Abstract
One of the key challenges for tourism and hospitality in the Sub-Sahara Africa (SSA) region is currency behaviours and Exchange rate regime choices. When a company engages in international business foreign currency risk management becomes a crucial part of doing business and the tourism industry of Zimbabwe was not spared on this issue. The objective of this research was to assess the foreign exchange (forex) Exposure Management Practices by Zimbabwe's tourism and hospitality companies. The study was done through a survey on 28 operators in Zimbabwe. A qualitative research approach was adopted in analysis of the data It was found out that the most commonly used ways of reducing the exposure by Zimbabwe's tourism companies were the amicable and mixed-method approaches, of receiving the currency and use it in the country of origin to import materials, matching receipts and payments in foreign currency, risk shifting though it come with low volumes and compromised repeat business. The study recommended that companies and the entire economy must consider invoicing products and services in Rands and even use the rand as a reporting currency. If for example tourism and hospitality players would price regional tourists especially from South Africa and other Rand countries, ignoring the impact of rand depreciation, it would mean that Zimbabwe's tourism and hospitality providers will be in direct competition with the former's own local service providers based on rand priced packages.
Highlights
The concept of exchange rate regime choice (Jefferis et al, 2013; Sikwila, 2013), and its effects on international business (Kramarenko et al, 2010) has received considerable attention by various scholars, researchers, analysts and practitioners. Kararach et al (2010) noted that the adoption of the Multi- Currency Regime by Zimbabwe stabilized the macro-economy by containing inflation and allowing the private and public sectors the possibilities of medium to long-term planning
It was noted from the research that the tourism industry in Zimbabwe was hard hit by the depreciation of the rand against the dollar given the nature of its regime choice
This was evidenced the growth in foreign exchange loss visa-vie the regional business component from the Rand area
Summary
The concept of exchange rate regime choice (Jefferis et al, 2013; Sikwila, 2013), and its effects on international business (Kramarenko et al, 2010) has received considerable attention by various scholars, researchers, analysts and practitioners. Kararach et al (2010) noted that the adoption of the Multi- Currency Regime by Zimbabwe stabilized the macro-economy by containing inflation and allowing the private and public sectors the possibilities of medium to long-term planning. The government switched on to a new foreign exchange rate regime or multicurrency system, a variation of dollarization in order to map a way forward on economic growth This exchange rate regime choice which was somewhat informal and partial variation of dollarization saw the country accepting the use of multiple currencies which among the dominant ones included the United States dollar, the British pound, South African rand, the Botswana pula and the Euro and this policy was made to effect 30 January 2009 during the country’s fiscal policy presentation. Given this kind of a set up, the United States of American Dollar (USD), become the most pronounced currency amongst a basket of various other currencies supporting the regime
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