EAC zone in $4.8bn tourism earnings loss

30Apr 2021
By Guardian Reporter
Dar es Salaam
The Guardian
EAC zone in $4.8bn tourism earnings loss

EAST Africa Community (EAC) member countries are estimated to have lost international tourism receipts reaching $4.8bn in the past year, following the Covid-19 outbreak.

Dennis Karera, EABC vice chairman said at a webinar to introduce a study by the East African Business Council said it was supported by the African Economic Research Consortium (AERC) with funding from the Bill and Melinda Gates Foundation.

The study assessed the impact of COVID-19 on the tourism and hospitality industry, while also examining policy options to protect sector players from COVID-19 disruptions and possible future pandemics.

The study says that tourism which contributed an average of 9.5 per cent to GDP in 2019 and 17.2o per cent of EAC total exports was among the most affected areas in the region. This was reflected in massive reductions in international tourist arrivals, receipts, jobs, visitors to parks and hotel occupancy rates, it said.

From March 2020 when the first cases of Covid-19 were reported in the region, about 4.2m foreign visitors were unable to travel to various destinations in the bloc, occasioning a dip of about two million jobs, from the about 4.1m jobs in 2019 to 2.2m jobs at last year’s end, it said.

Visitors to national parks declined by about 65o per cent, impacting negatively on wildlife conservation resources, while hotels registered average occupancy rates of below 30 per cent, compelling hotel managements to cut down staff levels.

An online survey conducted as part of the study indicated that 26.5 per cent of tourism sector businesses lost entire projected revenues while 44 per cent lost up to 75per cent of projected revenue. Around 17.6 per cent of the businesses lost around 50 per cent of projected revenues, the survey indicated.

Around 35 per cent of interviewed respondents said they reduced staff by more than 50 per cent while 20 per cent reduced staff by 50 per cent or slightly less. Around 32 per cent maintained staff at partial pay and just eight percent of respondents maintained most staff at full pay.

Businesses turned to borrowing to finance routine expenditures like rent and utilities, with reduced operational capital, with the loss of jobs touching off a steep decline in household incomes, it said.

The study will contribute to developing policy options for the EAC Secretariat and the Council of Ministers, it said.

Adopting an EAC coordinated approach in reviving the tourism sector by marketing the region as a single tourist destination, opening EAC skies, rolling out nation-wide vaccination drives and mutual recognition of COVID-19 test certificates are key measures that the report suggested.

Tourism destinations ought to have pandemic preparedness and risk management plans to minimize disruptions in future, the study recommends.

Tourism stakeholders need sustained stimulus packages provided by EAC partner states to redefine tourism products and leveraging digital technologies in tourism marketing and promotion, the report added..

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