The world’s tourism industry is evolving at an astronomical pace. Data emanating from industry regulators and key players suggest that the game has changed. The United Nations World Tourism Organisation (UNWTO) projects that international tourist arrivals in Africa are to grow by 4% in 2016 alone. IATA (International Air Transport Association) predicts that the African market will grow by 4.7% to 294 million passengers a year by 2034; and African aviation currently supports 6.9 million jobs, generates more than $80 billion in GDP and is seen as crucial to the development of Africa’s economy. IATA also submitted that if a quarter of African countries were to implement the ‘Open Skies for Africa’ decision, greater air access will be facilitated between African countries, an additional 155 000 jobs and USD 1.3 billion in GDP could be generated, with obvious benefits for tourism.
From the foregoing, it is as clear as the midday sun that tourism is no longer business as usual, and investors from every corner of the globe are now beaming their searchlight on this promising jewel of the savannah. Today, the global tourism sector supports over 227 million people in employment – that’s 1 in 11 jobs on the planet. Its growth of 3.6% was faster than the wider economy and out-performed growth in the majority of leading sectors in recent years.
African tourism has contributed significantly to these quoted figures. Countries such as Angola, Cape Verde, Madagascar, South Africa and Egypt all reported double-digit growth in arrivals while Tanzania, Cameroon, Seychelles and Mauritius also showed strong growth rates in the same period under review. But despite these figures, tourism asset owners, service providers and destination marketers in Africa seem not to be operating at their full potential in attracting new visitors. Let’s take a look at what other nations are doing right in this regard.
In a recent study, the US Department of Commerce reported that 78 percent of Americans use the web to make travel decisions while 68 percent trust the web for travel related advice. Only a meagre 5 percent submitted that travel agencies are their most trusted source of travel-related information. On Google, “vacation destinations” are searched 74,000 times every other month, yet no African destination pops up among the first 20 results. This speaks volumes about the future of tourism and the role of new media in the strategies employed by destination marketing professionals, tourism boards and service providers to increase inbound visits, which in turn increases their bottom-line.
This is a wake-up call to stakeholders in Africa’s tourism industry. There is more money to be made; and from the foregoing, it is obvious that the decisions on where to go and how to spend are largely being made online. Investors, owners and stakeholders of tourism assets need to understand that sponsoring print and billboards ads and putting up a website or social media page aren’t ‘just enough’. The competition for tourists is fierce and African destinations do not only compete against each other but against other better known destinations all over the world. Industry practitioners therefore need to wake up to the fact that strategic branding efforts are required in consciously positioning their destinations when and where the tourist will be making his or her buying decisions.
Having said these, the next statement on the lips of investors is, show me the money. In other words, how can you measure the economic value of tourism and its potentials in Africa?
First, let’s start with the basics. What is Tourism? Tourism is both a product and service that can be bought and experienced in exchange for monetary compensation. It is as tangible as it could get and can be measured using various parameters. For the purpose of this discourse, we will adopt the phrase ‘tourism products’ as our operational term.
According to Tourism in Africa, a publication by the Africa Region Working Paper Series, Tourism Products consists of the principal assets that a country has to offer tourists, combined with every aspect of the tourism experience. It is a complete package that encompasses the time the tourist decides to travel until his return home. The most frequent types of assets include the sun, sea and sand – for resort tourism; wildlife and deserts – for safari tourism; mountains, forests and valleys – for nature, scenic and adventure tourism. Others include cultural assets which are significant in the form of the built environment (monuments, old cities), a living heritage expressed in distinctive local customs and song, dance, art and handicrafts, among others. Museums that reflect the local cultural heritage or a wider global heritage are also significant tourism assets that should not be underestimated. These aforementioned tourism assets make destinations a delightful experience for tourists as well as investors.
Now, what are tourism products? These are broader than tourism assets, and they include transport to and from the country of final destination; hotels and other accommodation; access to security and health services. Others are restaurants and other types of food services as well as tour services that link the various components of a trip, including national parks and city tours.
A survey of 128 tour operators across 14 countries in Africa was recently carried out by the UNWTO to determine which of the aforementioned tourism products was most lucrative among the pack. Interestingly, Wildlife Watching carried the day, representing 80% of the total annual sales of trips to Africa.
From the survey, Kenya and South Africa emerged as major players in Africa’s tourism industry playing hosts to between 2 and 5 million visitors per year. These two countries earn an estimated sum of US$ 90 million. Countries such as Ethiopia, Lesotho, Swaziland, Tanzania, Uganda and Zimbabwe play host to over 500,000 visitors per year with an income of between US$ 2 and 15 million.
Countries with limited number of visitors welcome between 1,000 and 90,000 visitors per year; and are estimated to earn between US$ 20,000 and 700,000 per year. These include countries such as Burkina Faso, Chad, Cote d’Ivoire, Democratic Republic of Congo and Niger, among others. Receipts from these 14 afore-mentioned countries amount to an estimated US$168 million per year.
A further breakdown of these data reveal that the average daily price of a standard wildlife watching tour is US$ 433 and ranges from US$ 86 to 500 per day. In the “luxury” market, the average daily price is US$ 753 and ranges from US$ 179 to 2,500 per day. What’s more, tourists are wont to engage in out-of-pocket spending in the course of their trip. So whether it’s a cute carving they see along the way or a nice souvenir they’d love to get for a loved one back home, out-of-pocket (additional) spending by tourists range from US$7 to 250.
That is not all.
Further data from the UNWTO survey reveal that the average length of stay by a tourist for a typical wildlife watching tour is 10 days. In the “standard” market segment, the average length of stay is 11 days; the range starts at half a day and reaches up to 42 days while in the “luxury” market segment, the average length ranges from a day and half to 18 days. If you multiply this number of days with the average amount spent per day on these tours, you’ll appreciate the depth of the goldmine currently existing in the African tourism industry.
These figures clearly show that majority of visitors to Africa are ‘loaded’ with significant quantities of cash and will be willing to do business with whosoever is set to offer them value for money. In the same vein, while there’s so much money to be made, there are challenges which investors and stakeholders need to be wary of. Stiff competition is one of them. Unlike other service industries, competition is quite stiff in Africa’s tourism industry, but thankfully there is enough room for everyone to excel, especially service providers that offer value for money.
This is why delivery of quality services is non-negotiable for those who are in this for the long haul. Inbound travellers are not ignorant of the various infrastructural challenges facing the continent; they know that provision and maintenance of basic infrastructure is largely out of the control of service providers, yet they still come. But they also know that customer satisfaction is within everyone’s control. They know that this is an attitudinal thing, so it is non-negotiable and cannot be underestimated. It is the least anyone can ask for. Excellent customer satisfaction is central to business growth in the tourism sector. This is what propels customer retention, repeat business and word-of-mouth marketing by satisfied customers.
To be sure, no one investor or service provider in any destination can control all the components of the tourism product. This is why the tourist may have a range of good and bad experiences in the same destination. It could start from the embassy of the destination country (before departure) all the way to the customs or immigration officials on arrival, and even to the local population that might be seeking to exploit vulnerable tourists.
This is why stakeholders seeking to invest in countries with poor tourism awareness (but immense potentials) must be proactive in undertaking awareness campaigns about the value of tourism to the economy. Doing this will help counter such attitudes and ensure that all and sundry understand the considerable economic benefits that tourism brings to a nation, especially through job creation which ultimately brings prosperity to the local population.
Finally, it is important to reiterate the fact that tourism in Africa is booming; and being the world’s largest employer of labour, it is indeed a great industry to invest in, reap great returns and add value to the local economy. All in one fell swoop. The opportunities for innovation are endless. You should give it a thought.
This Article was Originally Written By Sam Adeleke and first published in Afro Tourism’s S.E.E. Africa Magazine.