Martin Endjala
The Occupancy Rate which is referred to as the percentage of occupied rooms in a house at any given time has slowed by a meagre one percentage point in May 2023, from 51.8 percent in April to 50.8 percent in May 2023.
However, on an annual basis, occupancy rates have improved by 11.4 percentage points from 39.4 percent in May 2022, still indicative of a recovery in the sector. This is according to the May 2023 Simonis Storm Economist Theo Klein.
He said that Namibians have been facing a notable surge in travel expenses, with prices nearly doubling in May 2023 compared to the same period in the previous year, where holiday packages experienced an increase of 99.2 percent.
In May 2022, the increase in travel prices stood at 14.7 percent. Local travel agencies indicate that this steep rise is primarily driven by increased flight costs for various destinations, particularly for routes dominated by a single airline.
Additionally, “there has been a general increase in demand for air travel, especially from business travellers associated with projects related to oil, green hydrogen, and other industries according to travel agents we engaged with, “said Klein.
The coastal area of Namibia recorded the lowest occupancy rate in May 2023, at 44.2 percent, from the highest last month at 58.1 percent. This month, the central area had the highest occupancy rate of 54.9 percent, 17.6 percentage points higher than the previous month, followed by the northern area at 52.1 percent, 3.9 percentage points lower than the previous month and the southern area at 48.5 percent compared to 0.8 percentage points lower than April 2023.
Meanwhile, May 2023 experienced business visitors taking up a larger stake of all occupancy rates (accounting for 9.52 percent of visitors), increasing by 7.8 percentage points compared to the prior month.
Visitors for leisure stand at 89.6 percent and remain the driver of tourism in the country, while 0.9 percent of visitors attended conferences in Namibia.
Going forward, Klein expects business and conference travel to increase owing to foreign investors being part of local green hydrogen pilot projects and Hyphen’s project in the South, as well as ongoing exploration for gas, oil, copper, gold and rare Earth metals.
Europeans accounted for 55 percent of all visitors across nationwide hospitality establishments. As usual, the majority of visitors during May 2023 came from Germany, Austria, and Switzerland constituting 30.9 percent, followed by locals at 22.8 percent, South Africans at 8.3 percent and the French at 8.4 percent.
Tourists from Germany, Austria and Switzerland are said to be exceeding pre-pandemic occupancy rates, and tourists from the rest of the world are near to reaching pre-pandemic levels.
In May 2023, the inflation rate for accommodation services and catering in Namibia showed a moderation, with both categories recording an annual increase of 6.7 percent. This is in contrast to the inflation rates recorded a year ago, where accommodation services experienced a significant rise of 14.6 percent and catering saw a more modest increase of 3.6 percent.
However, Klein stated that numerous specials and packages offered to locals to attract visitors during the pandemic provided a low base for accommodation services in 2020 and 2021.
During 2022 when inflationary pressures rose, accommodation establishments had to increase prices as a result of higher food, electricity and fuel prices, leading to double-digit inflation rates in recent months.
On a lighter note, tourist inflows into Namibia have shown signs of improvement, reaching 68 percent of the pre-pandemic passenger arrival levels.
In April 2023, a notable increase of 34.2 percent in arrivals to Namibia was recorded. However, departures saw a significant decrease of 25.6 percent in April 2023, leading to a net 4.1 percent drop in passenger numbers.
Although, monthly there was a net increase in total passengers by 13.1 percent, nevertheless, there remains a positive trend in arrivals which is more crucial to the local tourism industry.
Meanwhile, the Ministry of Environment, Forestry, and Tourism’s National Tourism Recovery Plan 2022 to 2024 is underpinned by five strategic interventions namely, policy matters (i.e. revising the National Tourism Policy of 2008), aggressive online marketing and promotion campaigns, attracting new geographical tourist markets, increased tourism market intelligence through data collection and analyses and improving accessibility and connectivity to Namibia.
The economist says that he is positive that the tourism sector as per their Economic Outlook 2023 report released in January 2023, with expectations that the average middle to high-income European households to still travel despite their country being in recession.
