Although there has been a significant increase in tourism in Africa, the sector’s abundant potential remains largely untapped on the continent. Mossadeck Bally gives an overview of the challenges and opportunities characterising the hotels and tourism sector, using the example of the flagship chain he founded, the distinctly pan-African Azalaï Hotels Group. He proposes a set of solutions to give a new impetus to a sector that is ready to take off and claim its rightful place in Africa’s economic development.
Generating business volumes equivalent to the petroleum, agri-food and automotive industries, 1 tourism is now an important growth driver for the African economy. World Bank figures show that tourism accounts for 8.8% of the world’s employment and 4.5% of global investment.
The 2015 Africa Monitor Tourism report, published by the African Development Bank (AFDB), paints a clear picture of the sector’s position in Africa. 2 Africa welcomed more than 55 million tourists in 2014, a remarkable increase compared with just over 17 million in 1990.
International tourism in Africa increased by 2% in 2014. 3 An influx of around 2 million visitors to the West African Economic and Monetary Union (UEMOA) states (Mali, Niger, Togo, Ivory Coast, Senegal, Guinea-Bissau, Benin and Burkina Faso) generated an estimated revenue of 580 billion CFA Francs, almost a billion dollars.
Aware of these high stakes, the members of the West African Economic and Monetary Union (UEMOA) and the Economic Community of West African States (ECOWAS) are determined to make tourism a cornerstone of strong economic and social development.
In 2010, West Africa confirmed its commitment to growth in the tourism sector by establishing a common tourism policy and signing up to “PRDTOUR”, the regional programme for tourism development in UEMOA countries (Programme Régional de Développement du Tourisme au sein de l’UEMOA). The programme provides for a series of incentives to strengthen the sector by 2020. These should bring visitor numbers up to 8.5 million and extend the average stay to 4 days for international tourists and 4.5 days for local visitors. On average, tourism is expected to contribute more than 7% to the GDP between now and 2020, creating 200,000 direct jobs and an overall total of 800,000 jobs. If the programme meets its goals, revenue from tourism will reach 4,070 billion CFA francs.4
In Mali, and throughout UEMOA, the various strategies being applied by the tourism sector bring with them opportunities to enhance cultural and natural resources and breathe new life into ancillary business activities. Growth in tourism also boosts activities in the construction and public works, transport, services, agriculture and traditional craft sectors.
Tourism: a growth driver for local economies
Controlled by the government and heavily dominated by international chains, the hotel sector saw profound changes in the mid-1990s. Azalaï Hotels Group acquired the Grand Hotel de Bamako when it was privatised in 1994. Over the past 20 years, the group has expanded its tourism activities in the subcontinent to provide 700 permanent jobs, 1,400 casual jobs and 2,100 indirect jobs in Mali, Burkina Faso, Guinea-Bissau and Benin.
Hotel groups like Azalaï have a responsibility to help their various partners address the challenges of sustainable development, especially by reducing their environmental impact. Our hotels have invested in energy-saving lightbulbs, water and electricity saving devices, waste-water treatment facilities and new, energy-efficient technologies.
Our local presence means we can contribute to socio-economic growth in the countries where we are based and help build a strong, responsible and professional private sector, which can drive growth and create jobs.
It should be standard, everyday practice within the sector to use raw materials and resources that come directly from Africa’s agricultural and rural environment. We maintain links with small and medium-sized local producers so we can involve local communities in the sector and create new sources of revenue. We have developed particularly strong partnerships with farmers, fishermen and women in business, both individual entrepreneurs and cooperatives. The decor in our hotels (paintings, portraits, tablecloths, etc.) is also primarily supplied by the local craft industry. By building ethical local partnerships, the hotels and tourism sector is establishing itself as a major player in diversifying local and national economies.
However, there are still many obstacles to the success of Africa’s tourism sector, and there is a lot more work to be done before we reap the full economic and social benefits of the hotel business.
Problems facing the hotel industry in West Africa
West Africa’s progress is impeded by low visibility on key markets, poor road and rail networks, inadequate and expensive air services and the absence of institutional and administrative mechanisms to provide incentives. With the exception of Mali, the hotels and tourism sector is not an investment priority, despite UEMOA directives, and there are no competitive incentives in place (such as customs or tax measures) to attract investment. The UEMOA states often prioritise mining and manufacturing, industries that add little value on a local scale.
The region’s instability also tarnishes its image as a destination and reduces tourist traffic. This was the case in Mali and Guinea-Bissau, two countries that suffered from military coups and political instability in 2012 and 2013. There are additional problems that complicate the situation and restrict hotel and tourism business, especially in UEMOA and ECOWAS countries.
To begin with, hotel complexes are largely concentrated in urban areas, neglecting rural areas where inferior road, air and hotel infrastructures restrict domestic and leisure tourism. Training for hotel personnel in the UEMOA region is also inferior, sometimes non-existent, which reduces the quality of the services they can offer. Finally, unofficial accommodation chains and failure to observe building regulations have an impact on hotel occupancy rates and result in loss of earnings.
The lack of a dedicated financial structure to develop the tourism sector is also a problem. A number of factors deter commercial and custodian banks from financing the sector: the absence of long-term resources, a lack of specialist expertise in tourism financing, failure to tailor credit agreements to professional needs, lack of confidence in credit agreements and high interest rates. Too often, investors still see tourism as a high-risk sector.
The situation is exacerbated by two additional factors. On the one hand, operational costs are increased by taxes in the UEMOA member states and the high costs of basic services such as water, electricity and telecommunications. These costs are reflected in the tourist’s bills, making hotel and tourism infrastructures in the region less competitive and attractive.
Furthermore, a lack of IT and information systems is hampering growth in tourism. African hotels rarely feature in CRS platforms, 5 and unstable internet speeds make it difficult to process online payments.
Five key initiatives to boost the sector
A local market must be created so that the tourist potential of the West African Economic and Monetary Union (UEMOA) states can be fully developed and the hotels and tourism sector can become more efficient. Against this background, the UEMOA member states have decided to join forces to overcome the sector’s challenges.
Five strong initiatives would ensure growth in West Africa’s tourist industry:
- Develop the tourism offer across the region by improving visitor sites and basic infrastructures like airports, roads, hotels and catering.
- Make UEMOA’s tourist destinations more visible and competitive by promoting tourism both internationally and across the region, and financing investment in tourism.
- Introduce incentives to attract investment in the sector, especially by improving current mechanisms. Mali has implemented a tourism growth strategy that strengthens its “Investment Code”. This includes making national funds available, attracting foreign capital, creating jobs, training a qualified workforce, and developing a framework for a successful supplementary economy.
- Build new road, rail and air infrastructures to open up tourist areas and make them more accessible to local and international tourists.
- Build capacity among key players in the sector such as national tourist bodies and consultation and training organisations, and set up a regional tourism information system.
Scrupulous management and commitment to promises are needed to win the confidence of funding bodies like the IFC and Proparco. This is how the Azalaï Hotels Group developed its ability to secure funding.
The hotels and tourism sector also needs a dedicated funding mechanism to support growth in hotel capacity. This could be achieved by creating a tourism investment fund to provide long-term financing to players in the sector. West African countries should follow the example of Morocco, Tunisia and Mauritius, which are leaders in this regard. To ensure their success, these initiatives to stabilise and improve the business environment must be adopted by all member states.
Environmental and social footprint: another aspect of the sector’s future
Our overview of tourism in West Africa would not be complete without considering the environmental and social impact of growth in the sector.
Environmental and social issues must be identified when sectorial policies are being defined and implemented, so that clear rules and goals can be established to protect the environment, young people and social and humanitarian values.
As an investor in the sub-region, our group has ascertained that all UEMOA countries have taken these issues into account in their national policies. Before any hotel project can be carried out in the area, a detailed impact study of its environmental and social effects must be carried out and approved by the appropriate authorities.
By encouraging eco-friendly practices, tourism will take on a particular social and environmental responsibility. This responsibility will become an asset on its own with the potential to attract investors and clients in search of new products that reduce their ecological footprint.
I cannot conclude this article without mentioning the tragic events that have hit the region recently. Sadly, death tolls from terrorist attacks have shown once again that no one, regardless of nationality, is immune to this scourge. The opening of an Azalaï hotel in Ivory Coast in the near future will be all the more symbolic in view of the devastating effects recent attacks in Mali and Ivory Coast have had on the tourism sector.
Only a positive approach can curb the threat of the new security challenges affecting West Africa. The problem is deeply rooted in the region’s difficult economic conditions, and in an absence of openness and dialogue with the outside world, due as much to misunderstanding as to the barriers they have imposed.
But no other sector represents openness, stability and peace to the same extent as the hotels and tourism industry, an endless source of encounters and interaction.
We firmly believe that our activities play at least a small part in the struggle against the blight of terrorism, by breaking down the barriers of misunderstanding, helping us to (re)discover each other and bringing us together.
Azalaï Hotels Group: providing leadership
Established in 2007 by the Azalaï Hotels Group, the Chiaka Sidibe Academy provides basic training and professional development, advice and support in the UEMOA states (Mali, Niger, Togo, Ivory Coast, Senegal, Guinea-Bissau, Benin and Burkina Faso).
The group makes recommendations with regard to human resources, including adapting training programmes to local contexts and needs, and developing “exchanges” to encourage sharing of best practices.
To achieve this, it draws on the skills of the African diaspora: experts who have studied overseas and now want to share their experience with their home continent. Our group employs several senior African executives who have had academic and professional careers in France and North America.
We also address a key contemporary issue by promoting gender equality. By involving women more in the hotel sector, and in tourism generally, we are bringing training and employment to a social group that is often less qualified and more vulnerable. We have set ourselves the ambitious goal of employing a 50% female workforce within 10 years.
1 World Tourism Organization website
2 Africa Tourism Monitor 2015: Tourism in Africa is on the rise but has not yet reached its full potential http://www.afdb.org/fr/news-and-events/article/africa-tourism-monitor-2015-tourism-in-africa-is-on-the-rise-but-has-not-yet-reached-its-full-potential-15284/
3 Faits saillants du tourisme – Organisation Mondiale du Tourisme – Edition 2015 [UNWTO Tourism Highlights, 2015 Edition]
4 PRDTOUR (Programme Régional de Développement du Tourisme au sein de l’UEMOA)
5 Computer Reservation Systems or Central Reservation Systems: A CRS is a digital reservation management platform allowing travel agents to view the availability of various tourism product providers (airlines, hotel chains, car hire companies, tour operators, etc.) and make bookings online.
Azalaï Hotels Group documents
Le Pays (Burkina Faso newspaper): Tourisme dans l’espace UEMOA « Des pistes de progrès examinées », Monday 21 June 2010 edition
Journal Du Mali: Le Tourisme au Mali, OMATHO (Mali Tourism and Catering Office)
Uemoa.int/Documents/Articles: Programme Régional de Développement du Tourisme au sein de l’UEMOA (PRDTOUR). Code des investissements du Mali – [Regional programme for tourism development in UEMOA countries (PRDTOUR). Mali investment code.] http://www.droit-afrique.com/upload/doc/mali/Mali-Code-2012-investissements.pdf
Report on 2nd meeting of CRC-PRDTOUR)