Tanzania’s tourism industry now worth over $2bn a year

09Mar 2016
Edward Qorro
The Guardian
Tanzania’s tourism industry now worth over $2bn a year

WHILE a marked increase in foreign tourist arrivals boosted Tanzania’s tourism earnings in 2015 to $2.23 billion, industry players have warned that an unconducive environment and security concerns in the region could stifle development of the sector, and maybe even cause a decline.

Minister of Natural Resources and Tourism, Prof Jumanne Maghembe

Despite a tough tax regime, infrastructural constraints and local tourism firms recording a slowdown in business, the Bank of Tanzania (BoT) confirmed in a new report issued yesterday that tourism continues to be the country’s biggest source of foreign exchange at present, easily outperforming the mining and manufacturing sectors.

Tourism revenues soared 11 per cent in 2015 on the back of higher tourist numbers, the central bank said in its latest monthly economic review. Although the official tourist arrival figures for the year have yet to be publicly released, records show that a total of 1.14 million tourists visited the country in 2014, up from 1.095 million the previous year.

In comparison, gold exports fetched $1.27 billion in 2015, marking a continued downward spiral of income from the once-booming mining sector due to a fall in global prices of the precious metal and declining production by local mines.

However, when contacted for comment by The Guardian, some local tourism industry stakeholders questioned the accuracy of the BoT’s latest tourism revenue figures, saying they do not reflect the actual situation in the country.

“We are surprised that the numbers show an increase, as our preliminary figures indicate this growth trend may have been broken and may even be down,” said the chief executive officer of the Hotel Association of Tanzania (HAT), Lathifa Sykes.

She added: “I say this based on figures from the Serengeti National Park and Ruaha National Park, where there was a 20 to 30 per cent decline in (tourism) arrivals last year.”

Tanzania has in the past had to play second-fiddle to Kenya, which has a more developed tourism industry and better air links to key client markets in Europe and United States.

But the surge in visitors to Tanzania over the past three years has chipped away at Kenya’s dominance and boosted Tanzania’s ambitions to become the regional tourist hub.

Frequent attacks by Somali militants have also hit Kenyan tourism hard, scaring away tourists, some of whom headed down to Tanzania for similar tropical beaches and wildlife safaris.

Kenya’s official tourist numbers slid in 2013 to 1.5 million after an all-time peak of 1.8 million in 2011, although tourists still favour the Jomo Kenyatta International Airport in Nairobi as their natural starting point when flying into the region.

But according to Sykes, despite the fact that Tanzania has been targeting low-volume and high-yield tourism as opposed to Kenya’s mass tourism, the local industry is still lagging behind due to other factors like a discouraging tax regime and various infrastructural shortcomings.

The HAT boss said a multiplicity of related taxes made Tanzania a more expensive tourism destination compared to Kenya or South Africa because of the costs being passed on to tourists.

“There are a total of 53 different taxes, levies and charges that are applicable to tourist companies in Tanzania. The average effective tax rate for businesses in the tourism sector is 48 per cent, ranging between 37 and 63 per cent,” Sykes revealed.

The managing director of Kibo Guides (Tanzania) Ltd and Tanganyika Wilderness Camps, Willy Chambulo, suggested that the BoT tourism revenue figures may have been “cooked up” by government officials or the media.

“The fact is, 2015 was a disastrous year for Tanzanian tourism. Our company’s business went down by 21 per cent… and we are among the top five tourist companies in the country,” Chambulo said, noting that local airlines also experienced a slump of about 19 to 20 per cent in business last year.

“Political instability, especially within East Africa, poses a (further) threat for tourism in 2016,” Chambulo predicted.

But Yosia Mchome, a reservation agent with Zara Tours in Arusha, and Pascal Shelutete, corporate communications manager of the state-run Tanzania National Parks (TANAPA), offered different views, both asserting that the outlook for local tourism this year looks “promising” despite some internal and external risks.

“The year 2015 was a turbulent one because of the terror attacks in Kenya and the Ebola outbreak the previous year, which saw many flights cancelled. We expect to receive more tourists this year, though it is too early to forecast anything,” Mchome said.

Shelutete echoed this, saying the future for tourism would also depend on the issue of security in the country. “We have our fingers crossed, hoping that nothing bad happens in Zanzibar (politics-wise),” the TANAPA official said.