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Global Economic Overview

Global economic growth, which was estimated at 3.7 percent in 2017, is
projected at 3.9 percent in 2018 and 2018 according to the IMF Global
Outlook.

Key Trends that are expected to Shape the Global Economy in 2018

Source: IMF
Positive Impacts of the US Tax Policy
The U.S. tax policy changes are expected to stimulate
activity, with the short-term impact in the United States
mostly driven by the investment response to the corporate
income tax cuts. The effect on U.S. growth is estimated to
be positive through 2020. The positive developments are
expected to have a positive impact on tourism in
Zimbabwe in the long run as the US is the destination’s
major overseas market.

Inward focus of the Western Economies & the Opportunity for China

The EU and US Governments are trying to focus on fixing their own local economic problems to unlock
their true growth potential. The UK was one of the first economies to take this
trajectory with their Brexit vote. In the US, the Trump’s administration has
showed clear signs on focusing economic development agenda’s on domestic
America rather than the global scene.

What this means for the world is that emerging economies’ hunger to
participate in the international economy will be met with unwillingness
limiting the extent to which they trade given their reliability on exports income
for national revenue and BOP accounts. On the other hand, China has an
opportunity to grow its footprint in the international economic system given its massive amounts of cash
and lower government debt compared to peers (US, India, EU & Japan). Chinese business travel to
investment destinations on their radar is set to shoot as a resultant factor. With the advent of the
new dispensation, this development is likely to be felt in Zimbabwe where already 32% of the Chinese
visitors are on business.
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 Global Tourism Overview
International Tourist Arrivals

International tourist arrivals grew by 7% in 2017 to reach 1.322 billion. The growth in arrivals Growth:
is expected to continue in 2018 at a rate of 4%-5%. Arrivals into Africa also increased by 8%
7%
from 58.2 million in 2016 to 62 million. Despite the growth in arrivals, the market share of
arrivals into Africa has remained very small at an average of 4% for the past decade and Total
Arrivals:
currently stand at 4.7%.
1.322
Billion
Global Arrival Growth Rates by Region 2017

International Tourism Indicators 2017

Source: UNWTO

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 Key Global Tourism Developments

Brexit: Triggering Article 50

Following the 2016 “Brexit” vote Britain

triggerred Artcle 50 of the Lisbon Treaty
initiating divorce proceedings from the
European Union (EU) marking a point of no
return in the process. Britain however still has
until March 29, 2019 to negotiate the terms of
its departure. Following the Brexit vote and
the triggering of article 50 the British outbound expenditure was estimated to have decreased
by 4.2% in 2017 as the drop in value of the pound will continue to impact UK outbound travel
market. This development might impact on Zimbabwe as UK is the destination’s second largest
overseas market.

Donald Trump and the America First Policy

The American President Donald Trump began

his first term in office projecting a policy of
"America First" as he ceded the United States'
leadership on climate change, blasted
international agreements and demanded more of
U.S. allies. The move was largely seen as
promoting America but also as a threat to both
global stability with tensions rising between the US and Korea, China and Russia. One of
President Trump's policies, the travel ban limiting entry to the U.S. from six predominately
Muslim countries, has caused some destinations and tourism organizations to project fewer
international visitors to the U.S. in 2017. However, overally the U.S. outbound travel forecast
is much brighter. The number of foreign trips by U.S. travelers is estimated to have grown by
5.4 percent in 2017 and the same is projected to continue into 2018 a positive development for
Zimbabwe considering that the US is the country’s major overseas market.

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Geopolitical Tension, Political Uncertainties And Terrorism

Global tourism continue to be threatened by the growing concern over political uncertainty,
exponential military developments and geopolitical tensions in several regions over the world.
In 2017 alone 1,778 terrorist attacks were recorded with 7,786 fatalities
(www.storymaps.esri.com). The majority of these attacks were experienced in the northern half
of Africa and the Middle-East. The regions’
vulnerability to such threat has been
sustained for years, with no clear sign of a
path to real peace and stability, necessary for
sustainable economic progression.
Apparently, this no-longer a problem for
these regions but also the Americas and
Europe as attacks have been made there as
well.

Meanwhile nuclear advances in North Korea, the civil war in Syria continues to cause unrest
amongst its people and regional neighbours, unrests in East and Central Africa as well as
domestic political shocks in most emerging markets continue to cause concerns the world over
hampering the full growth of global tourism. The political landscape makes the business
operating environment much more volatile, fragmented and risky, making it hard for business
to thrive and even encourage travel to and from regions with such conflicts. The peaceful
situation in most of Southern Africa including Zimbabwe is on the other hand an
opportunity in such a volatile world in terms of tourism. SADC as a destination should thus
position itself inorder to turn the situation intoan .

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 markets.
National Economic Overview
Overall economic performance in 2017 is estimated to have registered

a modest growth of 2.8%. In spite of the dry spell in the 2017/18 farming Growth:

season and liquidity challenges the economy is estimated to grow by

. 2.8%
6% in line with ongoing government reforms according to the Finance

Ministry.

Real GDP Growth (%) Projected

Inflation
The annual inflation rate closed at 3.46% in December 2017. In 2018, inflation is projected to slightly
increase to an annual average of 5%, owing to the looming dry season and the anticipated increase in oil and
energy prices. Although inflation may be considered healthy for economic growth, it also impact negatively
on the tourism industry pricing.

Liquidity Crunch
As such, the ongoing cash crisis continue to affect the tourism sector as both domestic and international
tourists find it difficult to access cash for use in the country. According to the recent VES 80% of the
international tourists to the country use cash in transacting, as such the access to cash may be hindering
business. However, this could also mean tourism may be bringing in the much needed hard currency in cases
where tourists come with the cash.

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Overview of Tourism Performance in Zimbabwe
Tourist Arrivals

Zimbabwe received a total of 2,422,930 tourist arrivals in 2017,

12% up from 2,167,686 received in 2016. The growth in arrivals
Arrival
was driven by the notable growth in arrivals from all source Growth:
regions and most major markets. Of particular note is the growth
in arrivals all European, North American and Asian markets.
12%
Total Arrivals:
These markets drove the growth in overseas arrivals into the 2,422,930
country.

Arrivals By regional Markets 1999 vs. 2017

1999 2017
AFRICA 1,652,605 1,948,509
EUROPE 380,113 218,140
AMERICA 116,109 121,043
OCEANIA 65,281 36,266
ASIA 35,507 91,435
MIDDLE EAST ** 7,537
GRAND TOTAL 2,249,615 2,422,930
**Middle East was included in the Asia figure in 1999

Performance by Source Region

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 Purpose of visit 2017/16

Purpose of Visit 2017 2016 Change

Business 191,663 119,101 61%
Education 14,825 23,096 -36%
Indirect Transit 871,763 823,579 6%
Shopping 127,143 87,279 46%
Leisure & VFR 1,198,979 1,080,657 11%
Other (Unspecified) 18,557 33,974 -45%
Total 2,422,930 2,167,686 12%

All major purposes of visit saw a surge in arrivals with the exception of education which fell
by 36%. VFR and leisure continue to lead the arrivals into the country followed by indirect
transits. Visits on business had the highest relative increase at 61% while those on VFR and
leisure had the highest absolute increase of 118 322 arrivals.

Mode of Transport 2017/16

2017 2016 %Change

Air 310,134 239,039 30%
Land (Road & Rail) 2,112,796 1,928,647 10%
Total 2,422,930 2,167,686 12%

Arrivals by air contribute 13% of the arrivals into the country (up from 11% in 2016) while
arrivals by land contribute the remaining 87% of all the arrivals. Both arrivals by air and land
increased with a significant increase registered by air.

Receipts

Tourism receipts recorded a 12% growth from $819 million in 2016 to $917 million in line
with the increase in international tourist arrivals.

Accommodation Utilization

Average Hotel Room Occupancy

Harare, Bulawayo and Victoria Falls maintain the largest share in terms of room and bed
capacity in the country making up 64% of the total room and bed capacity. The average room
occupancy level for Harare declined from 57% in 2016 to 55% in 2017. In Bulawayo the

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average room occupancy level rose from 42% in 2016 to 46% in 2017 while in Victoria Falls
also experienced a 6% growth from 49% to 55% during the period under review.

Average Hotel Room Occupancy 2017/16

60%

50% 55% 57% 55%

40% 46% 49%
42%
30%

20%

10%

0%
HARARE BULAWAYO VICTORIA FALLS

Harare Bulawayo Victoria Falls

2017 55% 46% 55%
2016 57% 42% 49%

Monthly Average Hotel Room Occupancy 2017

80%

70%

60%

50%

40%

30%

20%

10%

0%
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Harare 38% 53% 52% 50% 57% 58% 56% 59% 68% 63% 58% 55%
Bulawayo 34% 52% 43% 47% 42% 49% 43% 42% 58% 52% 47% 40%
Victoria Falls 28% 40% 45% 52% 55% 51% 57% 71% 75% 67% 61% 60%

Trends for major regions (Bulawayo, Harare and Victoria Falls) showed a
gradual increase in occupancies from January to September in line with

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seasonality trends. All regions generally experienced significant increases in
occupancies between the period July to mid-September with Victoria Falls
surpassing all the other regions from thence reaching an average occupancy
rate of 75% in September.

Average Hotel Bed Occupancy

Average bed occupancy level in Harare declined from 49% in 2016 to 37% in 2017.
Bulawayo’s average bed occupancy level experienced a positive growth from 31% in 2016 to
38% in 2017. In Victoria Falls the average bed occupancy level rose from 40% to 46% in 2017.

Average Hotel Bed Occupancy 2017/16

50%
45%
49%
46%
40%
37% 38% 40%
35%
30% 31%
25%
20%
15%
10%
5%
0%
Harare Bulawayo Victoria Falls
2017 37% 38% 46%
2016 49% 31% 40%

Domestic tourism continuous to be the major driver in the tourism sector, with the exception
of the Victoria Falls region which had a client mix of 75% foreign to 25% local, the local
clientele dominated the accommodation sector with 82% of hotel clientele being local.

Overally the national average hotel room occupancy level rose from 46%to 48% while the bed
occupancy level followed the same trend and experienced a 5% growth from 33% to in 2017.

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 Some Key Events Impacted Tourism

New Look Victoria Falls Airport Attracts New Airlines

The new-look Victoria Falls International Airport has begun to bear fruits with the resort

destination gaining confidence in the aviation industry. The airport welcomed Ethiopian

Airways, South African Airways and Kenyan Airways (KQ) in the first half of the year 2017.

The increase in airlines and flights into the destination has brought more connectivity with

major hubs like Addis Ababa, Nairobi and Cape Town now directly linked to the resort town.

Going forward more airlines and traffic are expected into Victoria Falls making it a true

regional tourism hub pushing the prospects of Zimbabwean tourism even higher.

Operation Restore Legacy

Following the intervention by

the Zimbabwe Defence Forces

in Operation Restore Legacy

there has been a notable

reduction of police presence in

the country’s highways, a move that is seen as positive to the destination image of the country.

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This is especially so as police harassment was seen as one of the major deterrence to tourism

in the country according to the 2015/16 Visitor Exit Survey. The move to clamp down all forms

of corruption in all sectors by the government following the operation will also go a long way

in bolstering confidence in the destination.

Persistent Liquidity Crisis

The liquidity crunch and forex shortage that has hit the country since Mid-2016 continues to

bedevil the country and tourism in particular as it affects everyone from the ordinary citizen to

international tourists. Although major tourism facilities and service providers in the country

are nor accepting plastic money, small curio and arts vendors are some of the players that are

worst affected by the liquidity crunch. Furthermore, the crisis also continue to impact

negatively on the image of the country as travel warnings from some major markets like the

UK, US and New Zealand continue to highlight this challenge.

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 Annexure I: Tourist Arrivals - 2017/16

Overseas Tourist Arrivals 2017/16

Source Country 2017 2016 Change
AMERICA
Argentina 1,001 781 28%
Brazil 3,428 1,619 112%
Canada 10,613 4,157 155%
Mexico 887 364 144%
USA 101,206 82,699 22%
CARRIBEAN ISLANDS: 435 547 -20%
Cuba 66 87 -24%
Jamaica 215 203 6%
Other Islands 154 257 -40%
Other America 3,473 2,458 41%
Total 121,043 92,625 31%
ASIA
China/Hong Kong 14,407 9,164 57%
India 6,960 4,074 71%
Japan 34,214 22,566 52%
Malaysia 4,991 2,589 93%
Pakistan 1,063 685 55%
Singapore 7,385 1,943 280%
South Korea 20,074 12,956 55%
Other Asia 2,341 1,387 69%
Total 91,435 55,364 65%
EUROPE
Austria 4,173 3,332 25%
Benelux 20,189 15,816 28%
Britain & Ireland 73,552 32,457 127%
France 23,055 14,286 61%
Germany 37,304 28,929 29%
Italy 12,944 9,551 36%
Nordic Countries 7,915 7,166 10%
Portugal 6,471 2,308 180%
Spain 12,583 8,950 41%
Switzerland 8,754 7,717 13%
Other Europe 11,200 6,671 68%
Total 218,140 137,183 59%

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 Overseas Tourist Arrivals (Continued)
MIDDLE EAST
Iran 713 135 428%
Israel 4,415 3,877 14%
Kuwait 76 142 -46%
Saudi Arabia 39 94 -59%
UAE 95 163 -42%
Other ME countries 2,199 372 491%
Total 7,537 4,783 58%
OCEANIA
Australia 27,000 21,413 26%
New Zealand 9,019 7,024 28%
Others 247 359 -31%
Total 36,266 28,796 26%
OVERSEAS TOTAL
GRAND TOTAL 2,422,930 2,167,686 12%

African Tourist Arrivals 2017/6

Source 2017 2016
Country Change
Tourists Transits Total Tourists Transits Total
Tourists Tourists
Angola 1,716 70 1,786 5,361 48 5,409 -67%
Botswana 76,238 25,607 101,845 72,158 22,189 94,347 8%
DRC 13,008 20,803 33,811 6,919 19,304 26,223 29%
Egypt 423 12 435 478 7 485 -10%
Ghana 1,524 227 1,751 2,271 62 2,333 -25%
Kenya 6,830 2,715 9,545 4,470 3,006 7,476 28%
Lesotho 15,823 3,282 19,105 4,516 4,804 9,320 105%
Malawi 70,098 336,908 407,006 68,585 340,717 409,302 -1%
Mauritius 3,044 76 3,120 1,301 196 1,497 108%
Mozambique 140,578 48,659 189,237 93,287 78,397 171,684 10%
Namibia 14,332 2,844 17,176 10,352 2,537 12,889 33%
Nigeria 1,956 23 1,979 2,220 421 2,641 -25%
Seychelles 2,662 25 2,687 6,496 257 6,753 -60%
S. Africa 638,124 78,110 716,234 658,508 78,485 736,993 -3%
Swaziland 20,868 5,821 26,689 10,439 4,222 14,661 82%
Tanzania 13,770 17,456 31,226 9,784 11,922 21,706 44%
Uganda 3,216 2,352 5,568 2,381 2,059 4,440 25%
Zambia 96,023 257,191 353,214 90,700 219,795 310,495 14%
Other Africa 21,255 4,840 26,095 5,908 4,373 10,281 154%
Total 1,141,488 807,021 1,948,509 1,056,134 792,801 1,848,935 5%

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 Annexure II: Accommodation Statistics - 2017/16
Average Hotel Room Occupancy Rates 2017/16
Clientele Mix
Room Occupancy 2017 2016
Room
Capacity 2017 2016 Change Local Foreign Local Foreign
Harare 2 371
55% 57% -2% 67% 33% 65% 35%
Bulawayo 785
46% 42% 4% 94% 6% 94% 6%
Mutare/Vumba 537
41% 38% 3% 96% 4% 92% 8%
Nyanga 244
37% 37% 0% 88% 12% 90% 10%
Midlands 314
37% 29% 8% 98% 2% 99% 1%
Masvingo 190
46% 43% 3% 84% 16% 91% 9%
Kariba 447
43% 38% 5% 93% 7% 89% 11%
Hwange 293
25% 19% 6% 78% 22% 79% 21%
Victoria Falls 1126
55% 49% 6% 25% 75% 26% 74%
Beitbridge 176
18% 14% 4% 100% 0% 92% 8%

National 6 483 48% 46% 2% 82% 18% 82% 18%

Average Hotel Bed Occupancy Rates 2016/17

Clientele Mix
Bed Occupancy 2017 2016
Bed
Region Capacity 2017 2016 Change Local Foreign Local Foreign
Harare 4 387 37% 39% -2% 67% 33% 65% 35%
Bulawayo 1 633 38% 31% 7% 94% 6% 94% 6%
Mutare/ Vumba 1 027 27% 25% 2% 96% 4% 92% 8%
Nyanga 508 24% 23% 1% 88% 12% 90% 10%
Midlands 596 29% 24% 5% 98% 2% 99% 1%
Masvingo 260 28% 27% 1% 84% 16% 91% 9%
Kariba 834 31% 26% 5% 93% 7% 89% 11%
Hwange 580 20% 15% 5% 78% 22% 79% 21%
Victoria Falls 2 463 46% 40% 6% 25% 75% 26% 74%
Beitbridge 484 15% 12% 3% 100% 0% 92% 8%

National 12 772 35% 33% 2% 82% 18% 82% 18%

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SOURCE: Tourism Operators through Levy & Statistical Remittance Forms

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