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The global Covid-19 pandemic could not have come at a worse time for the African travel and tourism industry. In the decade preceding 2020, the continent experienced some of the best industry growth rates in the world. Africa’s diplomatic relationship with China was particularly useful in this regard as it allowed for a streamlined visa process for one of the largest emerging tourism markets in the world. After the pandemic ground international travel to a halt, the market now faces a prolonged period of uncertainty, but there are some glimmers of hope. Governments have been quick to recognise the value of the industry and extend a bailout package for struggling enterprises. This has ensured that the industry is likely to carry on functioning in some form until late 2021 when a general relaxation of travel restrictions possibly ensues. In the meantime, the travel and tourism sector is poised to explore other avenues of growth, including digitisation and the enhancement of more niche service offerings including advisory.
Travel boom years see Africa benefit most of all
The past decade has been one of the greatest yet for the global travel and tourism industry. By late 2019 the sector had accrued an annual average of no less than 1.5 billion people globally. Not unlike other industries, the growth spurt over these 10 years wasn’t a product of established markets, but instead a sign of the developing world coming into its own. Nowhere was this truer than in China, which alone recorded 180 million outgoing tourists in 2019, up from 57 million in 2010. This growth in Chinese outbound travel has reflected in African destinations like Kenya, which saw Chinese tourism more than double between 2010 and 2019, from 40 000 to 84 000 visitors annually. While steep growth in the travel and tourism industry was evident across the world, Africa’s contribution grew at 8.9% annually compared to the global average of 7%. Mainstay destinations like Kenya, Mauritius, Morocco and South Africa, all enjoyed increased traffic brought about by cheaper air travel and the expansion in both luxury and budget accommodation. Nigeria’s largest city, Lagos, though not traditionally known as a tourist hub was the world’s fastest growing Airbnb market over the past two years. Niche industries like business and medical tourism proved equally popular, with South Africa, for example, growing to accommodate roughly 1 million business delegates annually and maintaining its reputation as an attractive destination for cheap and effective medical care. Bar the past year, local airline industry growth has also expected to be strong in the lead up to the 2020s, and reflecting in sizable investment in sub-regions like East Africa with the expectation that it become a key global transport hub.
Covid-19 ushers in new challenges to the sector
Few could have foreseen the impact of the Covid-19 pandemic at the start of 2020. Between April and July 2020, the global tourism business ground to an effective halt. International air travel declined by 80%, plunging airlines the world over, from Air Mauritius to Virgin Atlantic, into either bankruptcy or financial administration – by March stiff lockdowns had already cost African airlines US$4.4 billion. No travel naturally meant no tourism and by late 2020 the average hotel occupancy in Kenya and South Africa, the continent’s busiest markets, stood at 24% and 20% respectively. Attractions that cater to wealthier tourists have been hardest hit, as older demographics are now the least likely to risk travel. Job losses have been harsh as could be expected. The Egyptian government has announced that it expects hundreds of thousands of jobs to have been lost, while the Kenyan government estimates that resulting unemployment is 2.5 million. Though big hotel chains and corporate franchises have been able to weather the storm, a large proportion of smaller businesses across the continent have not, and poorer communities who have grown to depend on the local travel and tourism sector now face a precarious future, joining some 200 million people globally whose jobs in the travel and tourism sector are now at risk.
A game drive in the Amboseli Reserve, Kenya. Africa’s reputation as a hub for wildlife viewing ensures that it can maintain parity with Europe and other markets for digital tourist experiences. Image courtesy: RcrHee/WikiCommons
Prompt government action creates space for post-pandemic economic recovery
Despite the grim outlook the industry has proven surprisingly resilient, and ongoing support from the government in several key markets has ensured that the sector will still be in a position to recover once semblance of normal travel returns. This has mostly come in the shape of bailouts to carry the industry through the unforeseen stop in revenue it encountered at the beginning of 2020. Some governments have included tourism under a broad swathe of industries in need of financial support, as in the case of Morocco. Others, like Kenya and South Africa, have deliberately established tourism-specific support funds to the tune of US$60.7 million and US$13 million, respectively. A further encouraging sign is that these moves are not merely initiatives taken by local governments, but part of a greater and more cohesive strategy at the regional level to safeguard the gains the continent has made in what it now considers to be one of its most valuable industries. The African Union’s transport committee has encouraged union members to step in and support local airlines, while global bodies, such as the International Finance Corporation, have stepped in to directly assist its local partners in offering advisory support and financing to SMEs in Ethiopia, Rwanda, South Africa and Zimbabwe. This effort has meant that large parts of the local industry will be in a position to embrace key opportunities as the world emerges from the Covid-19 pandemic.
Sources: Science Direct, Copernicus Organisation, CG Trader; 2017-2020
The ‘Great (Digital) Reset’ of the travel and tourism industry
The Covid-19 pandemic has presented an opportunity for the industry to hasten the rollout of digitalisation, which had already gained considerable pace prior to 2020. In the past few years, digitally enabled accommodation has gained rapid popularity in the form of apps like Airbnb, while Intel and Sinclair have launched the world’s first all-digital hotel in Fort Worth, Texas in the US. With the pandemic likely to play a role in our lives for the next five years or more, there will be strong demand for digital bookings, check-in and room service systems. Popular tourist attractions can also take a similar approach, with European countries demonstrating the feasibility of digital tours where attractions are popular enough, as seen with Buckingham Palace in the UK and Schönbrunn Palace in Austria. Some African firms have already embraced this concept at smaller scale, including South African travel company andBeyond, which partnered with broadcaster WildEarth to livestream digital ‘safaris’ or game drives in destinations such as the Kruger National Park in South Africa and Maasai Mara in Kenya. Initiatives aimed at digitising local tourism SMEs have been active as well, as noted by the United Nations World Tourism Organisation partnership with Google in launching the first Sub-Saharan Africa tourism acceleration programme. The programme will assist the tourist sector to develop innovative solutions and upscale their digital transformation skills, while also providing local tourism authorities with travel data insights and tools to improve business strategies.
Jemaa el Fnaa Square in Marrakech, Morocco. Despite years of instability across the broader North African region, the country now enjoys its status as a destination with a sizable and growing tourist presence. Image courtesy: Calflier001/WikiCommons
Tourism growth offers developmental space for advisory services
With the popularity of African destinations on the rise, it’s important for the local travel advisory industry to keep pace with demand. Though travel advisors are well situated in more developed markets the same is not true for frontier markets like Angola, Rwanda and others where attractions are not as well popularised. With a digitalised industry allowing for much of the bureaucratic legwork to be automated, space will open for travel consultants to craft more individualised experiences tailored to customer needs, taking into account a host of new parameters including social-distance and environmental consciousness. This could allow for “regenerative tourism” specifically catered towards those tourists who desire a travel experience with a more positive impact on the local ecology and social landscape. Another avenue where these services could come into their own is the expansion of medical tourism advisory services. For years some markets on the continent have joined the ranks of Thailand and Mexico as destinations where tourists from developed nations can travel to in order to obtain medical treatment both more quickly and cheaply than is possible in their home countries. South Africa, with its world-class private healthcare sector is well suited for further expansion in this regard, as is Morocco whose government has recently launched a plan to attract over 300 000 foreign medical tourists annually.
Domestic tourism and the Pan-African passport are poised to drive future growth
Even at the pre-,Covid-19 peak domestic tourism represented only 40% of the tourism market on the continent. Despite this admirable figure, the African tourist has up until now remained a stranger to the market, closed off from many luxury accommodations and attractions by steep prices that cater specifically to foreign tourists. With travel from mainstay tourist markets like Germany, the UK and the US now difficult or impossible, countless hotels, guest lodges, game farms and other attractions bereft of income face the difficult task of realigning their current internationally-focused business model towards catering to the domestic market instead. Many will likely fail in this transition, but those that persevere may find themselves securing a vital early spot in a sub-segment that is only expected to grow. Projections prior to Covid-19 noted that South Africa expects to have 16 million international arrivals annually by 2030, and that only 6 million of these would be from outside the African continent. Tourism amongst regional markets like East and West African countries has also grown significantly and will continue to outperform international arrivals for the immediate future. The coming year will be significant for domestic tourism in other ways as well. In early 2021, the AU will again attempt to launch the long awaited African Continental Free Trade Agreement, a common market for goods and services covering the entire continent, which will dramatically increase the number of intra-Africa business travellers. Tied to this is the expansion of the Pan-African passport, an initiative to offer visa-free access to citizens of AU countries. Though similar initiatives have been around in various African regions for some time, it has only been in the last few years that some countries including Ghana, Mauritius, Rwanda and the Seychelles have begun to offer visa-free access to tourists from all other African countries. A domestically oriented tourist economy will require firms to reposition the way they engage with the industry, placing a far greater premium on both affordability and accessibility in terms of infrastructure and inclusive cultural experiences. This might require considerable investment to achieve and will necessitate close collaboration between policymakers and industry stakeholders.
Sources: World Bank, Food and Agriculture Organisation; 2018- 2020
Travel spending patterns are shifting in lieu of Covid-19
Some pronounced cultural impacts have been brought about by the Covid-19 pandemic. Data from a recent World Bank study showed that tourists now value safety precautions far higher than price, and that this has had a notable impact on where they are willing to travel to. When queried as to whether they considered countries’ pro-activeness in addressing the pandemic as part of their destination selection and whether they would make a point of avoiding large crowds, 72% and 73% of those polled responded in the affirmative. Traffic and search trends on popular travel website TripAdvisor, meanwhile, showed a definitive uptick in consumer interest towards natural areas such as beaches, campgrounds and national parks compared to what was customary before. While many African countries’ tourism sectors were based upon these destination criteria, there will be more emphasis now than ever in ensuring that these are developed with safety precautions in mind.
Future Covid-19 flare-ups will continue to pose a risk to businesses
As countries across Africa ease their lockdowns and open their economies, the potential for new waves of Covid-19 infections is a major concern. The increase in infections could further scupper the industry and result in renewed travel restrictions. In South Africa, recent Covid-19 flare-ups have put businesses and the tourism sector on high alert. The increase in figures could lead to tougher restrictions as well as ‘snap lockdowns’ or ‘regional lockdowns’, which is a major concern for businesses operating in the tourism industry. Hotels, Airbnbs, restaurants and entertainment venues have already been dealt a blow given tougher restrictions in Europe due to new waves of infection, particularly in the UK. It is evident that further restrictions on domestic tourism will pose a major risk to businesses across Africa. In addition to this, a lack of international tourists will certainly quell business confidence, and as a result could take the African tourism sector years to recover.
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