"Tanzania is among countries blessed with rich tourist attractions such as national parks, historical sites, cultural sites, mountains, valleys, and water bodies. Besides, the presence of peace, tranquility, and the hospitality of her people remain major charms that attract people to the East African Country. The tremendous increase in internet penetration in Tanzania reveals an untapped potential for growth in various sectors including tourism and hospitality."
Paul Midy - CEO Jumia Travel
Tanzania ranks among the 20 fastest growing economies in the world.
Tourism contributed 13.3% to the GDP in 2016.
Tourism contributed 11.6% of the total employment in 2016.
Over 40% of the population has internet access.
What is the current situation in the tourism and hospitality industry in Tanzania?
Hospitality industry in Tanzania is growing at a moderate rate. For example, when speaking on the state of economy in the country, the Minister for Finance and Planning, Dr. Phillip Mpango said that tourism sector has recorded a good performance in the period of 10 months from January to October 2016, with the arrival of a total over 1M tourists in the country. The sector has recorded an increase of 96,374 tourists, which is a 10.42% increase compared to the same period in 2015 when a total of 924,442 tourists visited the country from January to October.
Also, the national revenues resulting from the industry have been increasing year after year with USD 2.1 billion (about TZS 4.5 trillion) in 2016 against USD 1.9 billion (about TZS 4 trillion) in 2015. Therefore, for us all those indicators show that the industry is growing and impacting our economy immensely.
Usually, we gather all this information from the International Visitors’ Exit Survey conducted annually by the Ministry of Natural Resources and Tourism in collaboration with other government agencies such as Immigration Department, Bank of Tanzania, National Bureau of Statistics and our Executive Secretary among others. The recent survey for the year 2016 was released on June 9 2017, and indicates that the national parks attracted about 36% of tourists, followed by beach tourism. The biggest number came from the UK followed by the US for Tanzania mainland, while in Zanzibar Italy came second after UK in number of tourists. In addition to that, each tourist spends USD 178 (TZS 383,000) per day, and many of them come for leisure and holidays.
Which areas need to be improved in order to bolster the industry?
The key area to mainly improve is the business environment which involve all the stakeholders in the tourism and hospitality industry. For example, Tanzania Confederation of Tourism (TCT) regulates about 12 associations such as tour operators, travel agencies, hotel associations, and all others in the value chain. More has to be done in improving infrastructure, particularly roads and airports to attract more tourists as well as to help these key players operate smoothly.
Moreover, we need to invest much in accommodation facilities to cater to the influx of tourists in various national parks and other attractions. We still have a few of them, low quality and even lack skilled personnel. Currently, TCT in collaboration with Hotel Association of Tanzania (HAT) and International Labour Organization (ILO) have come up with the apprenticeship program to provide skills to the youth.
The program will be run in partnership with the National College of Tourism, with the aim of making them employable within the tourism and hospitality industry.
But all in all, the government is working very hard to create conducive environment, such as the expansion of the Julius Nyerere International Airport (JNIA). It has also formed a task force under the Ministry of Industry and Trade to oversee complaints of unfair taxes and policies by stakeholders.
What is the position of the government in working together with other tourism and hospitality stakeholders across the country?
Obviously, the achievements the country has attained at the moment is due to the fact that the government is working hand in hand with other stakeholders within the industry. Important to note is that all sorts of communication and engagement go through TCT which is the link between the government and the stakeholders. The government is also working on improving the current national strategic plan of the year 1999, in which the industry is operating. This will also be accompanied by its implementation plan for the coming ten years. So apart from our contribution in suggesting new reforms for taxes and policies to the government, we also have our staff in those task forces and committees which work very closely with the government. Though there are still challenges in achieving effective cooperation between the public and private sectors, we are confident in the clear and consistent system of organising and conducting meetings, dialogues or trainings. In conclusion, what we urge the government is to keep on creating a conducive environment for the tourism and hospitality stakeholders to operate. For example, improving the current state of our national parks and historical sites, which are major tourist attractions in the country.
What role does hotel investment play in the tourism and hospitality industry, specifically to the national GDP?
In Tanzania and in most countries in the Sub Saharan region, the tourism and hospitality industry is always in the top five. Here, I would argue that it is a little tricky to tell the exact figures on how it contributes since that requires statistics from the authorities and regulators.
As the Hotel Association of Tanzania, our statistics would basically be related to how many member hotels we have, how many bed nights we have received and so forth. But tourism is much bigger than that, we have cultural tourism, beach tourism, conference tourism, events as well as business tourism.
What impacts does the sector have in growth of employment rate in the country?
Tourism is a major contributor to the economy and thus obviously influences the employment rate. We directly employ more than 400,000 people besides those employed indirectly because of tourism.
You have to think tourism as a value of chain, for instance a guest comes and stays at a hotel; there, a waiter is a direct employee of the hotel. However, a guy standing outside selling necklaces and other cultural products might be not directly employed but it is a self-employment because of tourism or a painter doing the same thing to the visitors. In other words, the industry enables people to earn enough income which results to employing others as well. It is also the same business wise, there are hotel operators, tour operators, aviation companies, guides and the list goes on. So that depends on which sub-sector fits in.
Briefly, would you explain how the member hotels operate within the industry?
We have different kinds of members such as hotels of higher end, middle income, restaurants, tented camps, safari lodges, and beach bungalows which we also categorize as hospitality or tourism facilities. To a greater extent, the way hotels operate depends on several factors including hotels’ business models and their locations to mention a few. For example, a hotel in the city center, even though it has rooms, is likely to concentrate much on conferences or events because that's where it gets more revenue from. The situation might be different to safari lodges in the national parks. For example, because of the nature of the business and roaming, these places are usually up to 24 rooms. So to them the only thing which will be selling more is the room bookings.
Therefore, you have to look at the nature of the hotel, what their focus is, what is their business model and also where they operate. So, I can’t say that in the hotel industry conference services, restaurants or room bookings pay more than the other. We do concentrate and advocate for hotel matters and we also expand and see how hotel matters integrate with a big picture in the industry. The aim is to make our industry sustainable not only for the private sectors but also the public ones. In general, it's an advocacy towards making an environment which is fair and just for all players in the field, and also to incentivize people who want to come into the industry.
72.4 % of Foreign visitor spending
27.6 % of Domestic spending
85.5 % of Leisure spending
14.5 % of Business spending
|Dar es Salaam||26%||100 USD|
What are the impacts of the tourism and hospitality industry to the national GDP?
The impacts are enormous. To a country like Tanzania, it can be over proportional compared to other western countries. In a western country it can go up to 10% of the GDP. Here, it can go even higher because (a) its unexplored, with only over 1 million arrivals in 2016. I’ll give you an example, my country, Austria, had 42 million arrivals last year, 42 times more than Tanzania, and we only have 90,000 square kilometers.
We don’t have what you have in terms of nature products in the sector. So, the impact of tourism and hospitality sector could be the most important for Tanzania by far, even compared to others like mining, agriculture, and financial services, among others.
What are your views on the sector’s contribution to the national employment rate?
You have to be able to differentiate direct from indirect employment. Direct employees are people working in hotels, restaurants, travel agencies, tourism boards, conference centers, or whatever is directly related to tourism and hospitality industry. Indirect employees on the other hand are those who deliver us products, on a daily basis, on a weekly basis such as gardeners, florists, wholesalers who deliver vegetables and fruits, butchers who deliver meat, fishermen, etc. So I would say that if you take the overall current national employment rate as far as I know, then the tourism and hospitality industry could even be the number one employer in Tanzania; particularly if you add both direct and indirect employment. There are hotel constructions taking place at least two to four years. We are all buying water and electricity from DAWASCO and TANESCO, again, we are creating jobs there because we pay our bills. With regards to national employment rate, the tourism and hospitality industry should actually be the number one sector. We have a saying that, you cannot remove nor recreate mount Kilimanjaro, because it’s unique. Every destination is unique, and if we manage to preserve them, we shall create even more jobs for Tanzanians.
What part of your business would you say pays more?
For us, its of course the rooms plus conference facilities, so we obviously have a good mix of segments. These comprise of for instance NGOs, banking industry players, companies conducting trainings, among others. Unlike city hotels that are basically focused on transit and property endorsement, our main focus is conferencing due to our interior location. I however acknowledge that this year has been challenging in terms of revenue generation, but we are working really hard towards achieving our financial goals by the end of the year.
In general, what are your comments on the domestic expenditure among Tanzanians?
We used to have a big chunk of business from the locals especially during weekends. This year however, Tanzanians’ spending power has depreciated. Thus, we have experienced a downward economic trend as far as this particular area is concerned, but there is still a lot of potential. For example, during last year’s Christmas and New Year season, we generated the highest possible revenue for that particular period. In addition, Tanzania as a market has a tremendous potential in attracting foreign visitors due to her unrivaled natural beauty and tourist destinations. Therefore, if we can do more marketing to promote Dar es Salaam as a top tourist destination, that would tremendously uplift not only hotels in the region but the entire tourism sector. This is because we shall be offering diverse travel options apart from the popular Zanzibar, Kilimanjaro, and Serengeti.
|Percentage of search||Time before|
|35%||less Than 24 Hours|
|46%||less Than 48 Hours|
|67%||less Than One Week|
|82%||less Than Two Week|
|91%||less Than one Month|
|90%||less Than one Month|
Being a middle agent between the customers and hotels, what are the major challenges you face?
Sometimes we receive a lot of no-show cases from the hotels. In some instances, such cases cause misunderstandings between Jumia Travel and the hotels, which can later result to bookings being declined. Some hotels lack proper systems of keeping records, thus spend a lot of time before checking in the guests, leading to frustrations. Apart from that, some guests are not familiar with the locations they are heading to. Therefore, as the travel advisors, we have to completely familiarize ourselves with as many locations as possible, in order to provide a step by step guide to our customers.
Do you think online platforms are facilitating easy bookings to customers?
Yes, I believe that online platforms facilitate easy bookings. Jumia Travel for instance offers guests an easy and reliable platform for them to plan their holidays with ease. Guests do not have to go through the hassle of visiting each hotel to decide on their preferred option but instead can just view what we have online and make a decision based on the pictures, amenities and reviews that we clearly outline on our website.
With online platforms, guests are offered visibility on different options of hotels where they can compare prices and pick what suits them best. Their perfect holiday can be booked and paid for with just a click of a button. This clearly means that we can offer the best possible hotels and service at the comfort of your home.
In brief, how does the revenue management system operate in a hotel or an OTA?
The purpose of the revenue management system is to ensure that the hotel is earning as much revenue as possible from the rooms it has to sell. In a hotel, that means managing different channels and adjusting rates based on demand and availability.
As OTAs, we represent one of those channels that hotels manage, so our job is to guide the hotels on how to maximize the revenue that we can contribute for them.
How do you advise hotels in setting good rates in order to get good business?
While each hotel is unique and requires advice specific to its situation, the Revenue Manager’s job is to guide the hotel in setting a rate that makes sense for the property and for the market. It is important for a hotel to offer a low entry rate to bring people to their page (i.e. a non-refundable rate).
Once the guest is looking at all of the rate options, they will likely book something higher (i.e. a rate with breakfast), so we recommend that a hotel offer a variety of rates. But that low entry rate is important to get the guest to look at the hotel in the first place.
Do seasons affect hotel's pricing? If so, how and what would you recommend in dealing with seasonality?
Seasonality can affect hotels, particularly those in tourist destinations or where the weather changes throughout the year. The key to dealing with seasonality is to plan ahead.
A hotel should always be looking a year out to set the rate strategy when a season changes. That way, they don’t have to scramble at the last minute to fill rooms, or risk missing out on revenue from higher rates.
Over the years, Tanzania has grown to become one of the top tourist destinations in the world. Tanzania ranks among the 20 fastest growing economies in the world, with tourism contributing approx 12% of the total employment in 2016. The 2017 Tanzania Hospitality Report looks at the current state of Tanzania's tourism industry, compares it to previous years and looks to project its future. It further highlights the role of the government, hotel investment and e-tourism in the hospitality industry.
World Tourism & Travel Council, Tanzania Communications Regulatory Authority (TCRA), Tanzania Tourism Board (TTB), World Bank, Tourism Confederation of Tanzania (TCT), Hotel Association of Tanzania (HAT), National Bureau of Statistics (NBS), Bank of Tanzania (BoT), Tanzania National Parks (TANAPA), Internet World Stats, World Tourism & Travel Council, Jumia Travel BI