ETHIOPIA TOURISM PO­TEN­TIAL

Hospitality 9ja - - World Destination Review - Fabrice Le­clrecq

As a ser­vice sec­tor, tourism can pro­vide a large num­ber of jobs, es­pe­cially for women and young peo­ple. In the medium term, the Ethiopian Govern­ment aims at mak­ing tourism one of the lead­ing sec­tors of its econ­omy and one of the top-ve tourism des­ti­na­tions in Africa (Min­istry of Cul­ture and Tourism, MOCT). The in­crease in global tourist travel, es­pe­cially from a num­ber of emerg­ing mar­ket economies with a grow­ing mid­dle class, to­gether with grow­ing in­ter­est in tourism in Africa cer­tainly of­fer op­por­tu­ni­ties for Ethiopia. On the other hand, tourism is gen­er­ally vul­ner­a­ble to geopo­lit­i­cal dis­tur­bances and po­lit­i­cal in­se­cu­rity in the re­gion. There­fore, while the tourism in­dus­try can be an im­por­tant el­e­ment in the over­all process of struc­tural trans­for­ma­tion, its de­vel­op­ment should be well­bal­anced with that of the man­u­fac­tur­ing sec­tors, in or­der to avoid over-reliance on for­eign ex­change in­come from tourism.

In 2015, the tourism sec­tor ac­counted for about 34 per cent of Ethiopia's ex­ports of goods and ser­vices, for 4.2 per cent of its GDP and for 3.8 per cent of its for­mal em­ploy­ment. There is thus, al­ready a rel­a­tively solid base for fur­ther scal­ing up tourism in Ethiopia. Ethiopia's tourism ex­pan­sion ef­forts meet with favourable trends and dy­nam­ics in global tourism, and suc­cess­ful re­sults have been ob­tained in this coun­try in re­cent years. Fur­ther progress, as planned in the 2nd Ethiopia's Growth Trans­for­ma­tion Plan (GTP II), will have to be achieved in a highly com­pet­i­tive en­vi­ron­ment at both the global and re­gional lev­els. This will re­quire a great deal of pri­vate cap­i­tal as well as sub­stan­tial pub­lic ex­pen­di­ture for both in­vest­ment (tourism in­fra­struc­ture, fa­cil­i­ties, new at­trac­tions, site preser­va­tion) and op­er­a­tional sup­port.

Tourism Ca­pac­ity

In re­cent years, Ethiopia has con­sid­er­ably in­creased its over­all ca­pac­ity to host for­eign guests. Ac­cord­ing to data from the MOCT the num­ber of rooms of hotels and sim­i­lar es­tab­lish­ments grew at an an­nual av­er­age rate of 8.5 per­cent be­tween 2008 and 2013, and ac­com­mo­da­tion rooms of all kinds by 10.3 per­cent be­tween 2009 and 2012. To­day, there are over 595 hotels, with 19,998 rooms. How­ever, it is im­por­tant to rec­og­nize that it is not only the num­ber of ac­com­mo­da­tions that mat­ters, but also the ex­tent to which these re­spond to the ex­i­gen­cies of trav­ellers and to in­ter­na­tional qual­ity stan­dards. More­over, the ca­pac­ity to at­tract tourists to Ethiopia also de­pends on the avail­abil­ity of ac­com­mo­da­tion across the coun­try; at present, two thirds of all star-des­ig­nated hotels are in Ad­dis-ababa.

Af­ter a mod­est at­tempt to stream­line the grant­ing of li­censes to tour op­er­a­tors, the num­ber of li­censed tour op­er­a­tors in Ethiopia has risen to over 300, with about 2,500 em­ploy­ees. The qual­ity of the ser­vices pro­vided by these li­censed op­er­a­tors is again at least equally as im­por­tant as their num­ber and some ef­forts there seem to still be ex­pected.

As in other sec­tors, for­eign di­rect in­vest­ment (FDI) can make an im­por­tant con­tri­bu­tion to Ethiopia's ca­pac­ity of pro­vid­ing tourist ser­vices, in terms of both quan­tity and qual­ity. So far, FDI has made a smaller con­tri­bu­tion to the ex­pan­sion of the coun­try's tourism in­dus­try than it has in the Ethiopian man­u­fac­tur­ing sec­tor. Up to date, only four in­ter­na­tional ho­tel chains are present in Ethiopia, and all these hotels are in Ad­dis Ababa. Re­cently HIL­TON has planned to build another ho­tel of 190 rooms for 2018 in Awassa, South­ern re­gion ma­jor city lo­cated 285Km South of Ad­dis Ababa.

In terms of in­fra­struc­ture needed for a well-func­tion­ing tourism, Ethiopia has made, and con­tin­ues to make, rapid progress. Ac­cess to the coun­try is en­sured by air con­nec­tion to the cap­i­tal. But with about 20 re­gional air­ports, Ethiopia also has the high­est den­sity of do­mes­tic ight net­work in Africa, and this makes air travel also by far the most con­ve­nient mode of tourist trans­port within the coun­try, at af­ford­able prices. Ethiopia has also made ma­jor ad­vances in ex­pand­ing its rail­way and road net­works. The den­sity of the lat­ter has tripled in the thir­teen years be­tween 2000/01 and 2013/14, which is a great achieve­ment by any mea­sure. More­over, the pro­por­tion of ar­eas more than 5 km away from all­weather roads de­clined from 64.1 per­cent in 2011/12 to 40.5 per­cent in 2013/14.

Although th­e­ses in­fra­struc­tures may not have been built pri­mar­ily with a view of en­hanc­ing the tourism in­fra­struc­ture, its con­tri­bu­tion to the tourism in­dus­try ex­pan­sion is un­de­ni­able.

Tourism Per­for­mance

Ethiopia's over­all com­pet­i­tive­ness as a tourist des­ti­na­tion has im­proved in re­cent years. How­ever, it con­tin­ues to lag be­hind a good num­ber of other coun­tries, in­clud­ing in Africa. For ex­am­ple, in the Travel and Tourism Com­pet­i­tive­ness In­dex of the World Eco­nomic Fo­rum, which mea­sures a coun­try's readi­ness to at­tract tourists against 14 cri­te­ria,

th in 2015 Ethiopia only ranked 118 among the 141 coun­tries in­cluded in In­dex(ta­ble 1). Nev­er­the­less, the ex­pan­sion of tourism in Ethiopia has been quite re­mark­able in re­cent years.

The  rst Growth Trans­for­ma­tion Plan ( GTPI) had es­tab­lished am­bi­tious tar­gets for the tourism sec­tor dur­ing the pe­riod 2010 – 2015. These were not fully at­tained, but to a much larger ex­tent than the ex­port tar­gets set for the other pri­ori­tised sec­tors. Tourism ar­rivals were ex­pected to more than dou­ble dur­ing this pe­riod, to reach one mil­lion in 2015. The gure for 2014 in­di­cates 770,000 (ta­ble 2), an in­crease of more than the dou­ble com­pared to 2008, with tourist ar­rivals for hol­i­day pur­poses reg­is­ter­ing an im­pres­sive growth (more than 170 per cent). This is also reected in the rapid in­crease in vis­its to Ethiopia's pro­tected ar­eas (World Bank 2012: 30-31). Com­pared to 2013, the num­ber of vis­i­tors grew by 13%. As a re­sult of a con­tin­ued growth, to­tal tourism ar­rivals are ex­pected to be conrmed as close to reach 900,000 in 2015.

Euro­pean vis­i­tors have in­creased by 72 % be­tween 2008 and 2014 while Amer­i­cas (mainly USA) have even grown by as much as 160 %. These 2 mar­kets un­doubt­edly rep­re­sent the main tar­get tourism mar­kets for Ethiopia, with China also grow­ing fast. Rev­enue from tourism has grown even faster than the num­ber of tourist ar­rivals (ta­ble 2). In 2012, it amounted to US$ 1,980 mil­lion, 77 per cent more than in 2009, and it reached US$ 2,880 mil­lion in 2014, which is al­ready sur­pass­ing the GTP I tar­get for 2015.

Rev­enue from do­mes­ti­cally pro­vided ser­vices for for­eign trav­ellers, i.e. ac­com­mo­da­tion, restau­rants, do­mes­tic pas­sen­ger trans­port and other tourist ser­vices, rose by 85 per cent be­tween 2009 and 2012 to US$ 607 mil­lion. Yet, more than two thirds of in­come from tourism in 2012 was gen­er­ated by in­ter­na­tional in­bound pas­sen­ger trans­port, reect­ing the key role of the Ethiopian Air­lines com­pany in tourism de­vel­op­ment.

The work of the World Bank in its Ethiopian Sus­tain­able Tourism De­vel­op­ment Project (ESTDP Feb 2010- Dec 2015) should be com­mended for of­fer­ing for the rst time a holis­tic de­vel­op­ment ap­proach in­clud­ing roads con­struc­tion, des­ti­na­tion/site de­vel­op­ment, ca­pac­ity build­ing of t ourism ac­tors, vis­i­tors' ser­vice en­hance­ment, prod­uct de­vel­op­ment, and mar­ket­ing. All those known bot­tle­necks have been at­tempted to be ad­dressed in three prime tourist des­ti­na­tions, namely Axum, Lal­i­bela, and Ad­dis Ababa, with the pos­si­bil­ity of de­vel­op­ing other sec­ondary des­ti­na­tions in the coun­try. More and bet­ter ed­u­ca­tion and train­ing will be nec­es­sary to im­prove the level of hos­pi­tal­ity ser­vices and make sure that there is avail­abil­ity of man­power for the new in­vest­ments to come, both in quan­tity and qual­ity.

Some ex­change pro­grammes with Euro­pean/amer­i­can univer­si­ties, ex­pos­ing the young pro­fes­sion­als to for­eign ex­pe­ri­ences and bring­ing some in­ter­na­tional ex­per­tise will cer­tainly be key in that re­spect. Qualied by Ethiopian tourism ac­tors as hope­ful moves, two new tourism en­ti­ties - the Tourism Trans­for­ma­tion Coun­cil ( ETTC) and the Ethiopian Tourism Or­gan­i­sa­tion (ETO) (see be­low) –were re­cently cre­ated and charged specically of ad­dress­ing those is­sues of ed­u­ca­tion and train­ing, in ad­di­tion to prod­uct de­vel­op­ment, strength­en­ing of ex­ist­ing at­trac­tions and de­vel­op­ment of new ones (es­pe­cially for fam­i­lies), mar­ket­ing, and the ef­fec­tive­ness of col­lab­o­ra­tion among tourism ac­tors, with size­able chal­lenges for 2016 and be­yond. Ethiopia's elec­tion for the World's Best Tourism Des­ti­na­tion Award 2015 by the Euro­pean Coun­cil for Tourism and Trade rep­re­sents how­ever a ma­jor suc­cess for the Ethiopian govern­ment in its ef­fort to pro­mote the coun­try. The choice of Ethiopia sug­gests that the coun­try's po­ten­tial for tourism, while in com­pe­ti­tion with other coun­tries, is in­creas­ingly be­ing rec­og­nized in­ter­na­tion­ally.

In­vest­ment in star- des­ig­nated hotels (in­clud­ing re­sort hotels), mo­tels, lodges and restau­rants and tour op­er­a­tions is open for for­eign in­vestors (reg­u­la­tion 270/2012). How­ever, FDI in the tourism sec­tor does not en­joy the same ad­van­tages as in other sec­tors. There is an im­port-duty ex­emp­tion for im­ports of cap­i­tal goods and spare parts (with a value of up to 15% of the value of the ini­tially im­ported cap­i­tal goods), but this ex­emp­tion is granted for a max­i­mum of ve years, whereas there is no such time limit for in­vest­ments in man­u­fac­tur­ing and agriculture. More­over, for hos­pi­tal­ity es­tab­lish­ments, in­clud­ing star-des­ig­nated hotels and es­tab­lish­ments in re­mote and pro­tected ar­eas, there is no tem­po­rary ex­emp­tion from cor­po­rate in­come tax. This ex­emp­tion would how­ever be a much de­sired in­cen­tive to boost qual­ity ho­tel de­vel­op­ment and in­crease tourist at­trac­tion in those nat­u­rally and cul­tur­ally en­dowed re­gions. By mid-2015 there were 5322 li­censed ho­tel and restau­rant projects, of which around 5 per­cent were FDI projects. Of these li­censed projects 823 (or 9.8%) were in the process of im­ple­men­ta­tion or al­ready fully im­ple­mented. Among these, the share of FDI is con­sid­er­ably higher (20.5 per cent), sug­gest­ing that, for var­i­ous rea­sons, for­eign in­vestors are more ef­fec­tive in im­ple­ment­ing their projects than po­ten­tial do­mes­tic in­vestors. The Ethiopian Tourism Trans­for­ma­tion Coun­cil (ETTC) and its sec­re­tariat, the Ethiopian Tourism Or­ga­ni­za­tion (ETO) were es­tab­lished in March 2014 to pro­vide strate­gic sup­port to the tourism sec­tor through ca­pac­ity build­ing on des­ti­na­tion man­age­ment and prod­uct de­vel­op­ment. The ETTC re­ports di­rectly to the Prime Min­is­ter. Their tasks also in­clude to iden­tify and close press­ing value-chain gaps, while work­ing closely and jointly with the pri­vate sec­tor and the in­ter­na­tional tourism com­mu­nity. In the past, co­or­di­na­tion among dif­fer­ent stake­hold­ers in the Ethiopian tourism sec­tor has been less than op­ti­mal. For ex­am­ple, lo­cal gov­ern­ments from dif­fer­ent re­gions have been quar­relling over the set­tle­ment of com­mu­ni­ties in na­tional parks and the use of the parks; tour guides ac­com­pa­ny­ing tourists from Ad­dis Ababa to the re­gions en­ter into dis­agree­ments with lo­cal tour guides as to who is le­git­i­mate to show tourists around; and the church has taken de­ci­sions of great in­ter­est for tourism, such as fees for vis­it­ing church her­itages, with­out proper con­sul­ta­tion with other stake­hold­ers. Over time, the ac­tiv­i­ties of the ETTC and its sup­port­ive bod­ies may lead to im­prove­ments of co­or­di­na­tion among the dif­fer­ent ac­tors in Ethiopian tourism. Fif­teen pro­fes­sional and trade as­so­ci­a­tions en­gaged in tourism do also con­duct reg­u­lar con­sul­ta­tive meet­ings through the co­or­di­na­tion of the MOCT. In ad­di­tion to the poli­cies con­tained in that 2009 doc­u­ment, it would also be ad­vis­able to elab­o­rate and put in place a pub­lic pol­icy for the re­dis­tri­bu­tion of tourism rev­enues to en­sure sites preser­va­tion and con­ser­va­tion.

Tourism am­bi­tions and plan­ning

The Sec­ond Growth and Trans­for­ma­tion Plan (GTP II, 20162020) projects that by 2020 Ethiopia will col­lect 6 bil­lion USD from 2.1 mil­lion tourists for tourism to reach 5% con­tri­bu­tion to the GDP. With the Ethiopian govern­ment now throw­ing its full weight be­hind tourism, the plan in­di­cates the will to make Ethiopia a top ve tourist des­ti­na­tion in Africa by 2020, start­ing from a cur­rent po­si­tion be­yond the top ten be­hind strong lead­ers like Morocco, South Africa, and Egypt. Now, ac­cord­ing to the top ten African des­ti­na­tion rank­ings is­sued by the UNWTO in 2013, the fth place was oc­cu­pied by Al­ge­ria with 2.7 mil­lion ar­rivals. Hence, Ethiopia's am­bi­tion to reach the fth po­si­tion in ve years from now looks quite chal­leng­ing, with an aimed num­ber of ar­rivals that is still 600,000 be­low the achieve­ment of the fth ranked coun­try in 2013. The ETO has also been set­ting tar­gets in GTP II with re­gards to des­ti­na­tion man­age­ment, mar­ket­ing, and ca­pac­ity build­ing for tourism ser­vices. As a re­sult, 20,000 peo­ple who in­di­rectly or di­rectly give ser­vices t o t ourists i n gov­ern­men­tal, non-gov­ern­men­tal and pri­vate sec­tor or­gan­i­sa­tions are ex­pected to be trained over the next ve years. The ETO also plans to up­grade 15 des­ti­na­tions to world-class stan­dards and to pro­mote the Ethiopian Na­tional Tourism Brand to 250 mil­lion peo­ple, us­ing all pro­mo­tional mixes and out­lets.

To spear­head the GTP II, the Ethiopian Sus­tain­able Tourism Mas­ter Plan (STMP) aims to es­tab­lish a na­tional frame­work for sus­tain­able tourism de­vel­op­ment with a view to contributing t o so­cio-eco­nomic de­vel­op­ment and poverty al­le­vi­a­tion. The STMP there­fore sets out 10 Strate­gic Pil­lars, pri­or­ity projects, and ac­tiv­i­ties in a long-term im­ple­men­ta­tion frame­work cov­er­ing 2015–2025, for a to­tal bud­get of ETB 5,3 bil­lion ( Ethiopian Birr), which roughly cor­re­sponds to USD 250 M.

Beau­ti­ful tree in Lal­i­bela, UNESCO pro­tected Holy site cre­ated by Saint King, Ethiopia's Jerusalem Holy Cen­tre

Beau­ti­ful tree in Lal­i­bela, UNESCO pro­tected Holy site cre­ated by Saint King, Ethiopia's Jerusalem Holy Cen­tre

Splen­dors of Ethiopian Em­pire, 17th Cen­turt, Gon­dar, Amhara Re­gion, North­ern Ethiopia

cas­tles built by 3 gen­er­a­tions of em­per­ors in Gon­dar, former Ethiopia's cap­i­tal. Gon­dar cas­tle, Gon­dar, Ethiopia

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