By Hilary Mare
THE expected operations of additional airlines (Qatar Airlines, KLM, and Ethiopian Airlines) in Namibia are likely to attract more tourists from Central Africa, Middle and the Far East, and Europe which would improve Namibia’s net travel receipts and therefore ease pressure on the current account, which is estimated to be at 13 percent of GDP.
Purvance Heuer, director of research and securities at Simonis Storm Securities has highlighted that with this logic in mind, embracing an ‘open sky policy’ would be necessary to optimally capitalise on export earnings from international travel services. This will also resonate with the Government’s ambition of positioning the country as a transport logistics hub for Southern Africa.
An international tourism receipt is expenditure by international visitors, including payments to national carriers for international transport. Namibia has historically been in a deficit in terms of trade in services, until a breakeven was realised in 2014.
“In our view, this was partly attributed to an improvement in travel receipts. In effect, the value of Namibia’s net service for 2015 was recorded at N$339 million, from N$56 million in 2014. We thus believe that there is significant potential for a continued increase in the net value of service exports, especially following the recent approvals for the operation of three additional airlines in Namibia.
“Furthermore, net travel as a percent of total services exports has averaged 17 percent over the last four years and came in at 22.2 percent in 2015. Net travel receipts as a percentage of GDP has averaged 1.0 percent over the last four years, and measured at 1.4 percent in 2015. This once again, reaffirms the economic significance of the sector, and the need to embrace an open sky policy to optimally capitalise on export earnings in this regard,” emphasised Heuer.
In a recently published tourism industry report titled, ‘A beacon of hope for the Namibian economy’, Simonis and Storm highlights that the revenue generated from the tourism levy is under-optimised due to alleged underreporting of accommodation occupancy rates.
“We believe strengthening the efficacy of the levy administration holds significant potential to beef-up the revenue and therefore improve international marketing of Namibian tourism. Furthermore, it became evident that tourists in general prefer paying less for accommodation, and as such choose to stay at permanent tented camps or board with families. Given that observation, we believe that investment opportunities exist in developing camping structures,” added the firm.
The Namibia tourism industry has less regulatory barriers compared to its neighbours South Africa, Botswana, Zimbabwe, Zambia and Angola with respect to the four modes of services supply which presents an attractive investment climate for further investment.
“Another policy concern points at the reality that the existing business statistics cannot distinguish between services provided to foreign tourists and to non-foreign tourists. Therefore, it is almost impossible to explicitly measure the economic value of the tourism industry in its real sense. Furthermore, it is imperative that the informal sectors such as cultural activities be integrated into the mainstream economy. This would allow for the preservation of national heritage, create and sustain jobs, and thereby increase consumer spending to support growth,” concludes the report.
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