value chain of tourism
TRANSCRIPT
VALUE CHAIN OF TOURISM: PROBLEMS OF TOURISM TO CONTRIBUTE FOR ECONOMIC
GROWTH OF ETHIOPIA
Prepared by: Bayebegn Zewdie
A Senior Essay Submitted in Partial Fulfillment of the Requirements for Degree of Bachelor of
Arts in Economics
Advisor: Ato Atlaw Alemu
Addis Ababa University Faculty of Business and Economics
Department of Economics
July, 2008
Acknowledgment
I am faithful to the Almighty God for every thing He has dome to me.
I extend my special thanks to my senior essay advisor Ato Atlew Alemu
for his valuable comments and suggestions in undertaking this study.
I would like take this opportunity to express my heartfelt and special
appreciation to my brother Ato Abeje Zewdie and Dr. Wubaye Walelgn
and his wife Wro. Abeba Mengesha, for their moral and financial as well
as material assistance not only in my stay in the university but also in all
way to wards my achievement.
I would like to extend my gratitude to the CTTI Liberalist, Ministry of
Culture and Tourism of Ethiopia’s workers, National Bank liberalist etc…
for providing me necessary material that helped me for the preparation of
the study.
Last but not least, I would like to extend my thanks to my father Blata
Zewdie Tewlatu, my mother Wro Ziyn Alene and my brother Bayreyegn
Zewdie to their contribution in my achievement and to the typist
Wublame Haile.
Bayebegh Zewdie
Table of Content
Page
CHAPTER ONE
1. PROBLEMS AND ITS SETTINGS ................................................ 1
1.1 Background ......................................................................... 1
1.2 Research Question ............................................................... 2
1.3 Delimitations ....................................................................... 3
1.4 Definition of Important Terms Assumptions ........................ 3
1.5 Assumptions ........................................................................ 5
1.6 Importance of the Study ....................................................... 5
CHAPTER TWO
2. REVIEW OF THE RELATED LITERATURE .................................. 6
2.1 Historical Development of Tourism ...................................... 6
2.2 Classification of Tourism ...................................................... 7
2.2.1 Special forms of Tourism.......................................... 9
2.3 Sustainable Tourism Development ...................................... 9
2.4 What is Value Chain? ........................................................... 11
2.4.1 Global value Chain .................................................. 12
2.4.2 The Importance of Value Chain Approach for
Policy Makers and Practitioners ................................ 13
2.5 Value Chain of Tourism Industry.......................................... 13
2.5.1 Identifying the Main Sources of Growth of Tourism .. 14
2.5.2 Identifying the Key Policy and Institutional
Constraints Affecting Performance ........................... 17
CHAPTER THREE
3. DATA AND TREATMENT OF THE DATA ..................................... 19
CHAPTER FOUR
EMPIRICAL ANALYSIS .................................................................. 22
4. Value Chains of Tourism and Problems with in the Value Chain
in Ethiopia ..................................................................................... 22
4.1 The Stock of Resources .................................................... 24
4.1.1 Profile of Tourism Resource base in Ethiopia ............ 24
4.2 Promotion and Advertisement............................................ 28
4.3 National Tourism Policy .................................................... 30
4.3.1 Budget Allocation for Tourism ................................. 30
4.3.2 Visa and Exit Tax Payment ..................................... 31
4.4 Tourist accommodation Facilities and Infrastructure ............ 32
4.4.1 Transportation ......................................................... 32
4.4.2 Telecommunication .................................................. 35
4.4.3 Accommodation ...................................................... 38
Hotels ....................................................................... 39
4.4.3 (a) Availability of Hotels and Ownership in Ethiopia . 39
4.4.3 (b) Distribution of hotels in Ethiopia ........................ 41
4.4.3 (c) Tourism Rating of Hotels and Restaurants .......... 42
4.4.4 Average Rating of Tourism Products by Tourists ...... 43
Conference Facilities ............................................... 44
4.5 Tour Operations and Guides ............................................... 45
4.6 Skilled Man Power ................................................................ 46
4.6.1 Human Resource Development in the
Tourism Industry ............................................... 46
4.7 Social and Political Stability ................................................ 48
4.8 Attitudes and Habits ............................................................ 49
4.9 The State of Technical Knowledge ........................................ 51
CHAPTER FIVE
5. CONCLUSION AND RECOMMENDATION .................................... 53
5.1 Conclusions ......................................................................... 53
5.2 Recommendations ............................................................... 54
Bibliography
List of Table
Table 4.1.1 (a) National Parks .............................................................. 25
Table 4.1.1 (b) Game Reservers ............................................................ 25
Table 4.1.1 (c) Sanctuaries .................................................................. 26
Table 4.1.2 Other Major Tourist Attraction Sites by Region
and Recognition by UNESCO ............................................. 26
Table 4.2 Ethiopia’s Market Share in the International Tourism
Market from 1991 to 2003 ..................................................... 29
(Table 4.3.1) Budget Allocation for Tourism ......................................... 30
(Table 4.3.2) Visa and Exit tax Payment Comparison of Ethiopia to
Keny (in USD) ................................................................... 32
Table 4.4.1 (a) Major Sites and their Accessibility by Road .................. 34
Table 4.4.1 (b) Major Sites and their Accessibility by Air ...................... 35
Table 4.4.2 Summary of Basic Telecom statistics (1993-1998
EC (2000/01-2005/06) ...................................................... 38
Table 4.4.3 (a) Number of star hotels, recommended hotels,
ownership, and new additions until 2005 ....................... 39
Table 4.4.3 (b) Distribution of hotels in general and star hotels by
region (end of 2005) ...................................................... 41
Table 4.4.3 (c) Tourism Rating of Hotels and restaurants ..................... 42
Table 4.4.4 Average Ratings of Tourism Products by Tourists .............. 43
Table 4.4.5 Summary of International Tourist by Purpose of Visit
from 1991-2005 ................................................................ 44
Table 4.6.1 Level of Education and Training amongst Hotels and
Tour Operators .................................................................. 47
Table 4.7 Arrivals and Receipts From 1991-2005 via Addis Ababa
Airport and Other ................................................................ 48
Table 4.8 Arrivals by Age and Gender Group for 2003,
2004 and 2005 ..................................................................... 50
Acronyms
UNIDO United Nation Industrial Development Organization
WTO World Tourism Organization
UN United Nations
LDCs Less Developed Countries
CSA Central Statistic Authority
GDP Gross Domestic Product
UNESCO United Nations Educational Scientific and Cultural
Organization
AU Africa Union
ECA Economic Commission for Africa
CTTI Catering and Tourism Institute
ETC Ethiopian Telecommunication Corporation
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CHAPTER ONE
1. PROBLEMS AND ITS SETTINGS
1.1 Background
Half a century ago, history shows that the role of tourism as an economic
sector was negligible and until the global tourism statistics was not even
compiled. However, since 1950s it has showed a dramatic performance
and in recent years it has manifested itself as abundant industry
recording remarkable achievements in job creation, foreign currency
earning, and redistribution of income and generation of tax revenue.
(Theodros, 2002)
WTO (1994) stated that:
“Tourism sector is the most productive sector in the world and acconts
for 12 % of the world GDP”
Ethiopia is one of the sub-Saharan countries which is endowed with
natural and man made resources, which can be exploited for the
improvements of its economic performances and changing its images.
The country has a number of interesting and wonderful tourist attraction
sites. She is endowed with wildlife and game parks, ancient building and
historical traditions, magnificent scenery and pleasant weather etc…
(Ajebush,2004).
Despite this huge potential, the annual inflow of tourists in to the
country is low. In fact, Ethiopia’s share of the African Tourism market in
the year 1998 was only 0.5%, while that of the East Africa was only 1.7%
(Abebech, 2001).
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The trend of tourism contribution to GDP shows continuous increment,
but there was a slight decline in 1998 and 1999 due to the reduction of
tourist arrivals to Ethiopia following the Ethio-Eritrean war. In 1992 the
sectors contribution was 0.28 which is very insignificant, in 1997 it
reaches 0.67%, however, this increment in trends of tourism’s share to
GDP is negligible (Hawaz, 2006).
Previous statistics shown that,Ethiopia with relative to great potential of
both natural as well as man made tourist attraction sites, the economic
benefit from this sector and the contribution to national income is
insignificant. This is due to problems with in the value chain of tourism
at that time.
Tourism value chain cuts across many sectors, such as retail, housing
construction, hotels and restaurants telecom and transportation, and
activities like market promotion, tourism sector policy, political situation,
(Abebeh, 2006). It also includes tour operation activities human
resources development related to tourism profession and travel agents,
tour operators, conference organizers etc. (Mekonnen, 2006).
There for this paper investigates the value chain of tourism and identify
where the main problems for the low contribution of tourism with in the
value chain exists.
The statements of the sub-problems are:
(i) To investigate the existing value chains of tourism of Ethiopia.
(ii) To identify where the main problems exist with in the value chain of
tourism of Ethiopia.
1.2 Research Question
The basic questions that this paper addresses are the following:
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(i) What are the major factors that are included in tourism value
chain?
(ii) Where the bottlenecks of tourism development are with in the
value chain exists?
1.3 Delimitations
On this paper, attempt is made to treat value chain of tourism industry
and problems with in the value chain of tourism industry exist. This
includes stock of resources like National parks, sanctuaries and Game
reserve’s; promotion and advertisement; tourist accommodation and
infrastructural like transportation that is road, rail, air, water;
accommodation that is hotels and conference facilities; national tourism
policy like budget allocation,and visa and exit tax; telecommunication;
tour operations and guides; skilled man power; social and political
stability; attitudes and habits of the visitors and the suppliers; and state
of technical knowledge.
Some of the sectors with in the value chain of tourism face quantitative
data constraints due to lack of organized and effective statistical system
in the country.
1.4 Definition of Important Terms
1. Arrivals are visitors who travel to a country or within a country
other than that in which she/he has his/her usual residence but
outside his/her usual environment for a period not exceeding
twelve months and whose main purpose of visit is other than the
exercise of an activity remunerated from with in the country
visited. (WTO, 2000)
2. Domestic tourism receipts are defined as expenditures of internal
inbound visitors including their payment to national carriers for
domestic flight. They should also include any other prepayments
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made for goods/ services received in the country. This also defined
as expenditures and payments by the domestic travelers with in
their country to visit historical and natural sites. (Ministry of
culture and Tourism annual bulletin, 2006).
3. International tourism receipts are defined as expenditure of
international inbound visitors including their payment to national
carriers’ for domestic flight. They should also include any other
prepayments made for goods/services received in the destination
country. They should in practice also include receipts from same
day visitors except in cases when these are so important as to
justify a separate classification. It is also recommended that, for
the sake of consistency with the balance of payment
recommendation of the international monetary fund, international
fare receipts be classified separately. (Ministry of Culture and
Tourism anural bulletin, 2006).
4. Number of rooms refers to the total capacity in room of
establishments offering accommodation
5. Number of bed refers to the total capacity of beds in the
establishments offering accommodation.
6. Tourism is defined as the process, activities and out comes arising
from relationships and the interactions among tourists, tourism
suppliers, hot government, hot communities and surrounding
environments that are involved in attracting and hosting of
visitors. (WTO, 1995).
7. Value chain is defined as a sequence of productive (value-added)
activities leading to and supporting end use, (Sturgeon T.J, 2001)
and an alliance of enterprise, working vertically to achieve amore
rewarding position in the market place. (K.H. Lei, 2002).
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1.5 Assumptions
(i) Ethiopia wants to fully use its tourism potential properly and
efficiently.
(ii) Ethiopia wants to achieve rewarding position in world’s tourism
market share in both absolute and comparative terms.
1.6 Importance of The Study
In the world of full of competition, expanding tourism sector has become
a relatively better alternative by many developing countries as a means of
promoting their economic development and overcoming balance of
payment deficit as well as debt repayment.
Since Ethiopia is one of the developing countries, analyzing the problems
of tourism sector has significance for the development of the sector,
which contributes to the growth of national income.
The method used in this paper that is value chain analysis is also use
full for linking a sequence of actives which are use full for the growth of
the tourism sector and problems with in the activities with their
solutions. This paper also contributes to further research by introducing
new method of analysis to those persons who are doing their work by
this method and source of information to those who work their paper on
tourism. In general, this paper can be used as an important source of
information for further studies.
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CHAPTER TWO
2. REVIEW OF THE RELATED LITERATURE
2.1 Historical Development of Tourism
Tourism deals with the movement of people away form their normal
residence for holiday, recreation and leisure activities, business, meeting,
visiting relatives and other purposes.
Half a century ago, tourism was a particular little industry mainly in
West Europe and USA. It was viewed largely as frivolous endeavor largely
with in the domain of those with a lot of time and money of their part
with better to spend it. As standard of living, levels of education and
means of transportation and communication improved, the ability and
willingness of the world upper, middle class to travel increased.
Currently,tourism becoming the leading sector and major employer in
the world and expanding at a steady rate. The sector being an important
sector in its own right hand received considerable attention, especially in
the 1960’s (H. Robinson, 1997). The first step towards international
recognition of tourism appeared in UN conference, “On international
travel and Tourism” held in Rome in 1993. By the year, 2000 tourism
was expected to become the largest industry in the world and will
constitute the biggest component of international trade.
As indicated by WTO 2000 report, the volume of world tourism in 1996
was 459.2 million and the number had reached 546.3 million in 1998.
However, the benefits of these developments were skewed towards
Europe and USA as current trends may reveal. For instance in 1994
about 60% and 28% of world tourists visited Europe and USA
respectively. While 50% of the total world tourism receipts went to
Europe and 27% to USA.
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All in all, international tourism is not developing at the same rate and
unevenly distributed in different regions of the world. In LDCs weak
development of tourism due to lack of infrastructure and super structure
to develop their tourism sector (Martin, 2002).
2.2 Classification of Tourism
Tourism can be classified in different ways by different scholars and
organizations. Tourism can be divided in to two broad categories. These
are mass tourism and alternative tourism.
The following figure show different types of tourism briefly.
Figure 1 types of tourism
Source: the alternative tourism (after Mieczhowstes, (1995:459) and cited
by Stephen, 2000).
Tourism
Mass tourism (conventional, standard large scale tourism)
Alternative tourism
Cultural Educational Scientific Adventure Agri- tourism
Nature or eco-tourism
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Mass Tourism
Mass tourism is generally seen as being an overarching term for tourism
that is undertaken by the majority of travelers. This thesis, in exploring
the specific of particular tourist experience in depth, may contribute
towards an understanding of not only the significant divergences and
convergence that exist between both mass tourism and alternative
tourism, but also the subtle nuances that subtend these tourist
experiences. Therefore, it is to not simply a matter of differentiation, in a
binary fashion, between a general category of mass tourism and the
derivation of niche elements with in it.
Alternative tourism
The common feature of alternative tourism is the suggestion of an
attitude diametrically opposed to what is characteristically viewed as
mass tourism. Alternative tourism often is presented as existing in
fundamental opposition by attempting to minimize the perceived negative
environmental and socio-cultural impacts of people at leisure in tourism
promotion of radically different approaches to tourism. Examples include
eco-tourism, green tourism, nature oriented tour, soft tour and defensive
tourism.
Another classification is made by the world tourism organization (WTO
and the Conference on Travel and Tourism Statistics in 1995), the
following three major forms of tourism are outlined.
i. Domestic tourism- involving residents of the given area traveling (as
visitors) only with in that area
ii. Inbound tourism- involving non-residents traveling (as visitors) in a
given area.
iii. Out bound tourism-involving residents traveling (as visitors) in area
other than the given area.
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2.2.1 Special forms of Tourism
There are different forms of tourism. Amongst them some are as follows;
I. Adventure tourism involving travel in rugged regions, adventurous
sport mountaineering, and hiking or tramping.
II. Agro-tourism-farm based tourism, helping to support the
agricultural economy.
III. Cultural tourism-includes urban tourism, visiting historical or
interesting cities and experiencing their cultural experiences, such
as art, museum during the tour, or opera tourism when one sees
many operas or concerts during the tour.
IV. Ecotourism-sustainable tourism which has minimal impact on the
environment, such as safaris and rainforests, or national parks.
V. Heritage tourism-visiting historical or industrial sites such as old
canals, rail ways, battle grounds, etc…
VI. Health tourism-usually to escape from cities or relieve stress,
perhaps for some ‘fun in the sun’ etc. often to ‘Health spas’.
VII. Hobby tourism-tourism a lone or with groups participate in
hobby. Example might be garden tours, or square dance cruises.
VIII. Medical tourism for what is illegal in one’s own country eg.
Abortion, euthanasia, for non-citizens is provided by “Dignitas” in
Switzerland for advance care that is not available in one own
country.
IX. Perpetual tourism-wealthy individuals always on holidays, some
of them for tax purpose, to avoid being residents in any country.
X. Regional tourism-tourism bundle of few countries as the transit
point. (http://en.wikipedai.org/wik/touism)
2.3 Sustainable Tourism Development
The UN Burundtland Report of 1987 cited by Theodros; 2002 offers the
following definition;
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“Sustainable development is development, which meets the requirements
of the present generation with out endangering the requirements of the
future generation”. This requires a development with out over
exploitation of natural resources and with out destroying the basis of
existence. The goal must be to make growth possible in the mid and long
term while energy consumption and environmental stress under go
absolute decrease.
The world tourism organization (WTO, 1993), in which Ethiopia is a
member, has defined sustainable tourism as follows:-
“Sustainable tourism development meets the needs of present tourists and host regions while protecting and enhancing opportunities for the future. It is envisaged as leading to management of all resources in such a way that economic, social, and aesthetic needs can be fulfilled while maintaining cultural integrity, essential ecological processes, biological diversity, and life support system.”
The sustainable tourism development principles are there fore derived
from the sustainable development principles. The deference lies on the
scope. Tourism is part and parcel of sustainable development with in the
broad frame work of sustainable development. Sustainable development
of tourism has three basic principles as pointed out by WTO (1993).
i. Ecological sustainability ensures that development is compatible with
the maintenance of essential ecological processes, biological diversity
and biological resources.
ii. Social and cultural sustainability ensures that development increases
peoples control over their lives compatible with the culture and values
of people affected by it, and maintains and strengthens community
identity.
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iii. Economic sustainability ensures that development is economically
efficient and that resources are managed so that they can support
future generation. Tourism is not smoke less any more. The increased
movements of people due to high living standard (high income and
free time) in the north, there is high air and water pollution from the
exhaust fumes of aircrafts, motor cars and motor pleasure boats,
threatening the physical environment. These are the reasons, which
brought about the emergence of the idea of sustainable tourism
development.
2.4 What is Value Chain?
Value chain has several definitions and some of the important definitions
are:
Schmitz (2005), define value chain as a sequence of activities required to
make a product or provide a service. The second definition provided by
Keplins R. and Morris M. is that value chain describes the full rage of
activities which required to bring a product or a service form conception,
through the deferent phases of production involving combination of
physical transformation and the in put of various produces and services,
delivery to final service customers, and final disposal after use.
Value chain also defined as a sequence of productive (i.e. value-add)
activities leading to and supporting end uses (Stugesn T.J, 2001) and a
complex web of companies and other actors that affect the production to
consumption (Blowfield M. sited by denial Roduner, 2004).
The last definition presented on this paper is the definition given by
Agriculture and food council, Canada, is that value chain is an alliance of
enterprises, working vertically to achieve a more rewarding position in
the market place. (K.H.Lei, 2002)
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In generals, value chain describes the full range of activities like
- which are required to bring a product or services from conception
- through the deferent phases of production
- delivery to final customers
- to final disposal after use
Unit of analysis is not a company, a country, or a region, but a net work
of companies embodied in the internal and external governance system,
and the analysis focuses on who adds value where in the chain that is
the leading sector in the value chain. (Denial Roduner, 2004)
2.4.1 Global value Chain
A value Chain is the sequence of activities required to make a product or
provide a service (Schmitz, 2005). In itself value chain is a simple idea.
But the idea of a value chain becomes useful for analytical and policy
purposes. It includes three further features Schmitz pointed. These are:
firstly the activities are often carried out in different parts of the world,
hence the term global vale chain. Secondly, some activities add more
value and are more lucrative than others (the policy-makers’ concern is
to help local enterprise to move in to the lucrative activates). Thirdly,
some actors in the chain have power over the others. The powerful actors
are often called the ‘lead firm’ who seek to govern the chain. The set
and/or enforce the terms under which the others in chain analysis is to
“unpack” the relationships between global lead firms and local producers
and the opportunities and constraints that result form entering such
relationships.
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2.4.2 The Importance of Value Chain Approach for
Policy Makers and Practitioners
As stated by Schmitz, (2005) coming up with good economic policy
appropriate to the level of development in an industry and country
require and understanding of how local enterprises fit in to the global
economy. This way is to focus on the sectors in which the local
enterprises specialize and then ask how the global market for products
from this sector, is organized. As panted out before, often these markets
are not free for all open spaces. The spaces are coordinated by global
buyers who source different products and services form around the
world. There is increasing integration between internationally dispersed
activities.
The general point to be made here is that value chain is important, not
only for the entrepreneurs, but also for the policy makers. Understanding
value chains in an industry allows policy makers and practitioners to
provide relevant and appropriate support to local enterprises.
As pointed out by Schmitz, (2005) public policy aimed at the private
sector typically tries to influence decisions of entrepreneurs (owners and
managers) of the industry. So that, they can grow and improve their
performance. However, entrepreneurs are skeptical of the advice they
receive from government agencies or consultants employed by local or
foreign support institutions. Entrepreneurs do, however, listen to their
customers. If policy makers and practitioners start with this fact, they
can more productively engage with the private sector.
2.5 Value Chain of Tourism Industry
Tourism is one of the largest growing sectors and the fastest growing
sectors in the world and a major driver of growth for developing
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countries. Their tourism market shares have actually increased markedly
over the past two decades. Tourism industry cuts across many sectors,
such as retail, housing construction, hotel, restaurants, telecom and
transportation. Serious policy issues in one of these sectors may threaten
the whole tourism value chain. This makes that analysis of the sector
complex but crucial as it could be the catalyst for widespread reforms of
over looked issues (e.g. Land market) (Diagnostic methodology check list,
2007).
As recommended by diagnostic methodology checklist for tourism study
(2007), tourism value chain analysis includes identifying the main
tourism segments based on countries comparative advantages,
benchmark the countries economic performance on these key segments
with relevant international good practice, policy and institutional issues
which may constrains investment and growth, and then design station.
2.5.1 Identifying the Main Sources of Growth of
Tourism
The identification of the main sources of growth emanates form a five fold
exercise involving profile of the tourism sector, a stock taking of existing
and potential new sources of growth and comparative advantage, scope
of sources of markets. These exercises will ultimately bring about sub set
of tourism products in which the country has a comparative and
competitive advantage.
A. What is the tourism profile?
The profile has four parts that is the macro setting, the demand and
supply side and the institutional framework of tourism sector. For this
task the balance of payments statistics (IF/National Bank), the world
travel organization and world travel and tourism council provides good
data points (ibid).
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Macro
As stated by Diagnostic Methodology check list for tourism study, this
includes three important elements that are important for tourism value
chain. They are:
- Basic macro back ground of the economy (structure-
manufacturing, service etc… GDP per capita level and growth,
private and foreign investment as share of GDP);
- Tourisms contribution to the economy-share of GDP and growth
trend: contribution to growth, exports and foreign exchange
earnings; fiscal effect-taxes fees and incentives; job creation;
- Structure of the tourism industry-number of firms, owner ship and
management, employment, direct and indirect, fulltime/per time,
seasonality.
Demand
As stated by Diagnostic methodology checklist for tourism study, (2007)
the demand part of tourism value chain includes: number of foreign
tourists, average length of stay and average daily expenditure, percentage
of tourists return (level and grow trends), main categories of foreign
tourists by socio-demographic profile and country of origin as well as
seasonality’s, revenue by main tourist categories and market shares
(regional and global).
Supply:
As stated by Diagnostic methodology check list for tourism study (2007)
the supply part of tourism value chain also include; main tourist
attraction and circuits, size and structure of industry of hotels and other
accommodation, structure of key services sectors in tourism (such as
restaurants, bars, good transportation), structure of key activities service
providers in tourism (such as diving, horse back riding, guide tours,
fishing adventure activities, main tourist project in the pipeline).
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Policy and Institutional Framework
As stated by this Diagnostic Methodology check list for tourism it can be:
public institutions (ministry, statuary body, etc.), Private institutions
(business associations and business councils), tourism legislation-laws
and regulatory practices (licensing, classification, inspection), does a
country rely on a planning frame work-at what level, national, regional or
local, inventory of relevant policy issues, reforms under way or being
discussed are included.
B. Potential and recognized sources of growth and
comparative advantage
As stated by Diagnostic methodology checklists for tourism study, some
summary of the main sources of comparative advantage of tourism as
follows. These includes cultural assets, natural assets, labourassets,
reliably secured environment, access to world class health care,
education, low access cost (to and with in country), low labor cost,
low/and cost, and proximity to major/growing sources of tourists (ibid).
C. The current and potential tourist products where the
country could be competitive.
As stated by Diagnostic methodology checklists for tourism study, this
includes sun, sand and sea; other natural offerings (e.g. game reserves,
national parks, water falls, mountains); natural events (e.g, volcano
eruptions, eclipse); eco-tourism; sport events; sport offerings (eg. Golf,
rafting, diving, horse back riding, fishing, bird watching and hunting),
adventure activities; festival events; religious events; visiting friend and
families; boating; cultural offerings (e.g. land marks/heritage; theme
parks, museums, archeology, opera, music and dance); other cultural
events and offerings (e.g. spa, serenity, dining, night life, shopping,
gambling, leading hotels); stop on regional circuits; learning facilities
17
(language, music, dance); retirement homes; nursing homes; weekend
homes; and conferences.
D. The potential target markets with in the value chain of tourism
As sated by Diagnostic methodology checklist for tourism study, they are
young students, back packers, young professional bachelors, returning
emigrants, expatriates, traveling business men, local business men,
young families, upper in come foreign couple, and retirees.
2.5.2 Identifying the key policy and institutional
constraints affecting performance
According to Diagnostic methodology checklists for tourism study and
intuitional constraint include:
I. Issues affecting tourists directly such as security concerns (social
unrest, terrorism, crime/theft, harassment by people and/or policy,
lack of regulations/enforcement on road traffic), health concern
(HIV/AIDS,) food poisoning, tropical diseases, water safety, in
adequate health care services, restrictive emigration policies (eg.
Foreign retirees), issues with access to and ground services with in
the country (in adequate infrastructure, policy and governance issues
in the transportation sectors), payment issues (foreign exchange
services, credit card facilities), and issues with
management/governance of key tourist cultural land marks.
II. Issue affecting investors directly as stated by Diagnostic methodology
check list for tourism study, it includes difficult access to land
(unsecured property rights, problematic access to government and
customary land, issues with land use rights and development
policies), issue with the work force (relative emigration policies for key
workers, high minimum wages, social security, hiring/firing
regulations, unequal enforcement of regulation, training and
18
education issues, corporate social responsibilities and gender issues),
restrictions on FDI for key products and services, barriers to trade for
key imports (e.g. food products), contract enforcement issues (eg.
ineffective commercial courts, problematic enforcement of courts
decisions, lack of alternative dispute resolution , access to finance
issues (e.g. lack of mortgages and secured lending), fiscal issues (high
taxes and/or unequal enforcement), and administration barrier issues
(business registration and inspections).
III. Sector specific policy issues as stated by Diagnostic Methodology
checklists for tourism study, it includes in adequate environment and
conservation policies, licensing policies and practices for key products
or services (e.g. hotels, restaurants, taxis, etc), restrictive policies
(and/or unequal enforcement) in retail and other entertainments (e.g.
opening hours, zoning, price regulations), standard certification
issues (policies and unequal enforcement for key services. (eg hotels,
restaurants, taxis, diving and nursing), and telecom sector policy and
enforcement issue leading to poor internet and mobile services. (ibid)
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CHAPTER THREE
3. DATA AND TREATMENT OF THE DATA
The study will be conducted based on secondary data to show the value
chain of tourism and problems with in the value chain. This includes
data on the stock of resource of Ethiopia which is one of the value chain
of tourism, like number of national parks and their area as well as
regional distribution, game reserves and sanctuaries with their area as
well as regional distribution which constitutes some of profile of tourism
base of Ethiopia. The next data is the national tourism policy related
which includes budget allocation and visa and exit tax price by
comparing with neighboring country Kenya and problems related with
this value chains.
This paper in addition, include tourist accommodation and
infrastructure which is the third with in the value chain of tourism that
include data’s on transportation like major sites and their accessibly by
road to show the quality of road, cost of ticket by bus and distance from
the capital city, and major sites and their accessibility by air to show the
quality, size of the plane and cost of flight whether comfortable to
tourists or not. This value chain of tourism also includes data on
accommodation like distribution of hotels by region, star and
recommended hotels for tourists, ownership as well as new additional
hotels under construction to investigate the quality and quantity of
hotels, besides the general evaluation of tourists facilities, it is important
to see how the services provide look like in the eyes of tourists. This was
shown by the data on tourism rating of hotels and restaurants and
average rating the tourism products by tourists.
This paper also uses data on Ethiopia’s market share in the world
tourism market in both arrivals and receipts to show the effect of
20
promotion and advertisement on tourism which is within of the value
chain of tourism and problems with in this to low performance of this
industry.
The paper has in addition data related with the level of education and
training among hotels and tour operators to show the quality of facilities
which the country offered to the tourists arrived to the country. This
data is an indicator within the value chain of tourism that is skilled man
power and problems related to skilled man power.
The data on arrivals and receipts from 1991-2005 via Addis Ababa and
other ports also used to investigate the political and social stability of the
country which is within the value chain of tourism and data on arrivals
by age and gender group for 2003, 2004, and 2005 to investigate the
attitudes and habits of the people to visit with in the value chain of
tourism, are used in the paper. This shows the effect of gender and age
on the people’s behavior to visit or to move for pleasure.
The last data this paper uses is that the basic telecom statistic to show
the level of development of telecommunication in the country which is
within the value chain of tourism, and problems with in telecom services.
The above data’s are obtained from National Bank of Ethiopia i.e data’s
on arrivals and receipts form 1991-2005 via Addis Ababa airport and
other ports; Ministry of Culture and Tourism which is a place where
much of the data obtained for this paper i.e. data’s like budget allocation
for tourism, number of hotels, recommended hotels, ownership, and new
additions, distribution of hotels and stars, level of education and training
amongst hotel and tour operators, arrivals by age and gender group for
2003,2004 2005; World Tourism Organization which the paper gets data
on Ethiopia’s market share in the international tourism market form
21
1991 to 2003; Central Statistic Authority (CSA) which contributes some
data to this paper like data on number of national parks, game reserves
and sanctuaries with their area coverage in square kill meters as well as
their regional distribution; Ethiopian Road Transport Authority which
contributes data on major sites and their accessibility by road for the
fulfillment of this paper; Ethiopian Airline which the paper takes major
sites and their accessibility by air; at the last Ethiopian
Telecommunication which the data like summery of basic
telecommunication statistics are obtained from it.
With regard to the methodology the paper focuses on the value chain
analysis i.e. a sequence of activities that includes main tourisms
segments, bench mark the countries economic performance on these key
segments with relevant international good practice, policy and
institutional issues which may constrains investment and growth, and
then design solution; and descriptive analysis supported by statistical
fools such as tables, percentage, and ratios.
Figure 2 Value Chain of tourism
Stock of resource
- national parks
- game reserves
- sanctuaries
- other cultural
and natural attraction sites
Promotion
and
advertisement
Tourist services
- visa and exist
price
- transportation
like, road, air etc
- telecom
Accommodation
- hotels
and
restauran
ts
- conferen
ce
Tour operation
- guider (training of it)
22
CHAPTER FOUR
EMPIRICAL ANALYSIS
With wide resource base for tourist attraction resources, Ethiopia has the
potential to establish tourism industries that can assist the effort in
achieving a major economic transformation. With the existing resources,
it is also believed to pay a vital role in the poverty reduction endeavors of
the country and meeting the Millennium Development Goals (MDGs) by
absorbing a large number of labor force both skilled and unskilled with
gender consideration thus making the economic independence of woman
possible.
In this chapter there will be a brief discussion of value chains of tourism
and problems with in the value chain of tourism in Ethiopia.
4. Value Chains of Tourism and Problems with in the Value
Chain in Ethiopia
Even though there are numerous sectors and services with in the value
chain of tourism sector this paper focuses on some of the value chains of
tourism in Ethiopia that affects more the tourism industry of Ethiopia.
Thus, what follows a particular treatment of the sectors with in the value
chains of tourism with grater importance and problems with in the value
chain.
Figure 3. Value chain of tourism of Ethiopia
Stock of resource
- national parks
like Awash, Omo,
semen mountain etc…
- game reserves
like Balo, Gambela
Mango etc…
- sanctuaries
like Harer, Yabelo
- other cultural and
natural attraction sites
like Gonder castle,
Axum obelisks,
lalibela, lower Awash
etc…
Promotion and advertisement
By using
- ETV, Ethiopia
Radio, FM, News
Papers,
Magazines etc…
Tourist services
- visa and exist payment
- transportation like,
road, air etc
- telecom etc
ETC
Accommodation
- hotels and
restaurants
like star,
recommended etc
- conference
facilities
like African Hall
etc…
Tour operation
- guider
(Training of it)
23
24
4.1 The Stock of Resources
Economic activity depends first and for most on the stock of resources
available to use as factors of production. In traditional economic terms,
these include the resources of land, labor, capital and entrepreneurship.
Tourism calls on particular resources concerned with land and its
attributes, and the uniqueness of simple possession of these attributes
can ultimately dictate whether or not an economy is likely to be able to
support the sector.
The role and activities of modern tourism however demanded more than
land attributes. Most tourism involves some elements of services, which
requires a competent and willing labor force. According to Dekadt (1997)
whilst many jobs in the industry may not require a very high level of
traditional skills and qualifications, the presence or absence of a pool of
labor with a positive attitude towards tourism and tourists has of vital
importance.
4.1.1 Profile of Tourism Resource base in Ethiopia
All in all, Ethiopia has natural attraction sites i.e eight national parks
with total area of 11570 sq.km which accounts 1.04% of the total land
area of the country, ten game reserve possessing an area of 26600sq.km
that accounts 2.39% of the total land area of the country and
sanctuaries which possesses 7200 sq.km that accounts 0.6% of the total
land area of the country.
And also the country is endowed with cultural heritages like Axum
Oblisque, Gonder Castle, Lalibela Rock hewen churches, Awash Valley
(Hadar), Omovalley, Jegol (Harer) wall, and Tikel Dengay(Tia), and other
natural attractions like Lake Tana and its monasteries, Tis Issat, Sofemer
Cave, Eartali active Volcano, Rift valley and biodiversities with in the Rift
25
vally and attractive wild animals like Walia, Nyala, simen fox (Red Fox),
Zebra, birds and others. In addition to the above, the country endowed
with various nations and nationalities with diversified cultures and
colors which is attractive for tourists.
In general, Ethiopia with its vast area above 1,112,000 sq.km is endowed
with various tourist attraction sites including parks, game reservers,
sanctuaries, cultural heritages and others.
Table 4.1.1 (a) National Parks
National Parks Region Area sq.km Awash Afar 750 Simen mountain Amhara 150 Rift vally Oromia, SNNP 650 OMO SNNP 3,450 Denakil Afar 2000 Mango SNNP 700 Nechisar SNNP 700 Total area 11,400 Source: CSA
NB: sq.km- square killo meter
Table 4.1.1 (b) Game Reservers
Game Reservers Region Area in sq.km
Awash kled Oromia 800 Aledege Hareri 2100 Bale Oromia 10,800 Gambela Gambela 3,400 Mango SNNP 800 Gewale Hareri 2000 Mnie Tenado Amhara 1000 Sendo Amhara 400 Stefenie SNNP 600 Chie Tigray 600 Total Area sq.km 26,600 Source: CSA
26
Table 4.1.1 (c) Sanctuaries
Sanctuaries Region Area in sq.km
Harer Hareri 6000
Yabelo SNNP 1,200
Total Area sq.km 7200
Source: CSA
Ethiopia has national parks and Game reservers which are distributed
among regions of the country. Omo national park which is found in
SNNP is the largest covering an area of 3450 km.sq followed by Denakil
National Park. When it comes to game reservers, Bale is the biggest with
an area of 10,800 sq.km which is found in Oromia region and the last in
area is sendo which is found in Amhara region.
In Ethiopia the number of sanctuaries seems too small. One of the
sanctuaries called Harrer found in Harreri region which covers an area of
6000sq.km and the other is Yabelo which is found in SNNP region, which
covers an area 1200 sq.km.
Table 4.1.2 Other Major Tourist Attraction Sites by Region and Recognition by UNESCO
Major tourist attraction sites Region Recognized by UNISCO
Gondar Castle Amhara Recognized Axum oblisks Tigray Recognized Lalibela Amhara Recognized Lower Awash (Hadar) Afar Recognized Jegol Wall Harreri Recognized Sofomer cave Oromia Unrecognized Tis Issat Amhara Unrecognized Omo Vally SNNP Recognized Tia SNNP Recognized The Islands monastires of Lake Tana
Amhara Unrecognized
Yeha Tigray Unrecognized Source: Ministry of Culture and Tourism
27
As we see from the table above, Ethiopia has different natural and man
made tourist attraction sites which are distributed among the regions of
the country and most of them are recognized by UNESCO as world
heritage i.e. eight of them are recognized as world heritage by UNESCO.
These include Axum Oblisks, Lalibela rock hewncharehes, Gonder
Castle, Omo vally, Hadar (where lucy was discovered), Tia’s curved
standing stone and Simen National Park, and Jegol wall is recognized as
worlds heritage recently. From this Amhara region has possessed three of
the eight sites recognized by UNESCO as worlds heritage and has high
contribution to the development of tourism industry; and followed by
SNNP.
As a result the recognition of the above tourist attraction sites as world
heritage is important for the development of tourism industry in Ethiopia
by attracting large number of tourists to the country and used to change
the image that was attached to Ethiopia in previous years i.e. drought
and famine. Indeed, the above tourist attraction sites are not the only
sites but they are major ones indicated by ministry of culture and
Tourism. There are large number of tourist attraction sites which are not
recognized as tourist attraction sites and not included in the table. This
is due to the problem with in the value chain like lack of transportation,
lack of promotion and advertisement, low level of technical skills and
others.
Moreover Ethiopia is unique among African countries to attract tourists
due to the fact that:
(1) Ethiopia is a cradle of man kind as evidenced by the Skelton
of Lucy and Selam that were found in Afar by Prof. Johnson
in (1974) and Zeresenay Alemseged in (2006) respectively,
(2) The country have its own alphabet (script),
(3) It has its own calendar which has 13 months
28
(4) The Ark of the Covenant which is believed that God gave to
Mosses is suspected to be placed in Ethiopia in Axum
Tsiyion. Etc.
4.2 Promotion and Advertisement
Tourism promotion and advertisement in Ethiopia is expected to under
take:
• Sustainable hotel services especially star hotels and other
restaurants
• Effective tourist attraction areas and service promotion in the
country.
Hence, tourism advertisement and promotion are the basic elements of
tourism marketing both in increasing the number of tourist arrivals and
increasing the level of revenue from the industry.
In Ethiopia the above mentioned activities are not well done because of
inadequate financing given to the industry. As a result of this the country
couldn’t get sufficient market share in international tourism market. For
instance as we see from the table 4.2 the market share of the country in
international tourism market is almost negligible in both tourist arrival
and receipts. Ethiopia’s share in receipts show ups and downs i.e. in
1991 its share was about 0.0074%, in 1995 it declines and reach
0.0064% and by 1997 it increases slightly and reaches the figure of
0.0099% and then decreases to 0.0073% in 1998. After 1998, it shows
up ward movement i.e. in 1999 grows to 0.0075% then the market share
in receipts nearly doubles and reaches to 0.0143% in 2000 and increased
to 0.0172% in 2003.
Ethiopia’s share interms of number of tourists arrived also shows up and
down. As we see from the table below arrivals share of Ethiopia decreases
from 0.0176% to 0.0165% in 1991 to 1992 and then increases to
0.0179% in 1993. It also decreases to 0.0178% in 1994 and the share
29
increases from this on wards to 1997 and then decreases from 1997 to
2000. After this it shows increment i.e. increase from 2000 to 2003. This
shows the instability of tourist flows into the country due to problems
with in the value chain like inadequate promotion and advertisement
activities.
The promotion and advertisement activity to promote the country’s
tourist sites was not sufficient in comparison with other countries.
Moreover, very poor tourism promotion services have occurred. These
problems have seriously affected the tourism market and image of the
country.
Table 4.2 Ethiopia’s Market Share in the International Tourism
Market from 1991 to 2003
Description World total Ethiopias share Amount
Percent
1991 Arivals Receipts
Thousands Millions us $
466,044 271,827
82 20
0.0176 0.0074
1992 Arrivals Receipts
Thousands Millions us $
503,617 308,596
83 23
0.0165 0.0075
1993 Arrivals Receipts
Thousands Millions us $
519,045 324,090
93 22
0.0179 0.0068
1994 Arrivals Receipts
Thousands Millions us $
550,471 353,998
98 25
0.0178 0.0071
1995 Arrivals Receipts
Thousands Millions us $
565,495 405,110
103 26
0.0182 0.0064
1996 Arrivals Receipts
Thousands Millions us $
596,524 435,594
109 28
0.0183 0.0064
1997 Arrivals Receipts
Thousands Millions us $
610,763 435,981
139 43
0.0228 0.0099
1998 Arrivals Receipts
Thousands Millions us $
535,485.00 450,556.30
112 32.7
0.0209 0.0073
1999 Arrivals Receipts
Thousands Millions us $
549,175 450,181
115 33.6
0.0209 0.0075
2000 Arrivals Receipts
Thousands Millions us $
685,500 476,400
136 68
0.0198 0.0143
2001 Arrivals Receipts
Thousands Millions us $
684,000 464,400
148,4 75
0.0217 0.0161
2002 Arrivals Receipts
Thousands Millions us $
703,000 482,300
156.3 77.1
0.0222 0.0160
2003 Arrivals Receipts
Thousands Millions us $
691000 524200
179.9 89.9
0.0260 0.0172
Source: World Tourism Organization
30
4.3 National Tourism Policy
Tourism industry needs a properly formulated and sound tourism sector
policy for its conducive development. In Ethiopia, although there are
some policies related to tourism, one of the fundamental problems in
tourism sector development is the absence of clearly specified tourism
sector policy. Because of these policy problems, it is difficult to
coordinate the various institutions and organizations directly or
indirectly affecting the activities of tourism and to ensure the protection
and development of the countries tourist attraction.
4.3.1 Budget Allocation for Tourism
One of the factors that affects the quality of services and success of the
tourism industry is budget allocation to the sector i.e. the total budget
allocated to the sector is generally low as compared to the other sectors
of the economy such as agriculture and industry.
(Table 4.3.1) Budget Allocation for Tourism
Fiscal Year Budget allocated (in USD)
1998/99
1999/2000
2000/01
64,252
65,058
260,858
Total 390,168
2001/02 121,329
2002/03 93,240
2003/04 93,240
Total 307,809
Overall total 697,977
Source: Ministry of Culture and Ttourism, CSA
As (table 4.3.1) shows that there is a fluctuation with a declining trend in
the budget allocated to the sector. The budget allocated in 1999/2000
31
has shown an increase $806 than it was during the previous year. The
budget in the new millennium has shown, a 400% rise than the year
before, the next year shows a decline of $ 139,529 with constant decline
in the following two years. This fluctuation implies that there is a
problem of maintaining constant budget allocation standards leading to
fluctuation to earnings from the sector thus its contribution to the
national economy. Fluctuation in budgetary allocation can also affect
development works in and around tourist sites, thus failure to handle
tourists during peak seasons resulting in dissatisfaction among visitor’s
contribution to the GDP.
One of the main factors that can be sited to the lower number of tourist
visits in Ethiopia is its reputation as a poor nation, which is affected by
repeated drought and famine. Thus this requires undertaking a wide
range of promotional activity on the part of the government. However,
lower budget implies lower promotion of the tourism resources of the
country and this means that a lot of tourists are curtailed from knowing
what the country is really looking like and are not encouraged to visit.
4.3.2 Visa and Exit Tax Payment
Besides the natural and man made tourism endowments, visa and exit
tax payments play a vital role in making a particular country interesting
to a foreign visitor. If one wishes to visit a nation that doesn’t have an
embassy in his home town (capital city), then he needs to send his
documents to that particular country in order to make his visit a reality.
However this makes one’s travel costly because there will be added postal
and time costs. The number of countries from which visas are required
also has its own bearing on the number of tourist inflow.
32
(Table 4.3.2) Visa and Exit tax Payment Comparison of Ethiopia to
Keny (in USD)
Ethiopia Kenya
Visa free (single entry) 70 57
Air port tax 20 0
Getting in and out 90 57
Number of countries that do not require a visa 2 52
Source: World Travel Guide
The table shows that comparing the Ethiopian visa free for a single entry,
air port tax and transit fees, with the neighboring country Kenya, which
is claimed to be one of the successful countries in tourism, the fees are
much higher in Ethiopia than in Kenya explaining one of the reasons
behind Kenya’s success in the sector.
In considering the numbers of countries that do not require visa to enter
a nation are 52 to Kenya and only 2 countries which do not require visa
to Ethiopia, limiting the number of inflow of tourist. Thus leading to
lower earnings in the Ethiopian case.
4.4 Tourist accommodation Facilities and Infrastructure
Provision of efficient and standardized tourist accommodation and
infrastructure is one of the essential services in tourism industry
development. If there is a lack in all or some of these services such as
provision of lodging and food, transportation etc, the tourism sector will
collapse.
4.4.1 Transportation
Transportation for tourism is an essential element of the tourist product
in two ways: it is the means to reach the destinations and it is necessary
as a means of movement at the destination (Winhil et al, 1998).
33
The most obvious way of analyzing by mode to denote the manner in
which transports take place. There are four major modes of transport:
road, rail, water and air. But in Ethiopia air and road transports are the
most appropriate modes of transportations to reach major tourist
attraction sites.
(a) Road Transport
Road transport is dominated by the motor car and coaches. In deed, the
car is almost the perfect tool for providing door-to-door flexibility, going
views of the landscape and a means of transporting recreational
equipment (Adrian, 1995).
The number of tourist visit to a particular site is highly affected by its
infrastructural facility and its accessibility by major means of transport
particularly-road.
As the table 4.4.1 (a) expresses the accessibility of different tourist sites
by road interms of their distance from Addis Ababa or other major cities,
the time it takes, the cost of round ticket by bus in birr, road quality and
considers future plans to up grade the road for the betterment of the
service below. As can be seen from the table the cost of transportation to
get to the tourist sites is relatively cheaper to both foreigners and local
tourists. However most of the roads are in poor conditions with the
exception of the road to Hadar and Awash national park; and the road to
Netchsar discouraging the use of land transport. The poor status of roads
also means longer travel time ruling out the lower cost option of road
transport. Most of the sites take between 1-3 days to reach from Addis
Ababa due to poor status of the road.
34
And as to the future plans, in nine out of twelve sites there in no plan of
up grading the road to the sites while in 3 sites under consideration, up
grading works have commenced but not completed.
Table 4.4.1 (a) Major Sites and their Accessibility by Road
Name of sites Distance from A.A or other sites (in km)
Time it takes
Cost of round ticket by bus/birr
Road quality Plan to up grade road
Bahir Dar and its monasteries
565 1.5 days 135.80 Partially good Under the government action to up grade
Blue Nile falls 32 from Bahir Dar
1 hr from Bahir Dar
150.80 Poor road No
Gonder 768 from A.A 83 from Bahir Dar
2 days 200 2/3 good 1/3 poor
-
Semien mountains
101 km to Debark $ 50 km from debark to the mountains
2.25 days 250 Gonder to Debark is poor and Debark to the park is rough road
No
Axum 1005 from A.A
25 days Partically good No
Lalibela 642 from A.A and 241 from Dessie
2 days 200 520 kms good $ 122 kms poor
400 km road is under constriction
Harrer 535 km from A.A
1 day 110 Good No
Jima 335 km from A.A
1 day 75 Not good Up grading has started
Up grading has started
Hadar - 1.5 days - Very good - Awash National park
190 km from A.A
0.5 day 40 Very good -
Bale mountains National park
450 km from A.A
1 day 100 Partially good No
Netchisar National Park
510 km from A.A
1 day 110 Very good -
Source: Ethiopian Road Transport Authority
(b) Air Transport
The chief mode of travel to Ethiopia for tourist is by air, and the main
carrier is the Ethiopian Airline. Major international carriers such as the
Lufthansa, Alifalia and Saudi also land at Addis Ababa, the principal gate
35
way to Ethiopia. Several other airlines are at various degrees of
negotiation to fly to Ethiopia.
Table 4.41 (b) Major Sites and their Accessibility by Air
Time
full
Name of
site
Daily flight
schedule
Cost of (USD)
Flight
Time of
flight/hrs
Size of
plane
Carrier
Residents Non-
residents
Full Bahir Dar Twice in a
day
62.6 140.6 1.5 52 seats 757
Full Gonder Twice in a
day
82.6 187.6 1.4 52 seats 737
Full Axum Once daily 107.6 245.6 2 52 seats 737
Full Lalibela Once daily 82.6 187.6 1.05 52 seats 737
Full Diredawa
to Harreg
Once daily 80.6 181.6 1 52 seats 737
Full Arba
minch
Twice in
aweek
65.6 146.6 1.2 52 seats 737
Source: Ethiopian Airline
Even though the above table shows that most of the flights are full which
is shown in column, there need to be a plan to increase the number of
flight time to each site so as to satisfy both residents and foreigners as
shown in column three. Though there is a gap between the price for
foreigners and residents are charged, they remain expensive to most of
the residents that are at a low or average level of income. Thus there
should be a means of reducing the cost for local travelers to encourage
resident’s visits to different sites.
4.4.2 Telecommunication
Ethiopian Telecommunication Corporation (ETC) is the sole state owned
telecom service provider in the country. According to the Annual
Statistical Bulletin (2005/06), ETC provides national and international
36
telecommunication services using various media of communication such
as satellite, Micro wave, Digital Radio Multi- access system (DRMAS),
VSAT, UHF, VHF, long line and HF Radio. Currently, ETC is serving the
public with its ‘904’ public and exchanges, which showed 4.85 percent
annual growth vis-à-vis the precious years.
Consequently, the total number of fixed telephone subscription
(residential, business, government and others) has increased from
610,347 in 2004/05 to 725,046 in 2005/06 revealing 13.25 percent
annual increase over that of previous year. The number of waiting list for
fixed telephone subscribers, however, has decreased by 5.41 percent
from 58,755 in 2004/05 to 56,053 in 2005/06 (Table 4.4.2).
At the same time, the number of mobile subscribers reached 866,700 in
the review year demonstrating 100.13 percent growth over the previous
year level of 410,630 subscribers. But the policy followed by Ethiopian
Telecommunication Corporation (ETC) is not suitable for tourists to get
mobile services. Due to telecommunication service is supplied by the
government only, that is the rules and regulations followed by ETC are
not suitable for tourists.
In other countries like South Africa Kenya, North American countries
and Europeans mobile service give to those persons even coming to their
country for one day or two day conference. Out it is true opposite to
LDCs (Mekonen, 2006). Even ETC began to provide mobile services to its
citizens in 1991 E.C. (1998/99). i.e. it is a recent phenomenon as shown
on the statistical Bulletin of ETC. It is only in 2000 E.C (2007/08) ETC
provide for visitors of the millennium who are more interested visitors.
Even ETC has no rules and regulations related to mobile service to
visitors. In the related development, the number of internet subscription
went up from 17,710 in 2004/05 to 25,724 in the review year registering
37
42.8 percent increase. Reflecting the increased performance in fixed
telephone, mobile and internet subscription, the country’s
telecommunication penetration rate (tele-density excluding mobile or the
number of telephone subscribers per 100 inhabitants) has increased
from 0.83 in 2004/05 to 0.98 in 2005/06. The penetration rate was
higher (2.14 per 100 inhabitants) when mobile subscriptions are
included.
With respect to telephone traffic, the registered domestic traffic picked up
by 13.44 percent from 2,341.99 million pluses in 2004/05 to 2,475.56
million pluses in 2005/06. Similarly the out going international
telephone traffic calls has increased from 8.6 million in 2004/05 to 11.48
million in 2005/06.
In the country’s five year plan (development strategy) “Plan for
Accelerated and Sustainable Development to End Poverty”, (PASDEP), it
is planned to increase the number of fixed line subscribers from 830.000
in 2005/06 to 3.2 million by the end of 2009/10. The number of mobile
subscribers and internet users, on the other hand, is expected to pick up
to a respective 6.67 million and 193,100 by the end of the plan period
from 1.465 million and 48,970 in 2005/06.
38
Table 4.4.2 Summary of Basic Telecom statistics (1993-1998 EC
(2000/01-2005/06)
No
Item
Years Annual
growth
(%)
2000/01 2001/02 2002/03 2003/04 2004/05 2005/06
1 Public station and
exchange
649 700 770 784 865 904 4.85
2 Telephone
subscribers line
283683 353,816 404,790 484368 610347 725,046 13.25
3 Waiting list for
telephone
155208 139095 146662 156,963 58,755 56,053 -5.41
4 Mobile telephone
subscription
27532 42910 51234 155,534 410,630 866,700 100.13
5 Number of internet
subscription
4073 6740 9534 12155 17,710 25,724 42.80
6 Domestic traffic
(pulses)
1253.41 1573.99 1896.337 2,225.14 2,341.99 2,475.56 13.44
7 International
telephone traffic
4.62 4.62 4.93 6.67 8.57 11.48 12.90
8 Population 65.394 67.22 69.13 71.10 73.20 75.2 2.97
9 Tele density 0.43 0.53 0.59 0.68 0.83 0.98 10.11
10 Tele density
including mobile
0.48 0.59 0.66 0.90 1.3 2.14 30.82
Source: Ethiopian Telecommunication, Annual statistical Bulletin, 2005/06
4.4.3 Accommodation
Accommodation is a necessary component in the development of tourism
with in any destination that seeks to serve visitors other than day
trippers. The quality and range of accommodation available will both
reflect and influence the range of Visitors (Copper, Frecher, Gillbert,
Shepered and Wan hill, 1998)).
According to Adrian (1995), accommodation might be classified into
commercial sectors such as hotels, motels, gust houses, holiday campus,
etc… Among these, hotels and conference facilities are the most
important elements of accommodation facilities in Ethiopia.
39
Hotels
The development of hotels is necessary condition for the development of
tourism industry. After hard travel, and site seeing tourists desire
comfort when they return to their rooms in the evening. Thus if tourists
are to be satisfied and tourism to grow, hotel rooms should be of a
tourist standard and be able to accommodate guests during peak periods
with reasonable prices.
(a) Availability of hotels and Ownership in Ethiopia
The table below depicts the number of star and recommended hotels,
ownership structure, and new additions.
Table 4.4.3 (a) Number of star hotels, recommended hotels, ownership, and new additions until 2005
Region No of hotel
available
No of rooms
% of Government ownership
New hotels under
construction
New rooms to be added
Hotels recommended for tourist among available
Addis Ababa 66 3823 47 0 0 5 Afar 4 109 17 0 0 0 Amhara 51 1455 47 6 271 5 Benshangul Gumuz
1 26 0 0 0 0
Dire dawa 14 405 31 0 0 2 Gambella 1 222 100 0 0 0 Harrari 9 238 30 4 401 15 Oromia 148 4072 31 4 401 15 SNNP 61 1378 24 3 93 5 Somali 2 104 0 0 0 1 Tigriay 31 1018 15 2 128 8 Total 388 13105 15 893 46 Average 31.5
Source: Culture and Tourism Minister, CSA
As explicitly illustrated on the above table, there are only 388 hotels in
the whole nation with 13105 rooms of which nearly one third of which
are state owned. Regarding new additions there are only 15 hotels under
construction, which are expected to accommodate additional 893 guests.
And as to the regional distribution of hotels, 17% are situated in Addis
40
while 38% are in Oromia, 13% in Amhara, nearly 16% is situated in
SNNP and 8% in Tigray etc… In addition, from the total number of hotels
of 388 only 46 of them are recommended for tourists which have
adequate provision of lodging and food, transport accessibility like road
to the hotel and adequate parking, clean water supply, sanitary facilities,
security services, post and telephone services, electricity etc...
The above fact shows that there is no enough accommodation facility in
the country with the necessary facilities like telephone and a continuous
supply of electricity and other facilities that ensure tourists’ satisfaction.
Deeply, there is uneven distribution of hotels among regions with which
shows that there is an imbalance between the number of visitors and
available accommodation facilities. This can be seen in the case of
Benshangul Gumuz, Gambela, Dire Dawa, Afar, and Somali in these
regions there are many tourist attraction sites but totals are no more
than 15 in each. Aneven worse scenario is the case of Benshangul
Gumuz and Gamblla, where there is only one hotel in each,
accommodating only 26 and 22 people respectively regardless of the
quality of the service provided.
The construction of 15 hotels does not necessarily mean that there will
be enough tourist absorption capacity during peak periods. The fact that
most of hotels being owned by the state implies that further
development/construction works are subject to government budget to
the sector which is not sufficient let alone to add new ones, to sustain
the quality of the existing ones. This leaves the standard of hotels at low
level, not deserving the star rating given to them and unworthy of the
price charged for their services.
Regarding the number of recommended hotels, it shows the low level of
performance in hotel quality, which is not enough to fulfill tourist
demand, since only 12% of the hotels are recommended for tourists.
41
4.4.3 (b) Distribution of hotels in Ethiopia Table 4.4.3 (b) distribution of hotels in general and star hotels by region (end of 2005)
Regional state 1-star 2-star
3- star
4-star
5-sar Classified Not classified
Total
Addis Ababa No hotels 14 16 13 4 2 12 5 66 No rooms 1002 432 620 337 695 496 221 3823 No beds 1484 480 880 497 1074 755 313 5483 Amhara No hotels 10 1 5 0 0 8 27 51 No rooms 213 45 307 0 0 367 523 155 No beds 360 93 598 0 0 510 641 2202 Dire dawa No hotels 5 2 1 0 0 0 6 14 No rooms 81 67 68 0 0 0 189 405 No beds 93 105 118 0 0 0 252 568 Harari No hotels 1 2 0 0 0 0 6 9 No rooms 42 44 0 0 0 0 152 238 No beds 80 54 0 0 0 0 164 298 Oromia No hotels 12 7 0 0 0 16 113 148 No rooms 818 236 0 0 0 544 2474 4072 No beds 1920 280 0 0 0 829 2834 5863 SNNP No hotels 12 3 0 0 0 4 42 61 No rooms 342 116 0 0 0 150 712 1320 No beds 492 217 0 0 0 199 770 1678 Tigray No hotels 8 3 2 2 0 1 17 31 No rooms 210 96 91 168 0 21 432 1018 No beds 240 150 155 207 0 30 455 1237 Somali No hotels 2 0 0 0 0 0 0 2 No rooms 81 0 0 0 0 0 0 81 No beds 179 0 0 0 0 0 0 179 Gambela No hotels 1 0 0 0 0 0 0 1 No rooms 41 0 0 0 0 0 0 41 No beds 79 0 0 0 0 0 0 79
Source: Ministry of Culture and Tourism, CSA
Table 4.4.3 (b) shows us the most important problem for tourism
development in Ethiopia, which is uneven and inadequate distribution of
hotels in the whole of the country. As we see from the table, most of the
efficient and standardized hotels are found far from the tourist attraction
sites of the country. Most of the hotels which have star are found in
42
Addis Ababa, i.e. about 128 total with star hotels 49 are found in Addis
Ababa, and the remaining are distributed in the rest of the regions. For
example, Oromia which has the highest share in regional distribution of
hotels contributes only 19 star hotels to the country. This shows high or
large quantity but low quality hotels as well as low quality of services
supplied to the tourist which affects the performance of the tourism
industry.
4.4.3 (c) Tourism Rating of Hotels and Restaurants
Besides the general evaluation of the tourist facilities, it is important to
see how the services provided look like in the eyes of tourists. The table
below sows tourist rating of the facility provided by hotels and
restaurants like rooms, quality of dining variety and other services in
relation to its momentary value of the services.
Table 4.4.3 (c) Tourism Rating of Hotels and restaurants
The quality of rooms and facility
The quality and variety of dining
The quality of service
Value for money
Total travelers 3.0 3.0 3.4 3.7 Low budget travelers (<$40 per day)
3.1 3.1 3.4 3.8
High budget travelers (>$40 per day)
2.9 2.6 3.2 3.4
Note: rating scale 1-5 with 1=very poor, 2-poor,3-average, 4=good 5=very
good
Source: IF team survey with the support of Ministry of Culture and Tourism
It can be seen that most of the services provided by hotels and
restaurants and rated as ‘average’ while the quality of rooms and verity of
dining are rated poor by the high budget travelers indicating the needs
for lot of work to upgrade the services provided so as to satisfy both high
and low budget travelers. Monetary values for all the services are rated
43
average revealing the belief of tourists that what they get is not worth
what they paid, again indicating a disadvantage to future sectoral
development.
4.4.4 Average Rating of Tourism Products by Tourists
Table 4.4.4 Average Ratings of Tourism Products by Tourists
The ability
to use cash
and credit
cards
Control of
un official
guides and
beggars
Personal
security
The cost &
regulation
of taxis and
buses
Total 2.0 2.3 3.6 3.2
Europe and
America
1.9 2.1 3.6 3..3
America and
Asia
2.5 3.0 3.6 3.0
Average 2.2 2.55 3.6 3.15
Source: IF team survey with the support of Ministry of culture and Tourism
Note: the rating system as follows 1=very poor, 2=poor, 3=average,
4=good, 5=very good
In evaluating the tourist sector performance from the point of view of
tourists, the above table shows that none of the tourism facilities or
preparations has been rated above average. Actually only personal
security and safety, and the cost and regulation of taxis and buses were
rated average leaving the ability to use cash and credit cards and the
control of unofficial guides and beggars at a poor level in the eyes of
tourists. This fact will have an impact on the present conditions as well
as the future prospects of the sector and its contribution to the national
economy. Thus, efforts should be made to upgrade the facilities and
44
services provided with in and around the tourist sites so as to maintain
and sustain the earnings of the tourism industry.
Conference Facilities
Conference tourism is already a significant part of Ethiopia’s tourism
product. The flagship facility of the United Nations conference center that
can accommodate 1500 delegates and is a world class facility. There are
also 20 other standard conference centers in star hotels and AU in Addis
with total capacity of 6000. Of these Sheraton holds the greatest share
with 1400 (w.w.w.eatil. org 1/2/2005).
Table 4.4.5 Summary of International Tourist by Purpose of Visit
from 1991-2005
Year in Gc
Business Vacation transit Conference Vesting realties (Diaspora)
Not stated
Total
1991 20042 1566 13166 7011 5677 19419 81581 1992 20436 15974 13435 7768 5789 19811 83213 1993 22896 17870 1984 8656 6515 22151 93072 1994 27010 19522 10957 10264 8690 21627 98070 1995 30538 19984 11610 12436 9109 19659 303336 1996 28360 21446 15599 12127 11866 19487 18885 1997 30494 23511 14952 13526 12710 19539 139000 1998 26246 31143 8916 5983 13272 5287 102000 1999 22646 28803 15425 6917 13031 5037 115000 2000 27646 30768 18670 6689 1589 10321 1359054 2001 26577 41083 17216 5361 14913 11288 148438 2002 32752 10612 49339 20113 17779 25732 156327 2003 36571 11705 53315 31414 19895 27010 179910 2004 35014 11379 56790 34129 18209 28556 184079 2005 53873 42462 44576 25947 24394 36146 227398
Source: Ministry of Culture and Tourism
Visitors who are coming for the purpose of attending conference, which
are called conference tourists take the forth place. This is because Addis
Ababa is a place where many international organizations like, AU, ECA
and other international organization are found. Due to this many
45
conferences take place in the capital city and as a result the number of
tourists in flow in the case of conference becomes valuable for tourism
growth in Ethiopia.
From the table 4.4.5 the number of conference visitors shows ups and
downs like business cycle that is it grows form 1991 to 1997 but it falls
in 1998 due to the Ethio-Eritrean war, and then grows in 1999. It also
shows a declining tend between 1999 to 2001 and then grows up to 2004
and falls in 2005. This type of movements in conference tourism affects
the steadiness of the economy in general and tourism industry in
particular.
4.5 Tour Operations and Guides
There are legal and illegal tour operators in Ethiopia. The legal tour
operators are those that are licensed and can be classified in to two. The
first class consists of those who fulfilled the qualification or criteria, and
they are in rendering tourist services. The problems created by this class
are, they don’t make association, guides are not well trained, there are
also situations in price changes and tourist left, they don’t concern at
quality of services, they make description out of their topic etc. The
second class is those who have not full fill the qualification but they get
license by cheating, most of them use the name as cover and are joined
or evolved into other fields. They reduce the comfort of tourist services.
They also do not have any publication on indicating tour programme and
price as well as tourist attraction destination.
In contrast to the above, the there are illegal tour operations that do to
fulfill the qualification and they don’t have license or by using the name
travel agency as a cover but they are engaged in tour operation and
disturb the work of the sector and they don’t pay tax to the government.
46
Moreover, there are individuals with out training and knowledge who
calling themselves as tour operators and then robe and steal belonging of
tourists. By doing so they create problems on tourists and tourism
industry.
4.6 Skilled Man Power
Tourism industry needs both skilled and unskilled manpower.
Furthermore, the dynamic nature of tourism implies that training of
manpower to cope up with changes in tourism is of a great importance.
Generally, the number and type of manpower engaged in tourism
industry can influence the performance of the industry.
In Ethiopia there is lack of skilled manpower because the training
provided is mostly focused on primary services such as reception,
catering and food preparation and it gives less attention to the important
skills like tour operation, marketing analysis and promotion and
advertisement personnel. This shows us, there is insufficient and
inefficient tourism training center at higher education level. The other
major problem facing the industry is that some of the employees of the
sector are attracted by the private sectors which are not much significant
for tourism industry growth. Because of the fact that private sectors pay
higher salary compared with the salary prevailing in the industry which
is low. This variation or differential in salary leads to shift skilled
manpower form the industry which in turn leads to the shortage of
skilled man power in the industry.
4.6.1 Human Resource Development in the
Tourism Industry
The human resource that operates in the tourism sector interacting with
tourists is as important as the physical tourist infrastructure. Figure in
47
the table below shows that the hotel industry in particular is
characterized by low education levels and poor training. In this sector
only 22.5% of the employees have completed grade 12 and further i.e.
college and 69.7% of the employees are at a level below grade 12. On the
training side, only 15.8% have received any formal hotel training. In
contrast, the tour operator sector is better equipped and better trained.
On average, 51.3% of the tour operators have completed grade 12 and
above and only 41.3% have no sector specific training. Most of those
have received training got it from short term courses from the Catering
and Tourism Training Institute (CTTI).
Table 4.6.1 Level of Education and Training amongst Hotels and Tour Operators
Formal education
Read& write (%)
Grade 1-6(%)
Grade 7-8(%)
Grade 9-12 (%)
Grade 12+ (%)
College (%)
Profile of hotel employees
9.8 15 16.3 36.4 19 3.5
Profile of tour operators employees
0 10.9 7.6 30.2 28.2 23.1
Training None (%) On job (%)
Short term (%)
CTTI (%)
Profile of hotel employees
69.7 14.5 3.8 12
Profile of tour operator employees
41.3 9.3 45.6 3.8
Source: Ministry of Culture and Tourism
The general view is that the human resource development in the tourism
sector in general and the hotel sector in particular are poor with little
investment to change this picture. This will have its own effect on the
effort to generate a quality service and limits the ability to come up with
creative means of improving the existing structure of the industry by
learning form the experiences of other nations.
48
4.7 Social and Political Stability
Non-economic factors particularly cultural and political ones have been
recognized by economists as vital in determining the capacity and growth
of sectors in an economy. In tourism this is especially important. As
social and political conditions may be responsible for short term
fluctuations either value of productive resources like the value of tourism
sector.
For example the value of tourism contribution to the national out put
(GDP) in Ethiopia decreased due to Ehtio-Eritrean war. It shows decrease
in both tourist arrival & receipts on the table below.
Table 4.7 Arrivals and Receipts From 1991-2005 via Addis Ababa
Airport and Other
Year Bole Other ports Total Receipts in 1000 (birr)
1991 81581 - 81581 38824 1992 83213 - 83213 57763 1993 93072 - 93072 107822 1994 98070 - 98070 144315 1995 103336 - 103336 144972 1996 108,885 - 108,885 182665 1997 114732 24268 139000 27900 1998 90847 21153 12000 225000 1999 91859 23141 115000 252000 2000 108954 270000 378954 577800 2001 1116438 32000 148438 642000 2002 130947 25380 156327 676100 2003 166162 19748 179910 778000 2004 172954 11124 184078 991200 2005 187453 34110 22798 1177816 Source: Culture and Tourism Minister, National Bank of Ethiopia
Note: other eatry ports are Dire Dawa, Galafi, Moyale, Dewale, Metema, Togo, Chale, Dolo, Omate, Terferibir, Gonder, BahirDar, Mekele etc…
49
Table 4.7 shows that there is an increasing trend of both tourist arrival
and receipts generated form tourists to the country. From the data, one
can figure out a slow but a steady increase in the number of tourist
inflow as well as receipts since 1997.
Arrivals took a sever knock in 1998/99 for the duration of the war with
Eritrean. Taking the arrivals by air as the only indicative of the trend
over the past decade arrivals grew by 3.6% only. But this figure masks
the much higher annual growth rate of 5.8% up until the war began and
a high 9.2% growth form 2000 to 2001. The war caused a 20.8% drop in
total arrivals but there was a rapid recovery as total arrivals almost
reached their prewar level in 2000.
Taking in to consideration the amount of receipts generated by the
industry to the country, there is an increasing trend but with a
decreasing rate over the past decade, even negative rate is recorded
during Ethio-Eritrean war i.e. -24% decline in tourist receipts in 1998
from the previous.
In 2001, total receipts was $642mln up from $577.8mln the year before
by 8.5%, and in 2002 it grew to $676.1mln by 4.5%. However, the sector
registered a very remarkable change in the years 2003, 2004 and 2005
where it grows to $778mln (16.6%),991.2mln (27%) and 1,177.8mln
(17.7%).
4.8 Attitudes and Habits
Another major non-economic determinant is that of psychological values
both of suppliers and consuming tourists. Firstly, the attitudes of a host
population towards tourists, and in particular those of workers with in
the tourism sector have all important effect on the tourism product, and
their influence is similar in nature to that of social and political stability.
50
Secondly, on the demand side, tourism consuming habits are important.
Two persons with similar level of income may, all things being equal,
have deferent propensities to travel. This may be a function of cultural
surroundings at home, age and gender. This propensity to travel will
influence domestic tourism and the development of the sector in any
destination closely linked to those generating areas.
Table 4.8 Arrivals by Age and Gender Group for 2003, 2004 and 2005
Year Sex <15 b/n 15
&24
B/n
25&44
B/n
45&59
>60 Not
stated
Total
2003 Male
Female
Note stated
5593
3759
165
8299
5552
191
60832
27399
1119
36960
11425
552
10593
3900
150
2719
638
64
124996
52673
2241
Total 9517 14042 89350 48937 14643 3421 179910
2004 Male
Female
Note stated
5506
3790
325
8188
6159
305
60899
26918
1807
36491
11033
1014
10112
3687
325
4889
1968
662
126085
53555
4438
Total 9621 14652 89624 48538 14124 7519 184078
2005 Male
Female
Note stated
6744
4615
403
10073
7555
379
75495
33320
2243
45201
13604
1259
12462
4487
403
5979
2353
823
155954
65934
5510
Total 11762 18007 111058 60064 17352 9155 227398
Source: Ministry of Culture and Tourism
From the table 4.8, in these three yeas adults i.e. age between 25 and 59
are higher in number than that of young and old aged group to visit
Ethiopia that is 138287 in 2003 from the total of arrivals of 179910, and
138162 in 2004 from the total arrivals of 184078. It also 171,122 visitors
from the total arrivals of 227,398 to the country which contributes 76%,
75% and 75.3% of the arrivals in 2003, 2004 and 2005 respectively.
Regarding the gender group, male visitors are significant in number than
those of females, that is form the total of 179,910 arrivals to Ethiopia in
51
2003, males account 124,996 (69.4%) of the arrivals, and from the total
of 184078 arrivals to Ethiopia in 2004, males account 126085 (68.5%) of
the arrivals. And also in 2005, from the total of 227398 males account
155954 (68.6%) of the arrivals to Ethiopia.
This shows a bias that mostly those persons who are adults and that of
males had a chance to visit Ethiopia in the previous years since more
than 68% of the arrivals are males and more than 75% of the arrivals
are adults. This is due to reasons and problems with in the country and
the consuming tourist like image of the country as poor and highly
affected by famine and by thinking not suitable for females and
children’s in tourists mind, fear of disease due to children have no
resistant ability to disease, low level of promotion and advertisement
etc…
4.9 The State of Technical Knowledge
Many less developed countries have regarded tourism as an easy
industry to develop, because it demands relatively low technology
compared with many other industries, and skills which can be easily
mastered. Unfortunately, as tourism world wide has grown and become
more sophisticated, high value contributions to GDP by tourism have
tended to become associated with higher technologies. Examples range
from the ability to operate fleets of large cost efficient aircraft with the
associated technology in reservations and passenger handling, through
technical innovation in providing more interesting, all season attractions.
When technical advances are applied to existing inputs of other
resources, they enhance the productivity of the industry concerned and
hence its contribution to GDP.
52
Certainly there will always be a place for low technology tourism;
particularly while there are market segments which deliberately seek out
the simple or natural life (current fashions i.e. ‘ecotourism’) but dominate
cultural tourism generating areas will ensure that returns within tourism
sectors will continue to be high where supported by good technical
knowledge application. But our country has low level of technical
knowledge which affects the productivity of the sector as well as the
tourism contribution to the GDP.
53
CHAPTER FIVE
5. CONCLUSION AND RECOMMENDATION
5.1 Conclusions
Tourism deals with movement of people a way from their normal
residence for holidays, recreation and leisure activities, business
meeting, visiting relatives and other purposes. International touristm,
involves persons traveling to different countries while domestic tourism is
part of peoples’ movement with in their won country. Tourism has
significant economic and social benefits which includes, among other
things, foreign exchange earning, creation of employment, generation of
revenue for the government, integration of national cultures and
societies, and the like. These days, the tourism sector is one of the major
economic sectors in the world and is expanding at a steady state in the
world.
Ethiopia is endowed with exotic natural and man made historical
attractions, which could be the basis for growing tourism industry, if
complemented with standardized supporting services like
accommodation, transportation and tour operation, visa and exit prices,
telecom, promotion and advertisement etc… with in the value chain of
tourism industry. Ethiopia stands among the countries of the globe
which possesses great and unique tourist attraction resources. However,
the proper utilization and administration of these resources have been
poor, in the past as well as in the present day of Ethiopia. This is due to
lack of integrated tourism policy, like budget allocation problem and visa
and exist payment problems inadequate training institutes in tourism,
lack of trained man power, lack and low quality of tourist
accommodation facilities and infrastructure at/to tourist attraction sites
like inadequate transportation i.e. low quality roads, lack of air port to
54
much of natural and cultural tourist attraction sites; hotels and
restaurants are at low quality level and unevenly distributed; inadequate
promotion and advertisement, low quality and even untrained tour
operations and guides, low level of technical knowledge, and other
inadequate financial and material support that are vital to the
development of the sector and sectors with in the value chain of tourism.
Moreover lack of peace and stability and periodic drought and famine
have changed the image of the country from tourist attracting to tourist
frustrating.
With the value chain of tourism of Ethiopia government is the lead firm
since it owns on average 31.5% hotels, most of conference facilities,
controls visa and exit procedures, ownership and construction of roads
(as public good), monopoly ownership of airline, training institutes like
CTTI are owned by the government; national parks, game reservers,
sanctuaries, other cultural and natural tourist attraction sites financed,
protected and controlled by the government, monopoly of
telecommunication, control of media monopolistically etc…
The dominancy of the government in tourism sector is not good for
tourism development. But it is common in other most Less Developed
Countries (LDCs) like Ethiopia and African countries which hinder the
fast growth of tourism industry.
5.2 Recommendations
In order to facilitate the rapid development of tourism in Ethiopia both
the government and the private sector or in general the society must
participate in improving, protecting and advertising tourist attraction
55
sites and, supply good quality facilities or services for the tourists in
Ethiopia.
The government must have designed strategies like:
� study, protect and develop the country’s tourist attraction sites, and
give attention for those which are not known;
� encourage the private sector to:
- improve, develop and expand tourism facilitates that is facilities
like high quality hotels and restaurants as well as conference
facilities and others;
- Improve and expend tourism infrastructure that is develop the
quality and the quantity of transportation sector like road, air, rail
and water are important to the sector with the support of private
sector;
- Promote the country’s tourism resources that is by promotion and
advertisement in international media like DSTV, Show Time, G-TV,
ETV and other media’s;
- Awareness creation to the society about tourism industry;
- Create suitable conditions for tourists by avoiding war with
neighboring countries and create internal stability in order to
prevent from any fear of visiting the country.
- Provide high quality hotels and restaurants and other facilities
which includes all gender and age groups;
- Improve the level of technical knowledge by giving high attention to
the sector;
- Control illegal tour operators which have no license to secure
tourists form danger;
- The government should allow the private sectors to
participate/invest in the sectors with in the value chain of tourism
like airline, telecom, hotels, road constriction, national parks,
56
game reserves, sanctuaries and other cultural and natural
attraction sites etc…
On the other hand, the private sector must invest, its resources in
activities that are important for the development of tourism industry of
Ethiopia. i.e:
- participate in protection and development of the county’s tourist
attraction sites;
- participate in improvement, expansion and development of tourism
facilities like hotels and restaurants, conference facilities,
transportation, tour operation and other and as well as control
illegal tour operators which have no license
- etc…
24
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