Tourism in Africa – Challenges & Opportunities

Presentation to the International and National

Tourism and Hospitality Colloquium 16th October 2007

David FrostWTTC Advisor - Africa

Current State of Tourism in Africa

Tourism, with its low barriers to entry and ability to create jobs quickly and in rural areas is often touted as a panacea sector. Intuitively tourism could and should be seized on by governments in Africa as priority sector that can deliver real returns. This is especially true given the natural resource endowments many African countries posses. Indeed, when one examines the overall economic growth strategies of many African countries, tourism is right up there, identified as a priority sector.

Why then does Africa continue to attract such a low proportion of international tourism. The answer lies squarely with the lack of real investment by African governments in developing and marketing their countries as tourism destinations. Moreover, where best practice has been established and realised, this is not widely communicated and learned from.

Is it then possible, against this backdrop, to develop workable growth strategies that will increase the competitiveness of various African countries and drive additional tourism receipts? Clearly South Africa, Egypt and to a lesser degree Kenya, stand out as examples where significant investments in destination positioning have occurred. There have, however, been some questions raised recently whether, given the massive budget of South African Tourism, the performance in key international markets, especially compared to other more paltry funded destinations, is adequate.

Without seeking to engage in a critique of SA Tourism and its current strategies, the presentation will focus on a smaller African country, with a budget that is only 5% of South Africa’s – namely Namibia. By focusing and implementing a well thought through growth strategy, the presentation will show that smaller African countries can indeed take quantum leaps in increasing tourism receipts. The presentation will unpack some of the tactical as well as strategic initiatives that have resulted in a well above average performance.

In conclusion, based on the Namibian experience, suggestions for positioning tourism to access a portion of the vast developmental largesse available to Africa will be put forward.

World 735 Europe 377.6

Africa in Perspective

Source: UNWTO

International Tourism Receipts, US$ billion 2006

Americas 153.4

Asia & Pacific 153.4

Middle East 26.8

Africa 24.2Northern

Africa 8.5Subsaharan Africa 15.7

3.2 %

World 842Europe 456.9

Africa in Perspective

Source: UNWTO

International Tourist Arrivals (million) 2006

Americas 136

Asia & Pacific 167.4

Middle East 40.7

Africa 40.9Northern Africa 14.9

Subsaharan Africa 26

4.9 %

Africa in Perspective

Source: UNWTO

800670

290

690560 500

1950

870 950850

530 530 520380 450

0

500

1000

1500

2000

2500

North

ern E

urop

e

Wes

tern

Euro

pe

Centra

l / E

aste

rn E

urope

South

ern/ M

ed. E

urop

e

North

Eas

t Asi

a

South

Eas

t Asi

a

Ocean

ia

South

Asi

a

North

Am

eric

a

Carrib

ean

Centra

l Am

eric

a

South

Am

eric

a

Mid

dle

East

North

ern A

frica

Subsa

haran

Afri

ca

International Tourism Receipts per arrival (US$) 2006

Africa in Perspective

Source: UNWTO

4.3

7.8

2.1

67.4

11.2

02468

1012

Europe

Asia

& Pac

ific

Amer

icas

Mid

dle E

ast

Norther

n Afri

ca

Subsahar

an A

frica

International Tourist Arrivals 2005 – 2006 % change

Current State of Tourism in Africa

• Government policy

• Tourism promotion agency budgets

Selected National Tourism Board Budgets 2005

R40mBotswana

R7mMozambique

R7mZambia

R25mNamibia

R553mSouth Africa

R340mTunisia

R145mGuatemala

R190mIndia

R121mPeru

R364mNew Zealand

R462mCanada

R893mAustralia

R19mTanzania

Current State of Tourism in Africa

• Government policy• Tourism promotion agency budgets• Lots of activity – but no coherent growth

plans• No best practice learning• Boutique operators• Air access• Infrastructure• No co-ordination (RESTOSA ??)

Opportunities

• Commodities - Tourism • Access to markets key

• Can turnaround – Eg. Namibia– Growth strategy

Total International Leisure

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2001

2002

2003

Key SegmentsKey Segments

Leisure

142 755142 755

VFR / Business

22 58122 581

Namibia – Performance 2003

Land Arrivals173 141173 141

Air Arrivals

48 86848 868

Leisure

103 482103 482

VFR / Business118 527118 527

South Africa222 009222 009

Land Arrivals

216 574216 574

Air Arrivals

6 1786 178

Angola

222 752222 752

Rest of Africa81 12481 124

Africa525 885525 885525 885525 885

Germany

58 03658 036

Other Europe83 79883 798

Other Countries

27 50227 502

Overseas165 336165 336

Total Tourist Arrivals695 221

International Arrivals – Market Share 2006

Germany

UK

ItalyFrance

Scandinavia

Austria

Netherlands

Switzerland

Spain

Portugal

Belgium

Other Europe

Australia

USA

Other Countries

33.3%

12.1%4.6%

5.9%3.6%

2.6%

6.0%

4.4%

2.2%

1.8%

3.3%

2.3%

8.0%

8.2%

1.9%

The Marketing Strategy

• Tactical

• Strategic

• Organisational / Institutional

Target Markets

Primary Markets•German Speaking Europe•UK & Ireland•South Africa•Angola

Primary Markets•German Speaking Europe•UK & Ireland•South Africa•Angola

Secondary Markets•France

•Benelux•USA•Italy

Secondary Markets•France

•Benelux•USA•Italy

• Public Relations• Media

•Market Mapping•Key Account

management•Co-operative

marketing

The Marketing Strategy

Increased ArrivalsIncreased ArrivalsTr

ade

Gro

wth

Co

nsu

mer D

eman

d

Co-op Marketing – Delivery

• 2004 – 2006 spent NAD 9,3 million• Calculated in-country injection – NAD

431 million • Extra 14,000 tourists

Marketing Strategy – Strategic

Branding

The Namibia Brand

“It’s like a different planet here on earth”

“Namibia demands a lot, but gives you a lot in return”“I like the idea of going somewhere before the rest of the world has discovered it”

The Namibia Brand

“It’s as if God has finished and you’re the first person there”

“It’s like where the world ends”“The animals came right up to me and surrounded me”

The Namibia Brand

“The quiet that surrounds you lets you look inside yourself somehow”

“It’s all about the vastness and what it does to you as a person”“When you look at the Namibian landscape, you can see the hand of God.”

The Namibia Brand

“The openness, silence, vastness, distances, stars – it all makes you feel fulfilled.”

“Offers real tranquillity, here you can truly get away from people”

“There are still places in Namibia that you feel are yet to be discovered”

“Made me feel small, insignificant – all the worries at home paled into nothing”

The Marketing Strategy

Key Strategic Elements

Branding Product Audit Measurement

Research Transformation

Implementation

• Good representation

• Bolstered good offices

• Shut down inefficient offices

• Great PR

0

5,000

10,000

15,000

20,000

25,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

International Arrivals – Market Share 2006

2001

20052006

International Arrivals – Market Share 2006

3.6

3.9

4.2

4.9

11.8

5.9

7.3

14.9

5.6

9.1

7.2

0 5 10 15 20

South Africa % Change Namibia % Change

11.4

17.9

9.9

20.5

15.5

6.7

5.4

27.9

14.1

36.3

16.2

0 10 20 30 40

Germany

UK

Italy

France

Scandinavia

Switzerland

Netherlands

Spain

Total Europe

USA

Total non-Africa

Opportunities

• Commodities - Tourism • Access to markets key

• Can turnaround – Eg. Namibia– Growth strategy

• MCC – Tourism request US$95 m

• US$14 m - marketing

Way Forward

• Engage both governments & private sector within Africa

• Work towards tourism’s role in development agenda

• SAT – Botswana Sept 2007 – www.wttc.org• Share best practice• Get going with “how”• But – this has to come from Africans• Global Travel & Tourism Summit Dubai

21st – 23rd April 2008• 2009 – South Africa ??