looked at and how we are going to be dealing with them going forward.

“It appears though that at the moment, various banks have got their own policies on how they look at the FCAs as well as the RTGS accounts and the local accounts. It doesn’t look like there is common way of how do we do things and that creates a lot of problems for operators.

Every bank appears to have its own way of doing things but we are saying the RBZ must intervene so that we have a common system that is operating in all banks for these nostro and RTGS accounts.”

The meeting, was part of a series of similar meetings to be held more often, in a bid to get the tourism sector operating and moving in the same direction when marketing Destination Zimbabwe.

Chief among the challenges affecting tourism growth are limited international air access, inadequate internal airline connectivity, poor state of roads in tourism resorts and a non-competitive tourism product that is not only overpriced but old and tired.

Overall in the economy, key inputs such as food, fuel and electricity are in short supply again, supermarkets in the capital are running out of stock and some local fast-food outlets have even closed their doors citing difficult times.

Panic buying and hoarding has become the new normal, while increased demand for forex has led to higher prices.

The impact of Zimbabwe’s precarious inflation environment is also visible in the Zimbabwe stock market — Meikles, Rainbow Tourism Group and African Sun are listed on the bourse – with share prices skyrocketing as investors seek out equity investments to preserve value in the face of the depreciating bond notes — akin to the period late last year, when investors hedged against currency devaluation by investing heavily in local equities.

In response, central bank governor John Mangudya has said that Zimbabwe has enough foreign exchange to pay for imports of fuel, wheat and other items, and that the crash in bond notes is caused by “opportunists” trying to sow “unnecessary panic and despondency.”DailyNews