The growth of Namibia’s tourism industry has been hampered by the lack of experienced managers following the departure of many managers during the COVID-19 pandemic, Simonis Storm has revealed.
In a sector report, the research firm noted that many employees in this sector had to find alternative jobs, and these employees are not returning to the industry.
“After engaging various industry players, we understand that a significant number of hotel/lodge managers left Namibia to pursue job opportunities overseas. While many tourism graduates cannot find jobs due to lacking work experience, local hospitality establishments struggle to find adequate experts to train them,” said the firm.
The firm also noted that the Director of Tourism and Gaming, Sebulin Chicalu, mentioned that tour guide training will be implemented, to enhance the opportunities for graduates to find jobs.
“Furthermore, through the partnerships with Africa Tourism Partners, BDO and United Nations World Tourism Organisation (UNWTO), graduates will be exposed to practical training with the purpose to close gaps in the tourism sector and to continue the legacy of the tourism industry in Namibia. The Director announced that a Tourism Information Management System, to digitalize the system, will be implemented to provide for transparency in the industry. These planned improvements will increase the employability of our graduates, attempting to dent our high youth unemployment,” explained the firm.
For June, business activity in the restaurant and hotels sector has improved to about 86% of pre-pandemic levels (1Q2019), indicating that most of the recovery has been achieved. While the sector posted a 5.7% annual expansion in 1Q2023, it declined by 10.7% q/q in 1Q2023.
“However, we believe that the wider value chain of tourism is not fully captured in the hotels and restaurant sector, given that most professional hunting guides, air charters, tour operators, travel agencies, car rentals and lodges across the country are not captured in these GDP figures,” Simonis Storm said.
Occupancy rates increased by a meagre 0.4 percentage point m/m in June 2023, from 50.8% in May 2023 to 51.2%. However, on an annual basis occupancy rates have improved by 19.14 percentage points, from 32.1% in June 2022. YTD, occupancy rates are the highest on average since the pandemic, merely 3 percentage points shy of reaching 1H2019 level. This signals that the recovery in the market has picked up and given that occupancy rates usually peak in the third quarter of each year, we believe that occupancy rates going forward should reach pre-pandemic levels in 3Q2023.
“The southern area of Namibia recorded the lowest occupancy rate in June 2023 at 39.2%, from 48.5% in the prior month. This month, the northern area had the highest occupancy rate of 47.8% (4.3 percentage points lower than the previous month), followed by the coastal area at 42.6% (1.6 percentage points lower than the previous month) and the central area at 42.5% (12.4 percentage points lower than May 2023).
“Tourists that entered Namibia for business purposes increased their share of the market to 17.3%, while leisure tourist constituted 80.4% of the market and 1.38% of visitors came for conferences in June 2023 (Figure 5). Although our tourists mainly come to Namibia for leisure, tourists coming for business and conferences are increasing and are mainly associated with Namibia’s oil explorations and green hydrogen projects according to engagements with local travel agents and tourist operators,” said the firm.
Vehicle purchases by rental companies in Namibia in 1H2023 have surpassed sales in the 1H2019 by 0.41%. This signals that rental companies are currently faced with high demand and are further expecting higher demand in the peak quarter. Indeed, the self-drive trend continues to be the most popular experience chosen by tourists visiting Namibia and so keeping demand elevated for car rentals that are equipped with camping gear.
“Europeans accounted for 45% of all visitors across nationwide hospitality establishments in June 2023. As usual, majority of visitors during June 2023 came from Germany, Austria, and Switzerland (24.06%), followed by locals (30.23%), South Africans (11.46%) and the French (5.44%). Tourists from Germany, Austria and Switzerland are exceeding pre-pandemic occupancy rates, and tourists from the rest of the world are near to reaching pre-pandemic levels.
“Whilst the EU has avoided economic recessions during 1H2023, Namibia has benefited from improved travel across the globe and we expect the current tourist peak season (May to September each year) to be supportive of economic growth in Namibia given the wide value chain of tourism.”