Wilted Tourism Sector Seeks Government Support


Tourism, one of country's growth areas, has been negatively impacted by the state of emergency




Following a face-to-face meeting with the ousted Minister of Culture and Tourism, the Addis Abeba Hotel Owners’ Association and the Ethiopian Tour Operators’ Association are now compiling intervention strategy documents to present to concerned bodies, including the Office of the Prime Minister.

The decline in tourist inflows comes following the declaration of a state of emergency a month ago. Following the declaration, countries like the US, Canada, Australia and Ireland were among the first to issue travel warnings and advice to their citizens.

This is a blow for the country’s flourishing and striving hospitality and tourism industry. The previous year saw almost double the number of tourists there were just three years ago.

Addis Abeba is home to over 200 hotels – three of which have five stars and 13 of which are under international brands.

“Many of the newer hotels have active loans to repay,” said Benyam Bisrat, president of the Addis Abeba Hotel Owners’ Association. “We fear that the sector may be approaching the verge of collapse. Without the support of the government and all stakeholders, we cannot sustain the high results we have achieved so far.”

“If the impact is as heavy as this in just one month, it may become impossible for many companies to continue business,” he added.

The associations are proposing support from the government in the form of stimulus. Alternative mechanisms – like loan extensions, as a priority, and direct injections of cash – should be tabled as a last resort.

Requests like this – for an extraordinary industry-wide intervention from the executive – have been met with positive responses this year.

After a slump in the international price of coffee, coffee exporters requested assistance from the Prime Minister’s Office. They received an intervention from the National Bank, which ordered banks not to pursue any action against growers and exporters who could not repay loans.

The government has also set up a Special Committee to investigate how they can mitigate the effects of the damage to businesses during the recent wave of unrest in certain regions of Ethiopia. Under this mission, possibilities tabled for discussion include – full or partial compensation; revising the new 50:50 equity share of Foreign Direct Investment back to the munificent 70:30, with the government as the major stakeholder, and providing the duty free privileges they have already enjoyed anew.

“We have had over 1,200 cancellations in the period from August to October,” said one hotel proprietor, who wished to remain anonymous. “This is usually the peak season for tourists. Between lost bookings and cancellations, we have lost close to five million birr. Many in the industry are considering downsizing their staff because of the costs.”

The dip in tourist numbers and revenue came despite repeat reassurances from the Command Post that tourists would be allowed to travel as normal and protected in every part of the country. The directive for the state of emergency advises diplomatic communities in the country not to travel more than 40km from Addis Abeba without notifying the Command Post.

Travel warnings from embassies in the country started to come as early as December, with the Norwegian Embassy issuing the first travel advisory. The British, Canadian and US embassies issued warnings against “all but essential travel” to certain areas and outright bans of travel to areas such as the Shashemene-Mojo corridor and Ambo.

“October to February was our peak season, but we don’t have any bookings. But I think we have a chance to turn this negative into an opportunity,” Samrawit Moges, owner and director of Travel Ethiopia, a local tour operator, who was present at the meeting, told Fortune. “In Kenya, for instance, they used terrorist incidents as a chance to turn their attention to tourists from Asia instead of just Europe and America. There is a lesson there for the Ethiopian tourism industry. Now is the right time to focus on trying to improve and resuscitate the sector.”

Tourism has long been an area of strength for the Ethiopian economy. Over the five year period of the first phase of the Growth & Transformation Plan (GTP 1), tourism generated an average of 1.7 billion Br in revenue annually. During the 2015/2016 fiscal year, more than 910,000 tourists visited the country.



By MENNA ASRAT
FORTUNE STAFF WRITER

Published on Nov 08,2016 [ Vol 17 ,No 862]


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