Tourism is a major contributor to the GDP of African economies. In 2019, the industry accounted for about seven percent of Africa’s GDP and contributed $169 billion to its economy — about the size of Côte d’Ivoire’s and Kenya’s combined GDP. But Covid-19 changed all that.
In July 2020, the African Union estimated that Africa lost nearly $55 billion in travel and tourism revenues and two million jobs in the first three months of the pandemic.
The International Monetary Fund (IMF) predicted that real GDP among African countries dependent on tourism dropped by 12 percent in 2020.
However, as Covid-19 restrictions ease, tapping domestic tourism demand has offered the sector some respite, as a growing middle class and young population shows more interest in travel.
The International Finance Corporation (IFC) says much of the world has had the advantage of relying on captive domestic and regional audiences. But in Africa, domestic tourism has been overlooked for a long time. The sector needs to be oriented towards more diversified markets so that there is greater resilience in future.
According to the World Travel &Tourism Council (WTTC), domestic tourism accounted for 55 percent of travel and tourism spending in Africa in 2019, below the contribution of local tourism in North America (83 percent), Europe (64 percent) and Asia-Pacific (74 percent). Domestic tourism accounted for 73 percent of the total global tourism spending in 2017.
Africa’s growing middle class and population of young travellers hungry for adventure, and the recently launched African Continental Free Trade Area (AfCFTA), the world’s largest free trade area by the number of participating countries, are among the pillars seen supporting the future growth of domestic and regional tourism on the continent. This, therefore, calls for a rethink of strategy, especially in terms of building a domestic client base to match or even exceed the international base.
But a shift to domestic tourism requires capacity-building for service providers on leveraging digital technologies for product development and marketing.
There is also a need to enhance professional standards for tour service providers, including tour operators and tour guides. Equally, there is a need to build sustainability into the recovery process —sustainable environmental, social, and financial practices; diversification of the domestic tourism products and sustained domestic and regional tourism campaigns.
Travel costs also need to be reduced as this has been a hindrance. Alongside this, the construction of affordable hotels could go a long way in increasing affordability to local tourists. Africa needs hotels designed for this local market.
Most parts of Africa remain among the most expensive countries to develop hotels. Innovative technology and flexibility around brand standards will be critical to driving down costs, as will relaxation of import duties and more options around development professionals and contractors.
Hotels are growing flexible but more needs to be done to grow domestic tourism.