Tourism Sector
MID-YEAR PRIVATE SECTOR REVIEW OF THE
GHANAIAN ECONOMY
AUGUST 2008
PREPARED FOR THE GHANA TOURISM
FEDERATIO...
Contents
2

1.
2.
3.

4.
5.
6.
7.
8.
9.

The expectations you had for the year
Reasons for such expectations
The performan...
The expectations for the year 2008
3

 GDP
 GROWTH
 EMPLOYMENT
 DEMAND
 VISITOR EXORTS
 CAPITAL INVESTMENT
 GOVERNM...
The expectations for the year 2008
4

GDP:
 The Travel &Tourism Industry is expected to
contribute directly






4.3%...
The expectations for the year 2008
5

REAL GROWTH:
 In 2008, Travel & Tourism in Ghana is Forecast to See

Real Growth of...
DIRECT IMPACT 2008
6

 In 2008 Ghana's Travel & Tourism is Expected to

Generate GHC15,187 BN (US$1,611 MN) of
Economic A...
INDIRECT IMPACT 2008
7

 However, since Travel & Tourism Touches All Sectors of The Economy,

its Real Impact is Even Gre...
The expectations for the year 2008
8

EMPLOYMENT:
 Travel &Tourism Economy employment is estimated
at






393,000 jo...
The expectations for the year 2008
9

DEMAND:
 In 2008, Travel & Tourism is expected to post




GHC28,128.4 bn (US$2,9...
The expectations for the year 2008
10

VISITOR EXPORTS:
 Exports make up a very important share of Travel &
Tourism's con...
The expectations for the year 2008
11

CAPITAL INVESTMENT:
 Travel & Tourism Capital Investment is estimated at




GHC...
The expectations for the year 2008
12

GOVERNMENT EXPENDITURE:
 Government Travel & Tourism operating
expenditures in Gha...
Reasons for such expectations
13


ACN/CAN 2008





Increased arrivals from Africa an subregion
Increased revenues
Co...
Performance of Tourism Sector
January-June 2008
Output
15

 Focus on Key Areas of the Value Chain




Hotel Occupancy- high
Tours Generated and Executed high
Food and...
Employment
16

 Hotels

Trend towards Temporary Staff Recruitment
Indicator of Seasonality and or lack of recognition fo...
Profitability
17

 Hotel Occupancy



Upper quartile 65% plus
80% plus [for 3-5 star in Accra]

 Tours



Cultural T...
Level of Competitiveness
18

 Internal
 International/ Transnational players changing the climate in
Hotel Sub-Sector
 ...
Factors that affected the Performance of Tourism
Sector I
19

 Lack of bankable projects
 Financial institutions not sup...
Factors that affected the Performance of
Tourism Sector II
20

POSITIVE

NEGATIVE

 ACN/CAN 2008
 Increased arrivals fro...
Tourism Policy initiative in 2008
21

 that has boosted the growth of tourism sector

 that has retarded the growth of t...
Expectations for July-Dec 2008
22

 Average Peak Season in August because of expected fall

in African American numbers
...
Challenges facing the sector
23

 Excessive operational tariffs
 Weak domestic air link
 Expensive destination
 Low Go...
Actions taken to address challenges
24


Excessive operational tariffs

 GTB and GHATOF working together on this
 Weak ...
Recommendations to Government for an
improved performance of the sector.
25

 Incentivise Private Sector investments in s...
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PEF Ghana mid year tourism sector performance jean lukaz-aug_2008

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PEF Ghana mid year tourism sector performance jean lukaz-aug_2008

  1. 1. Tourism Sector MID-YEAR PRIVATE SECTOR REVIEW OF THE GHANAIAN ECONOMY AUGUST 2008 PREPARED FOR THE GHANA TOURISM FEDERATION (GHATOF) BY JEAN LUKAZ
  2. 2. Contents 2 1. 2. 3. 4. 5. 6. 7. 8. 9. The expectations you had for the year Reasons for such expectations The performance of your sector during the first half-year in terms of output, employment, profitability, turnover and level of competitiveness. What were the factors that affected the performance of your sector? Policy initiative in 2008 that has boosted or retarded the growth of your sector. Expectations for the last half year. Challenges facing the sector. Actions taken to address challenges. Recommendations to Government for an improved performance of the sector. Mid-Year Private Sector Review of the Ghanaian economy- TOURISM SECTOR-GHATOF 10/29/2013
  3. 3. The expectations for the year 2008 3  GDP  GROWTH  EMPLOYMENT  DEMAND  VISITOR EXORTS  CAPITAL INVESTMENT  GOVERNMENT EXPENDITURE Mid-Year Private Sector Review of the Ghanaian economy- TOURISM SECTOR-GHATOF 10/29/2013
  4. 4. The expectations for the year 2008 4 GDP:  The Travel &Tourism Industry is expected to contribute directly    4.3% to Gross Domestic Product (GDP) in 2008 (GHC6,847.4 bn or US$726.2 mn), rising in nominal terms to GHC18,416.3 bn or US$1,678.9 mn (4.5% of total) by 2018. The T&T Economy contribution (% of total) should rise from 9.6% (GHC15,186.8 bn or US$1,610.7 mn) to 9.9% (GHC40,761.9 bn or US$3,715.9 mn) in this same period. Mid-Year Private Sector Review of the Ghanaian economy- TOURISM SECTOR-GHATOF 10/29/2013
  5. 5. The expectations for the year 2008 5 REAL GROWTH:  In 2008, Travel & Tourism in Ghana is Forecast to See Real Growth of: Rate Value Direct Industry GDP 4.5 % ...to GHC6,847 bn (US$726 mn) Direct Industry Employment 0.8 % ...to 175,000 jobs Economy GDP 4.9% ...to GHC15,187 bn (US$1,611 mn) Economy Employment 1.2% ...to 393,000 jobs Mid-Year Private Sector Review of the Ghanaian economy- TOURISM SECTOR-GHATOF 10/29/2013
  6. 6. DIRECT IMPACT 2008 6  In 2008 Ghana's Travel & Tourism is Expected to Generate GHC15,187 BN (US$1,611 MN) of Economic Activity (GDP). The industry's Direct Impact includes: Rate Value Direct Industry GDP 4.3 % of Total GDP GHC6,847 bn (US$726 mn) Direct Industry Employment 3.5 % of Total Employment 175,000 jobs Mid-Year Private Sector Review of the Ghanaian economy- TOURISM SECTOR-GHATOF 10/29/2013
  7. 7. INDIRECT IMPACT 2008 7  However, since Travel & Tourism Touches All Sectors of The Economy, its Real Impact is Even Greater. In 2008 Ghana's Travel & Tourism Economy Directly and Indirectly Accounts for: Rate Value Economy GDP 9.6% of Total GDP GHC15,187 bn (US$1,611 mn) Economy Employment 7.8% of Total Employment 393,000 jobs Exports, Services & Merchandise 20.7% of Total Exports GHC 12,766 bn (US$1,354 mn) Capital Investment 8.2% of Total Investment GHC 4,102 bn (US$435 mn) Government Expenditure 3.3% of Total Government GHC 729 bn (US$77 mn) Expenditure Mid-Year Private Sector Review of the Ghanaian economy- TOURISM SECTOR-GHATOF 10/29/2013
  8. 8. The expectations for the year 2008 8 EMPLOYMENT:  Travel &Tourism Economy employment is estimated at    393,000 jobs in 2008, 7.8% of total employment, or 1 in every 12.9 jobs. By 2018, this should total 505,000 jobs, 8.0% of total employment or 1 in every 12.6 jobs. The 175,000 T&T Direct Industry jobs account for 3.5% of total employment in 2007 and are forecast to total 226,000 jobs or 3.6% of the total by 2018. Mid-Year Private Sector Review of the Ghanaian economy- TOURISM SECTOR-GHATOF 10/29/2013
  9. 9. The expectations for the year 2008 9 DEMAND:  In 2008, Travel & Tourism is expected to post   GHC28,128.4 bn (US$2,983.3 mn) of economic activity (Total Demand), growing to GHC73,607.2 bn (US$6,710.2 mn) by 2018. Mid-Year Private Sector Review of the Ghanaian economy- TOURISM SECTOR-GHATOF 10/29/2013
  10. 10. The expectations for the year 2008 10 VISITOR EXPORTS:  Exports make up a very important share of Travel & Tourism's contribution to GDP. Of Ghana's total exports, Travel & Tourism is expected to generate   20.7% (GHC12,766.2 bn or US$1,354.0 mn) in 2008, increasing to GHC33,349.1 bn or US$3,040.2 mn (21.7% of total), in 2018. Mid-Year Private Sector Review of the Ghanaian economy- TOURISM SECTOR-GHATOF 10/29/2013
  11. 11. The expectations for the year 2008 11 CAPITAL INVESTMENT:  Travel & Tourism Capital Investment is estimated at   GHC4,101.5 bn, US$435.0 mn or 8.2% of total investment in year 2008. By 2018, this should reach GHC10,797.1 bn, US$984.3 mn or 8.4% of total. Mid-Year Private Sector Review of the Ghanaian economy- TOURISM SECTOR-GHATOF 10/29/2013
  12. 12. The expectations for the year 2008 12 GOVERNMENT EXPENDITURE:  Government Travel & Tourism operating expenditures in Ghana in 2008 are expected to total   GHC729.3 bn (US$77.3 mn), or 3.3% of total government spending. In 2018, this spending is forecast to total GHC1,961.6 bn (US$178.8 mn), or a 3.4% share. Mid-Year Private Sector Review of the Ghanaian economy- TOURISM SECTOR-GHATOF 10/29/2013
  13. 13. Reasons for such expectations 13  ACN/CAN 2008    Increased arrivals from Africa an subregion Increased revenues Construction of Extra Luxury accommodation provision- direct & indirect jobs Tourism Marketing and Promotion   ITB 2008 [resumption]- increased arrivals from Germany COTTM 2008 [new market]    Gold Award in Aprilincreased arrivals from China Joseph Project- downturn [recession in US- main market] Civil War in Bawku   Low turnout in North and Ghana as a wholefor Community-Based Tourism oriented Tourists- Mole, Weichiau, Sirigu/SWOPA Travel Advisory negative about Ghana Mid-Year Private Sector Review of the Ghanaian economy- TOURISM SECTOR-GHATOF Crime    UNCTAD XII/AU Summit/ Ghana@50      High Road Accident Rates   Higher air fares to compound existing high rates Recession in US [Credit Crunch]   Risk of clashes- reduced tourist arrivals in Oct-Dec High Oil Prices   Even President involved!!! Elections 2008   Mugging on the rise Armed Robbery Roadside Thuggery on the rise Travel Advisory negative about Ghana African American Market adversely affected National Airline Crisis- GIA  Barbados; irregular flight schedules 10/29/2013
  14. 14. Performance of Tourism Sector January-June 2008
  15. 15. Output 15  Focus on Key Areas of the Value Chain    Hotel Occupancy- high Tours Generated and Executed high Food and Beverage Sales- high  Taxes and Levies from Sector High       Metropolitan Assemblies VAT GTB District Assemblies Airport Taxes IRS  Pro-poor impact high due to high % of MSMEs Mid-Year Private Sector Review of the Ghanaian economy- TOURISM SECTOR-GHATOF 10/29/2013
  16. 16. Employment 16  Hotels Trend towards Temporary Staff Recruitment Indicator of Seasonality and or lack of recognition for skills  Indicator of very little quality-demanding consumers   Impact on Service Quality  Tour Operators  Trend towards Temporary Staff Recruitment [Tour Guides]  Indicator of Seasonality  F&B  Trend towards Temporary Staff Recruitment Indicator of lack of recognition for skills  Indicator of very little quality-demanding consumers   Indirect Jobs from Capital Projects  Hotel Construction Mid-Year Private Sector Review of the Ghanaian economy- TOURISM SECTOR-GHATOF 10/29/2013
  17. 17. Profitability 17  Hotel Occupancy   Upper quartile 65% plus 80% plus [for 3-5 star in Accra]  Tours   Cultural Tours increasing Educational Tours increasing  Food and Beverage Subsector     Trends in Self-service increasing Ghanaian increasingly dining out at lunch-time and on weekends[Sundays especially] More establishments coming p due to low barriers to entry, especially in informal Sector Profitability of up to 70% gross Mid-Year Private Sector Review of the Ghanaian economy- TOURISM SECTOR-GHATOF 10/29/2013
  18. 18. Level of Competitiveness 18  Internal  International/ Transnational players changing the climate in Hotel Sub-Sector  Ethnic Cuisine taking over in the Fine Dining Category  Service Quality still a challenge in MSMEs  Hotels, Restaurants, Chop Bars  External  Tourist Product Competition questionable because of Unique cultural product  Neighbours leveraging on Lack of Aggressive Tourism Branding and Marketing by Government killing Sector Mid-Year Private Sector Review of the Ghanaian economy- TOURISM SECTOR-GHATOF 10/29/2013
  19. 19. Factors that affected the Performance of Tourism Sector I 19  Lack of bankable projects  Financial institutions not supporting sector apart from Car Rentals  Hotels built on loans [2-3yrs] defaulting- financial institutions do not offer long-term loans because they do not understand [long-term] profitability of Sector Projects  Tourism Sector still MSME driven- over 85%  Support to Tourism MSMEs Mid-Year Private Sector Review of the Ghanaian economy- TOURISM SECTOR-GHATOF 10/29/2013
  20. 20. Factors that affected the Performance of Tourism Sector II 20 POSITIVE NEGATIVE  ACN/CAN 2008  Increased arrivals from Africa an subregion  Increased revenues  UNCTAD XII/AU Summit/  Ghana@50  Construction of Extra Luxury accommodation provision- direct & indirect jobs  Tourism Marketing and Promotion  ITB 2008 [resumption]- increased arrivals from Germany  COTTM 2008 [new market]  Gold Award in Aprilincreased arrivals expected from China Crime      High Road Accident Rates   Barbados; irregular flight schedules Civil War in Bawku   Mid-Year Private Sector Review of the Ghanaian economy- TOURISM SECTOR-GHATOF African American Market adversely affected National Airline Crisis- GIA   Higher air fares to compound existing high rates Recession in US [Credit Crunch]   Risk of clashes- reduced tourist arrivals in OctDec High Oil Prices   Even President involved!!! Elections 2008   Mugging on the rise Armed Robbery Roadside Thuggery on the rise Travel Advisory negative about Ghana Low turnout in North and Ghana as a wholefor Community-Based Tourism oriented TouristsMole, Weichiau, Sirigu/SWOPA Travel Advisory negative about Ghana 10/29/2013
  21. 21. Tourism Policy initiative in 2008 21  that has boosted the growth of tourism sector  that has retarded the growth of tourism sector Mid-Year Private Sector Review of the Ghanaian economy- TOURISM SECTOR-GHATOF 10/29/2013
  22. 22. Expectations for July-Dec 2008 22  Average Peak Season in August because of expected fall in African American numbers  Because of Credit Crunch  Low Season in Election Period  Because of perceived risk of violence  Low Season  Because of Bawku War  Rising Oil Prices can keep more ‘dollar’ tourists out due to high air fares;  however, local inflation will make tourism cheaper for Euro/Pound Sterling holders  Domestic Tourism still unexplored potential Mid-Year Private Sector Review of the Ghanaian economy- TOURISM SECTOR-GHATOF 10/29/2013
  23. 23. Challenges facing the sector 23  Excessive operational tariffs  Weak domestic air link  Expensive destination  Low Government Budgetary Allocation  Misplaced Priories of Industry Decision Makers  Sector financing restricted to Development Funded Projects that skew progress towards foreign policies of donor governments Mid-Year Private Sector Review of the Ghanaian economy- TOURISM SECTOR-GHATOF 10/29/2013
  24. 24. Actions taken to address challenges 24  Excessive operational tariffs  GTB and GHATOF working together on this  Weak domestic air link  Local investors must be encouraged- beyond City Link  Expensive destination  In line with policy to keep out Mass Tourism  Low Government Budgetary Allocation  Advocacy Strategy being developed to build a Case for More Tourism Funding  Misplaced Priories of Industry Decision Makers  The 3 Key Figures-GHATOF+MOTDR+GTB must cooperate beyond collaborative self-destruction  Sector financing restricted to Development Funded Projects that skew progress towards foreign policies of donor governments  Financial Sector reluctant to research and learn about sector in spite of attempts Mid-Year Private Sector Review of the Ghanaian economy- TOURISM SECTOR-GHATOF 10/29/2013
  25. 25. Recommendations to Government for an improved performance of the sector. 25  Incentivise Private Sector investments in sector  Practicalize GIPC exemptions that do not work!  Dedicate a bigger and proportional % of National Budget to Tourism, being 4th largest FX earner  Recognize the pro-poor impact of Tourism on the Nation  Be reminded of the Competition  Te need for a focused aggressive National Branding and Marketing Strategy beyond Tourism Mid-Year Private Sector Review of the Ghanaian economy- TOURISM SECTOR-GHATOF 10/29/2013

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