Invest in emerging markets to boost Africa’s tourism

The Economist lampooned “governments that cannot produce many jobs” as the ones that “often talk up tourism as a pillar of their economy” (12/9/2011). But tourism is one of the largest and fastest-growing sectors of the world economy today. Total export earnings generated by international tourism in 2013 reached US$ 1.4 trillion.

The World Bank Report: Africa Tourism: Harnessing Tourism for Improved Growth and Livelihoods (October 3, 2013) resonated with the larger theme of “Africa Rising.”

The number of tourists arriving in sub-Saharan Africa has grown over 300% since 1990, with 2012 marking a high of 33.8 million tourists who visited the region.

Income generated from tourism has also climbed: proceeds from hotels, tours and other attractions in 2012 amounted to over US$36 billion and directly contributed just over 2.8% to the region’s GDP. During the same period, Africa’s market share of global tourism grew from 3% (1980) to 5% (2010).

Despite this triumphant narrative, the fortunes of tourism in Africa are plummeting. A lethal mix of political unrest, terrorism, cold-hearted travel advisories by traditional sources of tourists in the West and epidemics like Ebola has depressed Africa’s tourism industry, threatening to push it deeper into the margins of global tourism.

Kenya, where tourism has been the second-largest source of foreign exchange revenue, epitomizes this gloomy African narrative of the devastating impact of a declining tourist sector on the overall economic performance.

The Economic Survey 2015 reports that Kenya earned Sh87 billion from the tourism sector, marking the third straight annual decline from the Sh98 billion earned in 2011. Lower earnings from tourism slowed the pace of the growth of the economy from 5.7 per cent in 2013 to 5.3 per cent last year.

THREE SCENARIOS

As in Egypt after the Arab Spring where tourism industry is still feeling the negative effects of political unrest, the decline in tourism earnings last year can be partly attributed to the uncertainty triggered by political unrests and instability in 2014. Additionally, terrorism has resulted in dwindling numbers of local and international tourists.

Conceptually, the relationship between tourism and terrorism can be manifested in three possible scenarios.

First, terrorism aimed at civil targets has sometimes victimizes tourists as well.

Second, terrorism has also been directed at economic targets that are functionally related to tourism.

Finally, terrorism has sometimes been directed at tourism and/or tourists as “soft targets” with relatively high-impact media coverage and lucrative source of ransom.

Prior to 2011, robbery, hostage-taking and the killing of tourists by Somali criminal gangs at the coast forced the Kenyan military to go to Somalia to pursue Al-Shabaab extremists. After 2011, Al-Shabaab attacks have taken a heavy toll on incomes from tourism.

It never helped matters that security alerts by the British and other foreign governments forced tour companies to evacuate clients from Kenya’s coastal tourist hubs.

The ripple effects of the crisis caused by the Ebola epidemic in West Africa were also felt in Kenya’s tourist sector. It will take great efforts and time to restore confidence.

Reviving the tourist sector will demand that Kenya and its East African neighbours diligently explore alternative tourist markets that spend more per tourist and are not vulnerable to debilitating security advisories. This demands a careful study of the changing global political economy of tourism.

GEOPOLITICS OF TOURISM

Currently, the global geo-political balance in the flow of tourists is shifting in favour of emerging economies in Asia and Latin America. This shift began with the economic down-turn in the West between the second half of 2008 and the end of 2009 that saw reduced spending on leisure.

However, international tourist arrivals surpassed the milestone of 1 billion tourists globally for the first time in 2012. The number of Chinese tourists who travelled abroad increased from 83 million in 2012 to 115 million in 2014 and is expected to reach 150 million by 2020. The number of Chinese tourists visiting Kenya reached 37,000 in 2013.

Similarly, China has surpassed Germany and United States as the largest spender in international tourism globally, spending a whooping US$102 billion.

Beijing tops the UNWTO list of top ten biggest spenders on international tourism for the year 2013, spending $128.6 billion followed by the United States ($ 86.2 billion) and Germany ($85.9 billion). Other BRIC counties such as Brazil and Russia are also among the top 10 spenders on tourism.

Chinese tourists have a reputation of spending more than their European counterparts averaging at $2,500 per tourist, which is twice as much as the typical European or American tourist.

Yet, Africa is still tied to traditional sources of tourists in Europe and North America. There is little focus on emerging economies such as Brazil, Russia, India and China as new alternative sources of tourists.

Only Morocco, Namibia, South Africa and Zimbabwe have tourism promotion agencies in China. Other countries have not set up any organisations dedicated to attract Chinese tourists.

UNWTO Secretary-General Taleb Rifai recently visited Kenya and met with President Uhuru Kenyatta to whom he expressed the organization’s full confidence in the country’s tourism sector and its capacity to recover after the bouts of terrorism.

In Kenya, the reappointment of Dr Richard Leakey to chair the Kenya Wildlife Service could make a positive impact in tourism, but I doubt it is going to aide Kenya’s search for alternative tourist markets.

Kenya has to aggressively explore further areas of cooperation with emerging tourist markets, invest more in promoting domestic tourism and increased regional cooperation to counter the negative impact of travel advisories.

Prof Kagwanja is chief executive, Africa Policy Institute; [email protected]