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REVIVING ZIMBABWE’S TOURISM INDUSTRY
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REVIVING ZIMBABWE’S TOURISM INDUSTRY

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Opportunities for Private Investors

Opportunities for Private Investors
Presented by Shingi Munyeza, Group Chief Executive, African Sun Limited

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REVIVING ZIMBABWE’S TOURISM INDUSTRY REVIVING ZIMBABWE’S TOURISM INDUSTRY Presentation Transcript

  • REVIVING ZIMBABWE’S TOURISM INDUSTRY Opportunities for Private Investors Presented by Shingi Munyeza, Group Chief Executive, African Sun Limited
  • Overview
    • Tourism by its pervasive nature plays a significant role in the economies of most African countries
    • According to UNTWO tourism is the fastest and largest growing industries globally
    • Tourism is one of the largest industries in the world accounting for 9.9% of world GDP in 2008 with projections of 10.5% in 2018 (WTTC)
    • Globally tourism employs over 200 million people
    • In Africa tourism is expected to register a positive growth of 3% in 2009
    • Despite the Global Financial Crisis, tourism will continue to play a significant role in economic growth
    • Wealth of natural resources including minerals, oil & attractions
    • Fundamentals driving natural resource demand will remain in place, driving impetus for growth
  • Overview: Zimbabwe
    • Tourism has enormous potential for growth
    • Tourism currently employs approximately 300 000 people directly and indirectly (ZTA)
    • First half of 2009 registered US$287 million in tourism receipts and year is expected to close on US$700 million (ZTA)
    • GNU has brought about confidence in destination Zimbabwe
    • Major source markets have lifted travel warnings to Zimbabwe (USA, Japan, Germany, etc)
    • STERP identified as economic recovery platform with tourism being one of the key economic drivers with potential to contribute to Zimbabwe’s turnaround
  • Attractions
    • Zimbabwe has a wealth of attractions and boasts significant tourist charm with natural endowments such as the world famous Victoria Falls.
    • Zimbabwe is ranked number 33 in the world for natural resources overall, is ranked 117 th in most likely travel destinations in the world as compared to South Africa which ranks 60 th (Sub–Saharan Africa’s second strongest performer next to Mauritius, which ranks 41 st overall).
    • Big Five
    • Cultural Heritage
    • These features cost nothing to exist, however their preservation is important to the sustainability of the sector.
  • Attractions & Opportunities: Wild Life
    • Wild life Management still intact
    • Opportunity for integrated and coordinated regional marketing through Boundless Southern Africa Trans-frontier Parks
    • Afford tourists the opportunity to drive across the international borders of the countries within the boundaries of the park
  • Attractions & Opportunities: Trans-frontier Parks
    • There are 9 countries that fall with in the boundless Southern Africa trans-frontier parks as in the map : Angola, Botswana, Namibia, Mozambique, Namibia, South Africa, Swaziland, Zambia and Zimbabwe
    • Zimbabwe shares borders with 5 of these countries, namely Botswana, Mozambique, Namibia, South Africa and Zambia
    • Enormous opportunities for active synergies , investment and destination marketing of these parks
    • Significant potential for Zimbabwe to benefit from this circuit when fully developed and active
  • Status of Attractions
    • Victoria Falls Town
      • There is need to upgrade roads and the airport in this town which ahs the potential to become the second largest tourist hub in sub-Saharan Africa outside of Cape Town
    • National Parks
      • Need for upgrading of facilities within the parks
  • Human Capital
    • Zimbabwe has a high literacy rate of 85% though peaked at 96% in 2004 making communication easier for the travellers
    • Country has been besieged with skills flight to the surrounding countries, more recently to South Africa in light of the imminent FIFA 2010 World Cup
    • A study conducted by Scientific and Industrial Research and Development Centre (SIRDC) estimated that over 3-4 million Zimbabweans have emigrated since 1990. The majority went to:
      • United Kingdom (36.8%)
      • Botswana (34.5%)
      • USA (6.9%)
      • South Africa (4.6%) and
      • Canada (3.4%)
  • Skills Rejuvenation
    • Rejuvenation of skills in the hospitality and tourism industry
    • Skills development and retention is critical to the economic development of a country.
    • Government and businesses must build capacity by supporting academic and vocational training.
    • Synergies with local hospitality training institutions coupled with strategic links with other international tourism centres of excellence will play a pivotal role in upgrading skills to a level that is competitive with the rest of the world.
    • Government will need to engage training institutions on this initiative, and offer incentives to ensure that training is prioritized and meeting world standards.
    •  
  • Accessibility: (Roads)
    • Transport plays a critical role to international, regional, national and local development
    • To a large extent all of Zimbabwe’s attractions are still accessible though it is constrained by lack of comprehensive infrastructure.
    • Sufficient financing for new construction, expansion and refurbishment of facilities and other infrastructure is not supported by financial institutions
    • Local policies are not allied to strategic growth and investment incentives to the private sector.
  • Accessibility: (Air)
    • Air transport plays a critical role in tourism development
    • In 1999, Zimbabwe was served by 38 foreign carriers linking the destination to more than 100 international source markets (www.zimtreasury.com)
    • Currently 6 airlines service destination Zimbabwe
    • GNU to put in place incentives to increase air traffic frequency into the country
    • Ports of entry (Airports and border posts ) to be improved to international standards
  • Accommodation
    • Zimbabwe has the second largest offering of rooms outside South Africa despite the events of the past 10 years
    • Accommodation quality still good with award winning hotels such as
      • The Victoria Falls Hotel
      • International brands such as IHG , i.e. Holiday Inn, Crowne Plaza
      • Five star resort lodges
    • Potential to increase the room stock with requisite investment
    Actual Projections Year 2005 2008 2010 2013 2015 Total Rooms 8 657 8 510 10 900 15 000 25 000
  • Source: UNWTO Potential Markets & Spending Patterns
  • Source :Zimbabwe Tourism Authority Tourism Projections Tourism Receipts –Actual Vs. Projections
  • Source: Zimbabwe Tourism Authority Tourism Potential International Tourist Arrivals into Zimbabwe -Actual Vs. Projections
  • Potential Tourism Investment Opportunities:
    • Resorts & Casinos
    • Accommodation
    • Conference Facilities & Conventions Centres
    • Shopping Malls
    • Theme parks
    • Air Services
    • Hunting Safaris
  • Benefits from Opportunities
    • New openings will play a major developmental role through potential to bring investors (such as Mixed Use Developments which incorporate retail, residential, entertainment and office complexes
    • Infrastructure development to make properties accessible
    • Strengthen status of region as tourism destination
    • Creation of regional tourism packages
    • Increased competition resulting in price competitiveness
    • Trickle down positive effects to down-stream industry such as services industry
    • Development of skills base and investment in human capital
  • Tourism Investment Incentives
    • Duty Exemption on specified capital goods imported for use in Tourism Development Zones
    • Taxable income of an operator is as follows:
      • First 5 years of operation : 0%
      • Second 5 years of operation: 15%
      • Third 5 years of operation: 20%
      • Thereafter normal rates of corporate tax apply
    Source: Ministry of Tourism, Zimbabwe
  • Conclusion
    • To attract offshore investment, long term policy consistency is an imperative as it is a major attraction to investors across all sectors
    • Tourism can be used to trigger economic growth and economic integration within Zimbabwe because:
      • People visit, then trade and thereafter invest
      • The immense and diverse attraction in Zimbabwe is very real
      • The desire to make these attractions accessible will drive infrastructural development feeding into the supply side of the economy resulting in growth.
      • Construction of infrastructure will necessitate the need for increased accommodation capacity
    • Zimbabwe’s tourism sector is poised to grow into a leading key economic sector
    • Untapped potential and under investment in certain sectors of tourism present opportunities
    • Enviable natural resources and attractions make Zimbabwe a good tourism investment choice