A Tourism Development Strategy for Ethiopia Dialogue on Cultural Heritage in Sustainable Development 16th April 2007

Shaun Mann Tourism Development Specialist

Africa Region Private Sector Development World Bank 1

First tourism project in PSD †

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Starts from the premise that the project is there to create jobs and shared economic growth – that’s the PDO. If you start there then the inputs and outputs can be held accountable by all concerned. If activities are not contributing they can justifiably (politically) be weeded out. The PDO allows the project to fit with the CAS and the PRSP and most other partners can contribute. 2

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Prepare thoroughly † †

Use what had already been done, build on it. Four new studies (gaps in info available and extra rigor) Value chain Expenditure survey Economic impact in Lalibela Market survey

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Collaborative approach from the start, make inclusion a guiding principle. 3

Thorough analysis allows focused performance assessment Retail Travel Agent

Tour Operator

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Airline

Arrival

Inland

Hotel Stay

Transport

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Food & Beverage

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Services

Activities & Shopping

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KEY PROBLEM AREAS or WEAK PERFORMANCE • Not enough product • Expensive • Inadequate local supply being sold • Inadequate linkages • Weak promotion supply • Seasonality • Product image needs • Unreliable • Poor service revitalization domestic quality airline

• Low service standards

• Not enough product • Poor being • No variety communications sold coverage • Little outside • Poor standards 4 Addis • Poor credit card coverage

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Lessons †

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Cultural heritage is not a commodity - like a beach - it’s a way of life in Ethiopia. It’s not perceived as having an economic value. Economic value has to be created; jobs and enterprises. This focus creates inclusion and participation at all levels – local, regional and national see results. You can measure these results… 5

Why Historic and Cultural Tourists? † † †

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Unique & world class product Competition in Africa is limited Reinforces and preserves cultural identity and historic roots – Builds a Distinctly Ethiopian Brand Tourists characterized by higher incomes, longer stays and tertiary education Large market (8M to developing countries – compared to 3.5M safari tourists)

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3

Current Economic Impact of the Historic Route Segment

Estimated Daily Average Number expenditure Days

Foreign Package Tourist

7,000

3,000 Foreign Independent Traveler

Total Expenditure

$ 120

12

$ 10.08 Million

$ 40

14

$ 1.68 Million

Visiting Ethiopian

8,500

$ 100

6

$ 5.1 Million

Ethiopian Resident

35,000

$ 26

4

$ 3.64 Million

Total US$ 20.5 Million 7

Economic Impact of Tourism in Lalibela – Hub of the Historic Route †

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Tourism creates direct jobs for 850 people, who in turn support 4.4 family members – 3740 people depend on tourism to Lalibela – ¼of the population of Bugna Woreda Tourism generated $ 2.35 Million for over 500 enterprises in 2004 Each tourist represents a per capita income of $167 to the economy of Bugna Woreda

Who Earns the Money

Accommodation Transport Services Church Restaurants and Bars Suppliers of Goods Craft Sellers Tourist Guides Others (including 120 beggars)

45% 19% 13% 10% 8% 1% 1% 2%

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Weak Image and Market Presence †

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Out of the 360 or so specialist Africa tour operators in the UK and Europe only 10% offer regular itineraries for Ethiopia. By this measure Ethiopia ranks 14th in terms of market penetration

1. South Africa 2. Kenya 3. Tanzania 4. Botswana 5. Namibia 6. Zambia 7. Zimbabwe 8. Mozambique 9. Uganda 10. Ghana

11. Senegal 12. Rwanda 13. Gambia 14. Ethiopia 15. Mali

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Foreign Visitors to Other Significant World Heritage Sites 1 Ethiopia’s share of the foreign market for visits to historic and cultural sites is

860000

1 out of every 450 tourists 350000

45000 Angkor Wot Cambodia

Slave Forts Ghana

100000

Petra Jordan

18000 Lalibela Ethiopia

Machu Pichu Peru 10

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Ethiopian Tourism Product Misses Value Adding Opportunities 6 How Costs are Allocated in a Standard 12-day High Season Package for 4 offered by UK-based Tour Operator

50% 45% 40%

Ethiopia Mozambique Uganda Mali Egypt

35% 30%

Out of Pocket Expenditure

25% 20% 15% 10% 5% 0% Ticket from London

In-country Transport

Accommodation

Activities and Shopping

Food and Beverage

Tour Operator 11 Profit

A Five Year Plan Product Development ƒ Improve existing and

establish new accommodation stock ƒ Create holistic destination development plans for all key historic route destinations ƒ Implement plans ƒ Improve the quality of interpretation ƒ Support the development of a range of SMEs

Market Development

Institutional Framework

Targeted marketing and promotion strategy in 5 key source markets ƒ Launch Ethiopia’s new Brand and execute a Brand Management Strategy

Complete National Policy and Strategic Plan ƒ Formalize Council for Tourism and support its secretariat with TA and operational funds ƒ Support Regional Cultural and Tourism Bureaus as PPPs ƒ Review legal and regulatory environment

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Estimated Budget

Estimated Budget

¾ Public Sector $10M ¾ DONOR/NGO $35M ¾ Private Sector $30M

¾ Public Sector $5M ¾ DONOR/NGO $5M ¾ Private Sector $5M

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Estimated Budget ¾ Public Sector $5M ¾ DONOR/NGO $10M 12 ¾ Private Sector $0.5M

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