Investment and business opportunities in Africa’s tourism sector are vast and when chosen carefully, they can be very rewarding. You would probably think about offering tours or investing into tourist accommodation, but today I want to make you aware of less obvious opportunities in the tourism sector, as highlighted by stakeholders locally.
I thought, I start this blog post with a short fresh interview given by Mr Richard Rugimbana, Executive Secretary of Tourism Confederation of Tanzania (TCT), which I received a couple of days ago in my inbox. It was conducted by the team of Africa’s fast growing hotel booking platform Jovago. As always, there is no better way than hearing it from experts with real insights on the ground.
Dar es Salaam, January, 2016 – Over the last two years the hospitality industry has experienced the advancement in technology and a shift in marketing predominance, customer preference and management structure. To find out the insights, Jovago Tanzania has done an interview with the Executive Secretary of Tourism Confederation of Tanzania (TCT) that would be more helpful for 2016 master plans on the sector.
JOVAGO: What is the outlook for the hospitality industry in terms of market predominance, the impact of technology and the shift in management structures?
R.R: Tanzania’s hospitality sector is still in its infancy but growing rapidly to serve both domestic and foreign guests. At present, the Ministry of Natural Resources and Tourism’s master plan has a goal of attracting 2 Million arrivals by 2017. Greater emphasis will be placed on attracting tourists from other African countries in addition to established international market such as the United States and United Kingdom. At present there are a limited number of accommodation offering with global brand names though we have prestigious names such as Singita Grumeti, Hyatt, Ramada, Sopa and Serena etc. Manpower is still a challenge but we are building the capacity of young Tanzanians to take over managerial roles in the near future
JOVAGO: Are there any trends in customer preferences?
R.R: Yes many desire or looking for memorable holidays. Tanzania has a lot to offer for travelers although with the rise of internet penetration free WIFI is an essential need. However the most import thing is a quality services from the workers.
JOVAGO: Is there any difference in challenges when developing a hotel group chain as opposed to a stand-alone brand?
R.R: Yes it is clear that brand names have an advantage based on recognition although new entrants are also offering competition, especially in terms of price and quality of services. New ‘local’ hotels are also offering improved amenities to attract foreign and domestic tourists.
If you follow the words of Mr Richard Rugimbana, you will find a lot of trends and clues that have been highlighted in regards to Tanzania’s hotel industry, and industry that is very much at ‘infant stage’, which is ideal for first market entrants and investors, as competition will still be relatively low.
Here are 3 gaps that offer a range of hidden investment and business opportunities in Africa’s tourism industry !
But there is more. In 2015, 16 Tourism Ministers from Africa and the Middle East, investors, and experts from different areas attended the 6. Investment and Tourism Business Forum for Africa and they identified the key challenges and gaps in Africa’s tourism industry. I am bringing them to Africa Business Jumpstart, so you can be more strategic about your decision-making processes and business choices.
Fill the gap!
1. Branding and promotion
I am sure you would not have guessed it! But high-profile stakeholders in Africa’s tourism industry agree that the lack of branding and promotion is a top challenge. Many African states are planning to attract a lot of more tourists, including in both international and regional travel, but branding and promotion remain inadequate both in quality and quantity. There are various business models you could start to meet that gap.
2. Foreign direct investment
The tourism industry is a clear growth sector in several African markets, and although it becomes increasingly popular among foreign investors who largely invest in accommodation and related tech/e-commerce businesses the industry clearly faces a challenge to attract enough investment interest. Again, and excellent area for you to get in, by linking investors to opportunities and increasing deal flow, organizing related international events, or offering capacity building at the African end.
3. Human resources development
The lack of human resource development in Africa’s tourism industry is a challenge for many stakeholders. In Ghana for example, this problem has become so severe that according to Ghana Business News, the President of the Ghana Hotels Association said that ‘Ghana’s potentials to make money through the hospitality industry could be wasted if attention was not given to the training of more professionals.’ The situation is at an alarming state.
And this means more opportunity for you: Open a related training company with integrated recruitment agency. Offer HR management training packages to hotels or online courses & certificates. If an industry that is expected to grow significantly is so desperate, you are in business if you can help end the stakeholder’s pain. And parallel to that I suggest you build close working relations with the top national and international hotels in Ghana, because they have enough spending power and an image to protect.
More trends in my article: Get started with these 4 #Hidden Trends in Africa’s Tourism Industry (#3 is the most surprising!)
I would love to hear your comments and questions! And if you’d like to get my latest articles on Africa business opportunities and tips as soon as they are published, feel free to click the little box ‘Notify me’ below the comment section.
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