Tourism value chains: Transforming SADC arrivals into real earnings
Tourism value chains: Transforming SADC arrivals into real earnings
THE SouthernTIMES Mar 20, 2018
> Prosper Ndlovu
Travel and tourism is one of the chief economic activities in Africa and Southern Africa in particular, creating jobs for thousands of people and sustaining millions of livelihoods along the value chain. Southern Africa, according to the Regional Tourism Organisation of Southern Africa (Retosa), is endowed with everything that a traveller would desire, from the definitive safari to exquisite hospitality, adrenalin-pumping adventure and unique cuisine.
The Southern African Development Community (SADC) region, comprising Angola, Botswana, Democratic Republic of Congo, Lesotho, Malawi, Mauritius, Madagascar, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia, Mauritius and Zimbabwe, offers wonderful holiday experiences.
From indulging in mountains of peri-peri prawns on a golden Mozambican beach to trailing gorillas in the Democratic Republic of Congo, there is much more. Talk of bungee jumping in the spectacular wonder of Victoria Falls, the safari experience of tracking the big-five in Botswana and South Africa, diving in the depths of Lake Malawi to conquering Tanzania’s Mount Kilimanjaro, tourists have the assurance of the most exciting and unforgettable holiday in Southern Africa.
Reference has also been made to the secrets of ancient cultures in Lesotho and Swaziland, the Angolan beach bar and the romantic Mauritius and Madagascar palm-fringed beaches, as some of the top tourist attractions that travellers will not hesitate to spend on.
Given such diversity of prime tourism destinations, rich cultural, natural resource and environmental heritage in Southern Africa, the sub-region possesses a huge potential for economic growth, if all systems were put in place to harness this low hanging fruit.
A study by the United Nations University (UNU) on “The Tourism Global Value Chain and Africa (2017)”, done by Jack Daly and Gary Gereffi, however, points to lack of vibrant value chain linkages in African tourism in general, which reduces earnings for regional economies. While Africa continues to attract record numbers in terms of international arrivals, the study notes that there are industry undercurrents that influence the continent’s participation in tourism global value chains.
“African tourism is characterised by high foreign demand, which elevates the position of global lead firms and increases leakages of tourism spending out of local economies,” reads part of the study.
This emphasises the need to strengthen domestic and regional tourism value chains to ensure local economies derive better earnings from the rich tourism heritage. JB Cronje (2014), a researcher at the Trade Law Centre for Southern Africa (Tralac), defines tourism value chains as an industrial system that covers a variety of services in the destination country as well as services related to international travel organisations such as travel agents, tour operators and international transport among others.
North Africa, according to the UNU study, is the most vibrant tourism destination on the continent as measured by visitors, overall spending, leisure and tourism spending and capital investments with Southern Africa coming second in terms of total receipts.
There is consensus that SADC’s relatively high leisure spending is driven mainly by attractions in South Africa, which generally has the highest tourism revenue in the region.
West and Central Africa are both said to be relatively insulated markets. Most importantly, the study notes that local tourism operators in some SADC locations are constrained by low levels of domestic demand for tourism services, as many depend on foreign visitor spending.
Yet this clientele bracket often uses global lead agencies, which are usually based outside the region, says the study. With foreign-owned tour operators, hotel companies and investors usually contracting supply chain decisions outside the region, experts say this has a negative implication for the value received by domestic tourism actors.
As a result, procurement opportunities, linkages between local tourism players and supporting industries have sometimes tended to suffer and remain underdeveloped. These findings point to the need for regional governments to come up with supportive policy and investment decisions that are focused on creating sustainable local and regional tourism value chains.
There is a need, therefore, for SADC member states to scale up local tourism industry linkages with sectors such as agriculture, domestic food suppliers, beverages, clothing and textile, airlines, transporters, ICTs and other key services that support the tourism operations.
In some quarters, absence of vibrant tourism value chains has been blamed for frustrating viability of local manufacturing industries due to reliance of foreign procurement.
This also reinforces the need to ensuring that the tourism sector works closely with local contractors when championing refurbishment and new construction projects.
As a labour intensive sector, the tourism industry demands more investment in skills development covering both general staff up to managerial level. Areas such as basic housekeeping, food service, communication skills and time management, need to be attended to. This requires tourism players and support services in the region to work together in rolling out a comprehensive tourism workforce development programme.
This speaks strongly to the SADC Protocol on the Development of Tourism, which recognises the need to establish systems for facilitating travel to Southern Africa, training for industry workers, and marketing the region as a tourist destination.
Through this protocol, SADC also intends to ensure even distribution of tourism development throughout the region and creating a favourable environment for tourism, thereby using tourism as a vehicle for socio-economic development.
Zimbabwe, for instance, has already embraced the value chain approach across economic sectors, as espoused in its Zim-Asset blue-print, buttressing the broader SADC Industrialisation Strategy and Roadmap, which sees value chains as an integral component in the regional industrialisation and economic integration drive.
In the realm of tourism, Zimbabwe is already working on championing domestic tourism, which involves participation of local communities. Government has also recently announced adoption of a corridor approach alongside the Special Economic Zones model as a way of harnessing increased investment into the sector and earnings target of up to US$5 billion from about US$1 billion within the next few years.
With tourism likely to remain a critical source of revenue, foreign direct investment and employment for SADC and the rest of Africa, an understanding of value chain dynamics and global industry linkages with local players is pertinent towards improvement of tourism competitiveness and earnings for the industry in the region. Developing vibrant tourism value chains in the SADC region would no doubt ensure that the growth of the sector goes beyond mere increase in arrivals but real earnings. The model can also play a key role in overall regional economic integration, development and growth.
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