Strengthening pula spooks local tourism sector

The Botswana stall was a hive of activity PIC: MBONGENI MGUNI
The Botswana stall was a hive of activity PIC: MBONGENI MGUNI

DURBAN: Players in the local tourism sector are anxiously watching the strengthening of the pula against the US dollar, concerned that further upward movement will cut arrivals from the key target market.

The pula rose by 7.9 percent against the US dollar last year, although in the last month the greenback mounted a revival to end April with a 12-month loss of 6.7 percent. In January, the Ministry of Finance and Development Planning announced that the pula would adopt a downward crawl of 0.30 percent, which, even though minimal, was interpreted by analysts as a signal that authorities felt the pula was overvalued.

The local tourism sector is heavily dependent on arrivals from the United States, a wealthy and sophisticated market that suits the national policy targeting “high value, low volume” tourists.

Local exhibitors at the ongoing Travel Indaba here told BusinessWeek the strength of the pula against the dollar was a party spoiler in a year of otherwise positive signals for the economy.

“The more the pula rises, the more expensive it is for the tourists coming,” explained Cresta Marakanelo group sales and marketing manager, Patrick Chivese.

“Tourists would have long planned their trips based on certain exchange rates and the changes make it more expensive. Often, there is not enough time to go back and re-negotiate with them.

“Some end up opting for destinations such as Zimbabwe or South Africa.”

He said besides the Pula/USD situation, the sector was upbeat, particularly as global marketing of Botswana as a tourism destination had been enhanced by the seamless transition of power in April. Cresta, the country’s biggest hotel group, has begun a total overhaul of its Mowana hotel and hopes its Cresta Maun hotel, which opened last year, gathers momentum this year.

Tracey Tshekonyane, a manager at Big Sam Hubber based in Kasane, said although arrivals from the US were steady, any further strengthening of the pula would cause anxiety. “We depend on the USD and when it weakens, we wonder of the impact going forward. We are watching it and it is a concern to us,” she said.

Big Sam Hubber offers game drives, boat cruises, accommodation and others in the Chobe area. The strengthening pula is not a concern however for the specialised adventure tourism sector, who are reporting continuing strong bookings this year. “In our particular type of industry, we are not worried about that and we are actually making significant inroads into the US market,” said Limpopo Horse Safaris’ manager, Lindy Hill. 

“We appeal to a different category of tourists who are not influenced financially by such movements and operate in the high income category. We have not seen a decline in bookings, as a result.” Limpopo Horse Safaris provides horseback tours of the Tuli Block where tourists ride alongside wild animals as a type of adventure tourism.

The Travel Indaba, the continent’s largest travel and tourism trade show, ended on Thursday.

Editor's Comment
Seamless Business Environment Needed Post-COVID

The country was also classified as the least corrupt in the world with strong anti-graft checks and balances. With these assurances, investors were guaranteed safety on their investments and returns. That is no longer the case. Several countries like Namibia, South Africa and Mauritius have done well over the years and overtaken Botswana as attractive places to do business.Therefore, when countries that Botswana is competing with for a piece of...

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