Lesson for East Africa: In tourism, the race is not to the swift
Tourists at the Kenya Coast. Kenya’s travel and tourism sector is ranked as the most competitive in East Africa. PHOTO | FILE
IN SUMMARY
- A scrutiny in a worldwide survey of the four East African countries with the most vibrant tourism economies covered brings up some surprises.
Rwanda recently increased fees for gorilla trekking permits — to target high-end tourists and raise money for development of communities living around the Virunga Mountains.
Foreign tourists will
now pay twice as much as before for visiting the gorillas, from $750 to $1,500, while East Africans will pay the same amount as foreign tourists, up from $36 — a comparative increase of 4,000 per cent.
The move has been criticised for potentially locking out local tourists, and it is feared it will dampen Rwanda’s competitiveness against the gorilla experience in neighbouring Uganda and Democratic Republic of Congo.
Still, that is not the whole story. Attracting tourists and generating tourism revenues in East Africa is not as straightforward as that — there is some method in the madness, and it sometimes seems more of an art than a science, if recent data from the World Economic Forum is anything to go by.
WEF’s Travel and Tourism Competitiveness Index is an annual ranking of over 130 economies, analysing a host of factors that have an impact on the tourism sector, including a country’s overall business environment, infrastructure, safety and security, labour market, visa regulations, environmental sustainability and price competitiveness.
Punching far above its weight
A scrutiny of the four East African countries with the most vibrant tourism sectors (Kenya, Tanzania, Uganda and Rwanda) brings up some surprises.
The research reveals that Uganda is punching far above its weight, despite (or perhaps, because of) government neglect of the sector, and although Kenya has some of the strongest fundamentals and logistics, it is underperforming for a country of its potential.
Tanzania, on the other hand, has majored in the high-end approach — which is highly lucrative and efficient from a business perspective, but with fewer jobs created on the ground, Tanzania’s tourism model may suffer from lack of meaningful linkages with local communities.
And Rwanda — now looking to double down on Tanzania’s strategy — has the greatest aspiration, with dazzling marketing campaigns and strategic positioning, though may find itself constrained by factors it has little control over — such as its small size.
Overall, Kenya’s travel and tourism sector is ranked as the most competitive among the four East African economies, according to the 2017 Index, at 80th position globally (see table titled “WEF 2017 Travel and Tourism Competitiveness Index”). Second is Tanzania at 91st place, followed by Rwanda at 97th place. Uganda is in fourth place at position 106.
However — and perhaps paradoxically — even with Uganda’s low ranking overall, the country had the highest number of international tourism arrivals in 2015, which is the year with the latest available data (see table titled “International Tourism Arrivals”).
Uganda hosted over 1.3 million international visitors in 2015, surpassing Kenya and Tanzania, both of which recorded just over 1.1 million international arrivals.
Rwanda, despite its small size, was not far behind, hosting an impressive 987,000 visitors in 2015.
When it comes to earnings from tourism, Tanzania is in first place. In 2015, Tanzania made $2.2 billion from the tourism sector, the highest in East Africa (see table titled “International Tourism Inbound Receipts”). Uganda is in second place at $1.1 billion; Kenya is third at $723 million. Rwanda clocks in fourth, at $317 million.
Tanzania seems to have successfully developed a premium tourism model that targets high-spending tourists; the country makes an average of $2,020 per arrival, the highest by far in East Africa (see table titled “Average receipts per arrival”)). This is more than twice that of second-placed Uganda, where the average visitor spends $881.
And when it comes to jobs, Kenya is clearly the most dependent on employment created by or associated with the industry (see table titled, “Travel and tourism employment”). Tourism accounted for more than half a million jobs in Kenya, or 3.5 per cent of the country’s total employment.
Uganda is second in absolute terms at nearly 470,000 jobs, making up 3.1 per cent of its total labour force. Tanzania comes in third at just over 386,000 jobs, corroborating the view that the country has developed a particularly high-end product offering that does not require as many local jobs to bring in foreign exchange from visitors.
What is driving these highly divergent performances in the tourism sectors of the four countries? What are the unique strengths and competitive advantages of each country? And which opportunities can each of the four seize going forward? The factors underlying performance in the index give us a hint.
Lesson for East Africa: In tourism, the race is not to the swift