Will the renewed conflict overshadow the known systemic challenges of the uncompetitive tourism sector?
Mozambique has succeeded in attracting a significant tourism interest in recent years. Considerable capital investments in the sector have allowed the growth of a relatively diversified tourism sector in the past decade. Tourism demand in the country is largely based on its biodiversity, unique cultural heritage and the relative under-commercialization of it natural assets. Due to its proximity to South Africa, Mozambique currently captures a significant portion of its international leisure market share as an add-on destination for visitors to South Africa. However, the country is increasingly being seen as a stand-alone destination for world travellers with a preference for environmentally-responsible tourism. Tourism supply in Mozambique is centered on two key market segments, namely (i) business, and (ii) sun, sea and sand (SSS) leisure.
Despite the advances in the tourism industry, realization of investment calls in the sector throughout the country is still hampered by several key constraints including: excessive bureaucracy, persistent corruption, difficulties in securing land tenure for development, land usage conflicts, lack of infrastructural and administrative support, restricted access to financing, etc. The late 2013 through 2014 series of attacks mainly along Mozambique’s north-south highway, the EN1 between Sofala and Inhambane provinces, worsened the sector’s outlook and the economy at large. Recent press reporting has focused on potential destabilization of Mozambique’s economic development with a particular impact on the tourism sector. Cancellation of bed nights by tourists is one component of the said impact. It is important to note that tourism generates revenue throughout a complex value chain which includes suppliers of food and services to hotels through transport, artisan crafts and retail sectors.
Early findings from a SPEED commissioned study on the cost of renewed conflict in tourism indicate that while the renewed conflict is one of the factors affecting the tourism performance in Vilankulos area, it was has however, been the primary cause of the current state of the tourism industry in the area. The study finds that in Vilankulos, operators reported a 50% drop in business over the peak season [Dec-Jan] in comparison to previous years. The average occupancy rate of operators in 2013 was about 10% of the annual averages achieved between 2010 and 2011 [under no conflict]. Average occupancy rate achieved across all market segments in March 2014 was 5-10% confirming the declining trend [though with conflict]. The impact of this decline is clearly being felt across the value chains: Drop in arrivals – drop in occupancy rates – drop in spending per guests – drop in sales of local businesses, etc.
Should the armed conflict escalate the impacts throughout the tourism industry would be tremendously high. Tourists would become increasingly aware of and potentially effected directly and indirectly by the conflict and as such, higher levels of impacts would be felt. Addressing the structural and systemic constraints affecting tourism and the resulting downturn in performance reported prior to the conflict requires urgent attention and intervention (the virtuous cycle). However, as an element of the overall operating conditions, continued conflict is a significant threat to the industry’s recovery and growth.
Domingos Mazivila