Tourism Sector Tries to Stay Above Water




Abdurahim Ahmed, 55, who has three years of experience in the tourism industry, is the general manager of Experience Ethiopia Travel, a tour company which has been in the business for the past two decades.

The number of tourists who use his service has reached its lowest point in a decade, declining by three fold.

“This is ridiculous,” he said. “We are not earning as much money as we planned.”

He relates the decline with the recent unrest and political instability that has raised concerns in the international community.

Many travellers have cancelled trips to Ethiopia. Some countries even issued a travel ban for Ethiopia. The United States and several other countries issued travel advisories for their citizens to defer travel to Ethiopia. Many believe that the warnings issued by countries and cancellations of bookings following the unrest affected the tourism sector in Ethiopia.

“We achieved 45pc of our targets,” said Abdurahim, who has served only 80 tourists in the past three months. This time of year is known to be the peak season for tourists in Ethiopia.

The unrest in Oromia and Amhara regional states, which reached its peak in October, injured the country’s tourism industry, and in turn, the economy.

Last year, Ethiopia hosted 478,890 tourists, which is 12pc lower than the previous year. Revenues from the tourism sector went down by 200 million dollars to 1.6 billion dollars.

Five months ago, Ethiopia declared a six-month long state of emergency across the whole country following months of anti-government protests. Then last week, the parliament extended the state of emergency for the next four months.

Abdurahim believes that the states of emergency will worsen the current problems in the tourism sector.

“We cannot operate under such conditions anymore,” Abdurahim explains. “Even though the decree has a positive impact on securing peace and stability, it still has an adverse effect on our business.”

On the other hand, Tewodros Derbew, the director of the Tourism Services Accreditation Directorate, believes the contribution of the state of emergency to the decline in tourist numbers is moderate.

“We can say that the state of emergency has almost no influence on the drop in tourism earnings,” Tewodros said.

Yohannes Assefa, the managing director of Red Fox Tour and Travel, which has seen its foreign customer numbers plummet from 500 to less than 60, disagrees with Tewodros.

“The state of emergency just added fuel to the fire on an already troubled sector,” said Yohannes.

Previously, most of the tourists who used his service were from western countries such as Germany, which were the first to enact travel advisories and warnings after the Oromia unrest.

“Most of the tourists are not yet aware of the current condition of the state. Now, with the extension of the decree, things will get worse,” he added.

Last week, the country’s parliament unanimously voted for an extension of the emergency decree after the Command Post Secretariat Head and Minister of Defense Siraj Fegessa presented a proclamation before Parliament regarding continuing the state of emergency.

He explained that there were still people attempting to disrupt the peace and security that was restored after the wave of unrest. This, coupled with the need to address possible reasons for future insecurity, were the reasons behind the request for the extension.

Although Prime Minister Hailemariam Desalegn did not confirm or deny the extension during his last appearance before Parliament two weeks ago, he did refer to the situation of the country and the views of the population about the state of emergency. “Through studies and surveys, it has become clear that many people would support the extension of the state of emergency for at least one more cycle. Out of the people included in the survey, 82pc were in favour of a full or partial extension of the state of emergency,” said Hailemariam.

Hotel businesses were among those worst affected by the unrest. Some hotels were even left with zero occupancies of tourists during the unrest.

The effect, however, started to show a decline three months after the declaration of the state of emergency, according to Zena Dawit, vice director of Nexus Hotel, a hotel which has been in business since 2012.

He believes that the extension is not going to have an adverse effect on the hotel industry.

“The government has already removed some of the bans stated in the decree,” Zena said.

Around two weeks ago, during a press briefing, Siraj noted that some of the bans and restrictions associated with the state of emergency would be lifted. In particular, the ability of security forces to arrest and detain people without a court order, and to conduct searches and seizures without court orders were lifted. In addition, the curfews that were enacted around major infrastructure and investment projects were also lifted.

Efforts have been made to support the industry, through meetings with both governmental and private sector stakeholders. However, tour operators and hotels are still struggling to return to where they were before the state of emergency was declared.

The number of hotels in Addis Abeba has reached 1,129, an increase of 417 from the figure five years ago. The number of starred hotels have also increased to 111 from 58 in the past five years while tour companies reached over 460 throughout the country. Investment capital in hotels has also increased, growing from 80 billion Br to 101 billion Br.

Leulseged Mesele, an international hotels and tourism consultant, says the effects are still being seen.

“Some of the hotels are not even able to repay bank loans,” he said. “Extending the state of emergency shows the country is not stable, so, the problem will also continue in the coming months.

In November 2016, members of the hotel industry and the tour industry submitted a letter to the Prime Minister’s Office, asking for loan extensions and various other supports for the industry. It was not an unprecedented move. Last year, coffee growers in various areas also requested loan extensions from the government due to the fall of coffee prices on the international market.

“In order to solve the problem, the government should give compensation for the crisis,” Leulseged added. ”Otherwise, the decline in tourism earning will continue in the coming months.”

Currently, the contribution of tourism to GDP is around 10pc and projected to reach 7.7pc by the end of 2025, According to the World Travel & Tourism Council.

“I don’t know why the government has extended the state of emergency, knowing that the country is peaceful and stable,” said Leulseged.

The further effects of the state of emergency are still unknown, although the lifting of the restrictions and bans may have an effect on the tourism sector as people begin to come back to the country. However, for now, tourism businesses will have to try to keep its head above water long enough for customers to return.



By BEREKET BIRBIRSA
FORTUNE STAFF WRITER

Published on Apr 01,2017 [ Vol 17 ,No 882]


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