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Cablegate: Waiting for the 2010 World Cup to Be Over

VZCZCXRO6191
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSB #0082/01 0351028
ZNR UUUUU ZZH
R 041026Z FEB 10
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC 0005
INFO SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE

UNCLAS SECTION 01 OF 03 HARARE 000082

SENSITIVE
SIPDIS
AF/S FOR B. WALCH
INR FOR T. CHOJNACKI
AF/PD FOR C. ANYANSO
JOHANNESBURG FOR RCO KENT MAY
STATE PASS TO USAID FOR L.DOBBINS AND E.LOKEN

E.O. 12958: N/A
TAGS: ECON PHUM PREL SCUL SMIG ELAB KPAO ZI
SUBJECT: WAITING FOR THE 2010 WORLD CUP TO BE OVER

1. (U) SUMMARY: In spite of the Zimbabwean government's attempt to
hype the 2010 World Cup's ability to bring in a large influx of
tourists, businesses in Victoria Falls are projecting a significant
decrease in business. With the exception of the Zimbabwe Tourism
Authority (ZTA), business interlocutors in Victoria Falls told us
they had made no contingency plans for a large influx of tourists
from the 2010 World Cup. Most admitted they did not know what to
expect and that there had thus far been no coordination with either
ZTA or the Government of Zimbabwe (GOZ). Currently, the hotel
reservation rate in Victoria Falls, the largest tourism venue in
Zimbabwe, is down 30 percent (from normal June periods) for the month
of June 2010. Hotel and safari operators blame the World Cup because
airlines have raised ticket prices for June. Hoteliers and safari
operators are already predicting that 2010 will be the worst year for
hotels in Victoria Falls in the last 15 years. END SUMMARY.

NO RESERVATIONS, BUT ZTA EXPECTS RECORD TRAFFIC
--------------------------------------------- --

2. (SBU) During a recent consular visit to Victoria Falls on January
15 and 16, Conoff and the Consul from the Australian Embassy met with
ZTA, airport authorities, immigration officials, and local hotel and
safari operators to discuss their preparations for spill-over tourism
resulting from World Cup 2010. The obligatory first stop was the ZTA
office in Victoria Falls, a parastatal under the Ministry of Tourism
and Hospitality Industry. ZTA nationally is led by Karikoga Kaseke,
a ZANU-PF strongman, who is also a former governor of Matabeleland
North, the province where Victoria Falls is located.

3. (SBU) The director of the ZTA's Victoria Falls office, Petty
Kateketa, gushed that she and ZTA were anticipating a record level of
tourists to visit Victoria Falls. Because ZTA believed that the
hotels would be over-subscribed by soccer fans and normal tourists,
they were already meeting with homeowners to persuade them to rent
private rooms to tourists. When asked about the current reservation
rate at hotels, Kateketa admitted that very few bookings had been
made as of January 15, but she expected that this would quickly
change after it was announced that one of the World Cup soccer teams
would be staying and practicing in Victoria Falls. (NOTE: Zimbabwe
hopes to entice one of the participating World Cup teams to train in
Zimbabwe. To date, none of the teams have given any indication that
they would use Zimbabwe as a training camp. Most observers believe
this scenario to be unlikely, particularly after the Africa Cup of
Nations incident in Angola where two members of the Togolese
delegation were killed, and in light of the world wide perception
that there is still unrest in Zimbabwe. END NOTE.)

4. (SBU) Kateketa dismissed Conoff's suggestion that Victoria Falls
lacked the capacity to absorb a large number of last-minute tourists.
She stated that the June 2009 summit of the Common Market for
Eastern and Southern Africa (COMESA) held in Victoria Falls had
demonstrated that Zimbabwe could accommodate a large number of
tourists on short notice. Kateketa also cited the high hotel
occupancy rate in Victoria Falls during New Year's, which resulted
from the inauguration of a new musical festival. (NOTE: COMESA
delegates generally all used diplomatic passports and were flown into
Zimbabwe on planes owned by their respective countries. The normal
services required by a tourist such as immigrations services or
commercial flights were not needed. As for New Year's, the majority
of these attendees were Zimbabweans who arrived by vehicle, with a
small percentage of South Africans and Zambians, so most of the
attendees drove themselves to Victoria Falls and did not use
immigration services or airport facilities. END NOTE.)

5. (SBU) When asked to explain how the GOZ planned to accommodate a
large number of foreign tourists with limited runway space and no
capacity for night landings at the Victoria Falls airport, Kateketa
referred Conoff to the ZTA office in Harare for details. She did
state that ZTA planned to work with Air Zimbabwe to increase the
number of flights and that she expected many tourists would enter
through the ports of entry in Zambia and Botswana. (COMMENT: Air
Zimbabwe currently has one daily flight to Victoria Falls and that is
often delayed due to mechanical and scheduling problems. It is
unlikely that Air Zimbabwe could handle more than two flights a day.
END COMMENT.)

6. (SBU) Kateketa justified the lack of preparations thus far by
stating that ZTA was waiting for the U.S. Embassy to inform it of the
number of American tourists who would be coming to Victoria Falls.
Kateketa believed that we could give her an accurate forecast of
incoming tourists based on passport applications filed in the U.S.
Kateketa doubtfully accepted Conoff's explanation that U.S. citizens
are not required to inform the U.S. government where they are

HARARE 00000082 002 OF 003


traveling. She then asked how many inquiries the Embassy had
received from American citizens about the World Cup and related
travel to Zimbabwe. After being told that there had been no
inquiries from American citizens, she stated that this was because it
was still too soon to make travel plans and she expected it would
change in February.

-------------------------------------
IMMIGRATION HOPES VISITORS HAVE VISAS
-------------------------------------

7. (SBU) The Immigration Office in Victoria Falls, represented by a
Mr. Mabika, agreed to meet with Conoff only after a diplomatic note
was submitted to the Ministry of Foreign Affairs. Mabika stated that
Immigration could be ready at "a moment's notice" to handle a large
influx of visitors. He speculated that, if necessary, Immigration
would take staff from the smaller ports of entry to add officers to
the airport, although no such plans had been made. Mabika hoped that
World Cup tourists would be Americans because "they always arrived
with visas rather than requesting them at the airport." He admitted
that the immigration office at the airport was small and typically
did not have more than a couple of inspectors on duty, which caused
long delays when tourists didn't already have visas.

8. (SBU) Mabika admitted immigration authorities had not made plans
to meet with their counterparts across the border in Zambia to
discuss how to coordinate increased traffic at the border between
Livingston and Victoria Falls. (COMMENT: This is striking given the
fact that the airport in Livingston has more daily flights than the
airport in Victoria Falls. The failure to try to reach some
accommodation with Zambian Immigration will most likely result in
fewer tourists crossing into Zimbabwe. Already, Zambia has a
dedicated window at Immigration for tourists crossing by foot, or in
hotel vans from the Zimbabwe side, which is separate from the line
for daily crossers or truck traffic. Zimbabwean Immigration does not
offer a similar service to tourists crossing from the Zambian side.
END COMMENT.)

-----------------
NO PLANES PARKING
-----------------

9. (U) The Victoria Falls Airport is a small regional airport falling
under the jurisdiction of the Zimbabwe Civil Aviation Authority. It
operates 12 hours a day and has no capacity for night flights since
it lacks runway lights. (NOTE: Only Bulawayo and Harare have landing
lights, and those are often incapacitated, including once by roaming
warthogs. END NOTE.) Currently, it handles two flights a day.
According to airport officials, the airport can handle a maximum of
ten flights landing a day, providing no aircraft park or refuel. If
the World Cup results in increased flights, arrangements would have
to be made to park planes overnight, possibly in Bulawayo or
Livingston.

--------------------------------
WAITING FOR WORLD CUP TO BE OVER
--------------------------------

10. (SBU) In candid discussions with Conoff, hoteliers and safari
operators said that they expected tourism to be low for the entire
period of the World Cup. One hotel operator bemoaned, "I'm just
waiting for World Cup to be over so I can see if I will have enough
business to actually survive this year." They complained that ZTA
had greatly exaggerated the benefits that the World Cup championship
would have for Zimbabwean tourism. In fact, many thought this was
ZTA's attempt to escape the very real and immediate problems facing
the tourism sector. As of January 15, hotel bookings in Victoria
Falls were down approximately 30 percent for June 2010 versus June
2009. Making matters even worse, 2009 was the worst year on record
for the tourism sector in Zimbabwe. As one hotelier said, "we lost
more tourists to the threat of cholera then we ever lost during all
the political violence stemming from the 2008 elections."


11. (SBU) As the threat of another record low year for tourists
visiting Zimbabwe begins to materialize, hoteliers and safari
operators are banding together to share their collective economic
pain with the ZTA. They are actively lobbying for the ZTA to be
disbanded and the current 2 percent tax that ZTA collects from all
hotel guests to be directed to the Ministry of Tourism. This tax was
originally levied as a way of paying for non-infrastructure
investments to support tourism in Zimbabwe, such as the tourism
police. However, the ZTA has never taken on this responsibility.

HARARE 00000082 003 OF 003


Hotel managers told us the money had been siphoned off by Kaseke and
his cronies for their personal use. During Zimbabwe's
hyperinflation, hotel operators were willing to pay the 2 percent tax
and receive no services in return. However, as the hotel occupancy
rate has plummeted and operating costs have tripled (due to the
adoption of the U.S. dollar as the official currency), these
operators say they can no longer afford the corrupt ZTA.

--------------
DO-OR-DIE YEAR
--------------

12. (SBU) Most hoteliers interviewed told us this was a do- or-die
year for them. Victoria Falls Safari Lodge -- one of the highest
rated and busiest hotels in Victoria Falls -- shared its statistics
with Conoff. According to the hotel's statistics, the hotel
occupancy rates for Americans and South Africans decreased from 2008
to 2009 by 22 percent and 16 percent respectively. Since American
and South African tourists account for most of the tourism, this was
a particularly troubling development. Similarly, total hotel
occupancy rates in Zimbabwe declined 16 percent from 2007 to 2009.

13. (SBU) Compounding the problem of low occupancy rates are high
operating expenses, especially for electricity. Operators say
electricity rates in Zimbabwe are the highest in the region. In
December the Safari Lodge paid US$14,000 for electricity while the
Kingdom Hotel paid US$25,000. The hotels have lobbied the Zimbabwe
Electricity Supply Authority (ZESA) and the GOZ to reduce rates so
that hotels in Zimbabwe pay rates comparable to those in Zambia and
Botswana. Unfortunately, with significant projected shortfalls in
ZESA's operating budget, the situation appears unlikely to change in
the short-term.

14. (SBU) The hotels have also faced a significant increase in what
had been their cheapest operating expense: labor. The hoteliers
stated that with few exceptions they all pay their hotel staff a
minimum wage of US$150 a month. Just a year ago, these same hotels
paid approximately US$50 in cash and goods to these same employees.
So far, most hotels have managed to resist laying off full-time
staff, but they are letting positions remain vacant and they have
reduced temporary staff. As costs continue to rise, most hotel
managers say that they will now have to invest in mechanization for
daily operations (e.g. sprinkler systems to replace gardeners and
electric dishwashers to replace hand washing) as the cost of labor
becomes prohibitive. At the Victoria Falls Safari Lodge alone, an
investment in mechanization would cut 40 jobs. For the moment, many
of these hotels cannot afford the initial investment to mechanize.

-------
COMMENT
-------

15. (SBU) Tourism is one of the main pillars of the Zimbabwean
economy and critical to the overall economic recovery of Zimbabwe.
For more than a year now, the GOZ and the tourism sector have viewed
the World Cup as an opportunity to resuscitate tourism in Zimbabwe.
Instead, the World Cup has actually decreased the number of tourists
visiting Victoria Falls, which has both short and long-term
implications for tourism in Zimbabwe. Already, several safari
operators in Victoria Falls have moved their operations to the
Zambian side in an effort to capture more tourist dollars. The loss
of these businesses means fewer venues to attract tourists to the
Zimbabwean side of Victoria Falls. Without a vibrant tourism
industry in Victoria Falls, it is unlikely that tourists will come to
Zimbabwe and visit lesser known tourist attractions outside Victoria
Falls. Like other sectors of the Zimbabwean economy, tourism is
unlikely to recover without a greater commitment of resources from
the GOZ. Even with additional resources, Victoria Falls may have a
difficult time recovering as Livingston in Zambia becomes known as
the gateway to Victoria Falls. END COMMENT.
RAY

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