1. Tourism Sector
MID-YEAR PRIVATE SECTOR REVIEW OF THE
GHANAIAN ECONOMY
AUGUST 2008
PREPARED FOR THE GHANA TOURISM
FEDERATION (GHATOF)
BY
JEAN LUKAZ

2. Contents
2
1.
2.
3.
4.
5.
6.
7.
8.
9.
The expectations you had for the year
Reasons for such expectations
The performance of your sector during the first half-year in terms
of output, employment, profitability, turnover and level of
competitiveness.
What were the factors that affected the performance of your
sector?
Policy initiative in 2008 that has boosted or retarded the growth
of your sector.
Expectations for the last half year.
Challenges facing the sector.
Actions taken to address challenges.
Recommendations to Government for an improved performance
of the sector.
Mid-Year Private Sector Review of the Ghanaian
economy- TOURISM SECTOR-GHATOF
10/29/2013

3. The expectations for the year 2008
3
 GDP
 GROWTH
 EMPLOYMENT
 DEMAND
 VISITOR EXORTS
 CAPITAL INVESTMENT
 GOVERNMENT EXPENDITURE
Mid-Year Private Sector Review of the Ghanaian
economy- TOURISM SECTOR-GHATOF
10/29/2013

4. The expectations for the year 2008
4
GDP:
 The Travel &Tourism Industry is expected to
contribute directly



4.3% to Gross Domestic Product (GDP) in 2008 (GHC6,847.4
bn or US$726.2 mn),
rising in nominal terms to GHC18,416.3 bn or US$1,678.9 mn
(4.5% of total) by 2018.
The T&T Economy contribution (% of total) should rise from
9.6% (GHC15,186.8 bn or US$1,610.7 mn) to 9.9%
(GHC40,761.9 bn or US$3,715.9 mn) in this same period.
Mid-Year Private Sector Review of the Ghanaian
economy- TOURISM SECTOR-GHATOF
10/29/2013

5. The expectations for the year 2008
5
REAL GROWTH:
 In 2008, Travel & Tourism in Ghana is Forecast to See
Real Growth of:
Rate
Value
Direct Industry GDP
4.5 %
...to GHC6,847 bn
(US$726 mn)
Direct Industry
Employment
0.8 %
...to 175,000 jobs
Economy GDP
4.9%
...to GHC15,187 bn
(US$1,611 mn)
Economy Employment
1.2%
...to 393,000 jobs
Mid-Year Private Sector Review of the Ghanaian
economy- TOURISM SECTOR-GHATOF
10/29/2013

6. DIRECT IMPACT 2008
6
 In 2008 Ghana's Travel & Tourism is Expected to
Generate GHC15,187 BN (US$1,611 MN) of
Economic Activity (GDP). The industry's Direct
Impact includes:
Rate
Value
Direct Industry GDP
4.3 % of Total GDP
GHC6,847 bn (US$726
mn)
Direct Industry
Employment
3.5 % of Total Employment
175,000 jobs
Mid-Year Private Sector Review of the Ghanaian
economy- TOURISM SECTOR-GHATOF
10/29/2013

7. INDIRECT IMPACT 2008
7
 However, since Travel & Tourism Touches All Sectors of The Economy,
its Real Impact is Even Greater. In 2008 Ghana's Travel & Tourism
Economy Directly and Indirectly Accounts for:
Rate
Value
Economy GDP
9.6% of Total GDP
GHC15,187 bn (US$1,611
mn)
Economy Employment
7.8% of Total
Employment
393,000 jobs
Exports, Services &
Merchandise
20.7% of Total Exports
GHC 12,766 bn (US$1,354
mn)
Capital Investment
8.2% of Total Investment
GHC 4,102 bn (US$435
mn)
Government Expenditure
3.3% of Total Government GHC 729 bn (US$77 mn)
Expenditure
Mid-Year Private Sector Review of the Ghanaian
economy- TOURISM SECTOR-GHATOF
10/29/2013

8. The expectations for the year 2008
8
EMPLOYMENT:
 Travel &Tourism Economy employment is estimated
at



393,000 jobs in 2008, 7.8% of total employment, or 1 in every
12.9 jobs.
By 2018, this should total 505,000 jobs, 8.0% of total
employment or 1 in every 12.6 jobs.
The 175,000 T&T Direct Industry jobs account for 3.5% of total
employment in 2007 and are forecast to total 226,000 jobs or
3.6% of the total by 2018.
Mid-Year Private Sector Review of the Ghanaian
economy- TOURISM SECTOR-GHATOF
10/29/2013

9. The expectations for the year 2008
9
DEMAND:
 In 2008, Travel & Tourism is expected to post


GHC28,128.4 bn (US$2,983.3 mn) of economic activity (Total
Demand),
growing to GHC73,607.2 bn (US$6,710.2 mn) by 2018.
Mid-Year Private Sector Review of the Ghanaian
economy- TOURISM SECTOR-GHATOF
10/29/2013

10. The expectations for the year 2008
10
VISITOR EXPORTS:
 Exports make up a very important share of Travel &
Tourism's contribution to GDP. Of Ghana's total
exports, Travel & Tourism is expected to generate


20.7% (GHC12,766.2 bn or US$1,354.0 mn) in 2008,
increasing to GHC33,349.1 bn or US$3,040.2 mn (21.7% of
total), in 2018.
Mid-Year Private Sector Review of the Ghanaian
economy- TOURISM SECTOR-GHATOF
10/29/2013

11. The expectations for the year 2008
11
CAPITAL INVESTMENT:
 Travel & Tourism Capital Investment is estimated at


GHC4,101.5 bn, US$435.0 mn or 8.2% of total investment in
year 2008.
By 2018, this should reach GHC10,797.1 bn, US$984.3 mn or
8.4% of total.
Mid-Year Private Sector Review of the Ghanaian
economy- TOURISM SECTOR-GHATOF
10/29/2013

12. The expectations for the year 2008
12
GOVERNMENT EXPENDITURE:
 Government Travel & Tourism operating
expenditures in Ghana in 2008 are expected to total


GHC729.3 bn (US$77.3 mn), or 3.3% of total government
spending.
In 2018, this spending is forecast to total GHC1,961.6 bn
(US$178.8 mn), or a 3.4% share.
Mid-Year Private Sector Review of the Ghanaian
economy- TOURISM SECTOR-GHATOF
10/29/2013

13. Reasons for such expectations
13

ACN/CAN 2008



Increased arrivals from Africa an subregion
Increased revenues
Construction of Extra Luxury
accommodation provision- direct &
indirect jobs
Tourism Marketing and Promotion


ITB 2008 [resumption]- increased
arrivals from Germany
COTTM 2008 [new market]



Gold Award in Aprilincreased arrivals from China
Joseph Project- downturn [recession in
US- main market]
Civil War in Bawku


Low turnout in North and Ghana as a
wholefor Community-Based Tourism
oriented Tourists- Mole, Weichiau,
Sirigu/SWOPA
Travel Advisory negative about Ghana
Mid-Year Private Sector Review of the Ghanaian
economy- TOURISM SECTOR-GHATOF
Crime



UNCTAD XII/AU Summit/ Ghana@50





High Road Accident Rates


Higher air fares to compound existing
high rates
Recession in US [Credit Crunch]


Risk of clashes- reduced tourist arrivals in
Oct-Dec
High Oil Prices


Even President involved!!!
Elections 2008


Mugging on the rise
Armed Robbery
Roadside Thuggery on the rise
Travel Advisory negative about Ghana
African American Market adversely
affected
National Airline Crisis- GIA

Barbados; irregular flight schedules
10/29/2013

14. Performance of Tourism Sector
January-June 2008

15. Output
15
 Focus on Key Areas of the Value Chain



Hotel Occupancy- high
Tours Generated and Executed high
Food and Beverage Sales- high
 Taxes and Levies from Sector High






Metropolitan Assemblies
VAT
GTB
District Assemblies
Airport Taxes
IRS
 Pro-poor impact high due to high % of MSMEs
Mid-Year Private Sector Review of the Ghanaian
economy- TOURISM SECTOR-GHATOF
10/29/2013

16. Employment
16
 Hotels
Trend towards Temporary Staff Recruitment
Indicator of Seasonality and or lack of recognition for skills
 Indicator of very little quality-demanding consumers


Impact on Service Quality
 Tour Operators

Trend towards Temporary Staff Recruitment [Tour Guides]

Indicator of Seasonality
 F&B

Trend towards Temporary Staff Recruitment
Indicator of lack of recognition for skills
 Indicator of very little quality-demanding consumers

 Indirect Jobs from Capital Projects

Hotel Construction
Mid-Year Private Sector Review of the Ghanaian
economy- TOURISM SECTOR-GHATOF
10/29/2013

17. Profitability
17
 Hotel Occupancy


Upper quartile 65% plus
80% plus [for 3-5 star in Accra]
 Tours


Cultural Tours increasing
Educational Tours increasing
 Food and Beverage Subsector




Trends in Self-service increasing
Ghanaian increasingly dining out at lunch-time and on weekends[Sundays especially]
More establishments coming p due to low barriers to entry,
especially in informal Sector
Profitability of up to 70% gross
Mid-Year Private Sector Review of the Ghanaian
economy- TOURISM SECTOR-GHATOF
10/29/2013

18. Level of Competitiveness
18
 Internal
 International/ Transnational players changing the climate in
Hotel Sub-Sector
 Ethnic Cuisine taking over in the Fine Dining Category
 Service Quality still a challenge in MSMEs

Hotels, Restaurants, Chop Bars
 External
 Tourist Product Competition questionable because of Unique
cultural product
 Neighbours leveraging on Lack of Aggressive Tourism
Branding and Marketing by Government killing Sector
Mid-Year Private Sector Review of the Ghanaian
economy- TOURISM SECTOR-GHATOF
10/29/2013

19. Factors that affected the Performance of Tourism
Sector I
19
 Lack of bankable projects
 Financial institutions not supporting sector apart from Car
Rentals
 Hotels built on loans [2-3yrs] defaulting- financial institutions
do not offer long-term loans because they do not understand
[long-term] profitability of Sector Projects
 Tourism Sector still MSME driven- over 85%
 Support to Tourism MSMEs
Mid-Year Private Sector Review of the Ghanaian
economy- TOURISM SECTOR-GHATOF
10/29/2013

20. Factors that affected the Performance of
Tourism Sector II
20
POSITIVE
NEGATIVE
 ACN/CAN 2008
 Increased arrivals from Africa an subregion
 Increased revenues
 UNCTAD XII/AU Summit/

Ghana@50

Construction of Extra Luxury
accommodation provision- direct &
indirect jobs
 Tourism Marketing and Promotion
 ITB 2008 [resumption]- increased
arrivals from Germany
 COTTM 2008 [new market]

Gold Award in Aprilincreased arrivals expected from China
Crime





High Road Accident Rates


Barbados; irregular flight schedules
Civil War in Bawku


Mid-Year Private Sector Review of the Ghanaian
economy- TOURISM SECTOR-GHATOF
African American Market adversely affected
National Airline Crisis- GIA


Higher air fares to compound existing high rates
Recession in US [Credit Crunch]


Risk of clashes- reduced tourist arrivals in OctDec
High Oil Prices


Even President involved!!!
Elections 2008


Mugging on the rise
Armed Robbery
Roadside Thuggery on the rise
Travel Advisory negative about Ghana
Low turnout in North and Ghana as a wholefor
Community-Based Tourism oriented TouristsMole, Weichiau, Sirigu/SWOPA
Travel Advisory negative about Ghana
10/29/2013

21. Tourism Policy initiative in 2008
21
 that has boosted the growth of tourism sector
 that has retarded the growth of tourism sector
Mid-Year Private Sector Review of the Ghanaian
economy- TOURISM SECTOR-GHATOF
10/29/2013

22. Expectations for July-Dec 2008
22
 Average Peak Season in August because of expected fall
in African American numbers

Because of Credit Crunch
 Low Season in Election Period

Because of perceived risk of violence
 Low Season

Because of Bawku War
 Rising Oil Prices can keep more ‘dollar’ tourists out due
to high air fares;

however, local inflation will make tourism cheaper for Euro/Pound
Sterling holders
 Domestic Tourism still unexplored potential
Mid-Year Private Sector Review of the Ghanaian
economy- TOURISM SECTOR-GHATOF
10/29/2013

23. Challenges facing the sector
23
 Excessive operational tariffs
 Weak domestic air link
 Expensive destination
 Low Government Budgetary Allocation
 Misplaced Priories of Industry Decision Makers
 Sector financing restricted to Development Funded
Projects that skew progress towards foreign policies
of donor governments
Mid-Year Private Sector Review of the Ghanaian
economy- TOURISM SECTOR-GHATOF
10/29/2013

24. Actions taken to address challenges
24

Excessive operational tariffs
 GTB and GHATOF working together on this
 Weak domestic air link
 Local investors must be encouraged- beyond City Link
 Expensive destination
 In line with policy to keep out Mass Tourism
 Low Government Budgetary Allocation
 Advocacy Strategy being developed to build a Case for More
Tourism Funding

Misplaced Priories of Industry Decision Makers
 The 3 Key Figures-GHATOF+MOTDR+GTB must cooperate beyond
collaborative self-destruction

Sector financing restricted to Development Funded Projects that skew progress
towards foreign policies of donor governments
 Financial Sector reluctant to research and learn about sector in spite
of attempts
Mid-Year Private Sector Review of the Ghanaian
economy- TOURISM SECTOR-GHATOF
10/29/2013

25. Recommendations to Government for an
improved performance of the sector.
25
 Incentivise Private Sector investments in sector
 Practicalize GIPC exemptions that do not work!
 Dedicate a bigger and proportional % of National
Budget to Tourism, being 4th largest FX earner
 Recognize the pro-poor impact of Tourism on the
Nation
 Be reminded of the Competition
 Te need for a focused aggressive National
Branding and Marketing Strategy beyond Tourism
Mid-Year Private Sector Review of the Ghanaian
economy- TOURISM SECTOR-GHATOF
10/29/2013