Tourism stands at the threshold of growth

By Isaac Twumasi Quantus in Accra.

The tourism and hospitality industry is recognized as one of Africa’s greatest but most under-invested assets. The Africa investor 2010 Wealth Cheque Report estimates that the tourism market today is worth $49.90-billion, but has $203.7-billion of untapped potential with an estimated total market size of $253.5-billion. This is more than four times its current level in terms of potential, presenting rich opportunities for potential investors.

But doing business in sub-Saharan Africa is not easy. The World Bank has often said the region has the worst investment climate in the world due to the many obstacles that make running businesses difficult. Other bottlenecks besides the legal and regulatory challenges are the inadequate infrastructure and undeveloped financial markets.

Many international investors say they lack access to reliable and up-to-date details on potential investment opportunities and other information that relates to trade and investment on the continent.

Creating an environment that encourages and sustains investment that is necessary in meeting the needs of the economy is important for many African leaders. Consequently, the red tape that frustrates businesses is slowly being pruned across the continent.

Despite the challenges, hospitality operators seem to have a long term plan for Africa and have found innovative ways of dealing with challenges.

How well one does their homework is crucial to the success of any given venture. For instance, there is an acute shortage of economy hotel rooms in Africa and yet the tendency is to build large.

Opportunities for the global hospitality industry will be influenced by among other dynamics the more than 150 million Chinese people, who are likely to become international travelers in the near future, the world’s ageing population, which will mean increased travel, double digit economic growth in Asia and technical advances in the airline industry that will make long-haul travel easier.

As a new travel destination, Africa is attracting more and more Chinese tourists. Players in Africa are taking notice of these factors in their quest to sustain growth in a region where the supply of hotels isn’t matching the increasing needs fast enough.

Receptive African governments have upped the ante in luring business hotel developers after realising that good hotels and particularly internationally branded ones go a long way in attracting foreign investors.

Through tax incentives and grants, governments in various countries are becoming key role players in implementing reforms that should encourage more investment in the tourism and hospitality industry.

This article was originally posted on Africa Travel - Tourism

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