Category: Tourism

The National occupancy rates increased to 51.2% for June 2023 from 50.8 % recorded in May 2023 (Figure 1).  The central part of the country continues to record the highest occupancy rate of 58.4% for June 2023 followed by the coastal part of the country recording 50.7% and the Southern part recording the lowest occupancy rate of 44.10%.

According to the Hospitality Association of Namibia, the months of June 2019 and 2023 ended at nearly the same level of 51% occupancy across the country, with the average occupancy for the first six months of this year at 44,68%, just 2,5% lower than the 47,23% occupancy in the first half of 2019. On a quarterly basis, national occupancy improved during quarter 1 of 2023 recording 38.1% from 22.8% that was recorded during the quarter of 2022 (Figure 2).

Namibia’s occupancy rates continue to be driven by leisure activity travelers. During the month under review, occupancy rates for leisure activities took up 80.1% of the national occupancy rates, a decline from 89.6% that was recorded for May 2023. This could be driven by low demand as a result of an increase in the prices for package holidays between May and June 2023(NSA, NCPI June 2023). Additionally, the business category took up 17.1% of national occupancy for June 2023 an increase from the 10.6% that was recorded in May 2023. This implies an increase in the demand for business-related activities which suggests a vibrant and growing business environment. 

The domestic market accounted for only 30.1% of national occupancy during the month under review, an improvement from 22% that was recorded in May 2023 and the remaining percentage is from international tourists, with high demand for occupancy from Germany, Switzerland and Australia accounting for 24.06% of international occupancy demand.

We expect the tourism sector's positive trend to continue upward in the short to medium term. However, there is a need for data on the full tourism spectrum such as (travel agencies and tour operators, adventure tourism, car rental, aviation, and the catering sector) all of which will contribute to Namibia's tourism industry's full impact and value.

Figure 1: National Occupancy Rates, Namibia (June 2022- June 2023)

Source: H.A.N & HEI RESEARCH

Figure 2: National Occupancy Rates, Namibia (Q1 2022 vs Q1 2023)

Source: H.A.N & HEI RESEARCH

1. Background

According to the World Tourism Organization, international tourism is on its way back to pre-pandemic levels, with twice as many people traveling in the first quarter of 2023 as in the same period of 2022. During the first quarter of 2023, international arrivals had reached 80% of pre-pandemic levels. During this period, an estimated 235 million tourists traveled internationally, more than doubling the figure for the same period in 2022. This is an indication that tourism has maintained its resilience. Additionally, according to revised 2022 data, over 960 million tourists traveled internationally last year, implying that two-thirds (66%) of pre-pandemic numbers were recovered with the African continent reaching 88% of 2019 levels.

The domestic tourism activity, as measured by total airport passenger arrivals, improved significantly year on year with total tourist arrivals increasing year on year to 81 614 for the first quarter of 2023. The recovery could be primarily attributed to the normalization of travel activity following the removal of the Covid-19 restrictions as the economy opened up. The Covid-19 pandemic, as well as shifting consumer preferences and more significant international developments, many of which cannot always be easily predicted and catered to, have forced Namibia's tourism industry to adapt over the past few years. Namibia is known for its stunning landscapes, rich biodiversity, and unique cultural experiences, making it an attractive tourist destination in the region and on the continent.

2. Analysis

2.1 Quarter 1 2023

During quarter 1 of 2023 total arrivals were 37.0% lower than the pre-pandemic level when compared to the first quarter of 2019 (pre-pandemic period), the yearly increase in airport passenger arrivals was reflected in both international and regional arrivals. Quarter-on-quarter, the total number of tourist arrivals declined by 15.6% from 96 755 recorded during the fourth quarter of 2022. This could be attributed to seasonal patterns that influence traveler’s choices. Furthermore, international arrivals increased year on year, from 18 207 recorded during the first quarter of 2022 to 37 654 recorded in the first quarter of 2023. Additionally, regional arrivals increased from 30 890 recorded in the first quarter of 2022 to 43 960 recorded in the first quarter of 2023. The increase in international and regional arrivals could be attributed to an improvement in consumer confidence that could have led to a high demand in traveling activities.

2.2 May 2023

During the month under review (May 2023) a total airport arrival declined to 40902, down from 43943 arrivals recorded in April 2023. This translated into a 6% monthly decline (Figure 1). The decline was attributed to a decline in Hosea Kutako International Airport (HKIA) with a decline of 11% followed by the regional airport arrivals declining by 5%. This could have been attributed to low regional and international travelers’ confidence ascribed to a high cost of living, leading to cautious spending on traveling activities. Notwithstanding this, total airport arrivals for May 2023 were driven by international arrivals taking up 43.3% of total arrivals followed by regional arrivals with 40.8% and the remaining 15.9% was domestic arrivals.

On an annual basis, total airport arrivals increased by 32.7% when compared to 2022. This increase could be attributed to improved travelers’ confidence amidst the confluence of factors that influences consumers spending patterns (Figure 2).

Figure 1: Monthly Total Airport Arrivals (May 2022 – May 2023)

Source: NAC &HEI RESEARCH

Figure 2: International, Regional vs. Domestic Arrivals (May 2022 – May 2023)

Source: NAC & HEI RESEARCH

3. Outlook

The economic environment will continue to be the primary determinant of how effectively the tourism sector recovers in 2023 and beyond. However, we anticipate an increase in arrivals for the month of June, particularly domestic arrivals, given that June is a school holiday month, and as a result, we expect an increase in demand for travel-related activities.

The National occupancy rates declined to 50.8% for May 2023 from 51.8 % recorded in April 2023, (figure 1).  The central part of the country recorded the highest occupancy rate of 54.8% for May 2023 followed by the Nothern part recording 52.1% and the coastal part of the country recorded the lowest occupancy rate of 44.2%. According to the Hospitality Association of Namibia, Europe continues to shine as Namibia's main source market with over 55% of visitors coming from greater Europe, (just under 31% from German-speaking Europe and 24% from other European countries, 8% of them from France.

Additionally, Leisure tourism activities remain Namibia’s primary driver of tourism and it accounted for 89.2% of visitors during the month under review. Leisure tourism activities may not be favorable to an economy and may bring about negative implications. The implications may include;  popular leisure destinations may face issues of overcrowding, particularly during peak seasons. This can put a strain on Namibia’s infrastructure and public facilities, leading to congestion, increased pressure on natural resources, and degradation of the tourist experience, Overemphasis on leisure tourism activities may lead to negligence or underdevelopment of other tourism segments such as business travel, educational tourism, medical tourism, or adventure tourism, hence it is critical for Namibia to diversify the tourism portfolio. This can help mitigate risks and ensure a more balanced tourism industry.

The domestic market accounted for only 22.5% of national occupancy during the month under review, with the remaining percentage of national occupancy rates going to the international market. This indicates that the tourism sector is heavily reliant on international tourists, and thus there is a need to create an environment that encourages residents to engage in tourism-related experiences and activities within their own country. Measures to promote domestic tourism may include; Launching targeted marketing campaigns that highlight the benefits of domestic tourism, Introducing incentives such as tax breaks, subsidies, or discounts for domestic travelers, and engaging with tourism industry stakeholders, including hotels, restaurants, tour operators, and transportation providers to develop attractive packages and offers specifically targeting domestic tourists, encouraging the development of community-based tourism initiatives where local communities are involved in providing authentic and immersive experiences to domestic tourists, Promote travel during off-peak seasons or weekdays by offering special promotions, discounts, or packages, etc.

A consistent upward trend in occupancy rates in Namibia confirms the country's robust tourism recovery. While June is typically a quiet month prior to the tourism high season, we believe the trend of tourism growth will continue in the short to medium term.

Figure 1: National Occupancy rates vs. HKIA arrivals rooms and beds occupancy rates, Namibia (May 2022- May 2023)

Source: H.A.N & HEI REASEARCH

The National occupancy rates have been displaying excellent results since the start of the global Covid-19 pandemic increasing to 51.8 % for April 2023. National occupancy increased by 11.1% when compared to March 2023 (figure 1).  The coastal part of the country recorded the highest occupancy rate of 58.12% for April 2023 followed by the Nothern part recording 56.04% and the central part of the country recorded the lowest occupancy rate of 37.27%. The country’s primary driver of tourism continues to be leisure tourism which accounted for 98.2% of visitors during the month under review. A consistent positive trend in occupancy rates for Namibia confirms a robust recovery in the tourism sector as it continues to display green shoots on the horizon for the recovery of the entire tourism sector signifying greater utilization, demand, and efficiency within the sector.

According to the Hospitality Association of Namibia, most visitors in April 2023 came from Austria, Germany, and Switzerland. Visitors from those 3 countries constituted over 40% of all visitors for March 2023 compared to 30% in 2019 (figure 2).  The market has grown remarkably,  this could be attributed to the availability of 10 direct flights per week between Windhoek and Frankfurt.

As the peak travel season for Namibia approaches, the outlook for the national occupancy rates remains positive. This will demonstrate a steady recovery for the tourism industry.

Figure 1: National Occupancy rates vs. HKIA arrivals rooms and beds occupancy rates, Namibia (April 2022- April 2023)

Source: H.A.N & HEI RESEARCH

Figure 2: Occupancy rates by country, April 2023)

Source: H.A.N & HEI RESEARCH

The National occupancy rates increased to 40.7 % for March 2023. National occupancy increased by 9% when compared to February 2023 (figure 1). On a quarterly basis, the country recorded 36.8%  national occupancy rates. This reflected the best first-quarter occupancy rate since the onset of the pandemic, and so the local tourism sector is off to a good start in the new year (figure 2).  The Central part of the country recorded the highest occupancy rate of 52.68% for March 2023 followed by the Southern part recording 41.10% and the northern part of the country recorded the lowest occupancy rate of 34.56% (figure 3). Positive national occupancy numbers signify a positive recovery for Namibia’s tourism sector.

According to the Hospitality Association of Namibia, the country recorded an increase in visitors from main source markets, (D, A, CH = Germany, Austria, and Switzerland), which made up 37% of all accommodation for the first three months of 2023 compared to 26,6% recorded during the same period in 2019.  The USA market contribution was also slightly up for  2023 when compared to 2019. Furthermore, the international market contributed the most to national occupancy rates during the month under review, accounting for 72.9% of national occupancy rates, with German, Austria, and Switzerland) recording the highest demand of 38% of the national accommodation services. 

The performance of the sector remains positive for 2023. This is due to positive sentiments expected for national occupancy rates. The recent arrival of the Queen Mary 2 cruise liner with 2,000 guests could also increase the national occupancy rate specifically in the coastal part of the country. Additionally, the Namibian Ports Authority also expects 26 more passenger vessels to arrive at the port between March and May this year. This will further boost the performance of the tourism industry which in turn would lead to high demand for accommodation services resulting in the sector's full recovery.  

Figure 1: National Occupancy rates vs. HKIA arrivals rooms and beds occupancy rates, Namibia (March 2022- March 2023)

Figure 2: National Occupancy rates vs. HKIA arrivals rooms and beds occupancy rates, Namibia (March 2022- March 2023)

Figure 3: Occupancy rates by country, March 2023)

The national occupancy rates increased to 37.09% for January 2023. This reflects a significant annual improvement from 19.53% which was recorded during the same period last year. Positive occupancy rates signify an improvement in the overall full recovery of the tourism sector. Occupancy rates increased momentously and have reached pre-pandemic levels. Additionally, tourist arrivals improved substantially for January 2023 when compared to the same month in 2022 and 2021 respectively (See figure 1 below). Arrivals increased to 28, 441 for January 2023 compared to 17, 175 recorded during the same month of 2022. The increase in total arrivals between January 2022 and 2023 was mainly driven by international arrivals which increased from 5, 156 to 11, 909. This signifies a stellar recovery of international tourists visiting Namibia from the negative impacts of the Covid-19 pandemic.  

The performance of the sector remains positive for 2023. This is due to positive sentiments reflected by an increase in international arrivals which are expected to increase the national occupancy rates. We expect domestic and international arrivals to remain positive for 2023 and beyond, which will result in the tourism sector's wider recovery.  

Figure 1: National Occupancy rates vs. HKIA arrivals rooms and beds occupancy rates, Namibia (January 2022- January 2023)

Arrivals Report, 2022

Analysis

• International and regional tourism continues to recover from the Covid-19 crisis at a robust pace. During 2022, the number of National airport arrivals increased to 400,154 when compared to 130,046 recorded the previous year an increase of 208% (See figure 1). The annual increase in arrivals depicts raising confidence that Namibia is a safe destination for travel and tourism post-COVID-19
• Out of 400,154 National airport arrivals, a total of 163,830 were international arrivals, 157,758 were regional arrivals and 78,566 were domestic arrivals. This represents 41% and 39% and 20% of international, regional, and domestic arrivals respectively. Namibia remains heavily reliant on international travelers and hence it is critical to prioritize investment in domestic tourism to minimize undesirable influences brought about by global crises

• On a monthly basis, between November and December 2022, total arrivals declined by 4% (See figure 2). The decline was driven by a decrease in regional arrivals specifically from Katima Mulilo, Ya Toivo, and Rundu Airports
• Moreover, between November and December 2022, domestic arrivals increased by 142%. This was driven by the holiday specials and package initiatives by the Namibia Wildlife Resort (NWR) along with other companies

Figure 1: Total National Airport Arrivals, 2022 vs 2021

Figure 2: Total International, Regional, and Domestic Arrivals, 2022

Outlook

Green shoots of recovery seen in the Namibian tourism sector. This is supported by positive growths recorded for the hotels, cafes, and restaurants sector during the year 2022. The sector recorded a growth of 2.3 during the third quarter of 2022, the highest since quarter 4 of 2019 (pre-pandemic). We anticipate a gradual recovery in the number of arrivals and the entire tourism industry for 2023. The anticipated gradual recovery is at the back of diverse challenges including the economic condition and continued geopolitical uncertainty.

The National occupancy rate for December 2022 stood at 37.9% a decline from the 45.8% recorded for November 2022. This translated into a monthly decline of 7.9%. (See figure 1). On an annual basis, national occupancy rates increased by 17.5%. This is an indication that the tourism sector is returning to normality (pre-pandemic levels), augmented by the growth in the domestic market that has shown significant improvements.

Accommodation specials and package initiatives by the Namibia Wildlife Resort (NWR) along with other companies have instilled the eagerness of Namibians to travel to local establishments boosting occupancy levels. These initiatives continue to stimulate domestic travel and this will contribute to the overall recovery of the tourism sector.

According to the Hospitality Association of Namibia, in 2022 Central Europe still constituted over half of Namibian tourism accommodation numbers, while nearly 9% of all guests in accommodation establishments were from South Africa and 2% from the rest of Africa.  

Even in the face of diverse challenges including the economic situation and continued geopolitical uncertainty. The performance of the sector remains positive for 2023. This is due to continuous positive sentiments reflected in the national occupancy rates, which reflect a continuous high demand for accommodation services (See figure 2). We expect demand for domestic and international travel to remain strong and help drive the sector's wider recovery.

Figure 1: National Occupancy rates (December 2021- December 2022)

Figure 2: National Occupancy rates, Namibia (2019-2022)

The National occupancy rate for November stood at 45.8%. This was a decline from 55.3% which was recorded for October 2022. (See figure 1 below). According to the Hospitality Association of Namibia, this was an increase of over 10% when compared to 2021,  a clear indication of the continued tourism recovery in Namibia,  which in November reached almost 80% of normality (pre-pandemic levels).

The outlook for the tourism sector is positive, especially for the month of December. This is augmented by the much anticipated high demand for accommodation services influenced by the festive season.

Figure 1: National Occupancy rates vs. HKIA arrivals, Namibia (November 2021- November 2022)

The National occupancy rate for September declined to 52.9 % from 61.2% which was recorded for August 2022. This resulted in a monthly decline of 8.3%.  (See figure 1 below). According to the Hospitality Association of Namibia,  September’s national occupancy was slightly lower compared to that of the peak tourism month August the rate was still twice as high as in September 2021,  which indicates that tourism recovery has doubled since 2021.

All in all,  a very positive and encouraging result to see the Namibian tourism recovery advance to this level in this short time span and proof that most of Namibia’s source markets are back in full swing,  Central Europe remains the strongest market with over 66% of tourists, of which over 35% stem from Germany, Austria, and Switzerland,  but the French and Italian markets were also prominent in both August and September.

The US market also seems to have recovered well,  making up over 4% of the occupancy in September,  almost double what it was in 2021.

The recovery of the tourism sector continues to be on the right track, this is reflected by the continuous positive national occupancy rates. The outlook for the sector remains positive due to positive trends reflected in international arrivals and the demand for accommodation services.

Figure 1: National Occupancy rates vs. HKIA arrivals, Namibia (September 2021- September 2022)