Ghana: Tapping potential in tourism

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In an encouraging testament to the country’s push to increase the size of its services sector, Ghana has seen an impressive rise in visitor arrivals over the past few years, and capital investments look set to help provide the foundation for continued growth. New hotels are opening, easing a supply bottleneck, and the government has identified the sector as a key source of future revenues. However, capitalising on much of the still-latent potential will require investment and imagination.

The country attracted 1.087m tourist arrivals in 2011, up 16.5% from 2010 and surpassing the target of 1.08m, according to the Ghana Tourism Authority (GTA). Tourism receipts rose 16.8% to $2.19bn, again above the target of 16.2% growth.

The domestic sector is also growing – the number of Ghanaian and Ghana-resident visitors to tourist sites rose 5.3% from 2010 to 2011. However, with only 763,461 visits generating GHS1.92m ($987,000) in entrance fees – low for a country of nearly 25m people – there is room for greater promotion of local tourism, particularly as disposable income rises.

Overall, the World Tourism & Travel Council (WTTC), a global industry body, estimates that tourism and travel directly contributed 2.3% to Ghana’s GDP in 2011 and had an overall impact (through direct, indirect and induced effects) of 4.3%. This is a relatively small proportion by the standards of mid-ranking tourism destinations (Ghana’s tourism sector is 144th in the world in terms of relative contribution to GDP), particularly given the country’s attractions, which include a wide range of unspoiled landscapes, historical monuments, a lively and varied local culture and a high level of safety compared to many African countries.

However, thanks to a mix of concerted government support and private investment, tourism infrastructure is expanding and developing and the WTTC expects the industry’s total contribution to GDP to rise by 5.4% per year over the next 10 years. By the end of 2011 there were 2100 accommodation establishments in the country, up 17.7% year-on-year, according to the GTA.

Two of the most prominent new entries include the opening last year of the new Mövenpick hotel in Accra and a 269-room Kempinski hotel nearby that expected to open by the end of 2012. Nor are all of the developments concentrated in the capital city.

In Takoradi, the western port city that has become the centre of Ghana’s hydrocarbons industry, South Africa’s Protea Hotel Group, the continent’s largest hotel chain, is due to open a 136-room unit in 2013.

One of the challenges the sector has faced in recent years is that even with the increasing number of lodging options, particularly in the mid- to top-end range, infrastructure has not kept pace with the rise in visitor numbers, which have grown by around 50% since 2008.

The private sector is doing its part in building capacity, but the government is also aware of the need for better allocation of public resources to the sector. As the minister of tourism, Akua Sena Dansua, has said, the industry can play a leading role in national economic growth, but attractions must be better developed and international cooperation harnessed to ensure that Ghana takes advantage of its significant potential.

Some of the responsibility will fall to the newly established GTA, founded last year by overhauling the former Ghana Tourism Board and extending a range of new powers for raising revenue and enforcing regulations. The GTA is preparing a number of initiatives to help boost promotion, local engagement and targeted investment throughout the country, as are its branches in each of Ghana’s regions.

The Volta Region office, for example, relaunched its community-based tourism programme in June, focusing on a segment seen as having particular potential to support economic development in rural areas without the occasionally damaging effects of mass tourism.

The GTA will take control of the new Tourism Development Fund, supported both by government seed money and by a tax of 1% on any transaction related to tourism, including hotel room charges or tour fees. The fund will be used to help finance tourism investment as well as promotional campaigns. The aim of promotional efforts could be to raise the country’s profile through advertising its wide range of attractions, from pristine beaches to traditional culture, as well as reassuring potential visitors that Ghana is a safe place to visit.

Ghana has done well in terms of laying in place some of the foundations necessary for improved tourism performance. The task it now faces is to build its reputation as a destination internationally, which will involve not only heavily promoting the country’s global profile but also ensuring that Ghana has the infrastructure and facilities to match its promise.

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