44781. The costs and pricing of tourism in Zambia: The case of Livingstone
- Author:
- Bernard Banda and Caesar Cheelo
- Publication Date:
- 11-2012
- Content Type:
- Working Paper
- Institution:
- Zambia Institute for Policy Analysis and Research (ZIPAR)
- Abstract:
- Tourism is potentially one of Zambia’s best prospects for economic diversification and growth. The tourism sector has the potential to play an increasingly important role in stimulating economic growth by contributing to job creation, foreign exchange earnings, entrepreneurial development, infrastructural development, improvements to rural areas and communities, and more. There are questions, however, over the effectiveness of public sector policy and strategic interventions in fostering the realisation of the potential of tourism. In this regard, there are two opposing views of the realities of Zambia’s tourism industry. The operators argue that the business environment is exceptionally difficult in terms of both the odious costs of doing business and the variability of regulations in the industry. In sum, they say, it is a struggle to generate decent profits. Their critics, however, say that such claims are unfounded. They believe that the operators have been deliberately creating information asymmetries, causing immense loss of government revenue and benefitting from considerably higher prices for tourism service packages than do their competitors in the region. It is possible that both arguments contain some truth. Until we gain a better understanding of the cost and price structures and their differences with regional competitors, the mistrust between the government and the private sector will persist. This study seeks to make a modest contribution to informing tourism policy and strategies by taking a disaggregated look at the cost and price structures of tourism service operations in one of Zambia’s key tourism destinations and comparing them with the structures in a proximate competitor region. By benchmarking tourism services in Livingstone against those in Victoria Falls town (on the other side of the Zimbabwean border), it captures detailed data on prices, inputs (labour, main service ingredients), food and beverages, overheads and other establishment performance indicators. The services considered include: accommodation (hotels and lodges); food and beverages (restaurants, diners, pubs/bars, cafes, etc); adventure tourism (water rafting, water cruises, micro flights); and wildlife safaris (nature walks, game drives, safaris).
- Topic:
- Development, Tourism, and Economic Growth
- Political Geography:
- Africa and Zambia