On the road to robust recovery

Namibia must persist in innovating its tourism sector to swiftly meet market demands, enhance tourist experiences, and reclaim revenue to maximise returns.“The key to success in tourism and hospitality is to stay flexible and adaptable to change,” says independent economist Josef Sheehama. “The tourism and hospitality industry is dynamic and ever-evolving. By staying informed and open to new ideas, it can not only survive, but thrive in this fast-paced and competitive market,” Sheehama continues.In the past quarter, the tourism sector achieved its highest quarterly occupancy average since the third quarter of 2018, Simonis Storm’s analysis of the latest data shows.The global tourism sector, constituting about 10% of the world’s gross domestic product (GDP), carries significant importance, Sheehama points out. In Namibia, tourism and hospitality contribute N$7.7 billion, equivalent to 3.7% of the nominal GDP, along with an indirect contribution of N$24.8 billion or 12.0%. RecoveryDespite its significance, the industry encountered substantial challenges due to the Covid-19 pandemic, requiring strategic interventions for recovery, Sheehama notes.The ministry of environment, forestry and tourism seeks to revitalise the tourism sector by highlighting domestic tourism and promoting Namibia as a secure holiday destination. Recognising the pivotal role of the Namibian Tourism Board (NTB), the active participation of the ministry is considered essential in addressing the challenges presented by the pandemic, he says.Although domestic tourism presents an opportunity for rapid recovery, it has also been substantially affected by Covid-19 containment measures, Sheehama says. As such, government initiatives, including financial assistance, play a crucial role in sustaining businesses within the tourism ecosystem. Implementing structural adjustments to tourist destinations to meet health requirements and visitor expectations is imperative.“The crisis serves as an opportunity to rethink and reshape the future of tourism,” according to Sheehama.He continues: “Governments must consider the longer-term implications, capitalise on digitalisation, support low carbon transitions, and promote structural transformations for a sustainable and resilient tourism economy. The sector’s recovery, hindered by ongoing negative macroeconomic variables, necessitates a phased approach and innovation.”InnovationThe potential of domestic tourism remains constrained due to international geopolitics, influencing consumer behaviour, Sheehama says.“This presents an opportunity to accelerate the transition to digitalisation, emphasising and fostering demand for eco-friendly experiences. Namibia must ensure continuous innovation, invest in structural changes and address environmentally-friendly experiences for a robust recovery,” he urges.According to Sheehama: “Domestic tourism, with the right strategy and incentives, can lead the economic recovery.”Rebuilding the domestic tourism industry hinges on product innovation, pricing reforms and community empowerment, he says. With the world adjusting to changes brought about by the pandemic, the hospitality industry is gradually making a comeback. Prioritising domestic tourism necessitates robust marketing efforts, product development and incentives to stimulate demand.Capitalising on trendsFurthermore, to capitalise on emerging trends, tourism and hospitality sectors should adopt technology innovations, embrace sustainability, offer unique experiences, engage on social media, prioritise guest safety and invest in wellness amenities, the economist advises.“Staying adaptable and customer-focused is key,” Sheehama says.As these sectors keeps changing rapidly, they must partner with digital engineering workforces to provide maximum value to brands and guests, he adds. This can benefit the local community economically and socially and facilitate interaction between tourists and locals for a mutually enriching experience. “Hence, it is irrefutable that the tourism and hospitality industries are becoming a more significant economic force and has the potential to be used as a tool for development. “These industries not only drives growth, but it also raises people's standards of living with its ability to provide significant amount of diverse employment opportunities,” Sheehama says.DevelopmentsThe future of the tourism and hospitality sector in 2024 looks tech-savvy and eco-friendly, Sheehama says.The Namibian tourism and hospitality industry is preparing for a technology-driven era, with early signals and expert opinions pointing toward a strong recovery, he notes. This optimistic trajectory is credited to the resilience of online reservations and self-drive segments in Namibia. Performance indicators in hospitality have surpassed those in the broader tour operation sector, establishing online reservations and self-drive as leaders in the industry's recovery and expansion.“As the tourism and hospitality landscape evolves in Namibia, we must rethink what this means to us, to stakeholders and their involvement,” Sheehama stresses.“It is imperative that we continue to innovate as we strive to respond quickly to market needs, to elevate tourist experiences and recapture revenue to optimise returns. “Whether it's through personalised experiences, sustainability and eco-friendly practices or the use of technology, the future holds many opportunities to innovate and excel. Take advantage of these trends and get ready to elevate to new heights,” Sheehama urges.RobustSimonis Storm (SS) describes the tourism sector’s recent robust performance as “highly encouraging, signifying an upsurge in consumer spending within the nation, chiefly propelled by tourist activity”.“While domestic monetary circulation remains subdued among citizens, the influx of tourists is effectively bolstering demand for local retailers,” SS says.In September this year, the occupancy rate stood at 65.5%, showing a slight decrease of 3.4 percentage points from the previous month. Despite this modest decline, the rate maintains a favourable trajectory within the larger economic framework, SS says. According to the Hospitality Association of Namibia (HAN), leisure travel remains a primary factor in sustaining high occupancy rates at accommodation establishments.“There are discernible signs indicating a gradual upturn in the demand for business and conference-related packages, as reported by select hotels,” SS says.DataTourist arrivals have surged to their highest point in the past five years, with a total of 49 190 arrivals recorded in August this year, reflecting a robust annual growth rate of 16.8%, according to SS.“The tourism sector stands poised to reap substantial benefits from this pronounced influx of tourists,” the analysts say. The rise in tourism can be mainly attributed to a growing number of international arrivals, SS notes.These visitors consistently exhibit a trend of exploring diverse destinations within the country. Many are attracted to the scenic attractions of southern Africa, resulting in an increase in regional arrivals.Upon reviewing the yearly data, there is a significant 16.9% surge in arrivals at Namibian airports in August 2023, driven by notable growth in international arrivals (up by 20.1% year-on-year), regional arrivals (up by 11.6% y/y), and domestic arrivals (up by 19.8% y/y).OccupancyFor the consecutive second month, the northern region maintained the highest occupancy rate at 68.9%. The central area closely followed with a rate of 66.3%, while the southern region recorded a rate of 63.9%. In contrast, the coastal area had the lowest occupancy rate at 57.8%. These statistics highlight variations in tourism demand across these regions, with the northern and central areas emerging as the most favoured among tourists, SS says.Year-to-date, Europeans represent a substantial segment of Namibia’s tourist demographic, comprising 64% of the total tourists in September, down from 72% in August. In parallel, Namibians make up a smaller portion of the tourist pool at 18%, while South Africans contribute 5%.OutlookHAN noted that in conversations within the travel industry in Namibia, an observation has been made regarding accommodation performance indicators surpassing the recovery levels of the more extensive tour operation sector. “This observation underscores the resilience and resurgence of the online reservations and self-drive segments within the Namibian tourism market, marking them as the early frontrunners in achieving full recovery and growth,” SS says.An initial forecast for 2024 suggests a promising outlook for the group-travel market, with advance bookings in this sector indicating positive prospects, they add.As Namibia enters the tourism shoulder season, there is an expectation of focused efforts in the form of strong marketing initiatives aimed at international and regional markets. Simultaneously, stakeholders, service providers, as well as property and infrastructure owners, are anticipated to take advantage of this period for maintenance, skills enhancement and optimising their products.“These collective efforts are aimed at ensuring that Namibia sustains the momentum of a burgeoning and dynamic tourism industry,” SS says.Staying ahead of the curve“The tourism and hospitality industry is dynamic and ever-evolving, and by staying informed and open to new ideas, it can not only survive, but thrive in this fast-paced and competitive market,” Sheehama says. There are many more trends emerging and shaping the future of the tourism industry, and hospitality that stay ahead of the game will be the ones that succeed in the long run, he adds. “So, stay informed, stay ahead of the curve, and make the most of the exciting opportunities that the future holds for these sectors,” the economist advises.The growth of any economy is significantly influenced by the pivotal roles of tourism and hospitality. These two interdependent industries complement each other, collectively creating a positive impact, Sheehama explains. Tourism contributes by attracting visitors from various parts of the world, generating revenue for local economies, while hospitality ensures the comfort and satisfaction of these visitors during their stay.Revitalising these industries in Namibia has the potential to boost revenue, create employment opportunities and alleviate poverty, Sheehama stresses. To ensure a thriving and sustainable future for these sectors, key strategies include fostering Public–Private Partnerships, engaging local communities, and implementing well-being initiatives, he says.

On the road to robust recovery

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Namibian Sun 2024-12-27

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On the road to robust recovery

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Namibian Sun 2024-12-27

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