ANALYSIS OF TOURISM VALUE

CHAIN IN ETHIOPIA
FINAL REPORT

PREPARED BY CARMEN ALTES

SEPTEMBER 2018
Tourism VCA Ethiopia – Final Report – September 2018 2
 Table of contents
ACRONYMS ...................................................................................................................................................... 5
INTRODUCTION ............................................................................................................................................... 7
MANAGEMENT SUMMARY .............................................................................................................................. 8
ELEMENT 1. GENERATING EU TOURISM MARKETS AND COMPETITIVENESS OF THE ETHIOPIAN TOURISM
SECTOR IN THOSE MARKETS .......................................................................................................................... 11
1. TRENDS IN INTERNATIONAL VISITOR ARRIVALS........................................................................................ 12
2. CURRENT EUROPEAN MARKET DEMAND .................................................................................................. 16
3. THE POTENTIAL TO FURTHER DEVELOP THE EUROPEAN MARKET AND RISKS OF A REDUCTION IN
DEMAND........................................................................................................................................................ 19
4. ETHIOPIA IN THE EUROPEAN TRAVEL DISTRIBUTION CHANNELS .............................................................. 21
4.1. THE STRUCTURE OF THE TRAVEL TRADE IN THE EUROPEAN MARKETS ................................................................. 21
4.2. SMALL PLAYERS MOST INTERESTING FOR THE ETHIOPIAN TOURISM SECTOR ......................................................... 22
4.3. PACKAGES TO ETHIOPIA MARKETED BY EUROPEAN TOUR OPERATORS ............................................................... 22
4.4. IMAGE OF ETHIOPIA AS A TOURISM DESTINATION IN THE EUROPEAN MARKETS .................................................... 24
4.5. MAIN REQUIREMENTS TO BE COMPETITIVE IN THE EUROPEAN MARKETS ............................................................ 27
4.6. ARE THERE OPPORTUNITIES FOR PRODUCTS WITH IMPROVED CSR PERFORMANCE? .............................................. 29
5. CURRENT ETHIOPIAN TOURISM SECTOR PRODUCT RANGE ...................................................................... 32
6. COMPARATIVE ADVANTAGE..................................................................................................................... 35
6.1. GLOBAL COMPETITIVENESS ...................................................................................................................... 35
6.2. COMPETITOR ANALYSIS .......................................................................................................................... 36
7. POTENTIAL FOR NEW PRODUCTS.............................................................................................................. 38
7.1. HIGH-YIELDING TARGET SEGMENTS ........................................................................................................... 38
7.2. MAIN LEISURE PRODUCTS OF INTEREST TO THE EUROPEAN MARKET .................................................................. 40
RATE FROM ‘LEAST IMPORTANT’ (1) TO ‘MOST IMPORTANT’ (5)................................................................... 43
7.3. HIGH-YIELD GEOGRAPHIC MARKETS ........................................................................................................... 44
8. DESTINATIONS OFFERING HIGHER POTENTIAL FOR EUROPEAN TOURISM ................................................ 47
ELEMENT 2. STRUCTURE, GOVERNANCE AND SUSTAINABILITY OF THE VALUE CHAIN ................................... 51
9. THE TOURISM VALUE CHAIN ..................................................................................................................... 52
9.1. STRUCTURE OF THE TOURISM VALUE CHAIN ................................................................................................. 52
9.2. TOURISM SERVICE SUPPLIERS: THE KEY ACTORS IN THE TOURISM VALUE CHAIN..................................................... 53
9.3. PRIVATE SECTOR ORGANISATIONS THAT SUPPORT THE TOURISM VALUE CHAIN..................................................... 57
9.4. VALUE CHAIN SUPPORTERS IN THE PUBLIC SECTOR......................................................................................... 58
9.5. DONOR-FINANCED INITIATIVES SUPPORTING THE TOURISM VALUE CHAIN ........................................................... 68
9.6. OPPORTUNITIES FOR CREATING SYNERGY .................................................................................................... 71
9.7. SUSTAINABILITY OF THE TOURISM VALUE CHAIN .......................................................................................... 73
ELEMENT 3. OPPORTUNITIES AND OBSTACLES IN THE VALUE CHAIN REGARDING TOURISM FROM EU
MARKETS TO ETHIOPIA .................................................................................................................................. 80
10. KEY OPPORTUNITIES AND OBSTACLES IN THE TOURISM VALUE CHAIN .................................................... 81
ELEMENT 4. POSSIBLE INTERVENTIONS IN THE VALUE CHAIN TO INCREASE TOURISM FROM EU MARKETS TO
ETHIOPIA ....................................................................................................................................................... 86
11. WHAT CBI CAN DO TO SUPPORT A MORE COMPETITIVE AND SUSTAINABLE TOURISM VALUE CHAIN IN
ETHIOPIA ....................................................................................................................................................... 87
ANNEXES ....................................................................................................................................................... 97
ANNEX 1: STAKEHOLDERS CONTACTED DURING THE FIELD TRIP ............................................................................... 97
ANNEX 2: BIBLIOGRAPHY .............................................................................................................................. 99
ANNEX 3. THE OPPORTUNITY TO GET INSPIRATION FROM MEXICO TO UPGRADE TOURISM SMES ................................. 101

Tourism VCA Ethiopia – Final Report – September 2018 3

Tourism VCA Ethiopia – Final Report – September 2018 4
Acronyms

ARCCH Agency for Research and Conservation of the Cultural Heritage

CRM Customer Relationship Management (software)

CSR Corporate Social Responsibility

CTTC Catering and Tourism Training Center

EIC Ethiopian Investment Commission

ESTDP Ethiopian Sustainable Tourism Project1

ETB Ethiopian Birr (official currency)

ETO Ethiopian Tourism Organisation

EWCA Ethiopian Wildlife Authority

GTP Growth and Transformation Plan.

IFC International Finance Corporation (World Bank Group)

IFIs International Finance Institutions

IGAD Intergovernmental Authority for Development (East Africa)

MoCT Ministry of Culture and Tourism

MoFA Ministry of Foreign Affairs

MSMEs Micro, small and medium enterprises

PROHEDEV Heritage for Development Project (EU funding)

PUM Netherlands Senior Experts

SNNPR Southern Nations, Nationalities and Peoples Region

SMEs Small and Medium Enterprises

SDPASE Sustainable Development of the Protected Areas System of Ethiopia

TTCI Tourism and Travel Competitiveness Index

UNECA United Nations Economic Commission for Africa

UNWTO United Nations World Tourism Organisation

VFR Visit Friends and Relatives

WTTC World Travel and Tourism Council

1
Financed by the World Bank. Phased out at the end of 2015

Tourism VCA Ethiopia – Final Report – September 2018 5

Tourism VCA Ethiopia – Final Report – September 2018 6
Introduction
The purpose of this VCA is to map out current European tourism to Ethiopia, to describe
the range of products offered in Ethiopian tourism, current and planned, and to identify
opportunities for developing European tourism, including which interventions are needed
in order to do so and, specifically, which interventions CBI could include in a project.
A Business Case Idea (BCI) was submitted in November 2017 which showed that the
tourism sector in Ethiopia has the potential to attract more international tourism, in
particular European visitors, who represent about a third of the total demand. The BCI
also identified the main gaps and challenges in the value chain to achieve further
development and efficiency, as well as some areas in which the CBI could help to
address the challenges.
According to the procedures for project preparation, a Preliminary Desk Research Report
was produced in July 2018 with a compilation of excerpts from different published and
non-published documents. This showed that a significant amount of relevant information
is available, and that there is a need to:
 Obtain updated statistics about international visitors and tourism companies
 Get information regarding the current state of governance of the tourism sector
 Assess the current status of the Ecotourism Association and Ethiopian Sustainable
Tourism Alliance (ESTA) mentioned in the BCI
 Identify challenges and gaps in marketing and commercialisation in the European
markets
 Find out about sustainable practices and certification among tourism service
suppliers
 Identify projects financed by donors supporting the tourism value chain
 Make recommendations regarding the type of activities that could be financed by
a CBI project
To complement the information available through secondary sources, a field trip took
place between 4–18 August 2018 focused on Addis Ababa. Meetings with representatives
from relevant federal government organisations were organised, as well as with private
sector associations, tourism professionals and donors. The list of all stakeholders
contacted is provided in Annex 1.
Key documents that were used in the preliminary desk research and the preparation of
this report are:
 Tourism to Ethiopia, Senegal and Zambia, EU Market Scan, prepared in 2017 for
the CBI, referred to in this report as the ‘Market Scan’.
 The Marketing and Branding Strategy prepared with Ethiopian Sustainable
Tourism Development Program (ESTDP) funds for the ETO in 2015.
 The Sustainable Tourism Master Plan 2015-2025 (STMP), prepared with United
Nations Economic Commission for Africa (UNECA) funds for the Ministry of Culture
and Tourism (MoCT) and made public in 2015.

Tourism VCA Ethiopia – Final Report – September 2018 7

Management Summary
Ethiopia has a wealth of natural and cultural resources, with some unique cultural and
natural features that set it apart from other African destinations. In the last decade,
international arrivals to Ethiopia have shown a positive trend, reaching nearly one million in 2017.
However, growth has been fuelled mainly by the increase of international tourism worldwide,
improved air connectivity and a dynamic economy that generates many business trips. Tourism
data are skewed by weaknesses in the visa system, a large diaspora travelling on foreign
passports, and an increasing number of transit passengers from Ethiopian Airlines flights (that
cross the border to spend a night or a few hours in Addis). These have to be considered to draw
meaningful conclusions.
Holiday trips represented 37.4% of total arrivals in 2016 while Europe generated over a
third of those trips (34.4%). The UK, Germany, Italy and France consistently appear in the
ranking of the top-10 tourism generating markets for leisure tourism. Sweden and the Netherlands
also appear high in the ranking.
However, it seems that Ethiopia receives fewer holiday tourists than the number that
can be concluded from official data. The sentiment of many incoming operators, and the low
number of foreign visitors in key tourism attractions such as the National Museum in Addis Ababa
(47,208 in 20162), the Simien Mountains National Park (10,685 visitors in 2016)3 and Lalibela
(25,069 visitors in 2016), confirm this point. Both the Simien and Lalibela are UNESCO sites.
Thus, the number of true holiday trips from Europe to Ethiopia is well below the official
112,000 annual visitors (2016) (which includes a difficult to explain 25% growth over 2015).
Moreover, most tourists follow the same two routes (North and South) and the leisure
demand is quite seasonal due to the prevalent image among European outbound operators that
the rainy season (European summer) is not a good moment to visit Ethiopia. However, Italy and
Spain do generate visits at that time, when the number of holiday trips tends to go down.
There are opportunities for growth, but more proactive commercialisation is needed.
Current international trends in European markets present opportunities to diversify the product
portfolio and attract more visitors, and European markets were prioritised by the Marketing and
Branding Strategy as being among the ‘core’ markets with high revenue potential and high affinity
for leisure travel to Ethiopia, as well as among the ‘steady markets’ that are easier to penetrate.
In spite of all the opportunities, important obstacles and challenges hinder competitive and
sustainable tourism development in Ethiopia, the most important being:
 Limited understanding of tourism as a development and export sector among high-level
government officers
 Institutional framework in place but weak implementation capacity, skilled human
resources and financing as well as improved coordination at all levels is needed
 Poor quality of service mainly due to lack of trained manpower
 Very limited accommodating capacity of international standards for leisure tourism, with
investment concentrated in main cities and business-type hotels
 Lack of basic and IT infrastructure present challenges for tourism businesses
 Narrow product range offered to the market by incoming operators
 Weak private sector associations
 Official destination marketing focuses on mainstream trade shows (traditional activities)
and lacks human and financial resources. Poor digital marketing
 Unplanned destination development
 Poor visitor management in natural and heritage sites puts them at risk, untapped
potential for revenue generation
 Poor tourism statistics, needs improvement to provide grounds for sound decision-making
by public and private organisations
 Little attention for sustainable practices among public and private players
 No suitable funding available for tourism SMEs
 Need for a recurrent funding mechanism to support tourism development

2
Source: ARCCH
3
According to the Wildlife Tourism Strategy prepared for EWCA in 2013, the total number of foreign visitors to ALL
protected areas in Ethiopia was 51,269.

Tourism VCA Ethiopia – Final Report – September 2018 8

As a result, Ethiopia is lagging behind other East African destinations that have developed
a more competitive tourism industry and attract higher numbers of international tourists.
In this scenario, the key opportunities for the CBI to add value to the tourism value chain in
Ethiopia are:
1. To foster a proactive and more professionalised commercialisation and sales effort by incoming
operators, targeting strategic segments of the leisure market and higher-spending tourists in
the main European markets. This should contribute to: i) more professional incoming operators
with improved capacity to approach and develop lasting business relationships with the
European travel trade, ii) higher visitor numbers with more diversified travel motivations
(segments), and iii) better distribution of tourism flows throughout the year and across
Ethiopia.
2. To support existing small tourism service providers (accommodations and restaurants) to
upgrade the quality of their services and management practices. They are the main suppliers
of incoming operators, are in contact with visitors and have an impact on the quality of the
travel experience, as well as the destination image. The added value of a CBI project could be
multiplied by designing training and coaching in a way that could be replicated in the future
with local resources. This approach would be an excellent complement to the CBI method to
support incoming operators.
3. To foster improved conditions to direct private investment and tourism flows to lesser
developed regions. CBI could foster coordination to capture and strategically direct investment
in accommodation of higher standards that would attract more and higher-spending tourists,
increasing jobs and exports. The CBI could also contribute to a more competitive and
sustainable tourism product by providing very focused support to improve destination/product
development in unique areas with high potential for European tourism.
4. Promote sustainable practices among incoming operators and the tourism industry at large to
respond to the increasing interest in sustainability by European outbound operators and their
customers, and because sustainable practices will allow further growth of tourism safeguarding
natural and cultural assets. Providing technical assistance to improve visitor management and
sustainable tourism operations in key natural and heritage sites would also support sustainable
tourism development (including new opportunities for SMEs to provide services).
In general terms, to differentiate the project and achieve higher impact, the following approach is
recommended:
 Focus on few activities with more in-depth work leading to some practical impact.
 Design project activities (at least some of them) in such a way that they can add value to the
tourism value chain beyond the project scope.
 Regarding institutional development, involve relevant federal and regional public
organisations in the different project activities but avoid providing training in classroom
settings.
The specific CBI interventions proposed are summarised below and, as explained in chapter 11,
PUM could become a great partner to amplify capacity building.
ACTIVITIES
 Training and coaching for incoming operators to foster export
To foster a proactive, more
readiness
professional commercialisation
 Technical Assistance (TA) to design and organise a B2B event in
and sales effort by incoming
Addis in collaboration with the private sector, inviting outbound
operators
operators from Europe (B2B meetings plus fam trip) – to be
repeated in the future with local resources
 TA to strengthen the two incoming operators associations
 Design a training and coaching system for small accommodations,
To support existing small
restaurants, and other food and drink outlets. Produce training
tourism service providers
materials and train the trainers to achieve a cascade effect.
 Implement pilot test in Arba Minch (South)
 Working group to improve coordination, skills and procedures to
Foster improved conditions to
capture investments in accommodations for leisure tourism
direct investments and
 Working group to foster competitive and sustainable tourism
tourists to lesser developed
development in Danakil/Afar (North) (great potential and at risk)
regions

Tourism VCA Ethiopia – Final Report – September 2018 9

  Awareness workshops and campaigns
To promote sustainable
 Travelife certification for incoming operators
practices among incoming
 Working group to prepare guidelines for sustainable tourism
operators and the tourism
operation in protected areas (involve incoming operators)
industry at large.
 Working group to improve visitor management and foster
sustainable development at heritage sites (involve incoming
operators)

Tourism VCA Ethiopia – Final Report – September 2018 10

 ELEMENT 1. GENERATING EU TOURISM
MARKETS AND COMPETITIVENESS OF THE
ETHIOPIAN TOURISM SECTOR IN THOSE
MARKETS

Tourism VCA Ethiopia – Final Report – September 2018 11

1. Trends in international visitor arrivals
Upward curve of international tourist arrivals to Ethiopia. International arrivals to
Ethiopia reached 596,341 in 2012, a 39.6% growth since 2009. This upward trend
continued in 2013–2017, with a record 933,344 figure in 2017.

International tourist arrivals in Ethiopia: all trips

Source: World Bank, accessed via Tradingeconomics.com https://tradingeconomics.com/ethiopia/international-

tourism-number-of-arrivals-wb-data.html

Slowdown in visitor arrivals in 2016 with recovery in 2017–2018. After social

unrest in Oromia started at the end of 2015, in November 2016 violent anti-government
protests across the country led the Ethiopian government to declare a six-month state
of emergency. The United States, as well as the United Kingdom, Germany and other
source markets warned citizens against all but essential travel to Ethiopia, particularly in
the Amhara and Oromia regions. The result was devastating for Ethiopia’s holiday
tourism sector as many international operators cancelled planned trips.
In 2016, Ethiopia recorded 863,742 4 international tourism arrivals, a slowdown
compared to the growth registered in previous years, but still high given the difficult
situation in the country at that time. The figure includes all travel motivations and a
more careful analysis is needed to assess the impact of the unrest on the leisure and
holiday market.

Reasons for optimism regarding the recovery of tourism activity. In November

2016, Germany lifted the travel ban to Ethiopia, while the UK did so in July 2017. In July
2018, the USA also lifted the travel ban. This is all very good news for the Ethiopian
tourism sector that will foster the recovery of leisure demand. In fact, latest figures of
visitor arrivals show that since 2017 the demand has already returned to growth.
Moreover, in April 2018, a new prime minister took office announcing a number of
measures that have been welcomed with enthusiasm, have brought new faith in the
government, and have reduced the tensions among ethnic groups and federal regions.

4
This figure is too similar to the official figure published for 2015 to be taken as a reflection of the real situation.

Tourism VCA Ethiopia – Final Report – September 2018 12

The move of the new prime minister to sign a peace agreement with Eritrea in July has
brought popular support, and is opening up new opportunities for economic
development in both countries.

Seasonality of the demand is a challenge for the service providers serving the
leisure and holiday segment. According to tourism professionals in Ethiopia, a
pattern that has been maintained for many years shows that the high season for leisure
tourism is between mid-September (Ethiopian New Year at the end of the rainy season)
and March, with the highest number of arrivals recorded in December and January
(Ethiopian Christmas and Timkat festivals). The low season starts from April and runs
until September (wet season) with June and July recording the lowest number of
arrivals due to the heaviest rainfall in that period.
However, the following chart showing the distribution of total international tourist
arrivals by months in Ethiopia presents sudden changes that may be due to the launch
of new Ethiopian flights and the increased traffic of transit passengers. For example, the
peaks in 2014 and 2015 in July-August, the low season for leisure travel, indicate a
need for a more in-depth analysis by travel motivations.

Seasonality of international tourist arrivals to Ethiopia – ALL trips

Source: Based on Bulletin of Tourism Statistics 2013-2015, MoCT

In spite of the fact that in recent years an increasing number of Spanish and Italian
leisure tourists have been traveling to Ethiopia in their summer months (July to
September), according to the incoming operators consulted during the recent field trip,
the seasonality of leisure travellers is much higher than can be concluded from the
published data.
The seasonality of leisure tourism prevents consistent business operation throughout
the year for tour operators and accommodations with a negative impact on sales and
benefits, as well as on employment opportunities, because many jobs are seasonal.
Thus, incoming operators have expressed the need to prepare a strategy conceived to
change the prevalent image in the markets regarding the unsuitability of traveling to
Ethiopia in the rainy season.
The large majority of international tourists arrive in Ethiopia by air. Most
international tourists use Bole International airport in Addis Ababa as their main
gateway to the country. Tourism flows from neighbouring countries such as Sudan and
Kenya across the land border to visit nearby areas or for shopping, often on day trips.

Tourism VCA Ethiopia – Final Report – September 2018 13

Leisure and holiday is the main motivation of international visitors arriving in
Ethiopia. The share of leisure and holiday trips relative to total arrivals was around
34% in the period 2013–2015. In 2016, the breakdown of arrivals by travel motivation
was as follows:

 37.4% Leisure and holiday

 29.4% Transit (cross the border due to overnight connecting flight or to spend
a few hours in Addis while waiting for connecting flight)
 17.7% Business and conference5
 7% Visit friends and relatives6
 8.5% Not stated

These figures show an increase in the share of leisure and holiday arrivals, as well as
transit passengers, in relation to previous years. However, considering the social unrest,
it is unlikely that genuine leisure travel went up in 2016. This is a feeling also
shared by most tourism professionals consulted, who have expressed the need to
refine the tourism statistics in order to provide better grounds to make
decisions regarding investments and marketing by both private and public
organisations. More tables including a more in-depth analysis by travel motivations as
well as percentages should be included in the official tourism statistics bulletins,
together with the comments needed to facilitate a clear understanding of the situation.
A review of the methodology for data collection is also advisable. To this end, the MoCT
Statistics Directorate should closely collaborate with the ETO and private sector
associations.

The economic impact of tourism in Ethiopia: revenue and jobs

The direct export earnings generated by tourism in Ethiopia are increasing, and tourism seems to
be the third source of export revenue after agriculture and industry.
The Ministry of Culture and Tourism (MoCT) publishes some basic estimates of the direct tourism
expenditure based on total international arrivals multiplied by average stay and average daily
expenditure. However, more reliable data should be obtained based on consistent and accurate
visitor surveys, and by introducing more sophisticated methods that take into consideration the
direct and indirect contribution of tourism activity to the national economy.
The latest data available regarding the economic impact of tourism in Ethiopia are produced by the
World Travel and Tourism Council (WTTC) as part of their Travel and Tourism Economic Impact
2018 studies:
The DIRECT contribution of Travel & Tourism to GDP in 2017 was ETB 49,144.2 million (2.7% of
GDP). This is forecast to rise by 6.7% to ETB 52,431.6 million in 2018. This primarily reflects the
economic activity generated by industries such as hotels, travel agents, airlines and other
passenger transportation services (excluding commuter services). But it also includes, for
example, the activities of the restaurant and leisure industries directly supported by tourists.
The TOTAL contribution of Travel & Tourism to GDP was ETB 121,435.0 million (USD 5,074.3
million), 6.8% of GDP in 2017, and is forecast to rise by 6.3% in 2018, and to rise by 5.2% pa to
ETB 213,357 million (USD 8,915.4 million), 6.1% of GDP in 2028. The total contribution of Travel
& Tourism to GDP is twice as large as its direct contribution.
In 2017 Travel & Tourism DIRECTLY SUPPORTED 604,000 JOBS (2.4% of total employment). This
is expected to rise by 1.9% in 2018 and rise by 1.9% pa to 742,000 jobs (2.1% of total
employment) in 2028.

5
The percentage for independent business travel and conferences is not provided in the last bulletin. It could be obtained
based on raw figures provided but it needs elaboration.
6
Much lower than in the previous bulletin, although there is a large Ethiopian diaspora. The visa system does not provide
data about VFR and it would be necessary to review the method used to find out about travel motivations.

Tourism VCA Ethiopia – Final Report – September 2018 14

In 2017, the TOTAL CONTRIBUTION OF TRAVEL & TOURISM TO EMPLOYMENT, including jobs
indirectly supported by the industry, was 6.1% of total employment (1,538,000 jobs). This is
expected to rise by 1.7% in 2018 to 1,565,000 jobs and rise by 2.1% pa to 1,934,000 jobs in
2028 (5.4% of total).
VISITOR EXPORTS generated ETB 50,447.7 million (USD 2,108 million), 35.2% of total exports in
2017. This is forecast to grow by 6.6% in 2018, and grow by 4.0% pa from 2018–2028 to ETB
79,309.1 million (USD 3,314 million) in 2028, 18.7% of total. Visitor exports are expected to grow
by 6.6% in 2018 to ETB 53,772.4 million, and rise by 4.0% pa to ETB 79,309.1 million in 2028.
TRAVEL & TOURISM INVESTMENT in 2017 was ETB 18,490.3 million, 2.4% of total investment
(USD 772.6 million). It should rise by 5.8% in 2018, and rise by 5.7% pa over the next ten years
to ETB 34,179.5 million (USD 1,428.2 million) in 2028, 2.7% of total.
LEISURE TRAVEL SPENDING (inbound and domestic) generated 87.1% of direct Travel & Tourism
GDP in 2017 (ETB 69,933 million) compared with 12.9% for business travel spending (ETB
10,350.6 million). Leisure travel spending is expected to grow by 7.1% in 2018 to ETB 74,928.3
million, and rise by 4.8% pa to ETB 119,837 million in 2028.
BUSINESS TRAVEL SPENDING is expected to grow by 4.3% in 2018 to ETB 10,799 million, and
rise by 5.6% pa to ETB 18,585.4 million in 2028
DOMESTIC TRAVEL SPENDING generated 37.2% of direct Travel & Tourism GDP in 2017 compared
with 62.8% for visitor exports (i.e. foreign visitor spending or international tourism receipts).
Domestic travel spending is expected to grow by 7.1% in 2018 to ETB 31,954.9 million, and rise
by 6.3% pa to ETB 59,112.8 million in 2028.

Tourism VCA Ethiopia – Final Report – September 2018 15

2. Current European market demand
European visitors account for around a third of the TOTAL international arrivals
to Ethiopia. In 2016, the share of European LEISURE TRAVELLERS relative to total
leisure and holiday trips was slightly above 34%, showing an upward trend.
Nevertheless, considering the unrest which started in 2015, and the fact that many
business tourists (including business people, participants in conferences, consultants
and NGOs among other) still enter Ethiopia with a tourist visa 7 (issued for leisure
travel), the number of Europeans who travel to Ethiopia on leisure trips is probably
lower than what can be concluded from existing data, while the share of European
travellers on real leisure and holiday trips is probably higher. It is worth noting that the
motivation for travel is not stated for 15% or more of the total European arrivals due to
weaknesses in the data collection process.

Var Var Var Var

2013 2014 2015 2016 2017
2014/13 2015/14 2016/15 2017/16
Total
international 681,249 770,428 13.09% 863,742 12.11% 870,597 0.79% 933,344 7.2%
arrivals
Total from
200,745 231,407 15.27% 259,431 12.11% 272,404 5.00% 280,268 2.9%
Europe
Share of
29.5% 30.04% 30.04% 31.29% 30.03%
Europe/total
Total leisure
231,586 268,944 16.13% 298,357 10.94% 325,501 9.10% na na
and holiday
Share leisure
and holiday 34.0% 34.9% 34.5% 37.4% na
trips/total
Total Europe
leisure and 68,244 80,799 18.40% 89,615 10.91% 111,977 24.95% na na
holiday
Share of
Europe/leisure 29.5% 30.0% 30.0% 34.4% na
and holiday
Source: Based on Tourism Statistics Bulletin 2013-2015 (MoCT) and latest non-published data

Several European countries are among the top-10 tourism generating markets
for LEISURE AND HOLIDAY travel. According to a non-published analysis prepared
by the ETO in 2014, the UK, Germany, France, Italy and the Netherlands were among
the top-ten source markets for LEISURE TRAVEL in Ethiopia in the period 2009-2012.
Sweden was also featured in the top 10 in six out of seven years of the period analysed.
Between 2013 and 2016, the United Kingdom, Germany, Italy and France continued to
appear every year in the top-10 tourism generating markets for LEISURE AND HOLIDAY
TRIPS, accounting for almost 20% of that segment in 2016.

International tourist arrivals - Leisure and Holiday Trips - Top 10 source markets

7
It is possible to get a variety of business visas online, however, it is often difficult to get the support letters and other
documents required from the counterpart organisations.

Tourism VCA Ethiopia – Final Report – September 2018 16

 2013 2014 2015 2016

Total arrivals 231586 % 268944 % 298357 % 325501 %

USA 36744 15,9% USA 43223 16,1% USA 48061 16,1% USA 54033 16,6%
UK 12571 5,4% UK 14532 5,4% UK 16121 5,4% UK 19530 6,0%
China 10772 4,7% China 12971 4,8% China 14390 4,8% Germany 17577 5,4%
Germany 9956 4,3% Germany 12141 4,5% Germany 13468 4,5% Italy 13997 4,3%
Italy 8231 3,6% Italy 9774 3,6% Italy 10843 3,6% China 13671 4,2%
Kenya 7996 3,5% Kenya 9363 3,5% Kenya 10387 3,5% France 13020 4,0%
India 7407 3,2% Saudi Arabia 8441 3,1% India 9916 3,3% Saudi Arabia 11067 3,4%
Sudan 6905 3,0% India 8939 3,3% Saudi Arabia 9364 3,1% Sudan 10091 3,1%
France 6897 3,0% France 8301 3,1% France 9209 3,1% India 9440 2,9%
Saudi Arabia 6627 2,9% Sudan 8065 3,0% Sudan 8947 3,0% Canada 8463 2,6%
Total top 10 114106 49,3% 135750 50,5% 150706 50,5% 170889 52,5%
Europe 16,3% 16,6% 16,6% 19,7%

Source: Based on Tourism Statistics Bulletin 2013-2015 (MoCT) and latest non-published data

It is worth noting that, since 2013, new markets such as China, India, Sudan and Kenya
have entered the ranking of top-10 tourism generating countries for leisure tourism,
followed by Nigeria. However, the great majority of travellers from those countries are
in-transit passengers who cross the Ethiopian border to spend a few hours or a
maximum of one night in Addis; while those from Sudan and Kenya are mainly visitors
arriving by land to destinations near the border. The big differences found between
arrivals from those countries published in the Bulletin of Tourism Statistics 2009-2012
and the same publication for 2013-2015 suggest a more detailed analysis is required.
If the list is expanded to the top-16 tourism generating countries, the Netherlands and
Sweden, which were included among the top 10 in 2009-2012, also appear in the
ranking every year in the period 2013-2016.

Other conclusions based on the analysis of international arrivals.8 The UK,

Germany and France together accounted for 17.6% of the demand for conference travel
in 2012. The USA were the largest single source market with 16.7%. With Addis being
the diplomatic capital of Africa and a regional air hub, the capital city and its
surrounding area have great competitive advantage for international and regional
conferences and meetings.
Some European countries such as the UK, Germany and Italy were among the top-ten
source markets for ‘visit friends and relatives’ (VFR) in the period 2009-2012 and the
Ethiopian diaspora present in many other countries such as the USA could become an
important source of tourism demand. They travel to Ethiopia on holidays and around the
main religious festivals. The fact that many of these visitors enter the country with
foreign passports should be taken into consideration in the analysis of tourism arrivals.

Profile of European visitors. Official statistics in Ethiopia do not offer detailed and
consistent data about the profile and travel behaviour of international visitors (European
and non-European).
The first ‘International Visitor’s Exit Survey’ was conducted by MoCT in 2013 and the
main conclusions have been included in the Statistics Bulletin 2009-2012.
In that survey, friends and relatives were mentioned as the main source of information
for the preparation of the trip by 31.4% of respondents followed by the Internet/social

8
Source: non-published analysis of top 10 tourism generating countries, ETO (2014). For the latest data it is necessary to
expand on existing raw numbers.

Tourism VCA Ethiopia – Final Report – September 2018 17

media (30.7%) and travel books/magazines (20.9%). Concerning travel arrangements,
77% of respondents organised their trip independently while 23% used packaged tours.
As mentioned in the Marketing
and Branding Strategy, using the
same source, places visited by
respondents showed a skewed
regional distribution of tourism
flows. Due to Addis Ababa’s
status as an air arrival hub, 86%
of visitors visit the city. Five
other destinations (Amhara,
Harar, Oromia, SNNPR and
Tigray) receive 25% or more of
all visitors, while fewer than 5%
of visitors visit the remaining five
regions (Afar, Benishangul, Dire
Dawa, Gambela and Somali).

In addition to the above, leisure visitors were slightly skewed in favour of the 50-70
years age group, although a significant proportion of visitors fall into the 31-40 years
and 41-50 years age groups. Gender was skewed (70/30) in favour of male visitors,
although there are indications that the gender mix is more balanced among leisure
visitors.
Although this International Visitor’s Exit Survey was a good first attempt, more regular
visitor surveys are needed with a good sample that represents the whole demand and
allows for breakdown analysis by travel motivations and source markets, among other
factors.

IN SUMMARY
Official statistics recorded 325,000 international arrivals in 2016 motivated by
HOLIDAY AND LEISURE and European visitors accounted for over a third of these.
However, it seems that Ethiopia receives fewer holiday tourists than can be concluded
based on official data. The sentiment of many incoming operators, and the low numbers of
foreign visitors in key tourism attractions such as the National Museum in Addis Ababa (47,208
in 20169), the Simien Mountains National Park (10,685 visitors in 2016)10 and Lalibela (25,069
visitors in 2016), confirm this point.
Current statistics are skewed due to very unique circumstances:
 many business travellers make use of visas for leisure tourism (because it is easier);
 there is a high number of transit passengers due to the important air hub of Bole airport
(they cross the border for a few hours or one overnight stay);
 large numbers of visitors from the Ethiopian diaspora enter the country with foreign
passports and leisure visas to visit family and friends;
 Addis Ababa is the diplomatic capital of Africa and has a large community of expatriates
who work in embassies, international organisations and NGOs.
The conclusion is that the number of actual holiday trips from Europe to Ethiopia is
likely to be under 100,000 per year and that there are opportunities for growth.

9
Source: ARCCH
10
According to the Wildlife Tourism Strategy prepared for EWCA in 2013, the total number of foreign visitors to ALL
protected areas in Ethiopia was 51,269.

Tourism VCA Ethiopia – Final Report – September 2018 18

3. The potential to further develop the European
market and risks of a reduction in demand
International tourism is on a growth path. Confidence in global tourism remains
strong, according to the latest UNWTO Panel of Tourism Experts survey. The Panel’s
outlook for the May-August 2018 period is one the most optimistic in a decade, led by
the particularly upbeat sentiment in Africa, the Middle East and Europe. Experts’
evaluation of tourism performance in the first four months of 2018 was also robust, in
line with the strong results recorded in many destinations around the world. In January-
April 2018, international tourist arrivals grew by 6%, so far exceeding UNWTO’s forecast
of 4% to 5% for the year. Africa registered 6% growth in the first four months.
In addition, several recent market research findings also offer opportunities for
Ethiopia11:
 There has been a 29% rise in the number of long-haul trips booked by European
travellers since 2016 (Edreams-ODIGEO European Traveler Insights 2017)
 According to Booking.com, preferred travel activities in 2018 are: experiencing a
unique cultural event (28%), learning a new skill (27%), going on an epic road or
rail journey (25%) and visiting a remote or challenging location (25%).
 ‘Getting off the beaten track’ was the most common motivation for adventure
travellers (43.4%). Other items on the list were ‘Seeing or doing something new’
(26.6%) and ‘High adrenaline activities’ (22.5%). (Intrepid Adventure Travel
Index, 2018)
 The definition of adventure travel is changing. Risky adrenaline activities are
favoured 45% less than ‘experiencing a new culture’ (Adventure Travel Trade
Association, 2018)
 The State of Travel survey by AITO in 2017 shows that British holidaymakers
appear to be getting much more active on holiday as beach breaks move down
from fourth position to fifth, being overtaken by wildlife holidays (fourth) and
walking (third). Learning a new skill abroad is gaining momentum and increases
in tours such as expert-led study trips, gastronomy and wine tasting are
expected.

Positive prospects for Ethiopia to attract European tourists. Considering the

historic and ongoing growth figures from European visitor arrivals to Ethiopia, as well as
the forecasts for world travel, it can be expected that this trend will continue over the
next decade. Moreover, local production factors conducive to growth are:
 Expansion of airport infrastructure and air connectivity with the main international
markets, including several European major airports.
 Improvement of road network.
 New train services offering opportunities for new tourism routes.
 Qualitative and quantitative growth of accommodation supply, although still
insufficient.
The business environment is also improving:
 Travel bans have been lifted.
 Hotel grading system is being implemented although it needs to be improved and
expanded to other types of accommodation.
 Growing demand, looking for new destinations and unique experiences. Long-haul
Europeans are adventurous, interested in culture and nature and are in search of
new destinations.
 A number of European outbound tour operators already sell trips to Ethiopia.

11
Source: Trekksoft

Tourism VCA Ethiopia – Final Report – September 2018 19

  Travel in Ethiopia is increasingly getting coverage in general and specialised
media.
 Ethiopia has been present at some main trade shows in Europe with improved
booths and branding.
 European leisure tourists can easily get a visa to enter Ethiopia through the new
e-visa system.
 Peace treaty with Eritrea is making travel safer to destinations near the border
that used to be closed.
 Incentives available to foreign and domestic investors, although these need
improvement and a more proactive and strategic investment promotion activity.

Risks of a reduction of demand from European markets. Although current

European travel flows to Ethiopia represent a significant market share, two thirds of the
visitor flows are made up of non-European visitors who could compensate for an
eventual reduction in the demand from Europe.
The USA are the number-one source market for Ethiopia, generating significant leisure
tourism, but also ‘visit friends and relatives’ (VFR) trips as well as business travel. The
interests and requirements of the USA long-haul leisure market are quite similar to the
European markets, as they are seasoned long haul travellers with interest in the cultural
and natural heritage. Several American tour operators offer trips to Ethiopia in small
groups following similar itineraries to those offered by European operators, and with
similar levels of service. The air connections with the USA are good, as Ethiopian Airlines
flies to Bole airport from Washington DC, Los Angeles, New York and Chicago.
Ethiopians from the diaspora, with family links to Ethiopia, represented around 7% of
total arrivals 2016, and their share will certainly grow with the reforms expected from
the new government and many people returning to Ethiopia for the first time in decades.
There is also potential to further tap leisure tourism from domestic and regional markets
interested in family holidays in safe environments such as the Rift Valley lake resorts,
including extended families from Saudi Arabia in search of better climate in their
summer months.
The regional and domestic markets are also important potential markets for Meetings,
Incentives, Conference and Exhibits (MICE) tourism in Addis Ababa and surroundings
considering the business and political activity around the air hub and the African Union.

Europeans seem to be the main market for holiday trips that allow for a broad
geographical distribution of tourism flows across Ethiopia and a reduction of arrivals
from Europe would cause havoc for many small towns and, in particular, for
many SMEs and communities providing tourism services along the value
chain.

Tourism VCA Ethiopia – Final Report – September 2018 20

4. Ethiopia in the European travel distribution
channels
4.1. The structure of the travel trade in the European markets
With the increased segmentation of the tourism demand and the expansion of
information and communication technologies, the structure of the travel trade in the
European markets has become a mix of traditional and relatively new distribution
channels.

Source: CBI

Although online intermediaries like travel portals and online travel agents are becoming
increasingly popular, distribution through tour operators still dominates the trade
structure for long haul travel, particularly in Southern and Eastern Europe where the
tourism markets are younger and still have a traditional structure.

On the other hand, when it comes to holidays in relatively unknown emerging tourism
destinations, European travellers often prefer tour operators as well. Even adventurous
clients want some sort of security and safety. This makes tour operators a consistently
important distribution channel for Ethiopia. Most importantly, European outbound
operators tend to work with incoming operators at the destination countries that bundle
all ground services and ensure smooth operation of the whole travel itineraries.

Tourism VCA Ethiopia – Final Report – September 2018 21

4.2. Small players most interesting for the Ethiopian tourism
sector
Traditionally, most European outbound tour operators were large companies selling
standardised products and handling large volumes of passengers. They are still dominant
in mass tourism destinations and they should not be the priority for Ethiopia because
they mainly offer basic packages (flight plus accommodation), aggressively compete on
price and focus on other types of destinations.
The best partners to sell travel to Ethiopia in Europe belong to a new breed of smaller,
more specialised operators that focus on specific tourism segments in less common
destinations. They have an excellent knowledge of their respective market segments and
are particularly active in large and mature markets such as Germany and the UK,
although they are increasingly present in all European source markets.
Specialised tour operators tend to offer high-quality travel packages, which are more
complex products than what is offered by mainstream tourism operators, making them
more dependent on local suppliers. Incoming operators in Ethiopia would benefit from
partnering with those specialised outbound tour operators in Europe as they will help
them to grow their customer base and income, as well as to increase their quality
standards. This is because Ethiopian operators will receive guidance to provide the
required service standards and to meet the legal and ethical requirements.
Specialised European outbound tour operators can be identified online as they all have
good websites, as well as through specialised trade shows and associations. Of interest
for Ethiopia are trade organisations such as the Association of Independent Tour
Operators (AITO) in the UK, Operators specialised in Africa (ASA) in Germany or the
Africa Travel Association (ATA).

4.3. Packages to Ethiopia marketed by European tour

operators
The Market Scan selected 40 leading European outbound tour operators for the analysis
of their tour packages to Ethiopia, Senegal and Zambia. Those operators are based in
the UK, the Netherlands, Belgium, Germany, Scandinavia (Denmark & Sweden) and
France. They represent volume markets (e.g. TUI) as well as smaller consumer markets
(the specialised tour operators) and, in total, they offered 146 packages to Ethiopia. The
table below provides key information of the analysed packages.12

Total tour operators analysed 40

Total packages analysed 32
Single destination packages % 87%
Duration of trip (days) 15.7
Country specific days 14
Packages that include Kenya (%) 0%
Packages that include Uganda (%) 0%
Packages that include others (%) 6%
Others include South Africa, Zanzibar
Tour price (€)(excluding long haul flights) 2863
Price/day (€) 194
Maximum pax/tour 12.7
High season Sep-Apr
Nights in hotel (%) 85%

12
One package per tour operator was chosen for the analysis, and the figures in the table are an average of the different
types of packages being offered. Not considered is the popularity of each package in terms of annual bookings. This
information is confidential and not publicly available.

Tourism VCA Ethiopia – Final Report – September 2018 22

 Nights in home-stay /camp site /village accommodation (%) 15%

The table below shows the data by source market. However, as the number of tour
operators evaluated differs per country and is limited to three for the Belgian market,
the conclusions should rather be taken as a qualitative indication of the specificities of
the different European markets analysed. In any case, the differences by markets are
quite in line with common knowledge about those markets.

ETHIOPIA UK Netherlands Belgium Germany Scandinavia France

Total tour operators
8 7 3 8 7 7
analysed
Total packages analysed 8 5 3 7 3 6
Itinerary and duration
Single destination
50 14 14 25 3 21
packages
% Single destination
packages 83% 100% 100% 76% 100% 95%

Total days whole

13.5 20.8 15 15.3 15 14.3
itinerary
Country specific days in
13.1 19.2 13 16.2 9.7 12.8
Ethiopia
Packages that include
0% 0% 0% 0% 0% 0%
Kenya (%)
Packages that include
0% 0% 0% 0% 0% 0%
Uganda (%)
Packages that include
0% 20% 0% 14% 33% 0%
others (%)
Others include Zanzibar Zanzibar South Africa
Max participants number
Max pax/tour 12.3 15 15 12.6 11 10
Accommodation
Nights in hotel 10.1 14.8 12 11.1 7.7 10.2
Nights in homestay /
camp site / village 2 1.4 0 2 4.3 2
accommodation
Season
High season (10% more) Jan-Apr, Sep-Jan,
Oct-Feb Nov,Apr,Jul Nov, Feb-Mar Oct-Apr
Sep Mar
Tour price
Tour price (excluding 3392 2407 2180 3079 3329 2792
intercontinental flight)
Price/day 251 122 150 224 218 202

In general terms, the packages to Ethiopia have relatively balanced and varied
activities. Community tourism and ecotourism are among the top activities offered.
Community tourism primarily includes visiting and staying with the ethnic groups in the
Omo Valley, while ecotourism seems to be mainly focused in the Simien Mountains
National Park. The UNESCO cultural and nature heritage is also a key attraction in
Ethiopia.13
 Belgian, German and Scandinavian tour operators offer more balanced and varied
activities. Community-based tourism and ecotourism are the top types of tours,

13
The selection of tour operators seems to be skewed as the visitor survey conducted in 2013 – as well as general
sentiment – shows that more people visit the Amhara region (39%) where the main historic attractions are located,
compared with the 28% who visited the South which is home to the ethnic groups. The concept of city tourism should be
clarified as most leisure tourists stay in Addis Ababa at the beginning or the end of the trip.

Tourism VCA Ethiopia – Final Report – September 2018 23

 followed by cultural heritage and adventure activities. The adventure activities
explain the high price of their packages.
 French packages are more focused on hiking/trekking and in-depth contact with
the local cultures, visiting community-based tourism sites.
 Dutch packages offer cultural heritage, community-based tourism and ecotourism
equally.
Occurrence in Ethiopia packages (%)

Types of tourism UK Netherlands Belgium Germany Scandinavia France

City tourism 7% 0% 0% 0% 0% 0%

Cultural heritage (incl. 25% 29% 20% 20% 20% 21%

UNESCO-sites)
Community-based tourism 29% 29% 30% 30% 30% 36%

Ecotourism (hiking and 29% 29% 30% 30% 30% 36%

trekking)

Adventure (motor-based 11% 12% 20% 20% 20% 7%

sports, cycling,…)

The largest proportion of packages to Ethiopia (60%) are group travel, and most
travellers are mature people (age 50s-70s). Couples are another interesting target.
Upmarket accommodation is mainly provided in Addis Ababa. 50% of all
accommodations included in the packages are considered as ‘comfort’, while 19% are
upmarket and 22% are basic.

4.4. Image of Ethiopia as a tourism destination in the

European markets

THE OPINION OF THE EUROPEAN OUTBOUND TOUR OPERATORS

The following are the views from European outbound tour operators regarding Ethiopia’s
image in the source markets:
 Cultural and natural heritage are considered as the strongest reasons for
Europeans to travel to Ethiopia, followed by authenticity and ethnical diversity.
 Lack of destination awareness and health and safety concerns are the main
reasons for European travellers not to choose Ethiopia.14 Product and service
quality were also mentioned as negative factors, as well as prices that are higher
than what many people expect from a low-income country (value for money).
 In European markets there is a perception that the best season to travel to
Ethiopia is between September and April. The European summer period is the low
season for tourism in Ethiopia and 67% of European tour operators surveyed
indicated that they are not offering Ethiopia during the European summer
months.

14
A research by SABRE in 2017 showed that the main negative perceptions of travel in Africa have to do with: not feeling
safe, not having enough knowledge about the destinations, not sure which are the tourist hotspots, and too expensive.
Too complicated routes and stressful travel experience were also mentioned although to a lesser extent. The conclusion is
that changing those perceptions is in the hands of the African travel industry that can work with governments to educate
and reassure travelers and improve the travel experience.

Tourism VCA Ethiopia – Final Report – September 2018 24

To change these perceptions, it is key to improve the knowledge of Ethiopia among
those involved in the European travel trade. Organising field trips to Ethiopia will offer
them opportunities to experience the destination first hand and adjust misperceptions.

Regarding the need to improve the image of Ethiopia as a year-round destination,

incoming operators agree that the country can be visited all year round and that
extending the season would be possible but requires promoting the right regions taking
into account the weather patterns, organising special events and festivals in the summer
months, carrying out specific market promotion internationally and offering reduced
rates/special offers (although the latter should not be a priority because competition
should be based on added value and differentiation).

POSITIONING AND BRAND STRATEGY OF ETHIOPIA AS A TOURIST DESTINATION

Having a destination brand strategy and consistent communication were also mentioned
by the European outbound operators as requirements to improve the image of Ethiopia
in Europe. In 2015, the Marketing and Branding Strategy prepared for the ETO defined
the following positioning for Ethiopia:

Ethiopia is as ‘original’ as it gets; authenticity is engrained in the lifestyle, landscapes, nature,

history and heritage; in addition, the hospitality of Ethiopia’s people towards each other and
visitors is unique. Visitors are attracted and fascinated by this ‘spirit of originality’, which may be
attributable to various factors, including the fact that the country has never been colonised, the
geomorphological forces that have carved unique land and life forms, the confluence of cultures
and religions among other. This ‘Spirit of Originality’15 presents Ethiopia with a unique selling
proposition and a call to action for travellers to explore the many ‘origins’ to be found all over the
country.

Ethiopia’s Differentiated Market Positioning

The origin of
unique
The origin of species
spectacular
landscapes The origin of
and water humanity
bodies

The origin of
The origin of Spirit of cultural
coffee culture Originality diversity and
tolerance

The origin of The origin of

a na on on the a unique
rise language
The origin of
ancient
empires and
architectures

Source: Marketing and Branding Strategy, 2015

Some key implications of this positioning for the marketing strategy are:

15
The positioning statement should not be confused with a brand slogan; it presents the point of differentiation based on
which Ethiopia will be promoted and will be translated into a marketing brand.

Tourism VCA Ethiopia – Final Report – September 2018 25

 The journey is the destination: Ethiopia is primarily a travel destination for experiencing
and learning, more than a holiday destination for relaxation. This has implications across the
entire tourism value chain ranging from visitor access and mobility to community involvement.

The target market is the ‘experience seeker’: Those who want more out of a trip than
looking, sitting and eating; who prefer to see, touch, and taste and engage with the ‘spirit of
place’. Targeting and being focused on such travel segments is an important requirement for
achieving rapid and sustainable tourism growth.

The travel experience needs development and packaging: The variety of attractions and
experiences in Ethiopia are spread across the country and access to, availability and quality of
visitor services vary considerably from place to place. Product packaging and improvement are
of critical importance. Presenting such attractions and experiences to visitors requires a strong
public-private partnership, with private investors developing commercial facilities and services,
private tour operators linking experiences and attractions as itineraries that can be sold to
visitors and public tourism bodies promoting travel destinations and routes, providing public
visitor services and improving sites.

The brand is layered: The ‘spirit of originality’ is a multi-facetted positioning and expressing
it as a captivating brand identity and architecture that inspires across market and product
segments is important.

The positioning was the basis for the brand promise and brand essence shown below.16

The promise
Ethiopia invites you to discover why it is the origin of so
much history and culture, vibrantly alive in a landscape of
dramatic beauty.

The essence

TH E ORI GI N

The following logo was designed as part The overall unifying

of the idea strategy and was approved for
brand
official
Theuse inof2015.
origin so much, from humankind, to civilization, from tolerance of diversity to the strength of unity, in a place of
dramatic beauty – all supported by the regions that substantiate this claim.
iversity by a unifying love of their ancient, beautiful and bountiful land.
ng nation, by combining a dramatic landscape with strong flowing water
ape of the Simiens, the castles of Gondar and the source of the Blue Nile

, great heights and cool lakes you will discover a value system on which
Birthplace of humankind: This strange, otherworldly landscape, which

ern N ations: Cultural mosaic: A colourful mosaic of cultures united in

istorically significant city is a hub of African commerce and diplomacy.
Ababa: The hub of African D iplomacy: This vibrant, entrepreneurial

migrations give one an understanding of the inevitability of evolution.

i: Gateway to harmony: Go through a gateway to a world of colourful

hangul-Gumuz: The source of power: Providing the power to drive a

ia: H umanity and nature in unity: In this dramatic landscape of deep

awa: A crossroads of trade: An economic and rail hub where traders

ela: Where species congregate: A place of natural wonder where the

ra: Soul-enriching wonders: The miracle of Lalibela, the spectacular

: Roots of civilization: The beginnings of civilisation founded in a

ion where you will learn to understand the meaning of harmony.

li: N ever-ending horizons: In this space of far horizons you will

giving birth to itself, also gave birth to humankind.

Most European leisure travellers to Ethiopia fall within the main segment targeted by
e Tana touch the heart and soul of all travellers.

the brand strategy – experience seekers – and could be motivated by an improved

y of empire that goes back to a time of legends.

offer of itineraries and activities developed with their needs in mind, communicated
and commercialised accordingly.
ost importantly, the will of the people.

avellers have always been welcome.

over your own potential for growth.

16
Both were further developed in the report ‘Brand Strategy and the Ethiopia Tourism Brand Manual’, which set out the
brand identity in a comprehensive manner.
nity is founded.

Tourism VCA Ethiopia – Final Report – September 2018 26

4.5. Main requirements to be competitive in the European
markets

WHAT ARE THE MOST IMPORTANT LEGAL REQUIREMENTS ON THE EUROPEAN MARKET?

The European Package Travel Directive (EU) 2015/230217 is the most important
European legislation for the travel industry and it puts pressure on outbound operators
to ensure compliance with the travel programmes they market and sell.
Thus, European tour operators need reliable partners in the destination countries, the
most important being incoming tour operators that can select suitable service providers
and coordinate the whole ground operation as per the itineraries sold. The Directive has
recently been updated to include provisions regarding flexible or customised packages
and online sales.
Building trust and a long-lasting relationship with outbound tour operators in the
markets is a must for Ethiopian incoming operators, as they will not take the risk to
partner with unexperienced or unethical operators that may damage their reputation.
Safety and liability insurance are also important.
The General Data Protection Regulation (GDPR) is a more recent European
regulation that should be taken into consideration by incoming operators and
accommodations, in particular when handling booking data and using online channels to
communicate with European clients and sell trips. This is because the GDPR reshapes
how private data about EU residents are collected and used, and more thoroughly
defines data security. European companies and any company involved in processing data
of individuals from the EU, regardless of the location of their organisation, will be
responsible for updating their data privacy to comply with the GDPR.18

MAIN REQUIREMENTS OF EUROPEAN BUYERS REGARDING PRODUCTS AND SERVICES

Both outgoing and incoming operators interviewed for the Market Scan and the recent
field trip agree that the priority area to be tackled to attract more European travellers to
Ethiopia, and higher spenders in particular, is higher quality accommodations and
more ecolodges. More diversified restaurant menus, luxury dining options and higher-
end community products/services were also mentioned.
Health and safety are among the main concerns of European tourists and there is a need
to improve food preparation facilities and techniques and invest in toilets.
European tourists are increasingly active and need to be offered a variety of options
beyond guided visits to the main sites, something not well developed in Ethiopia.
Adventure activities that entail some danger should be performed by trained
professionals and licensed companies, and some ISO standards are available for specific
activities.
Being able to communicate in the visitor´s language is a must to ensure proper
engagement with the guides and service providers, a key component of the travel
experience. However, in Ethiopia few guides speak good English, not to say German,
French, Italian or Spanish. There is also a need for more knowledgeable specialised
guides able to respond to the interests and needs of specific segments.
In addition to reliability, European tour operators increasingly demand sustainability
from their suppliers, but in Ethiopia there is little awareness in this regard.

17
https://ec.europa.eu/info/law/law-topic/consumers/travel-and-timeshare-law/package-travel-directive_en
https://eur-lex.europa.eu/legal-content/EN/LSU/?uri=CELEX%3A32015L2302&qid=1529931942475
18
https://ec.europa.eu/info/law/law-topic/data-protection_en

Tourism VCA Ethiopia – Final Report – September 2018 27

European tourists expect to be given the option to pay with credit cards. However, in
Ethiopia it is seldom available and the network supporting it is not reliable. This is a
source of inconveniences for both businesses and customers, hampering the capacity of
tourists to spend more money in Ethiopia and increase tourism exports.

ABILITY OF ETHIOPIAN SMES TO MEET THE REQUIREMENTS OF THE EUROPEAN

DEMAND

Most tourist accommodations in Ethiopia including some ‘large’ hotels suffer from poor
architectural design and do not offer the look and feel expected by international tourists.
Many entrepreneurs lack experience in the sector and specialised management skills,
and their idea of ‘modernity’ does not match the expectations of European tourists. The
shortage of trained staff and poor attention to systematic maintenance does not help to
offer quality service.
Better regulation including specific market-based standards for different types of
accommodation would help investors to design well-conceived facilities and would have a
positive impact in the competitiveness of the hospitality sector.
Additionally, most investors and managers of tourism accommodations need an
improved understanding of markets and segments, product and service requirements,
commercial channels and pricing mechanisms. Safety and security issues also need
attention.
Regarding restaurants, given the uniqueness of the Ethiopian cuisine, food service and
table manners, together with the lack of exposure to Western-type restaurants, it is
difficult for local people to adapt their menus and service to international standards
without help. There is a need to improve the design/decoration of facilities, food
preparation techniques including food safety, pricing, and to learn more about
international cuisine and service standards. Basic knowledge of English is often lacking.
Many incoming tour operators are offering a narrow product base and are competing on
price as they lack the skills to develop and market more specialised and targeted tour
packages. Some unethical practices have also been reported such as not providing
services as per itineraries sold or asking for additional payments along the trip; however,
some tour services are offered to the market by non-licensed professionals who are
damaging the reputation of the destination.
To be in a position to add value to their product offer, proactively market their services
and grow their business, incoming operators need help to better understand market
opportunities, learn how to approach and develop lasting relationships with outgoing
operators, as well as understand the keys for success in the different geographic
markets and segments. Communication with the market and digital marketing are other
areas that need improvement.
Specialised regulations, training and licensing for adventure and outdoor sports activities
should be developed in Ethiopia to take advantage of market opportunities, together
with proper insurance and safety measures.

Tourism VCA Ethiopia – Final Report – September 2018 28

4.6. Are there opportunities for products with improved CSR
performance?19

THE DEMAND FOR SUSTAINABLE HOLIDAYS IS A GROWING TREND IN THE EUROPEAN

MARKETS

Although the exact demand for sustainable holidays in the source markets is difficult to
measure, 46% of travellers already consider themselves a sustainable traveller.20
This figure explains why 11% of European travellers actually book sustainable holidays
and 55% would like to have more information and more of a choice.21
The term ‘sustainable travel’ continues to mean many things to many people, but the
role of accommodations in helping travellers to achieve their sustainable travel goals is
clear. The research shows that over half (56%) consider staying in eco-friendly
accommodation as sustainable travel (it provides a more authentic local experience),
topping the list of what travellers think of when they hear the term. The same survey
found that the intention to book sustainable accommodation at least once was expected
to double in 2017, with 65% of global travellers expressing this intention versus 34%
who stayed in one or more sustainable accommodations in 2016.22
These sustainable travellers are generally higher-educated, well-travelled people of all
ages and from higher socioeconomic groups. They mainly come from more mature travel
markets in Northern and Western Europe and can be divided into two main groups:
 Dedicated sustainable travellers. This group is a relatively small segment with a
strong focus on sustainability, high expectations and cautious of so-called
‘greenwashing’. To target this segment, it is important that operators and service
providers at the destination can support any claims made about sustainable
practices; for example by getting sustainable tourism certification.

 ‘Soft’ sustainable travellers are the largest segment and with the most growth
potential. These travellers are not necessarily very knowledgeable about
sustainable tourism, but they prefer it because they associate it with doing ‘the
right thing’, and they rely on tour operators to provide these types of holidays. In
this regard, 66% of European travellers believe that the responsibility for
sustainable travel primarily lies with travel companies.

OUTBOUND TOUR OPERATORS IN EUROPE ARE INCREASINGLY REQUESTING

SUSTAINABLE PRACTICES FROM THEIR SUPPLIERS

Responding to these market trends, European tour operators, especially in Northern and
Western Europe, increasingly focus on working with sustainable suppliers. To increase
their chances on the EU market, tourism businesses in Ethiopia are therefore
recommended to implement sustainable practices. The main sustainability requirements
of European tour operators include a sustainability policy, decent working conditions,
poverty reduction, conservation of natural and cultural heritage and competitiveness.
Although most tour operators do not require sustainability certification yet, it is expected
to become more important over the next few years.
While certification itself is more or less valued by some customers, and the variety of
sustainable and/or green tourism labels worldwide may cause confusion among tour
operators and travellers, the implementation of those schemes allow for a systematic
19
https://www.cbi.eu/market-information/tourism/sustainable-suppliers/
20
https://news.booking.com/bookingcoms-2017-sustainable-travel-report/
21
https://www.tuigroup.com/en-en/media/press-releases/2017/2017-03-07-tui-survey-sustainable-tourism
22
https://news.booking.com/bookingcoms-2017-sustainable-travel-report/

Tourism VCA Ethiopia – Final Report – September 2018 29

way of introducing sustainable practices in a destination that are meaningful to most
tourists. Moreover, they engage the whole industry in an effort that improves awareness
and adds value along the value chain, going even beyond legal regulations.
Originally, certification programmes for sustainable tourism mainly focused on
accommodation. Nowadays, their scope is expanding to include providers of other
services and activities. Moreover, after having been primarily focused on individual
tourism businesses, sustainability is now expanding to entire tourism destinations that
increasingly strive to create an image for themselves as sustainable frontrunners.
Destinations in developing countries with a good sustainability reputation include Costa
Rica, Peru, Tanzania and South Africa.

The Association of British Travel Agents (ABTA) Travel Trends Report 2018 highlights
responsible tourism as an increasingly important market requirement 23
‘ABTA research shows that almost 70% of people now believe that travel companies should ensure
their holidays help the local people and economy. Following the huge public rise in sentiment for
programmes such as David Attenborough’s ‘Blue Planet II’ – the most watched programme of
2017 – and campaigns like Sky News’ Ocean Rescue Scheme, this trend looks set to continue and
take centre stage in 2018.
With a greater public awareness not only of environmental issues, but also of human rights and
working conditions, tour operators and hoteliers are supporting this move towards responsible
tourism that looks after our environment and our people. In 2018, we can expect more initiatives
such as social enterprise projects which give back to local communities, carbon-neutral group
tours and the banning of plastics from beaches.’
Interestingly, the same report includes Rwanda among the 12 destinations to watch in 2018 (the
only one in Africa) mentioning that ‘this award winning sustainable African jewel packs a great deal
and its people treasure and respect their heritage of lush and diverse forests, fertile plantations
and a wide range of wildlife’.

IS ETHIOPIA READY TO INTRODUCE A SUSTAINABLE TOURISM CERTIFICATION?

Ethiopia would certainly benefit from the introduction of one of the existing certification
schemes for incoming operators, accommodations and other service providers. This is
because:
 European tour operators increasingly select their suppliers based on sustainability
certification. Especially in the United Kingdom, the Netherlands and Germany,
certification is set to become a mainstream requirement.
 Some negative environmental and social impacts of tourism activity are already
visible due to poor planning and lack of awareness.
 Although some regulations exist in Ethiopia that would foster sustainable
practices, they are insufficient, they are not always enforced and may not cover
all the issues that need to be addressed.
The increasing number of tourists may only exacerbate some problems and weaknesses.
In particular, it is urgent to improve the awareness about the need to protect the
cultural and natural resources, reduce environmental impact of tourism services and
activities, to improve the relationships among visitors and residents, and to foster more
equitable distribution of the benefits of the tourism activity. This requires, among other,
awareness campaigns at different levels, introducing sustainable practices in the
operation of tours and services, improved guidelines and regulations regarding visitor
management in protected and heritage areas, and setting up mechanisms to ensure that

23
https://www.abta.com/sites/default/files/media/document/uploads/ABTA_Travel_Trends_Report_2018_0.pdf

Tourism VCA Ethiopia – Final Report – September 2018 30

local communities, as well as local businesses and professionals, have opportunities to
participate in the tourism value chain.

The situation in Ethiopia does not seem to be mature enough to introduce a

certification scheme that requires creating a local organisation to manage it. This is
because sustainable certification is something totally new, public organisations lack
implementation capacity, and there is no partner that could take over certification at
the end of the CBI project without receiving external funding.
However, it would be helpful to start working on awareness campaigns targeting
tourism service providers as well as relevant public organisations at federal and
regional level. Collecting and disseminating existing best practices (i.e. ecolodges in
Simien Mountains, Bale Mountains and Gheralta owned by Europeans, and some
incoming operators) would be an efficient way to showcase what needs to be done.
Additionally, there is a need to work with EWCA to improve visitor management in
protected areas including better coordination with incoming operators and national
guides.
On the other hand, a certification scheme such as Travelife, developed and supported
by the European travel trade, could be introduced for incoming operators after the
awareness creation phase, as it is relatively easy to implement (it is organised in
different stages and most tools are online).
Establishing tourism awards including the recognition of sustainable practices could
also help at this stage to prepare the grounds for certification of other players in the
value chain.

Tourism VCA Ethiopia – Final Report – September 2018 31

5. Current Ethiopian tourism sector product range
It is widely acknowledged that Ethiopia possesses remarkable tourism potential due to
its unique and largely unexplored cultural, historical, archaeological and natural
resources. Those resources are key to attracting visitors and are the basis on which to
build a strong tourism industry. With its more than 3,000 years of history and more than
80 ethnic communities, each with their own distinct languages, cultures and traditions,
Ethiopia stands out as a unique country in Africa. The following is an outline of the
country’s tourism resources and products.

Tourism routes.24 For many years, most Ethiopian tour operators have sold to the
international market packaged tours for the following two routes with little variations:
 Northern Historic Route includes Lalibela, Aksum, Gondar, Lake Tana monasteries
and the source of the Blue Nile (around Bahir Dar). A brief visit to the Simien
Mountains is often included. A detour to Gheralta has been added in recent years
to some trips.
 Southern Route includes cultural and natural attractions of the lower Omo Valley
National Parks, Rift Valley Lakes (Langano, Hawassa and Chamo).
The average stay at each destination is low, often short stopovers en route or less than
two days and apart from the sightseeing of the main sites there is little diversity in the
activities offered to tourists. Moreover, the potential for differentiation and the
organisation of more specialised routes and packages in those areas have not been fully
exploited.
Other tourism routes which are also promoted, although less often, include:
 Afar and Danakil Depression (north-eastern Ethiopia), Dalloll geothermal fields,
salt quarry sites, Erta Ale Volcano, and Low Awash Valley located on the way
from Addis.
 Eastern Route: Walled City of Harar and Awash National Park, Dire-Dawa, Hurso
Sercama rock paintings, Babile Elephant Sanctuary.
 South-eastern Route: Bale Mountains National Park, Sof Omar Cave and Dire
Sheik Hussein Muslim Shrine.
 The western and southwestern25 areas are not well developed although they have
great potential. They are well known for their cloud forests, considered the origin
of coffee, with three Biosphere Reserves (Kaffa, Shaka and Yayu) where many
varieties of wild coffee still grow. The Gambella National Park, known for seasonal
migration of about a hundred thousand Nile Lechwe, is also an outstanding
resource in the area but is difficult to reach and lacks visitor services.
In spite of the potential of these routes, they are not formally established, and they lack
proper tourism services and facilities as well as integrated tourism development plans.

Tourism resources, attractions and activities. The UNESCO sites and Wildlife
Protected Areas are the main tourist resources in Ethiopia that have an advantage
compared to other African destinations in heritage and culture (Lalibela, Axum, Gondar,
Harar). However, it also has great potential for nature-based tourism development that
has not been fully tapped yet.
Some protected areas are often included in the tour packages of many inbound tour
operators. These include the Simien Mountains, Awash, Bale Mountains, Nechisar and

24
See www.ethiopia.travel, the official tourism portal, for a description and maps of the routes.
25
In 2014, the ESTDP financed a Plan for the development of the Western Route. It was prepared by an American company,
and although it has some good analysis and proposals for action, it does not provide enough details to guide private and
public investments.

Tourism VCA Ethiopia – Final Report – September 2018 32

Mago National Parks, Senkelle Swayne’s Hartebeest Sanctuary and Guassa and Abuna
Yoseph Community Conservation Areas. But most visits are short as part of a route and,
with the exception of trekking, the National Parks are not developed or perceived as
destinations per se, as is the norm in most African countries.
Because in Ethiopia tourism is operated based on long routes and tourists do not remain
long at each destination, limited services and activities are offered. On the other hand,
as destinations do not offer a variety of good-quality activities and services, tourists do
not stay for long. This seems to be a vicious circle that needs to be broken with
improved product development in products than can retain visitors such as trekking,
hiking, birdwatching or special interest tours for those who prefer to travel less allowing
for a more in-depth discovery of the destination (i.e. culture, religious, textiles).
Access to the historic and natural sites remains an issue in some cases, although when
planning investments there is a need to take into consideration the targeted markets and
their expectations. For example, an adventure destination does not need large paved
roads everywhere.
Management of the natural and cultural attractions needs to be improved, including
collection of visitor statistics. Management plans of parks and cultural sites need to
include provisions for visitor management, and entrance fees collected should be
reinvested – at least partially – in visitor management. Public-private partnerships could
help provide the necessary management skills and investment needed to improve the
visitor experience and increase revenue.

Tourism towns. Most leisure tourism destinations in Ethiopia are small and mid-size
towns. Although many of these places are home to world-class attractions, there is a
lack of strategies and integrated planning to develop tourism, tourism facilities and
services are very limited in number and quality, and many services are still provided in
an informal way.
Tourism destinations are expected to offer a quality urban environment, well organised,
clean and with a distinctive character. In Ethiopia, there is an effort to clean the main
streets and add greenery to the urban landscape. However, most towns with high
tourism potential lack proper urban planning and building codes aimed at preserving the
natural resources, enhancing prime public spaces and conveying a sense of place.
Ensuring compatible land uses also remains an issue.
Moreover, the provision of basic services and infrastructure such as power and water
supply, sewage and waste collection and disposal, and paved streets are lagging behind
the fast pace of the new ‘modern’ constructions. Access to hotels and parking space are
often insufficient and chaotic; and weaknesses in the telecommunications infrastructure
make communications and payment transactions difficult.
Apart from the Regional Culture and Tourism Bureaus which are regional government
organisations, there are no destination management organisations (DMOs) with public
and private sector participation, and there is an appalling lack of coordination
mechanisms among the different stakeholders involved and having an impact on
tourism.
Awareness regarding sustainability is almost inexistent and, if no action is taken in the
short term, it will be difficult and costly to reverse the damage done to some of the most
iconic tourism destinations and resources.

Marketing and branding. The Marketing and Branding Strategy developed in 2015
provides guidance regarding market segments and geographic markets (see chapter 7),
as well as recommendations about marketing activities. However, the ETO does not have
sufficient qualified human resources and the allocation received from the government
budget does not suffice to conduct an efficient and effective marketing action in the main
source markets. Moreover:

Tourism VCA Ethiopia – Final Report – September 2018 33

  Since its inception, the ETO has dedicated most of its efforts and budget to
ensure continuity of participation in the main trade shows that was the main
promotional activity carried out by MoCT in the past. Traditionally, trade fairs
attended were mainly in Europe, (i.e. ITB in Berlin, WTM in London, Top-Resa in
Paris and Vakantiebeurs in the Netherlands26). In the last years new markets
such as China and Russia have also been targeted.
 Some B2B roadshows have also been organised in the USA and some European
markets, but the ETO has received criticism for not carrying out more innovative
or better-targeted promotional activities.
 Although a new official travel portal was developed following the preparation of
the Marketing and Branding Strategy, there is no clear online marketing plan, nor
consistent updating of the portal contents and use of social media.
 The ETO does not have market representatives in the source markets and often
has to rely on the support from the embassies abroad that lack specialised and
dedicated staff.
 The ETO does not have proper databases of tour operators and media in the
markets or CRM system to facilitate follow up of contacts and activities. Thus, it is
not in a position to ensure consistent communication before and after the trade
shows, and through the year.
 Familiarisation trips are organised, but they lack strategic focus and are not
conceived to actively foster B2B contacts with Ethiopian incoming operators and
other service providers.
Some Regional Tourism and Culture Bureaus (such as Aksum, Harar, Oromia and Addis
Ababa) print promotional brochures, have their own websites and sometimes participate
in trade events, although they lack marketing skills and collaboration with the ETO is not
well established. The ETO (in Addis Ababa) and the Regional Cultural and Tourism
Bureaus manage the centres of tourism information found in the main destinations.
Other findings from the industry’s stakeholders consultations held during the preparation
of the STMP indicated that key weaknesses27 of destination marketing in Ethiopia are:
 Current efforts are uncoordinated and fragmented
 Absence of well-established coordination mechanisms among private-public
partnerships and among private sector players
 Lack of focus on market niches, poor matching of market and products
 Limited skills and knowledge of inbound tour operators to promote and market
Ethiopia in the international markets
 Absence of a tradition of organising international and regional tour and travel
trade fairs and events in the country
 Absence of concerted efforts in marketing and handling events and MICE

26
Incoming operators that participate in the official booths are selected based on their sales figures in foreign currency.
Additionally, some spaces are kept for smaller operators. Incoming operators have attended other leading travel shows
such MITT (Moscow), ATM (Dubai) and COTTOM (Beijing).
27
Source. SMTP, MoCT, 2015.

Tourism VCA Ethiopia – Final Report – September 2018 34

6. Comparative Advantage
6.1. Global competitiveness28
The World Economic Forum (2017)29 ranked Ethiopia 116th (out of 136 countries) in its
Travel and Tourism Competitiveness Index (TTCI). This rank follows the gradual
improvement achieved in the last years, but Ethiopia still lags behind other African
countries, well established tourism destinations such as Kenya, Tanzania, Rwanda and
Uganda. Ethiopia’s relative lack of competitiveness is echoed in a number of studies.30

Year TTCI ranking Ethiopia

2009 123
2011 120
2013 122
2015 118
2017 116

The TTCI is based on 14 pillars, which are outlined in the table below.
Ranking - ETHIOPIA
Indicator 2015 2017 Direction of change
(141 countries) (136 countries)
Natural Resources 63 69 ↘
Price Competitiveness in Travel and
69 64 ↗
Tourism
Environmental Sustainability 76 56 ↗↗
Cultural Resources 79 70 ↗↗
Safety and Security 80 99 ↘↘
Air Transport Infrastructure 90 111 ↘↘
Affinity for Tourism / International
93 97 ↘
Openness
Health and Hygiene 104 102 ↗
Policy Regulations / Business
116 118 ↘
Environment
Prioritization of Travel and Tourism 118 115 ↗
Ground Transport Infrastructure 123 90 ↗↗
Human Resources 126 125 ↗
Tourism Infrastructure 134 129 ↗
ICT Infrastructure 137 125 ↗↗
Overall ranking 118 116 ↗
Overall ranking among sub-Saharan
17 (out of 31) 15 (out of 30) ↗
countries

Source: Market Scan, CBI

28
Tourism top Ethiopia, Senegal and Zambia. EU Market Scan. CBI, 2017.
29
World Economic Forum (2013): The Travel & Tourism Competitiveness Report, 2013 Edition
30
These include:
ODI (2009): Enhancing private sector and community engagement in tourism services in Ethiopia
World Bank Group (2012): Ethiopia’s tourism sector: Strategic paths to competitiveness and Job creation, in association
with MoCT
ETO (2014): Preliminary identification of weaknesses/problems of the tourism sector in Ethiopia

Tourism VCA Ethiopia – Final Report – September 2018 35

Quite surprisingly, Ethiopia received its best score in environmental
sustainability (based on environmental regulations, sustainability of travel, threatened
species, and waste water treatment), ranked 56th in 2017 compared to a 76th position in
2015. Other areas with best score were price competitiveness (based on factors like
price parity, airport charges, hotel prices) – ranked 64th – and natural resources
(based on number of World Heritage natural sites, quality of the natural environment,
total known species) – ranked 69th. It also scored favourably on cultural resources
(from 79th in 2015 to 70th in 2017) and ground transport infrastructure (from 123rd
in 2015 to 90th in 2017).
In 2017, Ethiopia lost ground in safety and security (based on business costs of
crime, violence and terrorism, and reliability of police services) from 80th in 2015 to 99th
in 2017, probably due to the unrest in 2016, and air transport infrastructure from 90th to
111th. The latter is rather surprising due to the quite good infrastructure available and
projects underway, and has been contested by government sources and tourism
professionals. However, the number of airlines operating in the country is included in the
evaluation and the dominant position of Ethiopian Airlines is a negative factor here.
Ethiopia scored poorly in terms of tourism infrastructure (based on numbers of
hotel rooms and ATMs, and major car rental companies); ICT infrastructure (based on
factors like Internet use, mobile and broadband subscriptions, ICT use); human
resources (based on enrolment rate in education, training of staff, and availability of
skilled workers among other); policy regulations and business environment (based
on a range of measures such as visa requirements, costs to start a business,
transparency of government policy making); and health and hygiene (based on access
to drinking water, improved sanitation, hospital beds), slightly improving to 102nd
position.

6.2. Competitor analysis31

The competitor analysis focuses on key tourism destinations of similar or larger scale
than Ethiopia in East and Southern Africa and the Gulf region. These include Jordan,
Egypt, Kenya, Tanzania, Uganda, and South Africa. A comparison of where Ethiopia is at
an advantage or disadvantage to these competitors is presented in the table below and
reveals the following:
 In terms of unique, iconic sites to visit, i.e. places declared as UNESCO World
Heritage Sites, Ethiopia is on par with Egypt, Tanzania and South Africa and is
better placed than Jordan, Kenya and Uganda.
 Ethiopia’s rich cultural diversity, ancient cultural practices and its unique cultural
character that spans both the Arabic and African world provides it with a distinct
advantage over all other competitors.
 Similarly, the outstanding hospitality, friendliness and peacefulness of the people
is a distinguishing feature that sets the destination apart from all other
competitors.
 Ethiopia is only exceeded by Egypt when it comes to historical sites and relics. It
is on par with Jordan and more attractive than other Eastern and Southern
African destinations in this regard.
 Concerning scenic beauty and natural features Ethiopia outperforms all regional
competitors except South Africa.
 In terms of tourism support services and demand conditions Ethiopia’s main
competitive advantages are its excellent air links and value-for-money, two major
advantages.

31
Tourism Marketing and Branding Strategy for Ethiopia, MoCT-ETO, 2015.

Tourism VCA Ethiopia – Final Report – September 2018 36

  Ethiopia is at a disadvantage concerning wildlife and safari, city life and
conferencing and contemporary man-made attractions.
 Factors that constrain the country’s tourism competitiveness are limited
hospitality facilities, land transport limitations, difficulty of planning and booking
travel and most importantly the limited human resources and institutional
capacity to operate, develop and promote tourism.
 While image barriers related to personal health and safety are real, such
perceived risks are even more relevant to competitors such as Kenya and Egypt
and are of equal concern in Uganda, Jordan and South Africa.

Competitor comparison of regional competitors vs. Ethiopia

REGIONAL COMPETITORS Kenya Ta nza nia Egypt Uga nda Jorda n South Africa

Classic safari, High end Ancient Ecotourism Ancient history, Contemporary

Selling proposition a fforda ble safari, beach, history, ma ss a nd a dventure high end Africa , na ture &
mass beach & a dventure bea ch wellness scenery
Volume: (‘000 arrivals 2013) Ethiopia = 681 1,433 1,063 9,174 1,206 3,945 9,537
Yield: (USD/arrival) Ethiopia = USD 909 617 1,768 659 982 1,043 968
Va lue Point: Ethiopia = Medium-high Low-Medium High Medium Medium-high Medium-High Medium-high
Fa ctors of competitiveness

TOURISM RESOURCES

Unique sites/Iconic experiences

Wildlife and safari

Cultural uniqueness/people

Historical sites and relics

Scenic beauty and natural features

City life and conferencing

People hospitality, peacefulness

Contemporary man-made attractions

TOURISM SUPPORT SERVICES

Hospitality (accommodation, catering)

Land transport

Air access

DEMAND CONDITIONS

Size/proximity of major markets

Value for money

Ease of arrangment and purchase

Image of health, safety

INDUSTRY CAPACITY

Human resources

Tourism entrepreneurship/innovation

Tourism institutions and funding

Colour Key: Ethiopia a t a n a dva nta ge Ethiopia Equa l Ethiopia a t a disa dva nta ge

In spite of the uniqueness of Ethiopia’s natural and cultural resources and the fact that
the country can still benefit from its status as a ‘new’ destination, competition is
increasing and Ethiopia is lagging behind other East African destinations such as
Kenya, Tanzania and Uganda. This is mainly due to the weak capacity of tourism
service providers and public institutions that need more qualified human resources and
consistent funding.

Tourism VCA Ethiopia – Final Report – September 2018 37

7. Potential for new products
The Tourism Marketing and Branding Strategy recommends that the ETO highly focus
on fostering the growth of international leisure travel to Ethiopia, as it is the
main travel segment that can be influenced by the official marketing activity. It also
makes recommendations regarding priority product/segments and geographic markets.
The information in this section is an excerpt from the document.

7.1. High-yielding target segments

Various current and potential market segments were identified through focus group
discussions, tour operator interviews, desk research and stakeholder workshops. Then
they were evaluated based on their scope for growth (in terms of value, volume and
ability to spread tourism around) and Ethiopia’s readiness for such growth in terms of
access to experiences, tourism facilities for these segments and cost of reaching them.
As a result, priorities should be as follow:

High

Tailored
Explorer
MICE
Indepen
-dent Packaged
Explorer Explorer
Adven
(Volume, Value, Spread)

-ture Trekker Domes c

Growth Scope

Sport break

Region
breaks

Other Birders
niches
Business
Exten-
sion Diaspora

Note: Size of o
Transit
is indica ve of
current market
size

Limited
Limited Growth Readiness High
(Accessibility, Facili es, Cost to Covert)

Packaged explorer: Cautious ‘soft’ exploration as part of a packaged group tour, visits mainly
the key cultural and historical attractions on the traditional northern and southern circuits and
sites.
Tailored explorer: Confident ‘soft’ exploration on a tailor-made itinerary, wants to delve deeper
and veer off the traditional circuit on personal preference, organised with some local interaction.
Trekkers/hikers: Always in search of new mountainous and other topographical, exotic
landscapes to hike in like Simien Mountains, Bale Mountains, Gheralta, etc.

Tourism VCA Ethiopia – Final Report – September 2018 38

Adventure sport enthusiasts: A collective segment of specialised niche adventurous outdoor
sport activities, especially trail running and endurance running capitalising on Ethiopia’s celebrity
athletes that could be expanded to cycling, motorcycling, mountain biking, overlanding, climbing,
canoeing or kayaking.
MICE: Meet with colleagues and discuss issues of mutual concern, in a professional and interesting
environment with opportunities for local, high-quality experiences. Mainly Addis Ababa.
Birders: Focused traveling to see endemic species (and other bird species) and adding them to
the list. Main destinations are Simien and Bale Mountains, Awash National Park, Lakes of the Rift
Valley.
Independent explorer: Confident ‘hard’ exploration on a flexible, largely independent itinerary
and in search of extraordinary experiences – prepared to sacrifice comforts to go to less visited
places or enjoy unique experiences.
Domestic breaks: Affluent locals and expatriates taking weekend and short breaks to spend
quality time relaxing.
Business extension: Extending the primary business trip to experience Ethiopia’s leisure
attractions.
Other niche segments: Various small segments of specialists visiting Ethiopia for its unique
features in particular areas like antiquities, religion and pilgrimage, archaeology, palaeontology,
geology, anthropology, art, etc.

In summary, marketing targeting the leisure market should give high priority to:
 Grow the demand of Packaged Explorers (most likely to be Europeans).
 Diversify the options for the Tailored Explorers (new routes, new activities).
 Build recognition as a destination for some trip-motivating travel experiences:
Trekking/hiking, birding and adventure/sports with running as a short-term
priority.

MICE tourism versus leisure tourism

MICE was also identified as a priority product by the Marketing and Branding Strategy. Given its
strategic position, the air hub of Bole airport, the number of diplomatic missions, the vibrant
business sector, and the increased number of international-standard hotels and meeting facilities,
Addis Ababa and its surroundings have a clear potential for meetings and events.
The hotel owners association of Addis Ababa is pushing for a more integrated effort to develop this
segment, and claims that official statistics do not reflect the real share of MICE travel. The
association is increasingly active in the promotion of MICE and has participated in specialised trade
shows such as IBTM in Barcelona and IMEX in Frankfurt. A trade show in Addis focusing on MICE
has also been launched by a private Ethiopian company.
Due to the fact that the main MICE players are bigger companies with more financial muscle, more
competent management, and that they are more concentrated and closer to decision makers than
the companies targeting the leisure market, it will be easier for them to mobilise resources and get
support from relevant public sector organisations. However, although they are probably right
regarding the higher share of business travel, the conclusion should not be to give priority to
MICE only, as its benefits will be concentrated.
With more fragmented players and a larger geographical scope, leisure tourism is lagging behind
due to lack of leadership and investment, but it offers more opportunities to expand the benefits of
tourism across the country reaching small towns and rural areas. It also makes it possible for a
diversity of small tourism service providers to participate in the export activity. Leisure tourism
flows are a source of jobs and income for local businesses, professionals and rural communities
including youth and women; sometimes complementing other traditional activities. Leisure tourism
also fosters the preservation of the natural and heritage resources and sustainable development.
However, as the players are smaller and more diversified, there is a need for leadership,
coordination and technical support that in most countries is provided by the public sector and
through destination marketing organisations with participation of the private sector.

Tourism VCA Ethiopia – Final Report – September 2018 39

The CBI main objective is to promote the participation of SMEs in exports to Europe, and as
Europe is an important market for leisure tourism in Ethiopia this report is focused on that
segment.

7.2. Main leisure products of interest to the European market

This section provides a more detailed analysis of the products prioritised by the
Marketing and Branding Strategy: Trekking/hiking, birdwatching, running,
adventure travel. Community-based tourism has also been considered.
These products are also highlighted in the Sustainable Tourism Master Plan (STMP) and
the national tourism Internet portal (see www.ethiopia.travel), and they have higher
potential to provide the unique and sustainable experiences expected by strategic
segments in the European markets. However, to add value to the tourism offering and
strengthen the positioning of Ethiopia in those segments, a more focused, organised and
sustained effort is needed with participation of all key stakeholders at federal, regional
and local levels.
All these products also offer more opportunities for services provided by small local
companies and local communities, fostering stronger linkages with sectors such as
building (local techniques), crafts, agriculture and food production. They also foster
sustainable practices.
Although hard investment is needed in core services such as accommodation offering
higher standards across Ethiopia, it is also necessary to work on other sources of
competitiveness and added value in the specific product value chains such as better
organisation and coordination aimed at improving the operation of tours and visitor
management in natural and cultural sites, and diversifying the services and leisure
activities on offer.

TREKKING/HIKING
The Simien Mountains National Park, Bale Mountains National Park and Mount Yossef are
already positioned as world-class destinations for high-altitude trekking and several
incoming operators are marketing trekking trips. The national parks offices and
organised communities in those areas provide information, sell tickets and offer support
services for trekking (scouts, porters with mules to transport camping gear, cooks and
guides, community lodges).
However, tourism facilities and services need upgrading and expansion. Camp sites are
in extremely poor condition but sometimes overbooked. Food safety is an issue and
there is a demand for proper cooking facilities, shelters and toilets among other. There is
also a need for more comfortable accommodations in mountain lodges 32 with food
preparation facilities that can serve higher-spending travellers, and that would also
provide more permanent jobs. The nearby towns of the above-mentioned sites like
Debark, Dodolla and Lalibela have the potential to become tourist centres and gateways
for the trekking market but need proper planning to offer a feeling of nature and
mountain destinations.
As stated in the STMP, many other areas across Ethiopia have great potential as trekking
and hiking destinations for the international market including, among others: Mekedella
Mountains, Gunna Mountains, Gheralta, Gunndagundi, Debredamo, Adwa Mountain
Swamps, Cherercher Highland, Chilalo and Arsi Mountain Plate, Guge Mountain, Choke
Mountains. However, there is a lack of organised tourism products and services ready to
be marketed to the international market.
32
An international best practice are https://www.mountainlodgesofperu.com, mountain shelters in the Alps and other
European destinations are also good examples of more basic but comfortable accommodations that can be reached on
foot only.

Tourism VCA Ethiopia – Final Report – September 2018 40

BIRDWATCHING
‘In recent years, Ethiopia has rightly become one of Africa`s leading birding
destinations. Its avifauna represents an interesting mixture of east and west African,
Palearctic and some strikingly unusual endemic components’.33
According to the STMP, the country is home to at least 596 resident species and 224
regular seasonal migrants, including 176 ones from the Palearctic. Of the world’s
endemic bird species, 43 species are restricted to Ethiopia and neighbouring states on
the Horn of Africa; of which 18 are endemic.
Top bird watching areas are Lake Tana, the Rift Valley Lakes (Abijatta-Shalla, Hawassa,
Chamo, Ababya, Chewbahir). The lower Omo Delta, Goba-Yabello and Bale, Nechisar and
Mago National Parks are some of the Important Bird Areas (IBA) that are visited by
birdwatchers and are included in the packages of many inbound tour operators.
However, to fully develop the potential, it is necessary to strengthen the product value
chain ensuring availability of:
 tourism facilities and services such as trails, hides, observation platforms and
visitor centres, and suitable accommodation in strategically located ecolodges;
 further specialisation among incoming operators;
 specialised and knowledgeable guides able to respond to the demands of serious
international birdwatchers;
 targeted promotion through specialised clubs and outgoing operators in the main
markets.

RUNNING-BASED TOURISM
As mentioned in the STMP, distance running has produced many world and Olympic
champions in Ethiopia, which is well known as a land of runners. Building on the image
of the great Ethiopian athletes, the well-established Great Ethiopian Run held annually in
Addis Ababa attracts thousands of local runners and an increasing number of
international participants (although still low). Several other road running events along
the year are less popular but also have the potential to attract further demand if
properly marketed.
The fact is that running is an activity increasingly practiced in the main source markets
for Ethiopia. In 2017, a German running expert at Runner’s World, a specialised portal,
stated that there is still major growth going on in running34: ‘The sport is becoming more
and more of a mass phenomenon, it is extremely broadly positioned, and continues to
find new interested parties from target groups who just a few years ago weren’t into
running’.
Furthermore, many runners are changing from road running to trails, and the popularity
of trail running has spread all over Europe and beyond because it offers runners a
real feeling of freedom as they run across beautiful natural landscapes. As a result,
every year the number of trail-running events across Europe and worldwide is
increasing. That potential is being tapped in Ethiopia with new initiatives such as the
Ethiotrail held for the first time in 2014 in the Abijata-Shala National Park and the
Wenchi Crater run, both in locations not far from Addis Ababa.
Additionally, there is already an offering for training professional athletes in high-altitude
areas including Sululta (near Addis Ababa), and Bokoji (in Arsi), the birthplace of many
of the Ethiopian world class champion athletes.
In 2015, the ETO prepared a plan to develop and market running-based tourism in
consultation with the Great Ethiopian Run and Run in Africa, the company promoting

33
http://www.africanbirdclub.org/countries/Ethiopia/introduction
34
https://www.ispo.com/en/products/id_79698856/running-is-digital-these-are-the-7-trends-in-running-of-2017.html

Tourism VCA Ethiopia – Final Report – September 2018 41

cross country running events. This is a niche that has great potential given the market
opportunity and the strong positioning of Ethiopia as a land of great running champions.
Updating and adopting the existing plan and sharing it with the stakeholders would
foster better understanding of the opportunities and what needs to be done to develop
the specific value chain of this product:

 Setting up a cooperation/coordination mechanism among public and private

stakeholders involved (ETO, organisers of running events, federation, regional
and local governments in running destinations, as well as accommodation
providers).
 Foster product development by supporting the organisation of new trail running
events, organising running retreats targeting different audiences, etc.
 Organising very targeted promotional activities, making the best use of the
resources of all participating stakeholders.

Share of population who runs in European countries (2015)

Source: Statista

ADVENTURE SPORTS AND EXPEDITIONS

For the more conservative ‘packaged explorers’ any kind of travel to Ethiopia will be
considered as adventure travel. But Ethiopia also has iconic great adventure destinations
such as the Danakil Depression and the Afar region, remote areas visited by a small but
increasing number of tourists. Most current demand is made up of ‘intrepid explorers’
that directly book the trip with local operators based in Mekele. Only a few basic
campsites are available to visitors, and local operators carry food, water and provide
cooks for their customers.
The product value chain is not well developed and there is a need to define and enforce
proper procedures to operate in such a remote and to some extent dangerous area due
to the extreme heat, geothermic fields and volcanic features. It is also urgent to reduce
the current negative environmental impacts, such as increased plastic waste, introducing
and enforcing safety and environmentally friendly practices, and involving the
communities in more meaningful and sustainable ways to obtain benefits from tourism
activity (currently there are several sort of ‘toll’ stations with no added value services
offered).
Apart from the unique geological and scenic resources in the Afar region, camel trekking,
scientific expeditions, educational travel and volcano climbing are some of the
opportunities for developing attractive tourism products. Investing in better tourism

Tourism VCA Ethiopia – Final Report – September 2018 42

facilities and services is a must to capture the higher-spending market but many soft
measures could be implemented in the short term.

COMMUNITY-BASED TOURISM (CBT)

Community-based tourism (CBT) is not included as a specific product in the Marketing
and Branding Strategy, because rather than being the main tourism motivation for a trip,
it offers different and authentic ways to experience a destination.
Products such as trekking and birdwatching offer good opportunities for communities to
be involved in the provision of services to tourists including accommodation and food.
Those services are rather targeted to the intrepid explorer but any travel experience in
Ethiopia would be more interesting by including activities and services offered by local
communities (i.e. boat tours, horse riding, crafts demonstrations, coffee ceremony).
Numerous community-based tourism initiatives and associations have been developed
across Ethiopia in the last decade. Regions like Tigray, Amhara, Oromia, and SNNPR are
actively promoting these alternative development models, and some locations of active
community-based ecotourism include the Simien and Bale Mountains national parks,
Menze Guassa,35 Lake Tana, Lalibela Meket, Lake Ziway, Wenchi Crater, Lake Langano,
Lake Hawassa, Abune Yossef,36 Mekedella, Adawa and Yirgalem. Some of them are
commercialised by TESFA tours.37 However, many other CBT initiatives have not been
successful because they were supported with donor funds and could not survive after the
end of the project. In Ethiopia, as in many other destinations worldwide, these projects
are seldom based on realistic assessments of the market potential, lack good feasibility
studies and links with the commercial channels are not well established from the outset.
In any case, there is a market opportunity, and feedback from European outbound
operators showed an interest in community experiences among operators selling
cultural, adventure and nature travel packages. In turn, the survey of Ethiopian inbound
operators showed that while most of them include visits to communities in their tours,
the potential is not being fully tapped and these initiatives are not yet well integrated
into the mainstream tourism marketing.38

Incoming operators in Ethiopia offering community experiences

Rate from ‘least important’ (1) to ‘most important’ (5)

Assessment of destination Ethiopia (1-5)

Visiting local communities 4

Walking or cycling through communities 4
Lunch break in community 4
Home-stays or community lodges 3
Bed and breakfast accommodation 3
Cooking courses in local home 3
Participation in daily (farm) life activities 3
Handicraft demonstration 2
Other: hair-style/hair pleating 2
Other: making local brewery 1
Other: village tours including weaving 1
Source: CBI Market Scan

35
See http://www.guassaarea.org
36
http://www.abuneyosephtourism.org
37
See www.rootsofethiopia.com
38
Market Scan, CBI

Tourism VCA Ethiopia – Final Report – September 2018 43

According to the Ethiopian inbound operators, in order to further develop CBT in Ethiopia
there is a need for providing training to community members (tourism basics,
hospitality, service provision, health and safety, food and hygiene) and foster the
development of community accommodation facilities (home-stays) complying with
defined quality standards that respond to the requirements of European tourists.
Main constraints for effective product development
A survey among tourism stakeholders in Ethiopia conducted for the preparation of the STMP
identified the following challenges related to the current tourism offer that have been confirmed
through the interviews held during the field trip:

 Most products are underdeveloped in quality and quantity

 Lack of new product development initiatives
 Lack of coordination among stakeholders focusing on product development
 Lack of capacity and know-how about how to develop tourism products
 Lack of destination development plans and packaging systems
 Lack of national conservation strategies, legal protection and proper site designation,
and management plans for cultural and natural resources

7.3. High-yield geographic markets

During the preparation of the Marketing and Branding Strategy, the opportunities in
traditional source markets and in new emerging markets were analysed. For each
market, the analysis included the current importance and their tourism value potential
on the one hand and the relative ease of attracting tourists and converting such
potential. Based on this evaluation, geographic markets were prioritised to determine
where to focus the destination marketing activity and funding to best maintain market
share, invest for growth or respond to and monitor market opportunities.
European markets are among the ‘core’ markets with high revenue potential
and high affinity for leisure travel to Ethiopia, as well as the ‘steady markets’
that are easier to penetrate.

Tourism VCA Ethiopia – Final Report – September 2018 44

The following approaches are recommended by the Marketing Strategy.

PRIORITIES COUNTRIES STRATEGY PROMOTION APPROACH

Core markets UK Capture Apply the full promotion mix including:

High revenue Germany Focus most  A major PR and media drive
potential, an promotional activities  Strong digital advertising and social
affinity for France here in the short and media focus with matching language
leisure travel to Italy medium term content
Ethiopia and are  Attendance of suitable travel trade and
easier and less USA (East and
West Coast consumer fairs
costly to Apply 70% of  Major trade education and joint
penetrate areas) marketing resources promotions drive with inbound and
Saudi Arabia- foreign operators
(Middle East  MICE sales and trade fairs
climatic summer  Selective consumer advertising
resort breaks)
season) Priority markets for ETO in-market
representation
Domestic

Potential China (focus on Invest for growth Selective activities e.g.:

growth markets ‘2nd wave’ Focus some  Selective travel trade and media
High revenue experiential promotional activities education and familiarisation
potential, low travellers) here in the medium programme
incidence of Japan term towards growing  Selective travel trade joint promotions
leisure travel to these into the core with inbound and foreign operators
Ethiopia and Australia market portfolio in the  Major online drive through language

Tourism VCA Ethiopia – Final Report – September 2018 45

more difficult Canada longer term content expansion (China, Japan) and
and costly to suitable social media channels
Apply 20% of
penetrate
marketing resources ETO to engage in promotional activities with
Ethiopian diplomatic missions and Ethiopian
Airlines in these markets

Steady  Benelux Maintain Mainly information provision and education,

39 including:
markets Focus limited
 Sweden/
Lower revenue Norway promotional activities  Providing Africa-focused and special
potential, an here aimed at interest travel trade with product
affinity for  Switzerland increased penetration updates and information
leisure travel to  Sudan by strengthening
 Leverage suitable online channels and
Ethiopia and are existing travel trade
 Kenya content to make it easy for travellers to
easier and less relations to ensure
access information online
costly to  Djibouti packages expand and
penetrate deepen Communication with travel trade in
 Israel collaboration with local inbound operators
Apply 10% of
and via diplomatic missions in these markets
marketing resources

39
Benelux and Scandinavia are collectively attractive markets and could move to core markets should resources allow.

Tourism VCA Ethiopia – Final Report – September 2018 46

8. Destinations offering higher potential for
European tourism

Apart from the two main tourism routes in Ethiopia (North and South), specific areas
that offer potential to increase the number of European visitors are the following:

GREAT ADVENTURE DESTINATIONS/DESERT EXPEDITIONS

The Danakil Depression and Erta Ale volcano in the Afar region. The Danakil is a
remote region with world-class geological features. It is attracting a small but growing
number of visitors which, in the absence of well-defined procedures for the operation of
tourism, is leaving behind significant negative impacts. The recent peace treaty with
Eritrea is expected to improve the security of the area and increase tourism flows.
The Danakil has been identified by the incoming operators in the recent field trip as the
area that needs more urgent attention in terms of product development. In 2014, the
ESTDP technical assistance to the ETO prepared a report summarising the situation and
identifying the issues in the Danakil and proposed to create a Geo Park (a concept
developed by the UN). A draft document is available that could be a departure point to
set up a strategy and action plan.
A document40 prepared for the ETO in 2015 prioritised this area for immediate action,
suggesting investment in facilities that could be used by the existing tour groups and
operated as community businesses:
 Development of Hamed Ali as a base for trips to Arte Ale, Dallol Ghost town
and the salt lakes.
 Setting up an organised and serviced campsite in Hamed Ali perhaps with
mule base for day trips to the lakes and Dallol.
 Establish a more basic campsite on flank of Erte Ale for night viewing of the
lava lake.
 The organisation of a ground transport hub in Mekele was also mentioned.
The ETO is currently working in the area, but a more comprehensive effort is needed to
define guidelines for tourism operation in collaboration with the associations of incoming
operators, the regional government and local communities, to foster the introduction of
sustainable practices and create new sources of income.

TREKKING/HIKING/RUNNING/CBT

 Simien Mountains National Park. Trekking in the Simien is a top world-class

tourism experience and attracts many European tourists. Whereas permits and
provision of guides and porters are organised by the park management in the
nearby town of Debark, proper visitor facilities are needed in the park to provide
basic services, reduce negative environmental impacts, and increase the tourism
expenditure. EWCA has prepared a Strategic Framework for Tourism
Development in the Simien Mountains National Park that identifies priority areas
for tourism services and includes useful recommendations. However, it is
necessary to improve coordination mechanisms and procedures involving the park
management, porters, cooks, incoming operators and guides. The small town of
Debark is the gateway to the park and has some basic accommodations and
restaurants that need support to improve their services.
40
Interim Draft Five Year Project Document, ETO, January 2015 (technical assistance financed by UNDP)

Tourism VCA Ethiopia – Final Report – September 2018 47

  Gheralta (Tigray). Away from the main Northern Route, this area is sometimes
visited as a detour, and is less developed but has the potential to become one of
the great destinations in Ethiopia.
Tigray is home to 121 rock-hewn churches, believed to represent the single
largest group of rock-hewn architecture in the world. With support from EU
PROHEDEV, the Sacred Landscapes of Wukro-Tigray is proposed to be nominated
as World Heritage Site with three separate zones consisting of groups of rock-
hewn churches in spectacular natural landscapes – the Sacred Landscape of
Gheralta, the Sacred Landscape of Tembien and the Sacred Landscape of Atsbi.
These three areas include eighty rock-hewn churches, dating to the 5th to 14th
centuries AD, as well as a small number of masonry-and-timber-built churches,
which include some of the oldest timber structures surviving worldwide, dating
from 6th to 10th centuries AD. A significant number of churches have wall
paintings and many retain treasures in the form of manuscripts, portable
paintings and liturgical objects, including examples which have survived from the
Middle Ages.
The area has very scenic landscapes of pink cliffs dotted with the small churches
and has great potential to be developed as a hiking/running destination
combined with cultural tourism. Developed with care, with low density
constructions, small towns, a network of trails – some of them leading to
churches – and complementary activities, it could retain tourists for several days
and become a prime destination.
The Gheralta lodge in Hawzen used to be the only accommodation in the area,
and is an excellent example of simplicity and comfort with a local flavour, but
some other lodges have been opened recently. Other small towns in the area
such as Wukro provide some simple tourism services but could become service
hubs for tourists in the future.
Mekele, a town with a reasonable range of hotels and other services, is the
gateway for those arriving by air. Mekele is also a departure point for visits to
Danakil by road, making it possible to develop combined tours with Gheralta. It is
also possible to visit the Danakil by helicopter from Mekele or Gheralta, an option
sometimes offered to high-end tourists that makes the whole area even more
attractive.

SOUTHERN ROUTE: NATURE AND ETHNIC GROUPS

The Southern Route already attracts European tourists but could be further
developed and more sustainable practices are needed. The town of Arba Minch –
included as a priority area in the Draft Five Year Project Document prepared by the ETO
in 2015 – has an airport and an established accommodation base serving attractions
such as the cultural villages of Dorze, Chencha and Konso, which are products with
strong community involvement included in the Southern Route. There are embryonic
water-based activities on Lake Chamo in the Nechsar Park and the town is a hub to
access other southern and south-western destinations.

UNTAPPED HERITAGE POTENTIAL: HARAR41

The town of Harar has been inscribed on the UNESCO World Heritage List since
2006 and has all the assets required to become a primary tourism destination,
but so far its World Heritage status has failed to translate into significant income
generation for the city.

41
Source: PROHEDEV (EU financed project)

Tourism VCA Ethiopia – Final Report – September 2018 48

Successful income generation through tourism requires: 1. Extended visitor stays –
every extra night spent multiplies the value of each tourism visit; 2. Providing a ‘positive
visitor experience’, so that tourists want to stay longer and want to come back again.
And, to achieve this: A. There must be enough ‘must-see’ attractions, so that tourists
feel they need to stay longer to see everything that’s important; B. Their visit must be
pleasant, memorable and free from unnecessary hassles.
Based on the above, the PROHEDEV Programme has assisted the Harari Region in
developing a tourism transformation plan, linked to visitor routes within the walled city
and outside, which are designed to significantly lengthen visitor stays and thereby
support local socio-economic development through:
 Creating a business environment which encourages private investment and
economic growth.
 Designing two tourism circuits within Jugol: 1. Museums and Crafts Circuit, which
links the five museums and the crafts training centres; 2. ‘Living City’ Circuit,
which links interesting historic buildings, workshops and crafts and antique shops.
Each of these circuits will take three hours to go around, i.e. half a day, and
therefore have the potential for keeping visitors in Harar for one day longer.
The outcome of successful implementation will be to lift Harar from a secondary to a
primary tourism destination in Ethiopia, so that it receives a comparable number of
visitors as Gondar, Lalibela and Axum. The improvement in conservation and
environmental management will enable an atmosphere conducive to private investment,
so that individuals and families invest in tourism-related businesses, which become more
numerous and diverse, making Harar a more interesting, pleasant and relaxing place to
stay.

TOURISM DESTINATIONS THAT STRENGTHEN THE BRAND PROMISE

 Source of the Nile (Bahir Dar). Bahir Dar, the capital of the Amhara region, is
a mid-size town on the shores of Lake Tana, with good road access, an airport
and a variety of accommodation options. The main tourist attractions are the Nile
waterfalls and the monasteries located on the islands of Lake Tana that are
visited by boat.
Bahir Dar is located on the Northern Route and visitors’ average stay is low, but it
offers opportunities for other activities such as bird watching and kayaking. The
traditional Tankwas made of papyrus could also be made available to tourists.
The creation of a Biosphere Reserve in 2015 has added value to the area and will
foster sustainable development. NABU, a German NGO, has been working in the
development of alternative tourism activities, and has produced a number of
brochures and publications available online,42 such as an Ecotourism Concept
Paper, a Green Guide to the Zege Peninsula, information about walking trails and
community activities around the famous peninsula and its monasteries.
Visits to the area known as Tis Abay (smoky water), the Blue Nile waterfalls, are
not well organised. There is a local guide association and sale of crafts, but it is
necessary to reduce hassle for tourists, and offer some other facilities and
services (seating and shaded areas, toilets, and sale of drinks should be added to
improve the visitor experience and offer new opportunities for income). Some
activities are taking place to improve the situation but a more integrated
intervention is needed.

42
http://www.laketana-biosphere.com/downloads/

Tourism VCA Ethiopia – Final Report – September 2018 49

 The reduced water flow experienced in some moments along the year, due to the
diversion of the water flow to a dam, disappoints visitors that expect to witness
the source of the mighty Nile.
 Origin of coffee routes in the southwest: The cloud forests around the town
of Bonga in the southwest have endemic wild coffee varieties and the area could
be developed as a tourism destination, including learning about the origin of
coffee, harvesting and preparation techniques, birding and hiking. However, this
area is located away from other main tourism routes, the current offer of
accommodation and tourism services is very small with poor facilities and
services. Significant resources have been invested in a future coffee museum that
is not finished due to a lack of funds. In any case, the museum’s concept and
design are not what one could expect in an area with Biosphere Reserves
(concrete, poor layout, poor ventilation system in a very wet climate). The ESTDP
financed a plan for tourism development in the southwest that provides some
ideas about what can be done, but significant investment is needed before the
area can be proactively promoted.
 Lower Awash Valley. This is the area where the skeleton of Lucy – our remote
ancestor – was found, and the palaeontological site is a UNESCO World Heritage
site. However, the site and the whole area are undeveloped and a strategy is
needed to provide guidelines for product development and foster investments in
accommodations. Focusing on educational and scientific tourism could help to
attract visitors in the short and mid-term.

Tourism VCA Ethiopia – Final Report – September 2018 50

 ELEMENT 2. STRUCTURE, GOVERNANCE AND
SUSTAINABILITY OF THE VALUE CHAIN

Tourism VCA Ethiopia – Final Report – September 2018 51

9. The Tourism Value Chain
9.1. Structure of the tourism value chain
The value chain describes the full range of activities that are required to bring a product
from its conception to its end use and beyond. A tourism value chain is simply defined as
a system which describes how private sector firms in collaboration with government and
civil society receive or access resources as inputs, add value through various processes
(planning, development, financing, marketing, distribution, pricing, positioning, among
others) and sell the resulting products to customers.43

As shown in the chart above, the main actors in the value chain are:

 Value chain influencers: Their decisions regarding the regulatory framework,

policies, infrastructures, etc. – at local, regional, national and international level –
have an impact on the key actors and the efficiency of the value chain. Online
contents increasingly have a positive or negative impact on the tourism value
chain of tourism destinations.
 Value chain key actors: They directly own, operate and deliver the tourism
services to the visitor. They are found along the customer path and cover the
different needs and activities along the trip.
 Value chain supporters: Although they may not directly serve the visitors,
these actors can add value to the product by protecting public natural and
heritage resources, promoting investment, providing capacity building and
fostering sustainable practices, etc.

43
Source: Hawkins

Tourism VCA Ethiopia – Final Report – September 2018 52

9.2. Tourism service suppliers: the key actors in the tourism
value chain

Tourism service suppliers are private companies that are in direct contact with the
tourist at the destination, providing the different services needed along the consumer
path. Unlike export products that are shipped to the markets, tourists travel to the
destination, offering opportunities for many SMEs to participate in the export activity.
Thus, the consumer path starts with international transport, a key link in the tourism
value chain.

INTERNATIONAL TRANSPORT
Contrary to international trends, Ethiopian Airlines is still a national carrier owned by the
government. It is managed by a local team of competent professionals, has a good
safety record, and has proved to be an extremely dynamic company that has built an
important air hub for Africa in Addis Ababa. The network of Ethiopian flights serves the
following European cities: Brussels, Dublin, Frankfurt, Geneva, London, Madrid, Milan,
Oslo, Paris, Rome, Stockholm, Vienna.44 Lufthansa and SAS are the only European
airlines flying to Bole.
Ethiopian has partnered with MoCT and the ETO to carry out promotional activities in the
European markets, providing discount tickets for Ethiopian operators and free tickets for
fam trips and media trips. Its CEO used to be the chairman of the Tourism Board.

LOCAL TRANSPORT
Ethiopian Airlines provides domestic flights to the main tourism destinations countrywide
(Lalibela, Gondar, Bahir Dar, Harar in the North, Arba Minch in the South) but it can be
expensive for those not flying Ethiopian to reach the country.
Until recently, private airlines were allowed to operate with small planes only and had
little impact on the leisure market. They are now authorised to operate with planes up to
50 passengers and it is expected that domestic air services will expand in the near
future. Helicopter flights are sometimes offered to high-end customers and are mainly
operated by foreign companies.
Regarding road transport, it is a good way to get to know Ethiopia and organised groups
mainly use the vehicles owned by incoming operators (4x4, small vans and coasters, and
a few large buses). Many independent travellers also hire chauffeured vehicles and
guides from the incoming operators. Rent-a-car is increasingly available, but there is a
need for a more organised activity of tourism transport providers that offer their services
without a specific license (for example, upon arrivals at airports in the regions).
Although road infrastructure has improved, safety remains an issue, but accidents rarely
involve tourism transports. The new train line between Djibouti and Addis Ababa is
opening up new opportunities for leisure travel.

ACCOMMODATION
Due to the pace of growth of tourism activity in Ethiopia, the availability of
accommodation facilities and services remains a major challenge, both in quantitative
and qualitative terms, to develop Ethiopia as a globally competitive destination.
European outbound operators interviewed for the Market Scan mentioned the lack of
adequate accommodation as one of the main obstacles to attracting more European
tourists.

44
Source: https://www.ethiopianairlines.com/AA/EN/book/destinations

Tourism VCA Ethiopia – Final Report – September 2018 53

The information provided in the Tourism Statistics Bulletin 2013-2015 (MoCT) shows
how small the number of star-rated hotels considered to have international standards is;
most of these hotels only received one or two stars.
Star-rated hotels

Location Number
Addis Ababa 79
Oromia 30
Tigray 11
Amhara 19
SNNPR 20
Dire Dawa 5
TOTAL 164
Lodges (not formally rated) 22

Though the situation is rapidly changing with a hotel construction boom across the
country, important issues remain:
 Uneven geographic distribution. Key destinations, such as Lalibela, Aksum, Arba
Minch and Gambela, still lack adequate accommodation facilities to serve
international tourists.
 The quality and standards of existing accommodation facilities continue to pose a
major challenge. Most hotels in the main tourist destinations are small and offer
poor service because owners/staff lack management and service skills.
 Although a star grading classification for hotels was introduced in 2015,
compliance is not properly monitored and standards for other accommodations
such as lodges and guest houses have not been implemented yet.
 There is a lack of reliable data on the existing accommodations, as well as on
upcoming projects.45 Good data on occupancy levels in different locations for
different types of accommodation are not available,46 and market data on existing
and potential tourism demand are also scarce and not fully reliable. As a result,
growth in tourism accommodation is rather unplanned, without careful
consideration of market and zoning issues, and there is a danger of over-supply
of lower-end accommodations.
 Poor urban planning and lack of alignment with tourism planning hinder the
allocation of the land needed by different types of accommodations, with many
hotels squeezed in small plots, often away from the most desirable areas. In
Ethiopia most land is public.
 Unreliable supply of power and water increase the building and operational costs,
since accommodation facilities must have generators and water tanks.
The conclusion is that there is a clear need to compile reliable statistics and to prepare a
strategy to guide and monitor the development of accommodation infrastructure. It
should provide directions regarding number, type and level of service of facilities needed
in different locations.
Business people from Ethiopia that are doing well in other sectors and the Ethiopian
diaspora are among the main investors in larger hotels, some of which are managed by
international hotel brands (e.g. Sheraton, Hilton, Radisson, Marriott, Golden Tulip, Best
Western, Ramada in Addis). However, the majority of hotels in the main tourist
destinations are owned and run by small local entrepreneurs who need help to improve
the levels of service as well as their management practices to become more competitive.
Local hotel owners and managers need to get better market insights and be aware of
customer expectations, in particular regarding safety and security as well as food
security and fire regulations, and they need guidance to implement them. The lack of

45
Information that many investors expected to get from MoCT.
46
Information that many investors expected to get from MoCT.

Tourism VCA Ethiopia – Final Report – September 2018 54

regular maintenance of facilities is another issue and service standards are quickly
deteriorating, as is the case with the value of the investment.
The lack of an official and clear definition of the different types of accommodation (hotel,
lodge, guest house, serviced apartments, resorts) and the corresponding standards
means there are no clear guidelines for investors, who build using their own criteria.
Regarding lodges, they are the most appealing accommodation for European tourists and
their number has increased in recent years, although it is still low. A total of 22 lodges
are listed in the Tourism Statistics Bulletin 2013-2015. They are mainly isolated
initiatives by small investors, many of them foreigners. Some lodges owned by
Europeans are:
 Simien Mountains Lodge (in the National Park), UK
 Limalimo Lodge (in Simien National Park), UK
 Gheralta Lodge, Italian
 Bale Mountain Lodge (in the National Park), UK
 Eco-Omo Valley, Italian partner
Some Ethiopians, including an increasing number of incoming operators, are investing in
lodges. Unlike many other hotels with poor design and decorated with cheap imports
from China, most lodges convey a sense of place, offering added value to international
travellers. However, there are no destination lodges in Ethiopia that can retain travellers
for three days or more, as is the case in many African destinations.

FOOD AND BEVERAGE

There is an increasing number of international restaurants in the main cities, but there is
a lack of restaurants offering international standards along the tourism routes. The
Ministry of Culture and Tourism regulates the so-called Cultural Restaurants only, a
special category of restaurants that serve Ethiopian cuisine, feature traditional
decoration and offer live music and dance from different areas in Ethiopia. The Regional
Tourism and Culture Bureaus regulate, issue licenses and inspect other food and
beverage outlets.
Most restaurant and cafes are small or micro businesses, facilities are not well set up
and lack cooking, managerial and service skills. Many of them offer the same menus,
present safety and health issues in food storage and processing, and lack proper toilets.
On the positive side, they offer many jobs, and most supplies are locally sourced as
Ethiopia has good fruits, grains, vegetables, meat and poultry.

LEISURE ACTIVITIES
The current supply of activities targeting international leisure visitors is rather narrow
but slowly growing, and it is often considered as a complement to sightseeing:
 Cultural restaurants, which interestingly do not cater for tourists only.
 Jazz clubs in Addis Ababa (tradition of Ethio Jazz and other music).
 A ballooning company owned by a Dutch entrepreneur was established some
years ago after a long bureaucratic process.
 Bike tours around Addis and routes countrywide.
 Short hiking around Addis.
 Short birdwatching walks.
 Boat tours (i.e. Lake Hawassa, Lake Tana, Lake Chamo).
 Activities at rural communities: coffee ceremony, horseback riding, etc.
Many opportunities exist to diversify leisure activities, offering more interesting
experiences to tourists and additional job and income opportunities for locals. They are
not well developed due to lack of knowledge and understanding of international markets
and lack of references, and there is a need for support in this regard. The lack of
regulations for outfitters or activity operators is a barrier for the development of new

Tourism VCA Ethiopia – Final Report – September 2018 55

activities and a source of problems for innovative entrepreneurs. The Tourism Act under
consideration should include some provisions in this regard. Entrepreneurs also need to
know under which business license they can operate, and investment regulations should
take into consideration these types of businesses.

INBOUND TOUR OPERATORS

Inbound operators are key players in generating exports, as they package and sell the
tourism product in the markets. They are also in direct contact with visitors as they
operate the tours when tourists arrive at the destination. This is a regulated activity in
most countries and in Ethiopia there are over 467 incoming operators accredited by
MoCT47 which are allowed to operate countrywide. Some licenses are combined with
travel agency and rent-a-car, and as it seems that Regional Tourism and Culture
Bureaus are also entitled to issue business licenses for travel agents/regional operators,
the status of many of those who serve visitors arriving by air to the regions is not clear.
Most licensed tourism operators are Ethiopian, but this is a sector open to foreign
investment and there are a few companies owned and managed by foreigners, most of
them Europeans. The investment incentives offered to buy duty-free vehicles have
attracted many business people not interested in the profession. For true operators, the
incentives offered are over-prescriptive (restricted type of vehicles only) without leaving
room for innovation and diversification.
Among those focusing on the incoming business, some are well established and have
gained professional experience, they have a fleet of vehicles and some of them have
invested in lodges. But the sector is very fragmented, with many very small businesses
that lack economies of scale and capacity to grow. This situation is exacerbated by lack
of financing adapted to this type of companies.
Because of a lack of specialised knowledge and skills, their capacity to reach the market
is poor and they often imitate others. However, with many key tourism resources with
limited visitor capacity such as Lalibela, incoming operators need to add value to their
product range and improve their capacity to attract high-yield visitors.
Many incoming operators are not used to working with outbound operators in the
markets (and mainly serve customers already in Ethiopia or through limited word of
mouth), have never attended a trade show or participated in a B2B event abroad due to
lack of resources, and they sometimes experience difficulties to obtain visas. There is no
clear understanding of what quality service is and there is little awareness about the
importance of adopting sustainable practices.
The lack of professionalism and specialised skills resulting in competition based on
prices, as well as some unethical practices, need to be addressed as they can damage
the image of the destination and the reputation of the whole profession. It is also a
barrier to increasing sales and visitor exports. Stronger professional associations are
needed to foster professional development.
The MoCT has been trying to improve the regulation of tour operators and updated
regulations are expected to be included in the Tourism Act under preparation.
Collaboration with private sector associations, regional governments and other relevant
federal organisations will be key to come up with good regulations that close current
gaps, and to reach agreements on procedures for effective enforcement.

TOUR GUIDES
National tour guides are accredited by MoCT and work for incoming operators. After
some time, many of them start their own business. Additionally, associations of local
guides have been set up in many destinations to offer job opportunities for the local

47
http://www.moct.gov.et/tour-operators

Tourism VCA Ethiopia – Final Report – September 2018 56

youth, but they lack service and communications skills as well as the capacity to
diversify their services, and are often a source of harassment and conflict with incoming
operators and tourists.48

Tourism SMEs need access to financing

Limited access to long-term bank loans by small accommodation providers and inbound operators
hamper further development and diversification of tourism facilities and services, and it is a barrier
that makes it difficult to keep up with the competition. Providing the guarantees required by banks
is often a challenge for SMEs.

9.3. Private sector organisations that support the tourism

value chain49

ADDIS ABABA HOTEL OWNERS ASSOCIATION (AHA)

AHA was established in 1997 to represent the hospitality industry’s collective interests. It
has 115 active members and eight full-time employees, and it has a chair at the Tourism
Transformation Council and the Tourism Board.
Among other activities, AHA provides training to its members and has been partnering
with PUM for some time to deliver group training covering different functions and
areas in hotel management and operations. A more ambitious project recently launched
is the establishment of a Hospitality Academy with the aim of solving the human
resource problem in the hospitality industry. Private funds will be raised, although they
are also looking for other funding sources, including donors. The Academy is expected to
have a hotel which will support it as an income source and will be used as an
apprenticeship and training centre for the students. Partnerships and affiliation with
renowned international hotel schools are envisioned.
It is worth noting that AHA members are the largest hotels based in Addis Ababa only
and that it does not represent the accommodation sector at large, in particular the small
hotels run by local entrepreneurs, and the increasing number of lodges located in key
tourism destinations. On the other hand, some regional or local associations are being
formed in other destinations such as Bahir Dar, Hawassa, and Axum and AHA would like
to see stronger hotel associations throughout the country as well as a future national
Federation.

ASSOCIATION OF HOTEL PROFESSIONALS

This is a small association of professionals with experience in hotel operations and
management. They collaborate with MoCT to deliver training to officers at Regional
Culture and Tourism Bureaus in charge of licensing, grading and inspecting tourism
accommodations. A new president and board have been appointed recently and they
have plans to expand the association, as well as the range of services offered to
members and to the hotel industry.

48
Given the original objective of the local guides associations, some regional governments are telling guides that after five
years they have to leave the job to make room for newcomers, showing a total lack of understanding of the role of good
guides in the tourism experience, not to mention of free markets.
49
The Ecotourism Association mentioned in the BCI (CBI) is not currently operational. Their members joined the hotel and
tour operators associations. Regarding TESFA, it was originally an NGO that supported the development of community
tourism. The NGO has been dissolved, but TESFA Tours, a private operator, provides a marketing and sales channel for the
services offered by local communities (mainly to trekkers).

Tourism VCA Ethiopia – Final Report – September 2018 57

ETHIOPIAN TOUR OPERATORS ASSOCIATION (ETOA)
Created in 1996 to defend and protect the interests of tour operators, ETOA is a member
of the Tourism Transformation Council and has a seat on the Tourism Board. It has a
small office and a manager and wants to play a more proactive role in the development
of tour operations and tourism activity at large. About 150 members are listed on the
association’s website.
ETOA would like to strengthen the association; however, they need:
 a stronger financial base, as it is reliant on membership fees and has limited
financial resources;
 a benchmark of best practices of similar associations;
 marketing intelligence for its members;
 to develop the marketing and commercialisation skills of its members;
 an improved website and online promotion;
 advice to make the association more meaningful for members and become a
stronger player in the tourism value chain, as well as an effective counterpart
for government organisations.
http://www.ethiopiantourassociation.com

SOCIETY OF TOUR OPERATORS IN ADDIS ABABA (STOA)

STOA was founded in 2011 by a group of young entrepreneurs, most of them graduates
in tourism, who wanted to start or formalise a tour operation business and did not have
the capital to buy the three vehicles that were required at the time to be accredited.
Since then, they have been lobbying the MoCT to accredit tour operators even if they do
not have vehicles. As a result, criteria were amended and, since 2014, only one vehicle
is required.
The Association has 33 members and some of them are still fighting to get accredited
without vehicles, operating in a legal limbo. It should be noted that those operators got
a business license from the Ministry of Trade before the coordination with accreditation
by MoCT was established.
http://www.stoa-ethiopia.org

OTHER PRIVATE SECTOR ASSOCIATIONS

In addition to the abovementioned organisations there are:
 A Chef’s Association. See https://www.facebook.com/chefhenok2008/
 A Guides Association in Addis Ababa (not clear whether members are national
guides or local guides).
 Small local guides associations in the main tourism destinations.

9.4. Value chain supporters in the public sector

Given that tourists travel to destinations where they share many spaces and services
with the local population, and the fact that tourism is an activity that has many links
with other sectors, there are many public organisations that have an impact on the
development and competitiveness of the tourism value chain at federal, regional, and
municipal levels. The following are the most relevant in Ethiopia, as they are responsible
for tourism planning, licensing, destination marketing and training specialised staff,
among other factors.

Tourism VCA Ethiopia – Final Report – September 2018 58

A NEW GOVERNANCE FRAMEWORK FOR NEW CHALLENGES

In Ethiopia, the Growth and Transformation Plan 2010/11-2014/15 prepared and

approved by the Federal Government set-up as strategic directions to enhance the role
tourism and culture play in socio-economic development initiatives. Going one step
further, the GTP II included tourism among the strategic sectors up to 2020.
On the other hand, considering that the international tourism marketplace becoming
increasingly sophisticated and that competition is tough, there was agreement on the
need for a higher degree of professionalism, efficiency and coordination among the
different government bodies that directly and indirectly impact on tourism development
and promotion. With this in mind, in 2013, the Government of Ethiopia proclaimed
the Federal Regulation 294/2013, which established the Tourism
Transformation Council, the Ethiopian Tourism Organisation (ETO) and the
Tourism Board. Their main mandates are the following 50:

The Ethiopian Tourism Transformation Council (ETTC) addresses the need to

develop a mechanism to better coordinate and manage the diverse goals and resources
of involved stakeholders. It reports directly to the Office of the Prime Minister, and the
CEO of the Ethiopian Tourism Organisation acts as Secretary.
Regarding the Ethiopian Tourism Organisation (ETO), its mandate covers the
following areas:

50
Road Map for the ETO, 2014.

Tourism VCA Ethiopia – Final Report – September 2018 59

The ETO has suffered from overstated expectations regarding its capacity to transform
tourism in the short term, a misconception regarding its mandate by public and private
51
stakeholders, and an unresolved conflict with MoCT.
Moreover, since its inception, the ETO has lacked the necessary human and financial
resources. According to the Council of Ministers Regulation to establish the ETO, the
Organisation’s budget would be allocated by the government. However, in order for the
ETO to fulfil its mandate and be able to introduce significant change in the development
of tourism in Ethiopia, it needs sufficient human, material and financial resources, well
beyond those allocated to tourism in the past. A benchmark of tourism taxes and bed
levies was conducted in 2014 as an option to ensure a recurrent source of funding, and
MoCT started to prepare the legal documents for introducing a tourism tax and creating
an associated tourism fund. After an impasse, MoCT seems to be working on that
initiative again.
Since 2016, the ETO has undergone two changes of CEO, and before it can move
forward, it has to solve the internal financial and human resource constraints.
The Tourism Board was initially chaired by the CEO of Ethiopian Airlines and its
members, twelve in total, were high-level officers of relevant federal organisations (such
as the Airport Authority and the Ethiopian Investment Commission) as well as two
representatives from the private sector associations (hotels and tour operators). In April
2018, the then minister of Culture and Tourism dissolved the Tourism Board, which was
reinstated recently with fewer members (only eight), with a majority (five) from the
private sector, and is now chaired by the prime minister’s Chief of Staff.
The Ministry of Culture and Tourism (MoCT) is the policy-making and regulatory
body at federal level for the tourism sector, and the Agency for the Research and
Conservation of the Cultural Heritage (ARCCH), the Ethiopian Wildlife Authority (EWCA),
and the Catering and Tourism Training Institute (CTTI) are autonomous organisations
under MoCT. The Ministry is responsible for preparing tourism policies, regulating and
grading tourism accommodations and cultural restaurants, as well as licensing national
incoming operators and national guides. It also has a Statistics Directorate in charge of
elaborating and disseminating the official statistics for the sector. Those functions
require significant improvement.

51
The mandate of MoCT was supposed to be amended after the ETO became operational, but it is interesting to see how
the organisational chart of MoCT (included in the STMP and shown on the next page) includes the ETO in the same position
as the former Marketing Directorate, directly under the State Minister of Tourism, not even considered as an autonomous
organisation such as ARCCH. This is not consistent with the ETO’s approved status and mandate.

Tourism VCA Ethiopia – Final Report – September 2018 60

The organisation and resources seem to be clearly skewed towards culture and the
offices and facilities for tourism services are very small and in poor condition. There is a
lack of financial and human resources, and turnover of staff is high. The IT infrastructure
is almost inexistent, with no databases to manage licensing and inspections or a good
website targeting the tourism industry and other internal audiences. The Ministry does
not have delegations in the regions.
In 2014, MoCT led the preparation of the Ethiopia Sustainable Tourism Master Plan
2015-2025 (STMP) undertaken with technical assistance from the UNECA Sub Regional
Office for Eastern Africa. The STMP is in line with the federal Growth and Transformation
Plan and aims at achieving the country’s tourism industry development goals. It sets out
a vision for sustainable tourism development and includes strategic programmes and
actions in a ten-year implementation framework.

Organisational chart MoCT

Source: STMP, MoCT, 2015

OTHER FEDERAL ORGANISATIONS THAT SUPPORT THE TOURISM VALUE CHAIN

a. Immigration and customs (facilitating access)

For many years, the Immigration Authority had a restrictive policy that limited travel
to Ethiopia. The requirement to get a visa and the paperwork involved used to be a

Tourism VCA Ethiopia – Final Report – September 2018 61

 significant barrier for the growth of tourism arrivals to the country. The new e-visa
system introduced in 2018 is a great improvement, as it allows all travellers to get
tourist and business visas in advance, although business visas require additional
paperwork. European visitors and nationals from other countries can also get a
tourist visa on arrival (36 countries in total for leisure travel only). In May 2018, the
new prime minister announced that Ethiopia would very soon follow Rwanda’s
example by allowing all Africans to travel to the country without visas, a measure
that will undoubtedly ease the free movement of African nationals and boost tourism.
Customs services have posed problems in the past for travellers bringing with them
binoculars or professional photo equipment (i.e. birdwatchers, travel journalists and
photographers) or large sport equipment, creating some unexpected and unpleasant
situations upon arrival in Ethiopia. In order to improve the travel experience for their
customers, incoming operators have to bear the burden of taking care of the
paperwork.
Employees of immigration, customs, and police working at airports have to enforce
laws and regulations, but attitude matters and some training is needed to project a
good image of the country, as well as a more welcoming experience for travellers.

b. Protection and management of cultural and natural resources

 Ethiopian Wildlife Conservation Authority (EWCA). Protected areas are
significant tourism resources in most African countries. According to the STMP, there
are sixty-six documented wildlife protected areas in Ethiopia, of which twelve
national parks and two wildlife sanctuaries are managed by the Ethiopian Wildlife
Conservation Authority (EWCA) at the federal level. The remaining wildlife protected
areas are protected by the respective regional states.
However, only 15 national parks and 1 sanctuary are legally gazetted, both at
national and regional level. Apart from a lack of legal boundaries, most protected
areas (except Bale and Simien National Parks 52) do not have a proper management
plan, and all of them lack proper tourism services and facilities. EWCA has given
priority to demarcating the legal boundaries of national parks and the preparation of
management plans and is currently supported by GIZ.
The national parks are mainly financed by public funds and they have suffered from
poor management and lack of human and financial resources. The economic value of
the natural heritage and the relationship between public investments and benefits for
local peoples and the local economy are not well understood and developed.
Although tourism is often considered a source of income for the parks and many local
communities, special guidelines for visitor management and regulations such as
concessions to the private sector and PPPs are not in place or not clearly
communicated and enforced, and there is no systematic coordination with incoming
operators and other tourism stakeholders.
Habitat loss and hunting have severely depleted most populations of medium- and
large-sized mammals and they are difficult to see. This presents a challenge for the
development of wildlife tourism, and the Wildlife Tourism Marketing Strategy 53
proposes ways to overcome it. Following recommendations from that strategy, the
department in charge of non-consumptive activities at EWCA is now in charge of
tourism development in parks and should foster the provision of small tourism

52
Those two parks have Management Plans prepared with support from GTZ and the Frankfurt Zoological Society (FZS).
See https://fzs.org/en/projects/bale-mountains-conservation/
https://balemountains.org
53
Prepared for EWCA in 2013 with support from SPADSE project.

Tourism VCA Ethiopia – Final Report – September 2018 62

 infrastructure and services for tourists, attract more visitors and generate income
from tourism. However, technical assistance and external funding will be needed.
The national defence and police are in one way or another responsible and
involved in the development and the conservation of natural resources and the
defence of the country’s resources. However, there is no established strategy to
strengthen the ongoing law enforcement effort to respect protected areas, and
collaboration with EWCA and the regional states should be strengthened.
Finally, it is worth noting that there is no public institution at federal or
regional level with the mandate to protect and manage outstanding
landscapes and unique geological features across the country. For example,
the Danakil and some lake areas deserve some kind of protection that could be
compatible with sustainable economic activities. A good example is the designation of
the Lake Tana Biosphere Reserve set up with support from NABU, a German NGO,
that is now managed by EWCA. Geo-Parks, another concept developed by UNESCO,
could also be used for this purpose.

 Authority for Research and Conservation of the Cultural Heritage (ARCCH).

The survey of European and Ethiopian tour operators indicated that the government
should urgently start to develop policies to ensure that the cultural heritage of
Ethiopia will be adequately protected. In this regard, it is important to note that while
the ARCCH is the federal agency in charge of heritage conservation, the management
and visitor services of the sites are the responsibility of regional authorities with little
or no supervision or coordination. This is true even for UNESCO sites such as Gondar
and Aksum, and ARCCH does not even collect visitor statistics. In Lalibela, the
Ethiopian Orthodox Church manages and administers the tourism visits and the funds
collected. In general terms, there is a need for guidelines and coordination regarding
visitor management, as well as investment in tourism infrastructure and services at
all sites including ticket booths, rest areas, toilets, signage, drinks, etc. Opportunities
for concessions, PPPs and sponsorship should be explored.

c. Business climate and investment promotion

 Ministry of Trade. It delivers business licenses for all kind of companies, including
tourism service providers. The document The cost of business registration and
licensing in Ethiopia and options for reform published in 2016 by the World Bank54
identifies the following main issues to be tackled in order to streamline business
licensing:
 Lack of compatibility between the Ethiopian Standard Industrial Classification
(ESIC) and the sectoral laws
 Overly prescriptive business licenses
 Lack of agency coordination and integrated system
 Insufficient institutional capacity
The document also makes some recommendations regarding licenses for which
certificates of competence are proposed to be abolished, as well as a simplified list of
licenses.
The lack of alignment of ESIC codes with the MoCT regulations and licensing of hotels
and tour operators created problems in the past and can create new challenges if
investors find ways to avoid existing regulations by applying for alternative types of
licenses. On the other hand, it is necessary to define and make publicly available the
activities allowed under each license,55 and to create new types of licenses covering a

54
http://documents.worldbank.org/curated/en/506611468197369773/pdf/106225-WP-PUBLIC.pdf
55
For example, what is the difference of a ‘safari and sightseeing’ company versus an incoming operator, or between a
lodge and a hotel.

Tourism VCA Ethiopia – Final Report – September 2018 63

 broad range of professional and business opportunities in the tourism sector such as
event organisers, independent guides, operators of adventure/outdoor activities and
tourism transport, among others.
The MoCT is currently working on the preparation of a new Tourism Act that should
include provisions regarding regulated activities. In order to ensure a more
transparent and consistent business environment, all issues mentioned above should
be carefully analysed and discussed with the Ministry of Trade and the private sector
to be addressed in the final version of the Act.

 Ethiopian Investment Commission (EIC). This is an autonomous government

institution accountable to the Investment Board chaired by the prime minister, whose
members are composed of relevant ministers. The Investment Board makes high-
level decisions on investment policy, issues regulations for investment promotion,
and supervises investment promotion and facilitation activities. A commissioner, who
is also member of the Board, heads the EIC.
The EIC offers a range of services to foreign investors including the issuance of
investment licenses, support to obtain business licenses and construction permits,
and issuance of work permits (including renewals, replacements, suspensions or
cancellations) among others. The EIC has restructured itself recently to become more
effective at attracting FDI and improving the services provided to investors, but they
do not have specialists in the tourism sector.
Tourism is not included among the strategic sectors of the EIC, although it is listed
among other sectors offering opportunities for investment. Investment incentives in
tourism are offered to domestic and foreign investors investing in star-rated hotels,
restaurants and ‘Grade 1’56 tour operators only, mainly consisting of an exemption of
custom taxes for a specific range of imported items:
 Hotels, lodges and restaurants are allowed to import duty-free building
materials, equipment and furnishings.
 Tour operators are allowed to buy up to three duty-free vehicles of a specific
type in a one-year period.
These provisions have created many disputes among investors and the Customs and
Revenue Authority that prosecutes duty-free imports used for other purposes. On the
other hand, they are overly prescriptive and do not foster innovation or
differentiation.
Up to five years of income tax exemptions have also been approved more recently
for hotel and tour services in non-traditional tourism destinations as defined by the
Ethiopian Investment Board. However, more detailed information is not available to
investors in English, which is a major constraint.
In the case of tour operators, no incentives are available for the periodical renewal of
imported vehicles that is needed to provide the standards required by the markets
(after six or seven years vehicles are considered unsafe and outdated by outbound
operators in the markets). Considering the high custom taxes, a reduction to a
reasonable amount would contribute to a more modern fleet and a more competitive
sector.
http://www.investethiopia.gov.et

 Ministry of Foreign Affairs. The network of Ethiopian embassies abroad can make
an important contribution to the promotion of Ethiopia as a tourism destination in the

56
This classification is confusing, as it does not exist in the sectoral regulations and licensing procedures established by the
MoCT. Thus, there is a need to ensure consistency among related laws and regulations, although it is not advisable to
create categories of tour operators to match the investment laws (as MoCT intended in the past).

Tourism VCA Ethiopia – Final Report – September 2018 64

 source markets and to attract investment. Given the lack of market representatives,
the embassies often support the organisation of promotional activities in the
markets. However, they lack specialised staff and cannot replace professionals. In
any case, there is a need to establish a stronger coordination with the ETO, as
embassies should be aware of and take into consideration the strategies and
priorities for tourism development and investment.

 National Bank of Ethiopia. It manages the country’s foreign exchange reserves;

ensures effective use of such reserves through monetary and financial regulations,
and issues approval of transactions involving foreign hard currency (investment
capital inflows, repatriation of funds, suppliers credit, export/import bank permits,
etc). The National Bank has an impact on tourism businesses transactions in foreign
currency (income from sales and payments to suppliers), as well as the availability of
foreign currency for promotion abroad. Limited access to foreign currency is an issue
in Ethiopia, which imposes restrictions on imports needed by tourism service
providers and on tour operators that must conduct promotional activities abroad. The
National Bank also releases foreign currency for the payment of official destination
promotion activities, and frequent delays in the approval process hamper the ability
to effectively plan and implement promotional activities.

d. Training centres – human resource development

Tourism is a service industry and it is labour intensive. Its capacity to create jobs at
all levels, including opportunities for women and young people, are among the main
reasons why tourism can contribute to the socioeconomic development of the
destination countries. In this regard, training institutions play an important role in
the provision of a trained workforce for the tourism industry.
The Tourism Policy approved in 2009 by the MoCT identified as one of its six pillars
‘Overcoming the serious capacity limitations observed in the industry’. The
shortcomings in human resources were also reflected in the Travel and Tourism
Competitiveness Report 2017 by the World Economic Forum, which ranked Ethiopia
125th out of 136 countries in human resources, considering both education and
training, and availability of qualified labour.
Professionals and public officers consulted during the field trip have confirmed that
one of the main and most pressing obstacles affecting the performance of
the tourism industry in Ethiopia is the acute shortage of skilled workers in
both the public and private sectors.
While there are many people who need a job and could be trained in Ethiopia,
training institutions are not able to respond to the fast development of the private
sector and cannot respond to the growing demand for skilled workforce at all levels,
both in quantitative and qualitative terms. As a result, there is competition among
hotels to get the best professionals available, resulting in high turnover, and many
larger hotels have opted to bring foreign professionals to cover managerial positions
(many of them from Kenya, which has a well-developed tourism industry and is
known to have a good training system).
Several levels of public organisations provide training for tourism and hospitality in
Ethiopia:
 Catering and Tourism Training Institute (CTTI) is an organisation under the
MoCT and has recently moved to the former Hotel Getnet (part of the former
chain of state-owned hotels). In its new location the CTTI has more space to
expand its activities and the number of students has grown (more than 800), but
it does not provide proper facilities as a training hotel and the centre cannot
obtain income from services offered to the public. The trainers received some

Tourism VCA Ethiopia – Final Report – September 2018 65

 training financed by the ESTDP and the centre has some collaboration
agreements with other centres abroad, although they are not fully deployed.
 The federal TVET Authority manages a large network of centres offering
vocational education and training across Ethiopia, and about 50 of them offer
training in tourism using a similar methodology. They are very important to
provide the skilled professionals at basic and middle level required by the
industry.
 More than 50 universities are under the Ministry of Education, and most
main cities and important tourism destinations such as Addis Ababa, Hawassa,
Gondar or Mekele, among others, have universities that offer higher studies in
tourism planning and management.
 A system for the certification of professional competencies (TVET level) is
also available, including the possibility of recognition of on-the-job training.
In addition, an increasing number of private sector centres are also offering training
in tourism, although quality tends to be low.
According to an assessment conducted for ESTDP in 2012,57 the main problems faced
by training institutions are:
 The training system is not based on current and future demand, it lacks input by
the private sector, and trainees and graduates do not respond to the needs of the
tourism industry.
 A lack of qualified instructors with practical experience in the industry, and high
instructors’ turnover in public training institutions due to a lack of motivation and
low wages (they cannot compete with the high demand from new hotels).
 A lack of adequate teaching materials, facilities and equipment for practical
education (most training is theoretical).
 A lack of cooperation with high-end tourism enterprises in order to provide
adequate practical training.
 Insufficient budget to accomplish their tasks.
 University graduates lack practical experience and outnumber the jobs available
in tourism planning, management and marketing.

In 2018, the same needs prevail, as was confirmed during the recent field trip.

TOURISM & CULTURE BUREAUS SUPPORT TOURISM DEVELOPMENT AT REGIONAL

LEVEL

Most regional governments in Ethiopia have a Regional Tourism and Culture Bureau that
to some extent mimics the functions of the MoCT at regional level. They have an
important role to play in :
58

 Protecting and managing the natural and heritage resources (some protected
areas and UNESCO sites, among others).
 Collecting revenue generated from National Parks, Protected Areas, as well as
other tourist attractions sites administrated by the Region, as well as managing
and developing them.
 Preparing tourism development strategies and plans.
 Regulating the sector in their respective regions. They inspect accommodations
and restaurants regulated by MoCT and provide licenses to those that do not
serve the international leisure market. They also provide licenses to travel agents
and local guides.
 Enhancing the skills and capacity of the sector through training.

57
CRISIL, 2012. Capacity building gap assessment and intervention plan. Vol 2. Training needs assessment.
58
CRISIL, 2012. Capacity building gap assessment and intervention plan Vol 1. Institutional assessment report.

Tourism VCA Ethiopia – Final Report – September 2018 66

  Undertaking awareness raising programs to prevent social discrimination and
harmful traditional practices.
 Designing and implementing strategies to ensure local communities benefit from
the development of attractions found around their area.
In Ethiopia most land is public and regional governments are also responsible
through other departments for land allocation, which is key to allow well-planned
tourism destinations and to allow and facilitate investments in suitable locations.
The organisational structures, human and financial resources allocated to the Regional
Culture and Tourism Bureaus show great variations (i.e. in terms of
departments/sections, number of positions and budget) that reflect the priority of the
sector in that particular region. Most of them lack basic IT infrastructure.

MUNICIPALITIES ALSO HAVE A ROLE TO PLAY IN THE TOURISM VALUE CHAIN

They are responsible for urban planning, building permits, solid waste collection and
disposal, traffic and security, etc. Decisions taken at this level have an impact on the
quality of the urban environment and the perceived value of the destination in the
markets, as well as on the value of private investments.
There is a need to create awareness about tourism activity and the role of the municipal
authorities and to develop the skills of municipal officers to plan and manage sustainable
and competitive tourism destinations.
VALUE CHAIN INFLUENCERS REGARDING ACCESS, BASIC AND IT INFRASTRUCTURE
(FEDERAL LEVEL)

a. Ethiopian Airports Enterprise (EAE)

The regulation approved by the Council of Ministers (CoM) on July 14, 2017
created the Aviation Holding Group by merging the Ethiopian Airlines Group with
the Ethiopian Airports Enterprise. The new Holding Group comprises Ethiopian
Airports Enterprise, Passenger Airline, Cargo Airline & Logistics Company,
Ethiopian Aviation Academy, Ethiopian Inflight Catering Services, Ethiopian MRO
Services and Ethiopian Hotel & Tourism Services. The Airports Enterprise has
been running 23 airports (four are international) and some are under
59
construction. At the time of writing the Bole airport is being expanded, facilities
and services in most airports are being revamped, and there are plans to build a
much larger airport for Addis Ababa.

b. Ethiopian Roads Authority (ERA)

As one of the organisations under the Ministry of Works and Urban Development,
ERA has the task of administering the federal road network system. It plays a role
in the tourism value chain as its investments provide and facilitate access to the
main tourism destinations. In spite of the effort made in the last years, some
tourism destinations still suffer from poor road connections and coordination
mechanisms are needed to take tourism development into account when planning
investments in roads. Additionally, there is a need to provide rest and service
areas along the main tourism routes, as well as scenic viewpoints that will
improve the experience of tourists traveling by road. Improvements of roads
should also contribute to improve road safety and reduce the high number of
traffic accidents and casualties in Ethiopia, that according the World Health
Organisations are among the highest in the world.

59
https://addisfortune.net/articles/airports-enterprise-joins-ethiopian-aviation-holding-group/

Tourism VCA Ethiopia – Final Report – September 2018 67

 c. Power supply
Ethiopia suffers from a chronic shortage of power, which makes it difficult and
costly for new businesses to get connected to the network, and often requires
additional investment in expensive transformers and generators. In order to solve
this situation that has an impact on all economic sectors, the government is
engaged in important investments in dams and reservoirs aimed at ensuring
sufficient and consistent power supply. In Ethiopia the energy supply is controlled
by the public sector.

d. Water supply and sanitation

Over recent years, significant progress has been made towards establishing the
basic institutional arrangements in the water and sanitation sector. However,
access to safe water supply and sanitation remain important challenges
countrywide for tourism accommodations, restaurants and related businesses,
and additional investments are required to overcome the limitations of the public
network. Municipalities are involved in the provision of this basic infrastructure
and some donors are supporting the government efforts.

e. IT infrastructure
Ethiopia is one of the very few African countries that has not liberalised its
telecoms market and introduced competition. In 2017, Ethiopia’s state-owned
telecommunications company Ethio Telecom, which benefits from its monopolistic
position, was reported to be the continent’s largest mobile operator.60 Although
the telephone network is improving, communications are often hampered by
saturated lines. Regarding the Internet, hotels, restaurants and cafes are among
the companies that get priority service, but online communications can be slow
and erratic, and continue to pose a challenge for tourism service providers that
increasingly rely on online channels to market and sell their services. Website
hosting is not reliable, and the sites are often down, limiting the options to access
the market. Payment with credit card is seldom available and cash payments are
the norm limiting tourism expenditure. Online transactions connected to bank
accounts are not easily available to small companies that are forced to use
alternative systems such as PayPal that add steps to the sales process.

9.5. Donor-financed initiatives supporting the tourism value

chain
By supporting public sector organisations, environmental management and local
communities, the projects financed by donors help to tackle weaknesses and
opportunities and add value at different levels of the value chain.
Many international organisations support tourism development in Ethiopia. However:
 Most donors and development organisations do not approach tourism as a
system. They rather use tourism as a tool to support their economic, social or
environmental objectives, and the support and impact on the tourism value chain
is often indirect.
 Support is skewed towards conservation of natural and to a lesser extent cultural
resources, and there is a need to help sustainable development in tourism
destinations at large including destination planning, support to existing tourism
service providers, fostering product development and diversification, business

60
http://www.africanews.com/2017/11/16/ethiopia-telecoms-monopoly-now-africa-s-largest-mobile-operator//

Tourism VCA Ethiopia – Final Report – September 2018 68

 development services for local entrepreneurs, and strategic investment
promotion.
 There is insufficient coordination with the public organisations in charge of
tourism planning and development. This is due in part to lack of leadership and
initiative on their side.

The Road Map of the ETO stressed the role to be played by the organisation in
monitoring, coordination, and dissemination of outputs and results of these initiatives.

PROJECTS FINANCED BY MULTILATERAL DEVELOPMENT ORGANISATIONS

The following are the main projects financed by multilateral development organisations
in the last few years.

a. Ethiopian Sustainable Tourism Development Project (ESTDP)

In 2010-2015, this USD 30 million World Bank loan operation with the Ministry of
Culture and Tourism financed the following projects, among others:

 Some civil works in and around heritage sites in Axum, Lalibela and Addis
Ababa (the project focused on those three areas).
 Training:
o assessment of training needs for the public and private sectors;
o short training on destination management and product development
for public sector officers;
o training and technical assistance to CCTI and TVET centres in the
project areas
o short training for the private sector was also planned but not
implemented.
 Advisor to MoCT and the ETO
 Tourism Statistics System, including the design of software to manage it.
 Hotel Star Grading System, including preparation of standards for all types of
accommodation, assessments of hotels countrywide, and training for officers
at MoCT and Regional Tourism Bureaus in charge of licensing and grading
accommodation services.
 Marketing and branding strategy (the counterpart was the newly established
ETO).
 Promotional materials including a new official tourism portal for Ethiopia,
image bank, press kit and production of brochures (also with the ETO).

b. UNDP

In 2015, the UNDP supported the newly established ETO by providing funds to open
and equip a new office and finance some temporary staff. The UNDP also financed
some technical assistance activities at a later stage.

c. European Union

Promoting Heritage for Ethiopia’s Development (PROHEDEV), a EUR 10 million EU

grant implemented by the Ministry of Culture and Tourism. This programme supports
culture to further Ethiopia’s cultural and socioeconomic development as well as
protecting and safeguarding its heritage for the future wellbeing of the nation. It
started implementation in 2015 and is expected to be phased out in a few months.
The PROHEDEV project works around the country in three interlinked clusters of
activities:

Tourism VCA Ethiopia – Final Report – September 2018 69

  The first cluster aims to strengthen the Ministry of Culture and Tourism’s
capacities and to improve conservation and promotion of the rich paleontological
heritage.
 The second cluster consists of specific support for regional development projects
based on local cultural resources. Six Regional Grants covering Tigray, Amhara,
Oromia, SNNPR, Harar and Afar supporting the regional cultural and tourism
bureaus’ work.
 The third cluster aims at strengthening two creative industries: 1) music, and 2)
image/audio-visual arts. A grant for the Yared School of Music and grants for
audio-visual art have been offered.

The second cluster has implemented activities that will directly and indirectly support
tourism development, in particular in the Gheralta area and Harar. It has also
provided training for crafts. Some project documents are available containing more
detail about activities supported.

PROJECTS FINANCED BY BILATERAL ORGANISATIONS AND NGOS

Bilateral development organisations as well as NGOs have also financed projects with an
impact at different levels of the tourism value chain, the main ones being61:

a. Conservation and management of natural resources and related economic

development

 Years ago, the Austrian Cooperation financed the construction of the office of the
Simien Mountains National Park in Debark, as well as some basic camping
facilities. The latter are currently in a very poor state.
 The Ethiopian Sustainable Tourism Alliance (ESTA) financed by USAID (2008-
2013) strove to enhance biodiversity conservation and economic development
through sustainable ecotourism products, services and other opportunities in
selected destination regions of the Rift Valley, the Bale Mountains and Awash
National Park. The project provided awareness and training, and prepared
business plans for CBT.
 Sustainable development of the protected area system of Ethiopia (SDPASE)
2008-2016, financed by the Global Environment Facility (GEF) of the United
Nations Development Programme (UNDP); Ethiopian Government – in-kind
contributions; national and international institutions as co-financiers. The
executing agency was EWCA. The project financed the demarcation of some
protected areas, wildlife management, training for park staff and development of
the economic value of protected areas including the preparation of a Wildlife
Tourism Strategy in 2013.
 NABU, a German membership NGO, has been involved in setting up the Biosphere
Reserves of Kaffa and Lake Tana, including some activities to support the
development of tourism services. They have offices in Addis Ababa, Bahir-Dar and
Bonga (southwest-Kaffa Area).
 Since 2014, the Frankfurt Zoological Society (FZS) has worked with EWCA to
support park management – mainly in the Bale area – empowering communities,
building capacity, and developing ecotourism, among other activities. Regarding
ecotourism, they contribute to developing policies and guidelines for ecotourism
in the park, as well as developing the capacity and opportunities of communities
to deliver tourism services.
 GIZ has supported several initiatives in the past including financing facilities for
hotel management education in Hawassa University. Currently, GIZ is working
with EWCA to launch the second phase of the Biodiversity and Forestry

61
Source: compiled by the author from different sources

Tourism VCA Ethiopia – Final Report – September 2018 70

 Programme (BFP) that focuses on the conservation and management of protected
areas, including some new national parks.
 The African Wildlife Foundation has been working in the Simien Mountains
National Park to support EWCA in conservation and tourism development, among
others.

b. Training and human resource development

 Several small ad-hoc training programmes have been carried out such as training
of trekking guides provided by the Italian Cooperation in Gheralta (facilitated by
Gheralta Lodge, owned by an Italian).
 Nicolas Youth and Adult Learning Center in Mekele (Tigray). Financed by
Rainbows4children, the centre started as a school for children of disadvantaged
families, mainly disabled war veterans. In 2017, they launched a TVET centre to
train youth in hotel and catering, as well as garment industries, two sectors that
are creating job opportunities in the area. The intention is for hospitality students
(food preparation and bar/table service) to spend four months in class and two
months at the workplace. The first groups have already graduated, and several
more are following the specialised training provided. PUM has been collaborating
with them on the new hospitality courses.

Regarding training targeting public officers, MoCT staff (and presumably ETO staff in
recent years) have benefited from numerous donor-funded initiatives, including one-
month stays in places such as Japan, India and China. They have also attended
many other trainings organised in Ethiopia. However, officers attend trainings that
are not related to their daily responsibilities and activities, and they are not
requested to come up with initiatives resulting from what they have learned. On the
other hand, many trainings take one week or longer and public offices are left
without staff (even those that are open to the public).
The fact is that, in Ethiopia, public employees often consider training as a way to
escape from boring jobs, enjoy opportunities for domestic or international travel and
get per diems that complement their low income. Thus, it is not surprising that for
many years, the numerous trainings do not seem to have had much positive impact
on the performance of the tourism value chain. New approaches are needed, such as
learning by doing, with coaching on practical activities aimed at skill development,
but also at getting things done. The lack of managerial and implementation skills –
including planning, monitoring and follow up – has been a big handicap for MoCT and
other public organisations in implementing the activities identified in many reports
and in their own action plans.
There is a need to break the vicious cycle of preparing new analyses, plans and
strategies while the perceived lack of progress is due to a lack of implementation,
due in turn to a lack of experienced human resources, proper management and
funding.

9.6. Opportunities for creating synergy

Collaboration at all levels (public-public, public-private, and private-private, at federal,
regional and local levels) is necessary to achieve the development of competitive and
sustainable tourism destinations.
The Road Map for the ETO stated that the organisation ‘will be able to assume full direct
responsibility regarding the implementation of international tourism marketing. However,
regarding destination and product development it will be necessary to count on the
active involvement and collaboration of the stakeholders at federal and regional level,
and the private sector’. To do so, the Road Map suggested to establish formal

Tourism VCA Ethiopia – Final Report – September 2018 71

collaboration and partnership agreements with tourism stakeholders in order to foster
alignment of strategies, plans and budgets. Those agreements should include:
establishment of communication channels, involvement in strategic decisions and in the
preparation of work plans, holding regular meetings, developing co-financing
agreements and exploring opportunities for PPPs. The ETO should proactively manage
the implementation.
To facilitate communication and collaboration, the ETO will seek to establish formal partnerships
with key stakeholders and manage the implementation.
Key partners Basic principles for successful partnerships
MoCT
§ Gain understanding of the respective roles
MoFA § Establish communication channels
§ Build mutual trust and respect
ARCCH
§ Define clear roles and ensure commitment
EWCA § Organise regular meetings
§ Ask for and give feedback
REGIONAL GOVERNMENTS
§ Appoint liaison person on each side
§ Formalise agreements (MoUs and other) and ensure
TOURISM INDUSTRY
implementation and monitoring.
UNIVERSITIES /TRAINING CENTERS

DONORS and IFIs

35

The following partnerships were specifically mentioned in the Road Map. However,
although some contacts have been established and some MoUs have been signed, effective and
systematic cooperation has not been established yet.
Agreements with federal bodies
In order to coordinate the ETO’s destination and product development activities, a Memorandum of
Understanding will be signed with key federal bodies, including the creation of working groups
chaired by members of the Tourism Board:
 The Ministry of Foreign Affairs (MoFA)
 The Ethiopian Wildlife Conservation Authority (EWCA)
 The Authority for Research and Conservation of Cultural Heritage (ARCCH)
 The Ethiopian Investment Agency (EIA)
 Others deemed relevant
Agreements with regional governments
Regional tourism authorities and local tourism authorities play a crucial role in destination and
product development, and collaboration and alignment is paramount. A working group with
regional representatives will be set up and will meet regularly, and an umbrella Memorandum of
Understanding will be signed with the regions.
 Additionally, specific MoUs for the implementation of annual work plans or ad-hoc projects
could be signed.
 MoUs will reflect in writing the agreements reached regarding the roles and commitments
of each party.
 ETO management and key staff will visit the regions to learn about their strategies, plans
and needs regarding tourism development, and to coordinate joint activities.
Agreements with the tourism industry associations
A working group with representatives of the tourism industry associations will be set up to:

Tourism VCA Ethiopia – Final Report – September 2018 72

  Discuss marketing and tourism development strategies.
 Discuss priorities for the operational marketing plan.
 Negotiate co-funding for marketing activities (written agreement and procedures will be
prepared).
 Discuss new regulations for incoming operators and guides among other relevant issues.
The working group will meet regularly to follow up the performance of the tourism sector, identify
bottlenecks and make recommendations.
Coordination with the donor community in Addis Ababa
The donor community supports a number of projects that have a direct or indirect impact on
tourism development. The ETO should play a coordinating role in order to ensure that every
project fits with the strategy and plans for tourism development, and to minimise duplications and
overlaps.
 Identify international donors active in Ethiopia.
 Identify ongoing projects having to do with tourism, funding source and implementing
agency to ensure coordination and avoid duplications (a preliminary identification has
already been done).
 Organise a presentation of the ETO to all donors
 Develop good knowledge and understanding of the different donors, their priorities,
planning cycles and funding facilities, and identify matching with ETO needs and project
concepts.
 Prepare brief project concepts based on operational needs and work plans, as well as
expected mid-term projects (3-5 years) in order to facilitate fund-raising.
 Organise at least one annual meeting to discuss tourism for development and share
information about projects.
Agreement with universities and other educational centres
A working group with representatives of universities and vocational education centres (TVET)
offering tourism studies will be set up to:
 Design an internship program.
 Discuss how to align the educational programs with industry needs.
 Set up a network of academics and define potential areas for collaboration.
Representatives from the tourism industry will also be involved.
At least one annual public event will be organised to discuss relevant issues on tourism
development, share best practices and research, etc.

Additionally, ad-hoc working groups, Destination Management Organisations (DMOs)

and Product Clubs should be organised at regional and local level, although the latter do
not seem to be viable in the short-term.

9.7. Sustainability of the Tourism Value Chain

In general terms, social and environmental good practices have not been a priority in
Ethiopia – for both the private and public sectors alike – as the country is rather focused
on fast economic development. Although there are some good examples, the claims
regarding sustainable tourism made by most Ethiopian inbound tour operators are
rather ‘green washing’, and there is a lack of awareness about the importance of
sustainable tourism development and what it takes to implement sustainable practices.
Currently, there are no official bodies in Ethiopia that deal with CSR implementation,
accreditation and auditing for the tourism industry.

MAIN ISSUES REGARDING SUSTAINABILITY

a. Terms of employment (working hours and contracts)

Tourism VCA Ethiopia – Final Report – September 2018 73

Most hotels and operators have formal contracts with their employees as per the labour
regulations, while in smaller tourism businesses members of the family are often
employed in different positions. Some contracts are fixed while others are seasonal or to
cover specific needs (for example, banquet service). Seasonal contracts are less frequent
in accommodations in Addis Ababa and main cities that attract a more consistent
demand along the year, but are more frequent in small incoming operators.
As advertised by the Ethiopian Investment Commission on their website, conditions
regarding the workforce in Ethiopia include:
 Normal amount of working hours per day is 8 (excluding breaks for lunch)
 Maximum number of working days per week is 6 (288 days per year)
 No general restriction on night works
The terms of employment are not a main source of complaints. This is because
employees in tourism companies have better working conditions and a safer and more
pleasant work environment than in sectors such as manufacturing, construction or
farming.

b. Forced labour and child labour62

It has been reported that children in Ethiopia perform dangerous tasks in agriculture and
also engage in domestic work and textile weaving.
In 2016, Ethiopia made a significant advancement in efforts to eliminate the worst forms
of child labour. The government adopted the Overseas Employment Proclamation that
prohibits employment agencies from recruiting workers younger than 18 and allows the
Ministry of Labour and Social Affairs to revoke the license of any agency that violates the
prohibition. The government also established a mechanism to refer victims of human
trafficking to social services and trained labour inspectors, police officers, and judges on
child labour issues. In addition, the government adopted the National Human Rights
Action Plan, which includes efforts to eliminate child labour, and participated in and
implemented several programmes to combat the worst forms of child labour.
Tourism services are not included among the sectors where child labour is prevalent but
in rural areas sometimes children are sent to meet tourists and try to sell them crafts or
ask for money and gifts. They often harass tourists and contribute to an unfriendly
environment. Many tourists consider this to be child labour which casts a negative image
on the destination, while other tourists feel pity and purchase items from them. These
activities keep children from attending school and this type of child labour is increasingly
becoming an issue in some places.63
Any tourism development efforts should carefully avoid allowing or promoting child
labour and there is a need for awareness campaigns targeting incoming operators,
guides and tourists. Encouraging to buy fair-trade textiles only will also help to fight child
labour. Finally, although sex tourism is not common in Ethiopia, hotels are not organised
to fight this type of practices.

c. Discrimination and gender

Ethiopia is a diverse country with many ethnic groups and different religions recognised
by the constitution.
In the tourism sector, the current Minister of Culture and Tourism, the State Minister of
Tourism and the CEO of the ETO are all women. This would be a good sign of women
empowerment but it rather seems the result of offering a weak ministry to women.

62
https://www.dol.gov/agencies/ilab/resources/reports/child-labor/ethiopia
63
Tourists in many areas face this situation, which is mentioned in Ecotourism Concept: Development and Promotion of
Ecotourism in the proposed Lake Tana Biosphere Reserve, NABU, 2014.

Tourism VCA Ethiopia – Final Report – September 2018 74

Several women work as technical officers at the Ministry and the ETO, and two of the
eight members of the new Tourism Board are women.
The tourism industry in Ethiopia counts a number of smart women entrepreneurs who
own and manage hotels, restaurants and tour operators. The presence of women is high
among tour guides in most countries; however, all national guides in Ethiopia are men
(they usually travel along the tourist routes and are often driver-guides) and most local
guides are also men. In the Simien Mountains there is at least one woman working as a
trekking guide.
In large hotels women receive equal pay to men, but it seems that they have less
chances of being promoted.
Ethiopian Airlines has a high number of female employees and although most of them
are flight attendants and check-in agents, they also have several women pilots and
captains. In 2015, Ethiopian launched the new flight to Bangkok with the first all-female
crew where pilots, cabin crew and flight dispatchers were all women. The experience has
been repeated in the launching of other flights and the inaugural flight to Laos was the
first all-female crew flight in Africa. These initiatives have benefited from ample media
coverage and Ethiopian Airlines is proud to offer opportunities to inspire young African
female students to believe in their dreams and embark to fill the skill gap for aviation
professionals.
In any case, it is necessary to improve the awareness of women regarding job and
business opportunities in tourism, and mainstream gender in training and other
initiatives in support of tourism development.
It is worth mentioning that, according to the traditions of the Orthodox Church, women
are not allowed into some monasteries and churches in Ethiopia. However, this is not
always publicised in advance and it can become a source of disappointment.

d. Salary and reward

In Ethiopia, there is no minimum wage requirement on private sector employers and low
wages are included among the advantages for investment by the EIC.
Although salaries in travel and tourism services are low, they are higher than in other
sectors.64 Moreover, the current shortage of skilled and trained professionals in the
hospitality and tourism sector is pushing an increase of wages as companies fight to
attract and retain good professionals, or even those with basic experience. For example,
a waiter with experience hired by a good restaurant may get over 2000 Birr per month
while basic salaries in restaurants may be around 600-800 Birr.
A hotel receptionist may get around 3000 Birr65 per month, the same as staff with some
experience working for tour operators preparing tours. Staff working in international
hotels and in large cities have more chances to get higher salaries. In addition, most
hotels and restaurants have a service charge that is distributed among the service staff.
The salaries of middle managers can go up significantly to reach around 15,000 or
20,000 Birr per month (still under USD 1000 per month).
The number of paid annual leave days for a starting employee is 14, with a slight
increment for additional years of service; and average premium pay for overtime work is
50%.

e. Rights of indigenous people

64
Construction workers may get one or two dollars a day for hard work and salaries in farms and manufacturing are very
low, often around 40 USD per month or less. Those amounts are below what a person, not to say a family, needs to have
their basic needs covered.
65
The exchange rate is around 27 Birr per USD, or 32 Birr per EUR.

Tourism VCA Ethiopia – Final Report – September 2018 75

Ethiopia has a diversity of ethnic groups and the smaller and more vulnerable are
located in the SNNPR, in particular in the Omo Valley, which is considered one of the
main tourist attractions in Ethiopia.
According to Human Rights Watch,66 the federal government considers that area
economically and socially backward and many official development efforts undertaken do
not take into consideration the interests and needs of the local population. With the
development of infrastructure and land allocated for intensive farming, traditional farms
are being cleared, grazing lands have been lost, and livelihoods are being destroyed.
These changes are being carried out in contravention of domestic and international
human rights standards, without meaningful consultation, consent, or compensation for
loss of land, livelihoods, food security, and access to vital subsistence resources. The
Ethiopian government should conduct an environmental and social impact analysis that
considers the cumulative impacts of new initiatives on the Lower Omo. Human Rights
Watch also urges Ethiopia’s donors to press for appropriate social and environmental
impact assessments.
Current and future investors should comply with best practices of corporate social
responsibility and refrain from any investment activities in areas where land title is
contested and involuntary resettlement is occurring, until all violations are investigated
and remedied.
Regarding tourism operations, visits to those ethnic groups tend to be limited to quick
exchanges of money with people selected to pose for photos. Immediately after, most
vehicles transporting tourists leave the communities. In some cases, out-of-context
traditional ceremonies are performed for tourists only. Given the situation, in 2013,
Exodus, a specialised UK tour operator, stopped offering trips in the South because the
way tourism is operated there was not aligned with their sustainability standards.67
This may not be the only case, and the whole approach needs to be redefined in order to
improve the quality of the experience for both locals and visitors, the economic impact
on the communities, and the respect for the traditional cultures and livelihoods.
However, at this stage, it may not be an easy task as in many communities people are
already used to getting cash directly from visitors, and some initiatives to create
community funds have failed. Nevertheless, in a few places such as Konso cultural
village, a UNESCO Cultural Landscape, better practices are in place (they charge an
entrance fee and 70% goes to the community).
Regarding tourism services offered by rural communities, no problems have been
reported as those initiatives were started with donor funds, the communities received
training and they charge for the services.

f. Waste management
Waste management remains a serious issue in fragile areas such as the Danakil where
trash is left behind, mainly plastic bottles.68 Online reviews often refer to trash and
include negative comments about the way tourism is operated. Incoming operators have
also reported that tourists are surprised and complain at the sight of trash in such wild
and remote area, although they do not seem to feel responsible to do something about
it. This situation could certainly improve if the incoming operators introduce more

66
https://www.hrw.org/report/2012/06/18/what-will-happen-if-hunger-comes/abuses-against-indigenous-peoples-
ethiopias-lower
https://www.nytimes.com/2017/10/30/travel/omo-valley-ethiopia-eco-tourism.html
67
https://www.telegraph.co.uk/travel/news/Exodus-abandons-Omo-Valley-tours/
68
By tourists, but also by local people. Interestingly, tour operators transport bottles of water in their vehicles as part of
the ‘payment’ requested by one of the chiefs that controls the tourism activity in Afar.

Tourism VCA Ethiopia – Final Report – September 2018 76

sustainable practices and if tourists are given proper instructions and are made aware of
the environmental impacts of their presence.
Poor cooking and food service practices in places as the Simien Mountains are also a
source of environmental impact (for example, sandwiches are often offered to trekkers
wrapped in aluminium foil. Both sandwich and aluminium often end up littering the
park).
The growth of resorts along the shores of the Rift Valley lakes and Lake Tana without
proper planning and little or no care for sustainable practices needs improved
management and basic infrastructure to avoid water pollution.

g. Preservation of biodiversity69
Many of Ethiopia’s Wildlife Protected Areas are under greater conservational problems
with extensive incursions by livestock and people, and their biological and physical
resources are in rapid decline. Moreover, the law enforcement practices are not well
integrated with the national defence and police who are supposed to be involved in the
protection of the natural resources.
Being aware of this situation, the EWCA at federal level and the respective Regional
States of Culture and Tourism Bureaus are collaborating to solve the prevailing resource
conflict that exists between the protected areas (especially national parks) and the local
communities. The initial focus is to re-demarcate the existing boundaries of the national
parks and conservation areas, with local administrators and local communities being
involved in this process. A compromise is needed so that wildlife areas-dependent people
are not adversely affected, and there is an interest in providing alternative sources of
income. Getting involved in the provision of tourism services is often one of them.

h. Other CSR topics at risk in Ethiopia’s tourism sector

In Ethiopia, tourism takes place in environmental and socially sensitive areas, and in the
absence of proper destination development, management plans and operational
guidelines, the increasing number of visitors in places such as the Simien Mountains, the
Erta Ale volcano, the Danakil Depression and the Omo Valley, although small, is already
causing significant negative impacts (camping without proper infrastructure, little benefit
for the local communities and accumulation of solid waste).
In many destinations across Ethiopia locals perceive that they do not get their share of
the benefits as most tourists arrive in vehicles provided by incoming operators from
Addis, with national guides that work for them. This has resulted in charges being
imposed on operators without any service offered in return, tourists harassed by people
asking for payment, even stones thrown at vehicles. These situations need to be
addressed in collaboration with the regional governments, with awareness campaigns,
the organisation of services or activities to generate some revenue for locals, and
through collaboration with the incoming operators.
Tourism is often seen as an alternative to unsustainable practices to create jobs and
revenue, and as a tool to fight poverty. However, there is a need to create awareness
among regional authorities and communities about the fact that the direct provision of
tourism services is not the only way for rural communities to get their fair share of the
benefits of the tourism activity in their areas. Some of the most successful examples in
other destinations involve agreements and partnerships with tour operators or lodges
that can ensure a flow of visitors and higher expenditure. Tourist income can then be
shared through some direct jobs, but also by investing in projects and activities
benefiting the community at large. As shown below, lodges also offer linkages with the
agricultural value chain as they need recurrent food supplies that can be sourced locally.
69
Source: STMP

Tourism VCA Ethiopia – Final Report – September 2018 77

Construction and maintenance works are other sources of employment and revenue for
locals.

Linkages vs. leakages70

The pre-eminence of global lead firms has implications for the value captured by domestic actors
who participate in the chain. With foreign tour operators, hotel companies, and investors often
controlling supply chain decisions and procurement opportunities, linkages between tourism and
supporting industries sometimes remain underdeveloped. The pro-poor tourism literature
advanced by Mitchell and Ashley and similar researchers investigates linkages in extensive detail.
Mitchell and Ashley (2010) conducted a broad literature review and estimated that the empirical
evidence suggests that roughly 25–33% of total tourism revenue is captured by the poor in
developing countries through direct earnings and indirect multipliers in the supply chain.
Although tourism and agricultural industries have a complicated relationship that is sometimes
characterised by competition for land rights (Torres and Momsen 2011), there are also thick ties
between the two. Mitchell and Ashley (2009) mapped the flow of tourism expenditures
throughout the Ethiopian economy. According to the analysis, Ethiopian tourists spend
roughly USD 55 million on food and beverages; of this, hotels purchased USD 16 million
from 6,300 domestic producers to support an estimated 25,000 farm jobs.
Many South African safari lodges also have relatively strong linkages with the domestic food supply
chain. Rogerson (2012) surveyed 80 lodges in six distinct regional clusters to examine local
sourcing of eight food categories: (1) vegetables; (2) fruit; (3) eggs; (4) dairy products; (5) meat;
(6) luxury goods; (7) tinned goods; and (8) dried goods. The average sourcing distance was the
shortest for fruit, eggs, and vegetables. Considering the robust demand from each location for all
three goods – each lodge, for instance, ordered 250 kilograms of vegetables per week – the
potential benefit for domestic actors in each industry is significant.
While 77.5% of the population of lodges in the Rogerson study were owned by South African
companies, backward linkages between tourism and agribusiness persist in markets with foreign
lead firms. Spray and Agarwal (2016) studied linkages in the tourism industry in Rwanda, which is
characterised by high degrees of foreign visitor spending and ownership. Only 3% of the total
imports from tourism were from the agriculture, forestry and fishing sectors, which suggests local
sourcing suffices to some degree (prepared foodstuffs, including beverages and tobacco, were the
largest single food import category). Instead, the largest imports in the tourism industry in
Rwanda were related to construction: base metals, machinery, mineral products, and stone and
cement.

ORGANISATIONS WORKING TO TACKLE THESE ISSUES

The federal government has already taken measures regarding the worst forms of child
labour (not a main issue in the tourism industry) and Human Rights Watch is pushing for
the recognition of indigenous rights. In addition, there are women’s associations and
NGOs supporting progress on gender issues. As mentioned in section 8.5, several
development organisations and NGOs support the protection and management of natural
resources. They also foster increased awareness among local communities about the
need to preserve the resources and alternative economic opportunities offered by
tourism. However, there are no government or development organisations that are
focused on fostering sustainable practices in the tourism value chain, and private sector
organisations are not playing a role in this sense either.

ARE THERE OPPORTUNITIES IN TERMS OF CSR?71

70
Source: https://www.econstor.eu/bitstream/10419/161581/1/87897041X.pdf
71 rd
https://www.cbi.eu/market-information/tourism/trends/, accessed July 23 2018

Tourism VCA Ethiopia – Final Report – September 2018 78

The European travel industry to long-haul and less developed destinations increasingly
demands sustainable practices from local inbound tour operators and service providers,
and sustainability continues to be an important topic in the travel industry. The UN
declared 2017 the International Year of Sustainable Tourism for Development and
sustainability has moved on from being a competitive edge to being the norm. Small,
specialised outbound operators were pioneers in the introduction of sustainable practices
and a growing number of European tour operators require their suppliers to be
sustainable.

WHAT IS NEEDED TO IMPROVE THE SOCIAL RESPONSIBILITY PERFORMANCE OF SME

EXPORTERS IN THE VALUE CHAIN?

As the main link with the market in the export value chain, incoming operators should be
the first to adopt sustainable practices in their companies that will have a cascade effect
on their suppliers and the destinations visited. The professional associations could help
to introduce these practices working together with the ETO, regional governments and
EWCA. Working with hotel associations will also foster more sustainable practices in the
design and operation of tourism accommodation

WHAT CAN CBI DO TO ENHANCE CSR IN THE TOURISM VALUE CHAIN?

At this stage, as mentioned in section 4.6, the CBI could start with supporting awareness
campaigns before introducing the Travelife certification for incoming operators. Support
may include:
 Public presentations, workshops and communication activities to create awareness
about the importance of sustainable tourism development, what is sustainable
certification, and what it takes to achieve progress. Target publics are:
o Relevant public sector organisations (i.e. MoCT, ETO, Regional Tourism
Bureaus, EWCA)
o Incoming operators and their associations
o The local population in selected destinations
Collaboration with the Tourism Media Forum, a group of media professionals that
cover the tourism sector, is recommended. They are coordinated by MoCT.
It is also important to support EWCA to develop and enforce overarching guidelines for
sustainable tourism activities in protected areas, in collaboration with the associations of
incoming operators, NGOs and donors. EWCA may already have some guidelines
prepared by different projects, but they are not implemented or well known to operators
and national guides.
Similar support is recommended for ARCCH and other organisations involved in the
protection and management of heritage sites.

Tourism VCA Ethiopia – Final Report – September 2018 79

 ELEMENT 3. OPPORTUNITIES AND OBSTACLES
IN THE VALUE CHAIN REGARDING TOURISM
FROM EU MARKETS TO ETHIOPIA

Tourism VCA Ethiopia – Final Report – September 2018 80

10. Key opportunities and obstacles in the
tourism value chain
A number of sectoral assessments and strategic plans that have been used to prepare
this report have already identified the opportunities and challenges for the development
of tourism in Ethiopia, and have suggested action plans. This chapter focuses on
opportunities and challenges related to export activity, in particular: marketing and
commercialisation, product development, performance of the small service providers in
the tourism value chain, and sustainable tourism development

OPPORTUNITIES
Europeans are a key Europe generates around 30% of total international trips to Ethiopia
market for leisure and and Europeans represent a significant source market for leisure and
holiday trips in Ethiopia holiday trips (37.4% in 2016). The UK, Germany, Italy and France
that could be further consistently appear among the top-10 source markets for holiday and
developed. leisure travel. Sweden and the Netherlands also appear high in the
ranking.
However, visitor numbers are still low while other African countries
are more successful in attracting European and long-haul leisure
travellers.
There is an opportunity to increase the demand from European
markets. The Marketing and Branding Strategy identified the
experience seekers as the most promising market for Ethiopia and
recommended giving high priority to the ‘Packaged Explorers’ that
are most likely to be European. It also included several European
markets among the ‘core’ markets with high revenue potential and
high affinity for leisure travel to Ethiopia, as well as among the
‘steady’ markets that although smaller are easier to penetrate.

Ethiopia can benefit Long-haul travel from Europe is growing, and European travellers
from current trends in search for authentic and unique experiences in non-traditional
the European travel destinations. More active and specialised holidays are in demand,
market to diversify the such as adventure tourism, walking/hiking, cultural and religious
product portfolio and tourism, nature and wildlife tourism. This opens up opportunities for
attract more visitors small, specialised incoming operators and activity operators, as well
as for activities that foster exchanges with local communities.
Ethiopia has a Its unique history and culture with old roots and a halo of mystery is
comparative advantage attractive to many Europeans. Eleven UNESCO heritage sites and
in relation to other rough and diverse landscapes that can be further developed to
African destinations attract European visitors.
Relative proximity to Europe makes travel to Ethiopia easier. Good
air hub with Ethiopian airlines serving several key European source
markets.
Private investors The lack of accommodation targeting the leisure market is often
interested in tourism mentioned as one of the key challenges for tourism development in
that could be Ethiopia. However, there is also interest from local and foreign
strategically channelled investors to invest in tourism. With improved information and
coordination, investments could be channelled to priority areas and
to types of facilities that can attract higher-spending Europeans and
more international leisure tourists.

The main obstacles and challenges in the tourism value chain to attract and retain
European leisure tourists, in particular higher spenders, are summarised in the following
table.

Tourism VCA Ethiopia – Final Report – September 2018 81

 OBSTACLES AND CHALLENGES
Tourism service providers accommodation/food services
Poor quality of
Poor service impacts the perceived value for money and customer satisfaction.
service
Unsatisfied customers will not return or recommend, and the travel trade may
be reluctant to proactively market the destination.
Although there are some good examples, service levels in the supply chain
(hotels, restaurants, guiding, etc.) across Ethiopia are low for EU standards.
The lack of understanding about European market needs and wants limits the
capacity to serve European tourists. Many small companies imitate others, often
repeating bad examples as they are the only reference available.
Owners have no experience in the sector and often lack exposure to
international standards. This results in poor projects for buildings and facilities
not adapted to the taste of the European leisure market.
Poor management skills and poor maintenance of facilities do not help to
upgrade the services offered.
Lack of trained
One of the main causes of poor service is the appalling lack of trained
manpower
manpower and addressing this gap has become a national priority. Training
institutions cannot follow the pace of tourism development, they lack adequate
facilities, human and financial resources, and graduates do not respond to the
needs of the industry, lacking practical experience and exposure to international
service standards. Of critical importance is the lack of experienced middle
managers that can train and provide guidance for staff.
Limited
In spite of the boom in tourism accommodations in the last years, investments
accommodation
are concentrated in the main cities and in business type hotels, with important
capacity of
design flaws, and in low-end accommodations. Maintenance, cleanliness and
international
hygiene are often poor, and the availability of decent bathrooms is often an
standards
issue. Thus, although the number of lodges is growing, the supply of
accommodation adapted to the European holiday travellers is very limited and is
a significant barrier to attracting and retaining more international tourists, in
particular the older as well as the higher spenders.
Some incoming operators have reported problems with not being able to
confirm the availability of accommodation when they receive a booking request
and they sometimes have to cancel group requests due to a lack of suitable
accommodation.
Current investment policy and promotion has not been successful in attracting
more investment in accommodations targeting the leisure market. The lack of
specialised staff, lack of coordination with tourism development strategies, poor
IT tools and lack of proactive search of relevant investors have prevented
Ethiopia from achieving better results.
CBT initiatives
Many donors have supported CBT projects in Ethiopia and elsewhere to fight
struggle to be
poverty, as an alternative option to unsustainable practices impacting natural
successful
resources, and because they require less investment in facilities and equipment
than typical service providers.
Although tourism is growing in Ethiopia, visitor flows to specific locations are
still low and do not provide enough income and incentives for many
communities to engage in consistent provision of tourism services. More
destination lodges and increased tourism flows would offer more opportunities
for linkages with agriculture, crafts and other sectors; and to provide more
opportunities for the development of SMEs and community-based tourism
services.

Tourism VCA Ethiopia – Final Report – September 2018 82

 Commercialisation and operation of tours
Incoming
Most Ethiopian incoming tour operators are not market ready. Many are selling
operators have
to independent tourists only (word of mouth) or to those already in the country.
limited skills to
They need to gain market insights, become aware of the market opportunities in
proactively
the different European markets, understand the product requirements of each
reach the
strategic segment, as well as pricing and commissions; and develop capacity to
markets and
proactively market their services offering the right product to the right customer
work with the
through the right channel.
travel trade
Missed opportunities to develop business linkages with outbound operators at
trade shows because participation is confirmed late, little or no preparatory
activities and lack of follow up.
Narrow product
Tours offered to the market concentrate on the main routes as product offer in
range, little
other regions is not sufficiently developed. Tours focus on sightseeing with short
diversification
average stay in each destination. Lack of product development hinders the
and innovation
possibilities to increase length of stay, attract other market segments, and
foster repeat visits.
Imitation and competition based on prices due to lack of market knowledge and
limited capacity to identify opportunities for specialisation or differentiation.
Need to acquire skills to diversify products to attract new European and
international visitors.
Poor regulation
The shortcomings in regulation of tour operators, national guides and tourism
and
transport, and the lack of monitoring and proper enforcement has allowed the
enforcement
disorganised growth of service providers. Some of them operate informally and
for incoming
some unethical practices by licensed operators and guides have also been
operators and
reported. There is no well-established system to register and process complaints
guides does
and act accordingly.
not encourage
a competitive Updated regulations and coordination with regional and municipal authorities
sector are needed to address these issues that have a negative impact on the
reputation of the destination. Stronger professional associations would also help
to fight unprofessional practices.
Destination marketing
Official
The ETO has the mandate to lead and coordinate the official destination
destination
marketing but lacks human and financial resources. Most resources and efforts
promotion
are dedicated to participation in mainstream trade shows, with little or no
focuses on
preparatory activities or follow up. A small number of incoming operators
traditional
participates in those events. The private sector is not showcased in publications
marketing
and online channels.
activities and
lacks strategic ETO lacks understanding and skills for efficient online marketing, although this
focus function should be mostly outsourced to specialised companies.
Institutional marketing activities are not consistent with strategies and plans,
budgets and decisions are prepared/taken in the last minute. There is a lack of
systematic procedures, databases and IT tools, and professional input (no
representatives in markets, little outsourcing to specialised professionals).
Sustainable tourism destinations
Lack of proper
Insufficient protection of national natural and cultural assets in the public
destination
domain that are key production factors in tourism. Poor linkages with incoming
planning and
operators and the private sector to ensure sustainable practices.
visitor
management Lack of integrated planning and product development strategies for the main
may tourism destinations.
compromise
sustainable Poor urban planning and building codes in tourist towns that should be aligned
development with the marketing and product development strategies. Poor basic

Tourism VCA Ethiopia – Final Report – September 2018 83

and long-term infrastructure, waste collection and disposal. Unreliable power and water supply,
success and erratic telecommunications and Internet. These can have a negative impact
on private investments that may lose value if the destination loses its appeal.
Some spontaneous and erratic operational visitor management procedures
decided locally, without proper understanding of the tourism activity, do not
allow for professional, efficient and sustainable tourism management, and to
foster positive relationships among locals, incoming operators, and visitors.
Lack of Some good practices exist but there is no clear understanding and awareness
sustainable among public and private actors in the tourism value chain of the importance of
practices sustainability in tourism development and operation, and there is no
throughout the coordinated effort in this sense.
industry

Policymakers and regulators

Limited
Although tourism has been included in the government’s long-term economic
understanding
development plan, not all public stakeholders and high-level government
of tourism as a
officers understand the role of tourism as a socioeconomic development lever
development
and as an export sector.
sector
Lack of understanding of tourism as a system and how many government
organisations have an impact on the value chain.
Linkages with other sectors are not well understood and tourism receives less
attention and resources than sectors such as agriculture or manufacturing, and
it is not taken into consideration in decisions regarding infrastructure or land
uses in areas with tourism potential putting long-lasting tourism development at
risk.
Weak
Although the governance framework is in place, most institutions involved are
institutional
weak due to lack of qualified human resources, and very limited financial
framework and
resources.
lack of
coordination MoCT and ETO are key players at federal level that are not in a position to
between provide the expected leadership needed to foster well planned, competitive, and
various sustainable tourism development.
stakeholders
Structural problems are at the root of the poor performance but, given the fast
pace of growth of the private sector, it will be difficult to correct many problems
created due to weaknesses in planning, regulation and enforcement.
Of particular importance are the regional and municipal governments that are
closer to the destinations and the tourism product. Public-private collaboration
(Destination Management Organisation) needs to be developed in the regions in
the mid-term.
Lack of
Statistics about tourism arrivals are not published and communicated in a timely
statistics and
manner, and lack in-depth analysis. No visitor surveys that provide info about
information
the profile of the demand. Lack of public statistics about tourism companies, in
systems to
particular investments in accommodation and hotel occupancy.
provide
guidance for Market research and insights about source markets are not available and are
tourism not taken into consideration in decision making (could be from secondary
planning and sources). Lack of knowledge management at institutional level hinders progress.
development Data and reports are not made easily available to public officers, private sector
and academics and are often lost due to poor IT infrastructure and lack of
procedures in place.
The weakness of the statistics system and the lack of IT tools leaves private
investors and public organisations without the information needed to make
sound decisions.

Tourism VCA Ethiopia – Final Report – September 2018 84

Lack of
Several regulations, strategies and plans for tourism do exist. However, human
resources and
resources in public organisations lack the technical skills and the experience to
skills to enforce
implement them. Lack of leadership and poor management skills do not help to
regulations and
get things done. Insufficient coordination, no counterparts appointed in different
implement
organisations, no working groups.
existing plans
and strategies The poor performance of the public sector leads to disorganised growth,
whereas the efforts and investments of many services providers may be
negatively affected.
Coordination and collaboration
Limited
Lack of working groups in place that ensure systematic communication and
collaboration
collaboration to remove bottlenecks in key aspects of tourism development.
and
Coordination at federal level may be needed in some cases, but collaboration at
coordination is
regional and local level is also important to enforce regulations, foster smart
a barrier to get
planning and product development, and monitor performance.
things done
Coordinating existing resources and funding, instead of working as independent
silos, would be an efficient way to close gaps and get more things done.
Organisations that are/should be key enablers in the tourism value chain need a
more integrated approach to tourism. MoCT, ETO and the Regional Culture and
Tourism Bureaus should take the lead and foster involvement of relevant
stakeholders and partners.
Further involvement of the private sector is needed in all cases.
Weak private
Hotel owners association in Addis Ababa is strong, but outside Addis there are
sector
only incipient hotel associations in some areas. Two tour operator associations,
associations
both rather weak. No national federations of hotels or incoming operators.
Associations of local guides were formed in many destinations with the aim of
creating job opportunities for youth but tend to offer poor services, harass
tourists and force incoming operators to pay for services not provided.
Stronger associations are important to support private sector development,
improved business environment, further collaboration with public sector
organisations, and improved visitor experience.
Financing
No guaranteed
Many small entrepreneurs and already existing tourism SMEs struggle to get
funding
funds to start or improve their business.
adapted to
tourism SMEs Lack of understanding of the tourism sector and of the type of investments
needed do not help. For example, banks prefer to finance concrete constructions
rather than an ecolodge or lighter facilities.
Required guarantees are also a barrier.
Need to create
Allocation from government budget to tourism cannot cover what is needed to
funding
achieve impact and bring meaningful transformation. Alternative sources of
mechanisms to
recurrent funding are needed and the opportunity of introducing a bed levy and
support
creating a Tourism Fund was assessed some time ago but has not been
tourism
implemented yet. In the meantime, Ethiopia is lagging behind while competition
development
intensifies, and tourism grows in a disorderly fashion.
Protected areas and heritage sites need to improve mechanisms to obtain
income from the tourism activity that could be reinvested in conservation and
visitor management. Concessions and other PPP arrangements are needed to
bring necessary funding, marketing and operational skills. Properly set up, these
initiatives would also benefit local communities and improve visitor satisfaction.

Tourism VCA Ethiopia – Final Report – September 2018 85

 ELEMENT 4. POSSIBLE INTERVENTIONS IN THE
VALUE CHAIN TO INCREASE TOURISM FROM EU
MARKETS TO ETHIOPIA

Tourism VCA Ethiopia – Final Report – September 2018 86

11. What CBI can do to support a more
competitive and sustainable tourism value
chain in Ethiopia

Based on the opportunities and challenges listed in the previous chapter, the key
opportunities for the CBI to add value to the tourism value chain in Ethiopia are:

1. To foster a proactive and more professionalised commercialisation and

sales effort by incoming operators, targeting strategic segments of the
leisure market and higher-spending tourists in the main European
markets. By taking advantage of the current growth of European visitors in
Ethiopia and the positive market outlook, and following the priorities defined by
the Marketing and Branding Strategy this should contribute to:
 more professional incoming operators with improved capacity to approach and
develop lasting business relationships with the European travel trade;
 higher visitor numbers with more diversified travel motivations (segments);
 better distribution of tourism flows through the year and across Ethiopia
(beyond the most popular destinations).
2. To support existing small tourism service providers to upgrade the
quality of their services and management practices. They are key actors in
the tourism value chain who are in contact with visitors and have an impact on
the quality of the travel experience as well as the perceived value for money.
They all need support to provide services up to international standards. Improved
services and management will positively impact tourist satisfaction and business
results.
3. To foster improved conditions to direct investment and tourism flows to
less developed regions. Accommodation of higher standards will make it easier
to attract higher-spending tourists and foster increase in exports. Thus, fostering
coordination to capture and direct investments where they are needed is
expected to contribute to increased capacity to receive tourists, as well as
improved distribution of tourism flows, tourism jobs and income throughout the
country. The CBI could also contribute to a more competitive and sustainable
tourism product by providing very focused support to improve destination/product
development in unique areas with high potential for European tourism.
4. To promote sustainable practices among incoming operators and the
tourism industry at large. This is to respond to the increasing interest in
sustainability among European outbound operators and their customers. From the
supply side, sustainable practices will allow further growth of tourism
safeguarding natural and cultural resources which are key attractions for tourism
and national assets. Providing technical assistance to improve visitor
management and sustainable tourism operations in key natural and heritage sites
will also support sustainable tourism development (including new opportunities
for SMEs to provide services).

In general terms, to differentiate the project and achieve higher impact, the following
approach is recommended:

Tourism VCA Ethiopia – Final Report – September 2018 87

  Focus on a few activities with more in-depth work leading to some practical
impact. Given the size of Ethiopia a narrow focus is also advisable for activities
requiring field work.
 Design project activities (at least some of them) in a way that they can add value
to the tourism value chain beyond the project scope.
 Focus on existing tourism service providers, mainly accommodations and food
and beverage services (restaurants and cafes) that are the main suppliers of the
incoming operators. Most projects pay little attention to supporting small
entrepreneurs who are already in business in the buffer zones of protected areas
and in service hubs along the tourism routes. Developing a system to train and
coach them would be an excellent complement to the job done by CBI with the
incoming operators. Those SMEs generate many jobs and it is advisable to work
at company level, as it will allow reaching the management as well as the staff
that need skills training (food preparation and service).
 Regarding institutional development, involve relevant federal and regional public
organisations that support and enable the tourism value chain in the different
project activities, with a focus on fostering collaboration and achieving practical
progress rather than providing typical training in a classroom setting.
 Foster synergies among project activities.

The specific activities that could be financed by a CBI project are listed and explained in
the tables below.

Tourism VCA Ethiopia – Final Report – September 2018 88

1. To foster a proactive and more professionalised commercialisation and sales effort by incoming tour operators targeting strategic segments and
higher-spending tourists in the main European source markets.

WHAT HOW WHY EXPECTED RESULTS

Foster export Provide training to incoming operators to By packaging and selling to the international Incoming operators in a better position to
readiness among improve their capacity to develop and market the market – directly or through commercial convey trust and establish business
incoming type of travel ‘experiences’ that European customers channels – incoming operators are the key relationships with European tour operators
operators expect and are ready to pay for. actors in the export activity, selling many and customers.
services provided by a variety of SMEs
Improve their knowledge and understanding of countrywide. More proactive and effective sales effort.
European markets including, among others:
differences by geographic markets, market segments, Improving their skills and performance will Reduced competition on price, higher value-
buyers’ profiles and habits, product requirements, lead to an increase of European visitors. added products.
commercial channels, pricing, communication and More EU operators offer a more diverse
product presentation; how to prepare and follow up A better understanding of market
opportunities and trends will improve range of tours and activities in Ethiopia for
attendance to trade shows; how to approach, travellers to choose from.
negotiate and establish lasting relationships with market/product match and a create a more
travel trade partners in Europe; online marketing. efficient sales effort. Stronger and more competitive incoming
Building capacity will not only help to seize operation businesses in Ethiopia with
Combine group training in collaboration with the improved growth perspectives.
professional associations (broader impact), with more the opportunity in the EU markets, as it will
specific coaching provided to selected incoming also contribute to address the challenge of a These will contribute to higher number of
operators (give priority to specialised operators or lack of skills and professionalism. European visitors with more diversified
those with potential to develop new markets) travel motivations and higher expenditure
per visitor/day.

Promote B2B Support effective participation by selected Exposure to specialised tradeshows abroad More European operators get to know what
networking incoming tour operators in specialised trade will contribute to a better understanding of Ethiopia has to offer, including options
between incoming shows in Europe. the benefits of targeted promotion and during the rainy season, and have
operators and specialisation. opportunities to experience the product first
outbound Assist in designing a travel trade event in Addis hand.
operators in the aimed at promoting B2B contacts between A well-conceived B2B event in Ethiopia will
European outbound European operators, incoming operators help reach and capture the interest of New agreements between incoming
markets and service providers (i.e. lodges). Create event operators from different European markets operators and outbound operators.
concept and brand (i.e. The Travel Merkato or in a single event.
Destination Ethiopia). Combine B2B with fam trips. More outbound operators offering tours to
Airlines, hotels and incoming operators should Higher contribution from private sector is Ethiopia in the European markets with more
contribute with in-kind services and logistics. (*) expected than in trade shows abroad. diversified tours on offer.

Provide technical assistance for the implementation A larger number of Ethiopian tourism The tourism industry will have a model
of the first edition of the B2B event. Monitor professionals will have the opportunity to to be replicated as the B2B event can be
results and make suggestions for improvement in establish links with the markets without the the basis for a recurrent event that could
future editions. limitations of travel (time, foreign currency evolve to include new target markets, focus
and visas). on specific segments, etc.

Tourism VCA Ethiopia – Final Report – September 2018 89

 WHAT HOW WHY EXPECTED RESULTS

Strengthen the Technical assistance: provide benchmarks, Stronger associations will be in a better More proactive associations offer improved
incoming prepare/update strategic plans, update requirements position to foster professionalism, attract added value to their members, attract more
operators for membership, improved services to members, new members and improve their position as members and have a positive influence on
associations identification of income sources, branding and private sector counterparts of MoCT and the development of competitive and
communication including online channels. other public sector organisations. sustainable tourism.
Foster collaboration among the two existing
associations.

(*) B2B event. Many leading tourism destinations organise large events conceived to facilitate business contacts between local tourism suppliers and
buyers from the markets. Kenya and Mexico are two examples of quite large events:
Magical Kenya Travel Expo
http://mkte.co.ke

Tianguis Turístico, México (Tourism Marketplace, Tianguis means market in one of the indigenous languages)
http://tianguisturisticomexico.com.mx/en/el-evento/acerca-del-tt-2018
Considering the limitations of the current tourism supply, Ethiopia should start with a smaller event, a sort of large workshop with pre-set B2B meetings
combined with presentations (destinations and products) and fam trips. This is the way how the other events started. The CBI will help provide technical
expertise to:
 come up with a well-conceived event with clear objectives and targets;
 careful selection of the outbound operators to be invited;
 define and provide support with the logistics required;
 work on a model for funding the event with private sector partners.

Tourism VCA Ethiopia – Final Report – September 2018 90

2. To support improved quality of services offered and management practices of existing small tourism businesses

WHAT HOW WHY EXPECTED RESULTS

Improve quality and PROVIDE TRAINING AND COACHING TO SMALL Tourism service providers are SMEs already System in place conceived to multiply training
competitiveness of existing TOURISM SERVICE PROVIDERS to improve the in business, their service needs activities without CBI support.
tourism service providers quality of services and their management improvement and there is little or no support
skills. available to help them. Training materials developed.

Target accommodation, restaurants and food Given the huge need to upgrade the quality Trainers all over Ethiopia ‘certified’ to
service/cafes. of services and improve professional skills implement training.
across Ethiopia, the added value of the Once the training is completed:
Come up with a good concept for a CBI project could be multiplied by
sustainable training system with a designing training and coaching in a  Staff has improved skills to provide good
wider/deeper reach than traditional short way that could be replicated in the service to tourists.
courses targeting service staff: future with local resources, and by  Management practices have improved
 Develop the concept and the process to designing a sustainable mechanism to with a positive impact on HRD, service
roll out training in the medium and long efficiently extend the training to the different quality, sales and business results.
term. regions. Train the trainer courses and the
 Develop training materials. development of practical training materials Managers more aware of the standards
 Train trainers from ALL regions in would be key to facilitate a cascade effect. needed to serve international tourists and
Ethiopia (trainers from TVET centres increase income, to be taken into
Owners/managers need support to consideration in new investments.
and other tourism professionals). understand international leisure travellers
 Provide pilot training in a focused area. and improve managerial skills (quality
A good option could be Arba Minch, a service, safety and hygiene, training staff,
service hub in the South that has a costing, pricing and marketing, maintenance
diversity of accommodations and of facilities, etc.).
restaurants and has received less
support than other areas. Staff needs to acquire basic service skills.

The partner to roll out this training system

could be CTTI, the national reference centre
for TVET in tourism that has links with TVET
centres in the regions.

A good benchmark for this type of training is

the MODERNIZA program developed in
Mexico to improve the competitiveness of
tourism SMEs in small historic towns and
rural areas, away from the main coastal
tourism destinations.
(See Annex)

Tourism VCA Ethiopia – Final Report – September 2018 91

3. To foster improved conditions to direct investment and tourism flows to lesser developed regions

WHAT HOW WHY EXPECTED RESULTS

Foster collaboration to Set up a WORKING GROUP AIMED AT More accommodation of international standards Improved information available to potential
capture investment in IMPROVING THE CAPACITY TO ATTRACT is needed in order to attract more leisure investors through official websites and written
accommodation for leisure AND CAPTURE INVESTMENT in tourism visitors from Europe and other markets, extend documents.
tourists accommodation targeting the leisure the average length of stay, and increase
market. expenditure. Portfolio of projects (location, land available,
type of project, special incentives).
Key stakeholders that should be The EIC has already identified some less
involved are: EIC, ETO, EWCA, developed areas where additional investment Procedure in place and definition of
Regional Culture and Tourism Bureaus incentives are offered. responsibilities to assist potential investors and
to proactively search for investors.
Support has to be practical and go However, opportunities are lost when potential
beyond the analysis of problems and investors approach the EIC, the ETO or the Create awareness about other investment
the identification of what needs to be regional governments and no proper opportunities that would contribute to
done, pushing to achieve some mechanism is in place to assist them and diversification and innovation of the tourism
progress in the implementation of channel investments towards priority areas and product.
actions needed. specific types of projects. Higher success rate in converting potential
Information could be made available to Higher accommodation capacity will improve investors in actual projects.
embassies of EU member states in the business opportunities for incoming
Ethiopia that provide information to operators, as well as other local businesses and
investors in their countries about communities serving tourists in the destination
investment opportunities. areas.

Foster competitive and Support product diversification and/or Afar region has iconic natural landscapes and Clear procedures for tourism operation defined
sustainable product improved tourism operations in key geological features that are world-class tourism and adopted, including sustainable practices.
development in selected destinations of interest to European attractions. Tourism flows are small but
areas markets, with high potential for new increasing and the peace with Eritrea is Opportunities for local people to benefit from
products or at risk. expected to remove safety concerns in this tourism identified and organised.
area near the border, attracting more visitors. Improved coordination mechanisms with
It is suggested to focus on
Danakil/Afar: ORGANISING A Spontaneous and erratic procedures and incoming operators in place.
WORKING GROUP AIMED AT SUPPORTING charges imposed by a few local leaders hamper Quality of service improved (within the limits of
MORE COMPETITIVE AND SUSTAINABLE the performance of the incoming operators and available facilities), improved experience for all
TOURISM DEVELOPMENT IN THE AREA. negatively impact the customer experience. (visitors, incoming operators, tourism service
Involve relevant regional and local This region has been left out of the tourism suppliers and local communities).
stakeholders and incoming operators. development activities and training, and the Opportunities for investment in accommodation
lack of knowledge and understanding of the of international standards identified and
tourism activity limits the options for locals to communicated.
benefit from tourism while the environmental
impact is already significant. Plan in place to protect the area as unique
landscape.

Tourism VCA Ethiopia – Final Report – September 2018 92

4. To promote sustainable practices among incoming operators and the tourism industry at large

WHAT HOW WHY EXPECTED RESULTS

Improve awareness of the ORGANISE AWARENESS CAMPAIGNS AND To respond to the increasing interest in Improved understanding of certification
importance of sustainable WORKSHOPS targeting various stakeholders. sustainability by European outbound schemes and assessment of opportunities
tourism development and Showcase existing good examples in operators and their customers. for their introduction in Ethiopia.
introduce Travelife Ethiopia and internationally. Collaborate
certification with the Tourism Media Forum established Sustainable practices will allow further Incoming operators certified by Travelife
by MoCT (media professionals covering growth of tourism safeguarding natural and
cultural resources which are key attractions Operators engaged in certification process.
tourism).
for tourism and national assets. More sustainable operations improve the
INTRODUCE TRAVELIFE CERTIFICATION FOR travel experience of most European tourists,
INCOMING OPERATORS and foster adoption of
Adoption of sustainable practices by
incoming operators will have a cascade and have a positive impact on the
sustainable practices. destination image.
effect on other tourism service providers.

Improve visitors SET UP A WORKING GROUP TO SUPPORT EWCA Current operation of tourism in protected Incoming operators adopt sustainable
management and TO ESTABLISH GUIDELINES FOR TOURISM areas needs to be improved in coordination practices in protected areas.
sustainable tourism OPERATIONS IN PROTECTED AREAS (with ETO, with incoming operators.
operations in natural and incoming operators’ associations, NGOs and Sustainable practices in protected areas
heritage sites donors working on conservation projects). contribute to improved relationships among
local communities, tour operators, guides
and visitors.
EWCA is in better position to enforce
sustainable tourism in protected areas.
SET UP A WORKING GROUP TO IMPROVE
VISITOR MANAGEMENT IN UNESCO AND
HERITAGE SITES, INCLUDING IDENTIFICATION
OF OPPORTUNITIES TO CREATE ECONOMIC
Most heritage sites are managed by regional Improved awareness at ARCCH and
ACTIVITY IN AND AROUND THE SITES. Provide
governments, without coordination. The Regional Tourism and Culture Bureaus of
benchmarks and guidelines and foster sites lack facilities for visitors and people in how to improve visitor management and
coordination, options for sustainable charge lack understanding and skills to how to generate income from heritage sites.
financing (concessions, sponsorships, etc), generate income and jobs within the sites
identify options for sustainable practices in and around them.
heritage sites. Selected officers from
regional governments, MoCT and ETO
should also attend.

Tourism VCA Ethiopia – Final Report – September 2018 93

WHICH AREAS COULD CBI FOCUS ON?

Only very targeted activities are recommended, but they should be examples to
introduce change in the approach to tourism development in Ethiopia.

a. Pilot area for training small tourism service providers: Arba Minch in the
South
As mentioned in chapter 8 , the town of Arba Minch is a service hub in the Southern
Route and the Nechsar National Park is nearby. The area has received less attention
from tourism development projects than other destinations in the North and, as it
has a critical mass of tourism businesses, it could be a good place to test and fine-
tune the training system as part of the CBI project.
b. To foster improved conditions to direct visitor flows to lesser developed
regions: focus on the Danakil/Erta Ale (Afar Region)
The Danakil/Afar was mentioned by most incoming operators contacted during the
field trip as an area with great potential but in urgent need of more organised and
sustainable tourism activity. The ETO is currently working there to improve some
basic tourism facilities but a more integrated approach is needed to ensure
competitive and sustainable tourism development in the short, medium and
long term.
Tourism operations are currently organised based on the views of a few local leaders
who have no training, exposure or proper understanding of tourism activity, but who
get personal benefit by imposing on incoming operators and visitors what can only be
considered as ‘bad practices’. This fact may result in reluctance to change the current
modus operandi. However, if no action is taken before the number of visitors
increases, the potential of this unique resource will be seriously
compromised, and there is a need to introduce more dignified and
meaningful ways for the local communities to benefit from tourism
combined with conservation measures and sustainable practices that ensure
the protection of the iconic natural resources (Dalloll geothermal field, Erta Ale
volcano, salt flat, Lake Afdera).
The CBI would add value by creating awareness of the potential of the
Danakil/Afar as a great adventure destination among the regional
government of the Afar region and local community leaders, providing
examples of what it takes to make it happen, and offering technical
assistance to come up with improved procedures to handle tourism flows in
the short term with a triple objective:
 improving opportunities for local people to benefit from tourism (where, how and
for what, charge operators and tourists as well as opportunities to offer new
services);
 reducing the current negative environmental impacts;
 improving the travel experience for tourists (safer, less hassle, cleaner
environment, better services).
These will, in turn, help to attract more visitors, offering more jobs and income
opportunities for locals.
The national associations of tour operators should be involved, as well as the
operators based in Mekele, as they are the ones that take tourists to Danakil. Mekele
is the capital of Tigray, a different region from Afar, but it is an important gateway
for travel to Danakil for those traveling by air as the city has an airport and a variety
of accommodations. For that reason, Mekele should be considered in any plan to
develop tourism in Danakil and key stakeholders there should be involved (i.e. Tigray
Regional Culture and Tourism Bureau).

Tourism VCA Ethiopia – Final Report – September 2018 94

OPPORTUNITIES FOR COLLABORATION

a. With PUM (Netherlands Senior Experts)

PUM could make an important contribution to the shortage of trained professionals
for the hospitality industry in Ethiopia by:
 Providing train the trainer courses to the faculty of the Catering and
Tourism Training Institute (CTTI) based in Addis Ababa. It is a centre under
the Ministry of Culture and Tourism. Through the CTTI, extend the training to
trainers working in training centres in the main tourism destinations across
Ethiopia. To this end, PUM should sign a MoU allowing for continued support that
could also include advice to improve the organisation and management of the
centre.
 Signing agreements with hotel associations in the regions to provide
group training. PUM already has a successful long-term cooperation agreement
with the Hotel Owners Association in Addis Ababa where they provide regular
group training in different areas of hotel management and operation combined
with visits to hotel facilities. The model could be extended through agreements
with hotel associations in the regions, giving priority to places with high
potential for European leisure tourism. Special attention should be given to
training owners/managers of small accommodations as well as middle managers
that can have a multiplier effect by providing on-the-job training and coaching to
their respective teams.
 Coaching individual hotels targeting the leisure market in priority areas.
Some basic criteria should be prepared, and eligible hotels would be invited to
apply for support. This type of assistance usually takes two weeks and the hotel
provides accommodations and meals. Considering that some hotels are small, it
would be useful to find ways to provide personalised assistance to more than one
company in the same trip (i.e. by shortening the time dedicated to each of them
or concentrating on specific management or operational areas. In that case the
method to fund the expenses of the trainer should be adapted).
 In addition, PUM could provide ad-hoc support for tourism destinations
(i.e. urban planning).
https://www.pum.nl

b. With Technical and Vocational Training Center at Nicolas Robinson School

(Mekele)
This educational centre that has recently started offering TVET courses for hospitality
professions has received support from PUM and could be a partner to roll out the
training system for small service providers in the North.
http://www.rainbows4children.org/index.php/what-we-do/nicolas-youth-adult-learning-centre/

c. With GIZ, NABU and the Frankfurt Zoological Society (German Cooperation)
These organisations have worked in Ethiopia for some time and are involved in the
protection and improved management of natural resources. They could collaborate
on the organisation of awareness campaigns regarding sustainability and could be
involved in the definition and implementation of guidelines for tourism activities in
protected areas. They could bring technical expertise and maybe collaboration
opportunities with the activities in their work plans, but in principle, they will not
contribute funds. Collaboration terms should be defined in Memorandums of
Understanding.
https://www.giz.de/en/worldwide/336.html

Tourism VCA Ethiopia – Final Report – September 2018 95

 https://en.nabu.de/projects/ethiopia/index.html
https://fzs.org/en/projects/bale-mountains-conservation/

d. With the African Wildlife Foundation (AWF)

AWF provided financing for the Bale Mountains Lodge and it is also working to
improve the management of the Simien Mountain National Park. Among other
activities in the Simien, they have produced a plan for tourism development in the
park. As it is suggested for the German cooperation, they could collaborate on the
organisation of awareness campaigns regarding sustainability and could be involved
in the definition and implementation of guidelines for tourism activities in protected
areas (each organisation works in a different areas).
https://www.awf.org/landscape/bale-mountains

MAIN RISKS FOR A CBI PROJECT FOCUSING ON THIS VALUE CHAIN

Given that the current government is not elected, elections to the federal parliament are
expected to take place in 2019. They may probably entail changes of ministers and top-
level officers in the government, including the Minister of Culture and Tourism, State
Minister of Tourism and probably the CEO of the ETO.

In that scenario, it is unlikely that a CBI project supported by the private sector will not
get support from the new high-level officers. However, some delays may be expected. In
order to mitigate this risk, the implementation calendar should take into consideration
key dates, and a presentation of the project to the new officers should take place soon
after they take office. Additionally, private sector associations should send formal letters
to the new high-level officers making clear that they support the project.

Another risk is the slow decision-making process within public organisations in Ethiopia
and the lack of implementation capacity. Considering that the project will require hiring
specialists and consultants with clear terms of reference, public institutions may need to
be pushed to get things done timely as per work plans. On the other hand, some
activities will require partnerships and collaborations with private sector players that are
expected to be more active and committed than public sector organisations. For
example, giving priority to implement training activities targeting the private sector
would make it possible to achieve progress while the new government is in place.

Tourism VCA Ethiopia – Final Report – September 2018 96

ANNEXES
Annex 1: Stakeholders contacted during the field trip
FEDERAL GOVERNMENT ORGANISATIONS

Ministry of Tourism and Culture (MoCT)

State Minister of Tourism
Advisor to the Minister
Advisor to the Minister
Service Providers Licensing and Standardization Director

Ethiopian Tourism Organisation – Under MoCT

https://www.ethiopia.travel Official Tourism portal
Deputy CEO
Director Tourism Marketing
Director Product Development
Senior marketing tourism officer

Agency for the research and conservation of cultural heritage (ARCCH) – Under MoCT
Director Immovable Heritage Development Directorate (responsible for UNESCO sites)
Exhibition Display Officer (National Museum)

Ethiopian Wildlife Authority (EWCA) – Under MoCT

Directorate in charge of non-consumptive activities in protected areas (deal with tourism) / EMEPA
Project

Catering and Tourism Training Institute (CTTI) – Under MoCT

General Director

Ethiopian Investment Commission (EIC)

Investment Promotion Director

Ethiopian Holidays
Department of Ethiopian Airlines selling travel packages to their destinations operated by incoming
operators.
Team Leader Holiday Product Distribution
Team Leader Holiday Product Development

PRIVATE SECTOR ASSOCIATIONS – TOURISM SERVICE PROVIDERS

Ethiopian Tour Operators Association (ETOA)

About 200 members, the most established operators
http://ethiopiantourassociation.com
They organised a meeting with participants:

Managing Director/ Grand Holidays Ethiopia Tours (beneficiary of past CBI project)
Member of the Board

General Manager Source Awash Tour and Travel

Member of the Board

General Manager/ 13 suns Tours

Member of the Board

General Manager of ETOA

Tourism VCA Ethiopia – Final Report – September 2018 97

Society of Tour Operators in Addis Ababa (STOA)
33 members. In spite of the name, they operate countrywide.
http://www.stoa-ethiopia.org

Managing Director of Pleasure Ethiopia Tours and Travel

President of STOA
Organised a meeting attended by 11 members of the association:
Timeless Ethiopia, Aramu Tours, Isabella Tours Operation, Coffee Tours Ethiopia, Nightjar Tours,
Faranji Tour Operation, Senait Ethiopia Tours, Daniel and Frey Tours, Direct Link Ethiopia Tour and
Travel, Zersi Ethiopia Tour and Travel, Source Ethiopia Tours.

Addis Ababa Hotel Owners Association

President

Association of Hotel Professionals

Former member of the Board
(General Manager Inter-Continental Hotel Addis), recently appointed President

DONOR FUNDED PROJECTS/NGOs

Promoting Heritage for Ethiopia’s Development (PROHEDEV) – EU-financed project

Team Leader technical assistance

NABU (German NGO)

Country Director Ethiopia

GIZ
Deputy Program Manager Biodiversity and Forestry Programme (BFP)
Team leader

PRIVATE SECTOR

TESFA Tours
Founder

JACARANDA TOURS
Manager
Vice President ETOA

Ethiopian Quadrants
General Manager

Ethio Cycling Adventures

Manager

Travel Ethiopia (Incoming operator)

Manager
Former President Ecotourism Association. This association is not currently operational.

Red Jackal Tour Operator

General Manager (beneficiary of past CBI project)

Zeigst Lodge (small hotel in Addis Ababa)

Owner/manager

Aladdin Restaurant (Addis) and Eco-Omo Lodge (Arba Minch)

Owner/manager

Tourism VCA Ethiopia – Final Report – September 2018 98

Annex 2: Bibliography
CBI documents
CBI, Tourism to Ethiopia, Senegal and Zambia, EU Market Scan (2017). Prepared by ECEAT.
CBI, Business Idea BIC for Ethiopia (2017)
CBI, Several fact sheets on tourism available for download https://www.cbi.eu/market-information/tourism

Other documents publicly available

MINISTRY OF CULTURE AND TOURISM, 2016. Tourism Statistics Bulletin 2013-2015
MINISTRY OF CULTURE AND TOURISM, 2013. Tourism Statistics Bulletin 2009-2012
http://www.moct.gov.et/documents/20181/25147/Tourism+Statistics+Bulletin/d92bf191-c97d-48c0-
b81f-22d8ceea6dae

MINISTRY OF CULTURE AND TOURISM, 2015. Sustainable Tourism Master Plan 2015-2025
https://www.uneca.org/sites/default/files/PublicationFiles/ethiopian_tourism_master_plan_2016_1.pdf

WORLD BANK, 2016. The cost of business registration and licensing in Ethiopia and options for
reform
http://documents.worldbank.org/curated/en/506611468197369773/pdf/106225-WP-PUBLIC.pdf
WORLD BANK, 2012. Ethiopia's Tourism Sector: Strategic Paths to Competitiveness and Job
Creation. Washington, DC. https://openknowledge.worldbank.org/handle/10986/15489
WORLD TRAVEL AND TOURISM COUNCIL, 2018. Travel and Tourism Economic Impact 2018
Ethiopia https://www.wttc.org/-/media/files/reports/economic-impact-research/countries-
2018/ethiopia2018.pdf

ESTDP funded non-published reports and studies

C. ALTES, 2015. Assessment of the situation regarding tour operators and guides, international
benchmark and recommendations for updating the existing regulations, (draft)
ETO, 2015. From origin of great runners to a runners’ destination. Plan to develop and promote
running-based tourism.
ETO, 2015. Gaining insights and fostering investments in tourism in Ethiopia with a strategic focus.
Draft proposal for support from IFC.
S. BILLI, 2015. Ethiopia Tourism Statistics Management System, Annual Report (PPT presentation
includes results from visitor survey)
R. GAMBASSI, 2015. Ethiopia Tourism Statistics Management System, Annual Report (PPT
Presentation about structure and functions of the System)
THE JOURNEY, 2015. Tourism Marketing and Branding Strategy, Report 4: Final Draft Marketing
Strategy 2016-2020.
SOLIMAR, 2014. Development plan for the Western Route.
C. ALTES, 2014. International Tourism Arrivals to Ethiopia (Analysis based on MoCT data)
CRISIL, 2012. Capacity Building Gap Assessment and Intervention Plan. Vol 1. Institutional
Assessment Report.
CRISIL, 2012. Capacity Building Gap Assessment and Intervention Plan. Vol 2. Training Needs
Assessment.
CRISIL, 2012. Capacity Building Gap Assessment and Intervention Plan. Project Vol 3. Intervention
Plan Final Report.
ATC Consultants, 2012. Assessment of tourism programs for enhancement of tourism training
institutions and professionalization of hospitality industry workforce, Final Report. Tourism
Workforce skills gap assessment.
ATC Consultants, 2012. Assessment of tourism programs for enhancement of tourism training
institutions and professionalization of hospitality industry workforce. Action Plan MoCT.

Tourism VCA Ethiopia – Final Report – September 2018 99

ATC Consultants, 2012. Assessment of tourism programs for enhancement of tourism training
institutions and professionalization of hospitality industry workforce. Action Plan Private
Sector.

Other non-published reports and studies:

D. MICHELMORE, 2018. Promoting Ethiopia’s Heritage for Development. Power point presentation
at Addis Ababa University (EU technical assistance PROHEDEV)
MINISTRY OF CULTURE AND TOURISM, 2018. Tables tourism statistics 2016 and 2017 (raw data)
ETO, 2015. Interim Draft Five Year Project Document (prepared with UNDP support suggests
priorities for product development)
ACE, 2014. Tourism Development Ethiopia Draft Final Report (EU technical assistance)
ACE, 2014. Tourism Development Ethiopia Roadmap for ETO. Final Report Volume II. Detailed
support documents (EU technical assistance)
AFRICA WILDLIFE FOUNDATION. Year?. Strategic Framework for Tourism Development in the
Simien Mountains National Park - Prepared for EWCA with donor funds.
NABU, 2014. Ecotourism Concept: Development and Promotion of Ecotourism in the proposed Lake
Tana Biosphere Reserve.

NABU, 2013. Sustaining Life: the Cloud Forests of Kafa. Marketing Concept for the Kafa Biosphere
Reserve, Ethiopia.
EWCA, 2013. Development of a Marketing Strategy for Wildlife Tourism in Ethiopia (GEF/UNDP)

Additional sources

Other information about NABU (Nature and Biodiversity Conservation Union)

 Supporting a UNESCO Biosphere Reserve in Lake Tana

https://en.nabu.de/projects/ethiopia/tana/
http://www.laketana-biosphere.com
http://www.kafa-biosphere.com

 Conservation and sustainable use of the last wild coffee forests in Ethiopia
https://en.nabu.de/projects/ethiopia/kafa/biodiversity/17155.html

Tourism VCA Ethiopia – Final Report – September 2018 100

Annex 3. The opportunity to get inspiration from Mexico to
upgrade tourism SMEs
The programme MODERNIZA in México: an innovative approach to upgrading
tourism SMEs and an excellent benchmark for Ethiopia
Both Mexico and Ethiopia are federal countries with a diversity of ethnic groups and
languages and Ethiopia can certainly benefit from the experience of Mexico – the
number-one tourism destination in Latin America and one of the leading destinations
worldwide – in the development of human resources and micro, small and medium
enterprises (MSMEs) in tourism.
One of the reasons why tourism is a strong contributor to economic development is
the opportunity it opens up for many small service companies. On the other hand, the
predominance of MSMEs is a limitation for competitiveness and profitability, as most
businesses often start without any formal training. For these reasons, most
governments support the development of MSMEs in tourism destinations through
different instruments (training, business development service, access to finance, etc .).
The programme MODERNIZA72 in Mexico (a name derived from the verb ‘modernizar’ for
upgrading) is a proven example of how to improve the capacity and performance of
tourism MSMEs. It could be considered as a hybrid between training and technical
assistance and was designed by SECTUR, the State Secretariat of Tourism (federal), to
obtain better results than traditional short-term training. The programme is being
implemented in other countries in Central America as part of cooperation agreements.

 MODERNIZA was specially designed to upgrade small and micro enterprises in a

developing economy where there was a big gap between the big hotel groups and
tourism companies operating in the main coastal destination and those located in
historic towns and rural areas.
 One key objective is to generate tangible results in the performance of the
company in the short term. To do so, one element of MODERNIZA is to provide
tourism MSMEs with the tools to improve business performance and financial
results, increase customer satisfaction and enhance employee performance. The
focus is on improving business competitiveness to provide quality tourism
services and encourage a culture of continuous improvement based on modern
leadership and management approaches.
 MODERNIZA helps MSMEs to incorporate effective tools and modern management
practices in their day-to-day business operations. Thus, it focuses on
owners/managers and through them reaches the whole staff. This approach was
developed to overcome the problems encountered with training programmes that
were mainly focused on service personnel without fostering change in
management practices.
 The programme combines short in-classroom training sessions with personalised
advice provided at the company premises.
 The whole programme follows a standard methodology and timeline allowing for
standardised implementation across the country.
 The personalised advice is extremely useful for small companies that often
encounter barriers to applying abstract concepts to their daily operations. The
visits of the advisor allow for open discussion of the problems and lead to very
specific recommendations to improve performance in the short term.
 Training and advice are provided by certified professionals: private consultants,
experienced tourism professionals and public officers who attend a specially
designed train-the-trainers course.

72
http://www.sectur.gob.mx/es/sectur/sect_Programa_Moderniza

Tourism VCA Ethiopia – Final Report – September 2018 101

  The training provided by MODERNIZA is made available at a reasonable cost (the
public sector subsidises part of it), allowing small companies to have access to
technical assistance.
 SECTUR, in coordination with the Secretariats of Tourism of the Mexican States
and certified consultants, promotes the programme and organises the groups of
companies that will participate in MODERNIZA. For logistical reasons, a minimum
number of participants is required in a given geographic area.
 Companies that complete the programme are awarded an emblem with the
Modernisation Quality Programme ‘Distintivo M’, to be displayed at their
respective premises. The M emblem endorses the use of best practice and also
gets media coverage.

MODERNIZA was included as a best practice in the OCDE publication ‘Quality

Jobs for Tourism’ (2015)
The report highlights the results achieved by MODERNIZA. A study measuring the impact
of the programme showed that after training, MSMEs recorded a 42% increase in
customer satisfaction, 32% increase in productivity and 25% increase in sales. Of the
MSMEs certified, 64% were micro- and 29% small enterprises; while 44% were
restaurants, 26% hotels and 11% travel agencies. In 2012 the Mexican State Secretariat
of Tourism, through the Fund for Tourism Research, Development and Tech Innovation,
conducted a study on human capital focused on competence-based qualifications of
workers in the tourism industry. It showed that MODERNIZA has also proven to be
successful in helping young graduates from tourism studies to actually reach the
expected competencies required by the industry.

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