Business Reporter
OCCUPANCY rates only experienced a marginal decline of 1 percentage point from April to May 2023, dropping from 51.8% to 50.8% in May. However, on an annual basis, occupancy rates have shown a noteworthy improvement of 11.4 percentage points compared to May 2022, indicating a recovery in the sector.
These statistics were provided by Simonis Storm Securities, a local equities and wealth management company.
According to Theo Klein, an economist at Simonis Storm Securities, the coastal area of Namibia reported the lowest occupancy rate in May 2023 at 44.2%, down from last month’s high of 58.1%. He added that this month, the central area had the highest occupancy rate of 54.9% (an increase of 17.6 percentage points from the previous month), followed by the northern area at 52.1% (3.9 percentage points lower than the previous month), and the southern area at 48.5% (0.8 percentage points lower than April 2023).
“In May 2023, business visitors accounted for a larger share of all occupancy rates, representing 9.52% of visitors, which is an increase of 7.8 percentage points compared to the prior month. Leisure visitors (89.6%) continued to drive tourism in our country, while 0.9% of visitors attended conferences in Namibia. Going forward, we expect business and conference travel to increase due to foreign investors participating in local green hydrogen pilot projects, Hyphen’s project in the South, as well as ongoing exploration for gas, oil, copper, gold, and rare Earth metals,” said Klein.
He further noted that Europeans made up 55% of all visitors to hospitality establishments across the country. “As usual, the majority of visitors in May 2023 came from Germany, Austria, and Switzerland (30.9%), followed by locals (22.8%), South Africans (8.3%), and the French (8.4%). Tourists from Germany, Austria, and Switzerland are surpassing pre-pandemic occupancy rates, while tourists from the rest of the world are nearing pre-pandemic levels,” Klein added.
In May 2023, the inflation rate for accommodation services and catering in Namibia showed moderation, with both categories recording an annual increase of 6.7% year on year. This is in contrast to the inflation rates recorded a year ago, where accommodation services experienced a significant rise of 14.6% year on year, and catering saw a more modest increase of 3.6% year on year.
Klein said that tourist inflows into Namibia have shown signs of improvement, reaching 68% of the pre-pandemic passenger arrival levels. He also shared that in April 2023, there was a notable increase of 34.2% year-on-year in arrivals to Namibia. “Many analysts expected a decrease in international travel and tourism inflows due to the widely held view that the US and other advanced economies would be in a recession. However, halfway through 2023, this has not materialized. Contrary to consensus views, we remain positive on the tourism sector, as stated in our Economic Outlook 2023 report (released in January 2023), as we expect middle to high-income European households to continue travelling despite their country’s recession,” Klein said. He added that according to the Hospitality Association of Namibia (HAN), there is a growing market for camping, but it is difficult to retrieve specific statistics.
“Indeed, conversations we had with hospitality establishments in the South of Namibia indicate that demand for camping is strong and growing, especially among South African travellers. We still believe that the tourism sector will be a significant driver of economic growth in 2023, supporting job creation and complementary industries,” Klein concluded.
