For the Bazaruto itinerary, expenditure in hotel accommodation and for food/beverages is the second-largest cost component. Available data suggests that demand and occupancy rates are low for most of the year and hotels and resorts rely heavily on intermediaries for the supply of tourist visitors. As a result, foreign tour operators are usually able to negotiate discounts of up about 15-25% of the “rack” rates, with no need to buy capacity in advance.



 Discounts off rack rates can reach 48% in certain cases. In a mature tourism industry, the tour operator will often seek an allotment of bed capacity for each travel season, given expected demand. This is, however, not the case for tour operators servicing Bazaruto Archipelago.  The quality and coverage of the statistics concerning all types of accommodation establishments is spotty at best.  Moreover, the most recent available data is from 2003 and for some categories only 2002 data is available. 


Although the paucity of relevant data makes it difficult to fully assess the tourism product in the destination, direct observation and interviews with the industry participants allow for some considerations53. Good quality accommodation along the north coast from Maputo and all the way to Vilanculos - Bazaruto is limited and expensive. Very few are able to meet the demands of an upscale international tourist, and the standard and types of services and amenities offered (e.g. air conditioning) vary widely. Similarly, food and beverage options are limited to lodge and resort restaurants.   


Compared to Seychelles and Mauritius, a number of differences are evident. Supply of accommodation is very low – less than 700 beds in Vilanculos-Bazaruto region. Furthermore, this limited supply is characterized by very small establishments, with varied quality levels. These three factors constrain a tour operator’s ability to organize travel packages for larger tourist groups.  For example, with the current structure of supply of international quality beds in Vilanculos as shown in Table 10 a tour operator can only accommodate a maximum of 30 tourists, in the same hotel (Vilanculos Beach Lodge), for the same price. 


To accommodate groups greater than 30, the tour operator would need to split groups into two or more hotels, which will not deliver the same level of quality. In Bazaruto there’s one resort, which can accommodate groups and to some extent packaged tours, but again it can only accommodate less than 100 guests per night.  The lack of data on accommodation such as bed and breakfast, self-catering bungalows and dormitories, and campsites makes it difficult to assess the supply characteristics of these facilities.


 Although some of them cater to high-end adventure tourists, a majority caters to back packers, domestic and regional tourists. Anecdotal evidence suggests that some of them observe prevailing rules and regulations while others operate more or less informally. The bias towards informality is due, in part, to the significant start-up, entry, and growth barriers to entrepreneurs involved in this segment of the market. In general, all accommodation and hospitality firms face the following broad challenges in Mozambique.


Tax administration is sometimes ambiguous and difficult for small businesses to navigate, often resulting in high effective rates. The 2003 World Bank investment climate survey of manufacturing firms suggests that a majority of companies (55% of respondents) found tax rates to be a major or very severe obstacle to doing business. As a result, an average firm reports only 67 percent of profits. Delays in VAT and other tax refunds were also cited as serious concerns for the private sector. Anecdotal evidence suggests that the same situation exists in the travel and hospitality industry. The basis for taxation is sometimes ambiguous and the burden can be prohibitive for small establishments who do not benefit from the investment code.


 As a result firms have an incentive to not declare, or to underreport their revenues. For example, firms consider the finance office in Vilanculos as one of the most corrupt departments to deal with. Officers come unannounced and show no transparency for estimating taxes. Imposition of fines, arbitrary tax assessments and other operational restrictions on businesses are said to be rampant. 


Furthermore, for formal establishments that procure local products such as building materials, fish, fresh fruits and vegetables, vendors do not typically provide receipts. This limits the ability of (formal) small hospitality establishments to document such expenses for tax assessment purposesThe table illustrates a multiplicity of taxation that creates a big incentive for informal businesses in the tourism industry.


Portuguese tourists going to Bazaruto need to make two stops – first in Maputo, and then in Vilanculos. In Maputo, the tourist could take a taxi for less than €10, or rent a car for about €120/day. Taxi service quality is poor because most cab drivers use second-hand cars with high operating and maintenance costs. Section 3.4 and 3.6 of this report will discuss the challenges confronting car rentals in more detail, while section 3.7.7 presents issues related to taxis.  


In Vilanculos, depending on the mode of transport, transfers to Bazaruto can cost between €25 and €70. For boats, there are no safety standards in place and no monitoring mechanisms to ensure compliance. The occurrence of an accident due to negligence may further undermine Mozambique’s image as a safe leisure destination. 


ASSAS, a franchise of Pelican Airlines, has recently started flying to Bazaruto at a cost of about €70. Prior to this, transfers and ground handling activities in Vilanculos were handled directly by hotel representatives who assist the tourist with customs procedures and luggage handling in Vilanculos. In some cases, the costs of transfers are not included in quoted rates to tour operators.