For decades, tourism has remained a major contributor to the GDP of African economies. In 2019, the industry accounted for around 7% of Africa’s GDP and contributed $169 billion to its economy, about the size of the combined GDPs of Ivory Coast and Kenya. But the advent of the Covid-19 pandemic changed all that. In July 2020, the African Union estimated that Africa had lost almost $55 billion in travel and tourism revenue and two million jobs in the first three months of the pandemic alone. The International Monetary Fund (IMF) has predicted that the real GDP of African countries dependent on tourism will decline by 12% in 2020.
However, as Covid-19 restrictions ease, harnessing domestic tourism demand has offered some respite to the sector, as a growing middle class and young population show more interest in domestic tourism.
The International Finance Corporation (IFC) says much of the world has had the advantage of relying on captive national and regional audiences. But in Africa, domestic tourism has long been neglected. The sector must be oriented towards more diversified markets in order to have greater resilience in the future.
According to the World Travel & Tourism Council (WTTC), domestic tourism accounted for 55% of travel and tourism expenditure in Africa in 2019, below the contribution of local tourism in North America (83%), Europe (64 %) and in Asia-Pacific (74%). Domestic tourism accounted for 73% of total global tourism spending in 2017.
Domestic tourism resilience
Africa’s growing middle class and population of young, adventure-hungry travellers, and the recently launched African Continental Free Trade Area (AfCFTA), the world’s largest free trade area by number of participating countries , are among the pillars supporting the future growth of the domestic market. and regional tourism on the continent.
While international bookings represent a higher value in terms of revenue, the domestic market is more resilient. This scenario therefore calls for a rethink of the strategy, particularly in terms of building a domestic customer base equal or even superior to the international base.
To give an indication of likely long-term changes, data from the United Nations World Tourism Organization (UNWTO) suggests that by 2024, international leisure travel will be 10% above 2019 levels, but that domestic leisure travel will increase by 30%. In contrast, international business travel will continue to decline by 15%, while domestic business travel will increase by 15%.
And according to the OECD tourism policy response to Covid-19, domestic tourism, which accounts for around 75% of the tourism economy in OECD countries, is expected to recover faster. It offers the main chance to stimulate recovery, especially in countries, regions and cities where the sector supports many jobs and businesses.
But a transition to domestic tourism requires building the capacity of tourism service providers to leverage digital technologies for product development and marketing. There is also a need to improve professional standards for tourism service providers, including tour operators and tourist guides. Likewise, there is a need to build sustainability into the recovery process – sustainable environmental, social and financial practices; diversification of national tourism products and national and regional tourism campaigns supported.
Travel costs also need to be reduced as this has been a source of complaint for most domestic tourists. At the same time, building affordable hotels could go a long way in increasing affordability for local tourists. The hotel sector in Africa must adapt to this change, with hotels designed for this local market.
Most parts of Africa remain among the most expensive countries to develop hotels. Innovative technology and flexibility around branding standards will be key to reducing costs, as will the relaxation of import duties and more options around development professionals and entrepreneurs. Covid-19 has certainly brought positive changes in this regard, hotel brands are realizing the need for greater flexibility, but there is still much to be done to prepare the sector for the huge opportunity that the domestic tourism.