The travel and tourism industry is one of the major sources of employment, tax revenue, and foreign exchange earnings to Tanzania. In the 2019 FY, the total value of foreign exchange earnings generated from tourism amounted to USD 2.557 bn.
This represented 25.79% of all goods and service exports and 61.4% of service exports. In a budget speech made in 2017, the former minister for Natural Resources and Tourism estimated that the sectoral contribution of tourism to Tanzania’s GDP stood at 17.5%.
The sector is more important for Zanzibar as it accounts for about a third of its GDP, 80% of its revenue, and remains the biggest employer on the island.
In this blog, we’re discussing, in brief, the impact of Coronovirus/Covid-19 outbreak on the travel & tourism industry in Tanzania, a topic that we can’t and must not ignore.
We will be honest with you, we did find it difficult to keep our calm while researching this topic, since it directly affects us and the business we are part of. But, as a company, we felt the need to discuss this topic with you, for it’s better to have a known devil than an unknown angel.
Travel & tourism industry in Tanzania has been a significant contributor to the country’s GDP. The sector even generates a large employment base. So when by mid-March, the popular tourist attractions in Tanzania started to close down, and the news on putting a halt on flying began to make rounds, we all started to predict the grim future of the travel industry in the country already.
In this blog, we will try to understand the importance of the tourism sector in Tanzania’s economy; the present and future impacts of the pandemic; and the proposed measures and recovery plans.
Let us first discuss the role of travel and tourism in Tanzania
- In 2019, travel and tourism contributed 11.7% in Tanzania’s GDP and generated TZS 2.557 billion. This industry not only employs workers in cities but also provides an earning base for the rural population.
- The tourism sector accounts for 12.75% of employment in Tanzania, 5.56% of it is direct and 7.19% is indirect.
- Over 807,942 people were employed in the travel sector in 2018-19 in Tanzania, according to the Ministry of Natural Resources and Tourism annual report for 2019-20.
- It is estimated that in Tanzania, branded and organised hotels annual revenue is TZS 500 billion).
- The restaurant industry in Tanzania has an annual turnover of approx 2 billion. This industry provides direct employment to more than 0.5 million people.
- Tanzania’s air transport industry employs over 521,698 people directly and 940,000 are employed in related supply chains.
Effects of Coronavirus on Travel and Tourism in Tanzania
- On account of Coronavirus, the Tanzanian tourism and hospitality industry is expecting a potential job loss of around 0.6 million.
- In the third week of March 2020 itself, the hotel sector saw a decline of more than 65% in occupancy levels as compared to the same period in 2019.
- With international and domestic travel on halt, demand for turbine fuel has substantially declined.
- The Tanzania Tourism Board estimates the hotel, aviation and travel sector together may suffer a loss of about TZS 85 billion keeping in mind the travel restrictions imposed on foreign tourists.
- Impact of Covid-19 would be felt on both white and blue-collar jobs.
- India’s outbound and inbound travel will witness an all-time low.
- The restaurant industry in Tanzania is expecting almost low revenue in the immediate term, and a drop of 50% in the months to come.
- At least 30 per cent of hotel and hospitality industry revenue could be impacted if the situation doesn’t improve by the end of June 2020.
- There is a threat of job loss of nearly 15% in the hotel and restaurant industry once they will not see an immediate surge in demand.
- The passenger growth of airlines is likely to fall sharply to a negative 20-25% growth for 2020-21.
Things to Know on Travel and Tourism in Tanzania
- The tourism sector was already facing some trouble before the rise of the Covid-19 pandemic due to the impact of the global economic slowdown.
- Economic growth in the world decelerated in 2019-20, resulting in weaker growth in foreign tourist arrivals and foreign exchange earnings from tourism in Tanzania.
- With more than 60% of organised hotels in Tanzania shut, recovery should be expected gradually.
Recovery Plans Travel and Tourism in Tanzania
As per the point above, we are staring at a gradual or in fact slow recovery scenario of the tourism industry in Tanzania, however, the important thing to focus on is there’s the hope of recovery after all. For the recovery of the sector, few things have been proposed by leaders in the industry.
- Experts have emphasised on the need to focus on the potential of domestic tourism and try to gain some profit through it.
- Setting up of a ‘Travel & Tourism Stabilisation Fund’ with direct benefit transfer to each unit to prevent financial and job loss.
- The experts also recommend cost optimisation at all operational levels.
- Any dry powder that is available in the market should be utilised more on buying operating assets rather than building new ones.
Coronavirus may have brought the pace of the travel & tourism industry in Tanzania to a complete halt, but it hasn’t yet defeated the spirit of the people involved in this sector. The blow may seem harsh but there’s still hope left.
We believe, if we persevere and stay in this together, you as travellers and we as operators, we will get through this what right now feels like a nightmare. Our request to you is to not give up on your plans for domestic travels this year. Once things are in place, we will be back with our unmatched travel services. Remember like everything else in our lives, This Too Shall Pass.