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Tourism: Botswana loses its shine


Botswana is among African countries that continue to experience a severe decline in rankings as an attractive tourist destination, a recent tourism survey has indicated.

Although the tourism sector is now reported to have become the second biggest revenue earner for the country, and the country continues to witness more tourism ventures rising, the government seems to be failing to effectively market the country’s tourism riches and its attractive destinations to the outside world.

Attributed to its decline as an attractive tourist destination, is the lack of growth in its tourism receipts over the past years along with a better relative performance from its main competitors.

According to the Bloom Consulting’s Country Brand Ranking Tourism Edition 2014/2015, Botswana dropped by four (4) places down compared to its last position in the 2013 report. Botswana is now ranked at position 17 in Africa and position 132 in the world as an attractive tourists’ destination.  

The survey explains that Botswana and other nations like Nigeria and Madagascar have lower global positions than those they held in 2013 due to an improved focus on tourism and tourism infrastructure in other regions of the world, as well as the weaker tourism brand strategies of the many African countries with poor CBS Ratings. Subsequently, these nations which are said to have underdeveloped tourism industries also have low Digital Demand and little revenue from tourism receipts.

However in the country brand strategy (CBS) ratings, Botswana is rated slightly stronger. CBS evaluates the accuracy of the strategy by each National Tourism Organization (NTO) for all 180 countries included in the ranking.

The report measures the NTO’s branding accuracy by means of formulae that compare the most popular brand tags for a specific country to the brand tags most heavily promoted by that country’s NTO. A Country Brand receives a higher rating if that country’s NTO focuses its strategic and promotional positioning on the tourism-related brand tags with the highest demand as measured by total online searches from international tourists.

Excelling on the surveys is Botswana’s neighbor, South Africa, which for the first time ever, tops the list in the African continent of Bloom Consulting's Country Brand Ranking 2014/ 2015 Tourism Edition. Taking advantage of a debilitated Egypt which came second in Africa, South Africa has steadily risen to the top slot in the region recording a strong CBS Rating and Digital Demand.

The report states that South Africa taking the leadership in the region is the most impressive change of this year’s Country Brand ranking Tourism Edition in Africa. South Africa, in addition to its credits, is the only African country to break into the global top 25 for the first time. It has moved up four places from last year’s report to rank 24th.

In Africa, South Africa has overthrown the previously undefeated Egyptian tourism Country Brand. Egypt, due to it’s political instability, decrease in tourism receipts, relatively weak CBS Rating and unfavorable online presence, has fallen from it’s regional throne, dropping to only the second strongest tourism-related Country Brand in Africa. Morocco continues to maintain its 3rd place position in Africa.

With the exception of Egypt, the top three (3) countries are said to have improved on their 2013 positions.  

According to the report, Kenya and Tanzania who took position four and five respectively, rely on fewer but wealthier tourists coming for safaris and other nature-centric excursions. Their strong CBS Ratings, tourism receipts and ever-increasing popularity help the two nations to continually improve their positions in our ranking; Tanzania, for example, has accessed the regional top five for the first time, defeating the tropical tourism paradise of Mauritius which dropped to position six.

The report indicates that Zimbabwe and Sudan have experienced an extraordinary improvement in the ranking mainly due to their recent amazing growth rate in tourism receipts. Sudan has moved up six places to position 19 while Zimbabwe has moved up five times to position 13.

Bloom Consulting further forecasts that stagnancy and a reduction in positions for the rest of the African Nations will occur in the next edition of the Country Brand ranking as lower numbers of Europeans will travel due to economic limitations, security issues and the Ebola crisis.  

For the global top 25 performers rank United State of America, Spain and Germany continues for the fourth consecutive year to dominate first position. This is due to its dominance in total tourism receipts, along with the effectiveness of its NTO strategy (as measured by its very strong CBS Rating) and a high level of Digital Demand. Spain and Germany follow at position two and three respectively.

Along with South Africa, India was also the second new country welcomed to the global top 25, with it improving three positions to 23rd place. These newcomers have, inversely, knocked two formerly top-ranked countries from last year’s Country Brand ranking out of the global top 25 being Egypt and the United Arab Emirates.

Bloom Consulting is an 11 year-old Country Branding consultancy which annually ranks 180 countries through key variables used to analyze their success as well as their relative performance as compared to one another. This include economic prowess of a country’s tourism sector, its online performance, Digital demand and country brand strategy.

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Business

Pula smiles at COVID-19 vaccine

25th November 2020
COVID-19 vaccine

A squeaky and glittering metaphoric smile was the look reflected from the Pula against the greenback this week and money market researchers lean this on optimism following Monday’s announcement of another Covid-19 vaccine which is said to have boosted emerging market economies.

With other emerging market currencies, the Pula too reacted to optimism and fanfare on the new Covid-19 vaccine against the weakening US dollar which has been losing its shine since the uncertainty laden US elections.

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Business

Choppies high on JSE rollercoaster volatility

25th November 2020
CHOPPIES

After bouncing back into the Johannesburg Stock Exchange (JSE) last week Friday, following a year of being in the freezer, the Choppies stock started this week with much fluidity.

Choppies was suspended in both the Botswana Stock Exchange and its secondary listing at the JSE for failure to publish financial results. Choppies suspension on Botswana Stock Exchange was lifted on 27 July 2020. On Friday last week, when suspension was being lifted, Choppies explained that this came into fruition “following extensive engagement with the JSE.”

Choppies stock, prior to suspension, hit a mammoth decline in value of more than 60 percent, especially in September 2018. Waking from a 24 month freezer, last week the Choppies share price was at R0.64 and the stock did not make any movement.

However, Monday was the day when Choppies stock moved vibrantly, albeit volatile. Choppies’ value was on a high volatile mood on Monday, reaching highs of 200 percent. At noon, the same Monday, the Choppies share had reached R1.05. Before taking an uphill movement, Choppies stock slightly slipped by 2 cents. But the Choppies share rode up high and by lunch time the stock had reached the day’s summit of R2.00 and that was at 13:30 when investors were buying the stock for lunch.

The same eventful Monday saw gloom on the faces of Choppies rivals, when Choppies gained by 220.31 percent around lunch time its rivals in the JSE Food & Drug Retailers sector were licking wounds. Spar lost 2.94 percent, Pick Pay fell by 2.43 percent, Shoprite 7.52 percent and Dis-Chem 1.98 percent. The only gainer was Clicks by a paltry 0.51 percent.

In an interview with BusinessPost, Choppies sponsors at the JSE PSG Capital Managing Director Johan Holtzhausen explained that the retailer’s stock was in high demand after a long suspension. He said when a company list or a suspension is lifted the market needs to find itself on the pricing of the share.

“Initially when the suspension was lifted there were more buyers than sellers. As far as we could see this created a shortage of shares so to speak and resulted in the price at which the shares traded going to R1.20 and eventually R2.05 before finding its level around R0.80 sent from a JSE perspective.

This is marked dynamics and reflect that there are investors that are positive about the stock in the long run. This is a snapshot over a short period and one requires a longer period to draw further conclusions,” said Holtzhausen in an interview talking about the Choppies stock.

On Monday this week where the Choppies value grew by 200 percent, the stock took a turn looking down, closing the day at R0.87 from a high of R2.00. According to local stockbroker Motswedi Securities on Monday while there was no movement by Choppies in the local stock exchange as the retailer appeared on the board as 141,000 shares traded at P0.60 each.

However in Choppies’ secondary listing the stock price rallied to over 200 percent during intraday trading on Monday before losing steam and declining to around R0.87 share.

Before press yesterday Choppies opened the market with the stock starting the day at R0.80 then went flat for few hours before taking a slide downward, dropping 5 cents in 30 minutes. Choppies then went flat at R0.75 for 50 minutes yesterday before going up at 10:20 am where it nearly recovered the open day price of 80 cents, but was shy of 1 cent. From 79 cents the price went flat until noon.

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Foschini-Jet merger, a class and rivalry conundrum dissection

25th November 2020
Foschini

Competition and Consumer Authority (CCA) has revealed that in its assessment of the Jet take over by Foschini, there were considerations on possible market rivalry and a clash in targeted classes.

According to a merger decision notice seen by this publication this week, high considerations were made to ensure that Foschini’s takeover of Jet is not anyhow an elimination of rivalry or competition or if the two entities; the targeted and the acquiring enterprise serves the same class of customers or offer the same products, to elude the anti-trust issues or a stretch of monopoly.

The two entities are South African retailers whose services stretched to Botswana shores.  Last month local anti-trust body, CCA, received an acquisition proposal from South African clothing retailer, Foschini, stating their intentions to take-over Jet.

South African government’s Business Rescue Practitioners earlier this year after finding out that Jet’s mother company, Edcon, is falling apart, made a decision that Foschini can buy Jet for R480 million. This means that Foschini will add Jet to its portfolio of 30 retail brands that trade in clothing, footwear, jewellery, sportswear, homeware, cell phones, and technology products from value to upper market segments throughout more than 4085 outlets in 32 countries on five continents.

However the main headache for the CCA decision which was released this week, is distinguishing the targeted and the acquiring entity businesses and services.

When doing a ‘Competitive Analysis and Public Interest’ assessment, CCA is said to have discovered that Foschini is classified as a “standard retailer” which targets middle-to-upper income consumers and it competes with stores such as; Truworths and Woolworths. The targeted entity, Jet, is on the lower league when compared to its acquirer, it serves customers of lower classes and is regarded as a discount/value retailer targeting lower income consumers or a mass market. This makes Jet to be in direct competition with Ackermans, Pepkor, Cash Bazaar and Mr Price.

“Therefore, a narrower view of the market is that Foschini through its stores trading in Botswana is not a close competitor to Jet. Additionally, there exist other major rivals who will continue to exercise competitive constraints on the merged enterprise post-merger,” concluded CCA this month.

The anti-trust body continued to explain that in terms of the Acquisition of a Dominant Position, the analysis shows that the acquisition of the target business by Foschini Botswana will result in an insignificant combined market share in the relevant market.

This made CCA reach to a conclusion that there is no case of an acquisition of a dominant position in the market under consideration or any other market on the account of the proposed transaction.

What supports the merger according to CCA is that it is in compliance with regards to ‘Public Interest Considerations’ because the findings of the assessment revealed that the transaction is as a result of the need for a Business Rescue by the target enterprise. This is so because in the event that the proposed transaction fails, it will translate into the loss of the employment positions at the target business.

“On that note the Authority (CCA) found it necessary to ensure that the proposed merger does not result in any retrenchments or redundancies. In light of this, the assessment revealed the critical need to protect the employees of the merged entity from possible merger specific retrenchments/ redundancies,” said CCA.

Before making a determination that the recently proposed transaction is not likely to result in the prevention or substantial lessening of competition or endanger the continuity of the services offered in the relevant market, CCA said it then moved into a concern for public interest which is a protection enshrined in the Competition Act of 2018.

CCA’s concern was mostly loss of livelihood or employment by 126 Batswana workers at Jet stores, stating that possible retrenchments or redundancies may arise as a result of implementation of the proposed merger.

Much to the desire of trade union or labour movements in Botswana and across Southern Africa where the Jet stores are stemmed-who also raised concerns about the retail’s workers job security- CCA subjects Foschini to keep the target entity 126 workers.

“There shall be no merger specific retrenchments or redundancies that may affect the employees of the merged enterprises. For clarity, merger specific retrenchments or redundancies do not include (the list is not exhaustive): i. voluntary retrenchment and/or voluntary separation arrangements; ii. Voluntary early retirement packages; iii. Unreasonable refusals to be redeployed; iv. Resignations or retirements in the ordinary course of business; v. retrenchments lawfully effected for operational requirements unrelated to the Merger; and vi. Terminations in the ordinary course of business, including but not limited to, dismissals as a result of misconduct or poor performance,” said CCA.

CCA also orders that Foschini informs it about all the details of 126 Jet employees within thirty (30) days of the merger approval date. CCA should also know information of when Foschini is implementing the merger, within 30 days of the approval date.

Other conditions include Foschini sharing a copy of the conditions of approval to all employees of the Jet or their respective representatives within ten (10) days of the approval date.

“Should vacancies arise in the target, the merged enterprise shall consider previous employment at one of the non-transferring Jet stores to be a positive factor to be taken into account in the consideration of offering potential employment,” said CCA.

According to CCA, in cases of any job losses, for the Authority to assess whether the retrenchments or redundancies are merger specific, at least three months before (to the extent that this deadline can be practically achieved and in terms of the prevailing and legally required employment practices) any retrenchments or redundancies are to take place, inform the Authority of:  i. The intended retrenchments; ii. The reasons for the retrenchments; iii. The number and categories of employees affected; iv. The expected date of the retrenchments.

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