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OpenWe Are Not Involved In Externalisation - Tourism Operators
The Tourism Business Council of Zimbabwe said that they are not involved in the externalisation of foreign currency and urged the Reserve Bank of Zimbabwe (RBZ) to understand how they operate.
The RBZ recently granted a moratorium to all operators, who have unregistered tourism agreements and unapproved offshore accounts to regularise the agreements and offshore foreign currency accounts with the central bank before the end of this month.
The Hospitality Association of Zimbabwe (HAZ) said the regularisation of unapproved offshore accounts and unregistered agreements will control tourism leakages and pave the way for accurate reporting on the tourism satellite account.
However, Tourism Business Council of Zimbabwe president Wengayi Nhau told The Standard that they are not involved in externalisation. Nhau:
For argument’s sake, we have a client in Europe or the United States who wants to go on holiday.
Then on the other end, we have a destination management company (DMC) that is, in most cases, based either in that particular destination within the country or they operate remotely.
And then you have what we call a travel agent and a tour operator.
The DMC is more like the supply chain manager. It consolidates all services, manage everything on the ground.
The tour operator provides a service of taking people for the tours.
The travel agent does packaging in conjunction with the tour operator and the DMC.
The travel agent is back in the source market; in this case, it’s in Europe or the United States.
The travel agent then contacts the local ground handler, which is the DMC in the case of Zimbabwe and asks for services which include accommodation, tours, and safari activities, and they are given a quotation based on the rates that we have got locally.
Nhau further explained that when the travel agents in Europe or the United States check all the costs; they put their own mark-up which the local operators have no control over.
He added that if there is an intermediary between the overseas client and the regional client, they also put their mark-up. Said Nhau:
I might be dealing with the South African operator, who would be dealing with the Canadian operator or American operator.
I give a quotation to the South African operator who put his mark up and give it to the overseas operator who also put their mark up.
What they transmit and remit to Zimbabwe is only what I’ve invoiced and we have no control over all other things.
So, the bone of contention that has been happening is that with the RBZ and Zimbabwe Revenue Authority in some cases they’ve attempted to also factor in the difference between what the agents have collected and what I have charged.
We have what we call special tour operators rates. These are contract rates.
When I book accommodation as an agent in Zimbabwe I get it at less 20%, 15% or 10% depending on what negotiations we have done and when I pass on to this operator, I also give him maybe less 10% or 5% whichever. He puts his mark-up.
So, what then the authorities are thinking is that the difference between what we have quoted here and what the client has paid, they take that as externalisation.
Since these are contracts and as you know we are dealing remotely, people feel secure and safe to pay after the service. In the case of agents and operators, they prefer to pay one invoice.
He said where the money is paid into the Zimbabwean account, they also collect payments on behalf of other downstream operators who are outside Zimbabwe’s jurisdiction.
He said when they receive this bulk payment into the country, they should then be able to forward the payment and keep it as a deposit until the time the payment is due we transmit it. Said Nhau:
Our exchange control regulations are very inconsistent to the extent that people no longer feel secure holding the money for a longer period here because even if we have an account that allows you to hold payments in foreign currency, they have up to 90 days that you must have used that money.
But in a lot of cases, we hold deposits for 6, 12, 18, 24 months or beyond.
As we speak, we are running activities and services for payments that were deposited prior to COVID-19 that were interrupted by the pandemic, but where there is that extended control requirement that we must liquidate payment, we become handicapped.
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