Public Disclosure Authorized Public Disclosure Authorized ETHIOPIA’S TOURISM SECTOR: STRATEGIC PATHS TO COMPETITIVENESS Public Disclosure Authorized AND JOB CREATION Public Disclosure Authorized World Bank Group Ministry of Culture and Tourism Finance and Privet Sector Federal Democratic Republic Development of Ethiopia ETHIOPIA’S TOURISM SECTOR: STRATEGIC PATHS TO COMPETITIVENESS AND JOB CREATION የኢትዮጵያ ቱሪዝም ዘርፍ: ስትራቴጂካዊ አቅጣጫዎች ለተወዳዳሪነት እና ስራ ፈጠራ October 2012 World Bank Group Ministry of Culture and Tourism Finance and Private Sector Federal Democratic Republic of Ethiopia Development Ethiopia’s Tourism Sector: Strategic Paths to Competitiveness and Job Creation Table of Contents ACKNOWLEDGMENTS ...................................................................................................................... 8 EXECUTIVE SUMMARY .................................................................................................................... 9 I. INTRODUCTION ......................................................................................................................... 15 1. Purpose and scope of the study ...................................................................................................... 21 2. Methodology .................................................................................................................................. 21 3. Context: the GTP 2010-2015 and the National Tourism Development Policy .............................. 22 4. Tourism as an economic force: African and global trends ............................................................. 24 II. THE TOURISM SECTOR IN ETHIOPIA .................................................................................... 28 1. Tourist arrivals, expenditure and markets ...................................................................................... 28 2. Contribution to GDP, employment and poverty reduction ............................................................ 36 3. Tourism products and services ....................................................................................................... 41 4. Institutional framework and stakeholders ...................................................................................... 48 5. Benchmarking tourism development and competitiveness in Ethiopia ......................................... 51 III. FINDINGS AND RECOMMENDATIONS .................................................................................. 58 1. Ethiopia’s tourism sector is a major employment generator .......................................................... 60 2. A greater and conducive space for the private sector and the regions is needed ........................... 63 3. Tourism’s potential for cross-sectoral complementarities is yet to be realized ............................. 63 4. Tourism faces a combination of hard and soft infrastructure bottlenecks ..................................... 75 5. The negative image of Ethiopia as a tourism destination is persistent ........................................... 80 6. Tourism competitiveness is hindered by a lack of good tourism data ........................................... 84 7. Tourism training supply is not keeping pace with sector growth ................................................... 85 IV. CONCLUSIONS ............................................................................................................................ 88 REFERENCES ..................................................................................................................................... 117 2 Ethiopia’s Tourism Sector: Strategic Paths to Competitiveness and Job Creation List of Annexes Annex 1: Map of Ethiopia ........................................................................................................................... 89 Annex 2: Ethiopia’s tourism value chain: Entry points for strategic interventions .................................... 90 Annex 3: Ethiopia’s National Tourism Development Policy ..................................................................... 91 Annex 4: Ethiopia’s Ministry of Culture and Tourism organization chart (2012) .................................... 105 Annex 5: Stakeholder Consultations’ Summary ....................................................................................... 106 Annex 6: List of stakeholders interviewed ............................................................................................... 110 Annex 7: Tourism Policy Pillars and Case studies ................................................................................... 112 Annex 8: Strategic interventions: Next steps through ESTDP ................................................................. 113 Annex 9: EU Package Travel Directive .................................................................................................... 115 Annex 10: Strategic interventions, priority and timeframe ....................................................................... 116 List of Tables Table 1: Summary table of findings, recommendations and strategic interventions .................................. 14 Table 2: Africa’s growth across sectors, 2002-2007 ................................................................................... 26 Table 3: Worldwide market share for meetings, 2008 ................................................................................ 27 Table 4: Sub-Saharan Africa and Ethiopia tourist arrivals, 2001-2008 ...................................................... 29 Table 5: Sub-Saharan Africa and Ethiopia tourist receipts, 2001-2008 ...................................................... 30 Table 6: Tourism arrivals and receipts in protected areas, 2001-2009 ....................................................... 31 Table 7: Tourism segments by purpose of visit, 2003-2008 ....................................................................... 32 Table 8: Ethiopia’s main international source markets, 2008 ..................................................................... 34 Table 9: Ethiopia’s main source markets for business and leisure tourists by country, 2008..................... 35 Table 10: Dynamism among main source markets, 2003-2008 .................................................................. 36 Table 11: Urban employment in hotels and restaurants, floriculture and leather, 2011 ............................. 38 Table 12: Hotels and restaurants, urban employment per region, 2011 ...................................................... 38 Table 13: Total (urban and rural) employment in hotels and restaurants, manufacturing, and construction, 2005 ............................................................................................................................................................ 38 Table 14: African cities’ rankings for MICE tourism, 2011 ....................................................................... 43 Table 15: Natural and cultural tourism resources, 2011 ............................................................................. 44 Table 16: Comparison of tourist arrivals for some of Ethiopia’s main tourism products ........................... 45 Table 17: Tourist accommodation by classification, 2008 ......................................................................... 45 Table 18: Comparison of accommodation facilities and bed capacity........................................................ 46 Table 19: Tourism benchmarking: Ethiopia, Tanzania, Kenya, South Africa, and Egypt .......................... 52 Table 20: Overall competitiveness benchmarking, 2011 ............................................................................ 54 Table 21: Competitive advantages benchmarking, 2011 ............................................................................ 55 Table 22: Competitive challenges benchmarking, 2011 ............................................................................. 56 Table 23: Scenarios: From status quo to a globally-competitive tourism sector ........................................ 59 Table 24: Marketing spending per tourist in Ethiopia, Jordan and South Africa, 2009 .............................. 80 Table 25: Ranking of tourism data systems (Ethiopia, Tanzania, Kenya and South Africa) ...................... 84 3 Ethiopia’s Tourism Sector: Strategic Paths to Competitiveness and Job Creation List of Boxes Box 1: Rwanda’s public sector: Successful move towards a facilitating role ........................................... 60 Box 2: Building long-term tourism strategies: The formulation process of South Africa’s Tourism White Paper ........................................................................................................................................................... 61 Box 3: Peer-to-peer learning in policy implementation: Sharing real experiences ..................................... 62 Box 4. The role of local communities in heritage resource management: Botswana and South Africa Experiences ................................................................................................................................................. 64 Box 5: Lumbini Rickshaw Pullers Association: The benefits of clustering among tourism SMEs ............ 65 Box 6: Brazil’s tourism public administration structures ........................................................................... 66 Box 7: Australia inter-ministerial and intergovernmental tourism coordination .......................................