Zimbabwe’s 15% VAT on tourism accommodation for foreign tourists, which was implemented in January, has resulted in a one percentage point decline in occupancies for the first quarter of 2015, according to Paul Matamisa, CEO of the Zimbabwe Council for Tourism (ZCT).
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The average hotel room occupancies for the first quarter of 2015 was 38% compared with the 39% for the first quarter of 2014. Tourist arrivals in the first quarter fell marginally by 0.3% from 388 732 tourists in 2014 to 387 557 in 2015.
“Judging by the current statistics that we have for the first quarter, it is indicated that there is a negative reaction to the VAT charges,” said Matamisa.
Francis Ngwenya, President of ZCT, said: “Hotel occupancy forecasts and performance year to date are lower than last year for the international market.”
The ZCT recently conducted a study regarding the 15% VAT and it was revealed that Zimbabwe is 30-40% more expensive in offering tourist packages and services. “The study was conducted to find out the effects of the 15% VAT and the implications it has on our tourism, such as arrivals,” said Matamisa.
Zimbabwe is more expensive as a result of the high VAT, however the use of the US dollar currency in the country is also a contributing factor, said Matamisa. “The use of the US dollar in Zimbabwe is more daunting for visitors in comparison to the use of the rand in South Africa, pula in Botswana and metical in Mozambique. With this, visitors will find it cheaper to travel elsewhere.
“The 15% VAT has slowed down the momentum we built up over the last few years, in terms of trying to get more tourist arrivals into the country. It now means we have to start pushing to get our target number back, which we were about to reach,” added Matamisa.
