Over the next 12 years Ghana aims to move from an off-the-beaten-track locale to a major African tourism player. Ambitious plans are afoot to increase visitor numbers five-fold by 2027, capitalising on natural beauty, cultural heritage, hospitality, and safety and security. A new, well-financed tourism authority is already implementing a detailed strategy emphasising private sector leadership and investment.
Contribution & Growth
According to the World Travel & Tourism Council (WTTC), the sector directly contributed GHS2.62bn ($727m) to Ghana’s GDP in 2013, or 3% of the total. This nudges the country above the global average of 2.9%, but it lags behind regional leaders such as Gambia (9%), Senegal (5.3%) and Kenya (4.3%). From this modest but solid base, robust growth is expected. The WTTC forecasts that the sector will grow by an annual average of 4.5% between 2014 and 2024. This is in line with broader economic growth – the WTTC expects tourism and travel to contribute the same 3% to GDP in 2024. Yet Ghana’s increasingly active tourism authorities, and the private sector, will be hoping to accelerate this growth and boost the sector’s share of economic production. The WTTC expects the sector across Africa to grow by an annual average of 4.9% and, given its potential, Ghana could well match or beat this rate.
Tourism has a considerably greater impact on the broader economy than its direct contribution suggests, counting factors such as capital investment and government spending supporting the sector, and supply chain effects. The WTTC calculates that the total contribution of travel and tourism to Ghana’s economy was GHS6.24bn ($1.73bn) in 2013, or 7.2% of GDP, with GHS2.51bn ($697m) indirect and GHS1.11bn ($308m) induced (that is, the impact on the economy of the spending of those directly or indirectly employed by the industry). This is significantly below the global average of 9.5% of GDP, and Kenya’s 12.1%, for example. Yet the WTTC forecasts growth of 4.5% per year between 2014 and 2024 – the authorities and investors in the sector might aim for, indeed expect, higher growth if plans are well implemented.
According to the WTTC, “visitor exports” the revenue generated by foreign visitors to Ghana) totalled GHS2.09bn ($580m) in 2013, or 5.7% of total exports. This makes tourism a particularly important earner of foreign exchange once commodities are stripped out. Oil, gold and cocoa are Ghana’s major export earners but have volatile prices. By comparison, tourism earnings are steady and rising: the WTTC expects visitor exports to rise by 2.4% annually to 2024. The sector drew in investment of GHS787.6m ($219m) in 2013, 3.2% of total investment in Ghana; the WTTC forecasts that investment will grow by 3% a year to 2024.
Ranking & Rivals
Ghana’s tourism sector was the 98th biggest in the world in 2013 in terms of absolute earnings, and the 119th largest in terms of its relative contribution to GDP, according to the WTTC, which estimates that the sector will be the world’s 88th-fastest-growing tourism sector between 2014 and 2024. There is little doubt that the authorities would like to improve all rankings considerably. Kenya is widely seen as a model for success in tourism in Africa, though the country is not without its own challenges in the sector – for example, it is less politically stable than Ghana.
While acknowledging that regional competitors Senegal and Gambia have better-developed tourism facilities, sites, products and marketing, Ghana does not intend to copy its neighbours’ model in its entirety. Rather than aiming at the mass market, Ghana is focusing on niches, such as ecotourism and cultural tourism. Such visitors tend to be higher-income and support higher-margin business, while having less of an environmental and social footprint.
Ghana attracted around 930,000 visitors in 2014, down slightly from nearly 1m in 2013, Sampson Donkoh, deputy executive director of the Ghana Tourism Authority (GTA), the official body overseeing the industry, told OBG. The sector experienced a slower year due to a number of factors, including the global economic situation, but most significantly the outbreak of Ebola in West Africa from December 2013. While as of mid-2015 there had been no cases of Ebola in Ghana, nor in any of its immediate neighbours, the outbreak had a significant impact on tourism. This was partly due to a perception of risk in the region among visitors from overseas, but arrivals were also affected by limitations put on travel from other countries in West Africa. The Ghanaian government suspended all conferences, including international conferences, between September 2014 and January 2015 to reduce the threat of contagion.
The mid-to-high end of the market was thus particularly hard hit. Occupancy dropped to 40-50% at upmarket hotels, according to Donkoh. Local press reports cited a resort near Cape Coast where arrivals from Europe had fallen by half and those from the US by 80%. Yet Donkoh expects a strong rebound in 2015, forecasting 1.5m arrivals – an estimate that some might consider optimistic. The lifting of the ban on conferences, the easing of the Ebola crisis elsewhere and Ghana’s clean slate on the disease – which the minister of tourism, culture and creative arts, Elizabeth Ofosu-Adjare, has been vocal in publicising – should all contribute to recovery.
The GTA stands by a previous target of attracting 5m tourists a year by 2027. Indeed, Donkoh said that this target could be reached earlier if Ghana’s tourism strategy is implemented, and particularly if service standards and industry capacity can be driven up by a new tourism school (see analysis).
The Tourism Act of 2011 (Act 817) established the GTA, replacing the Ghana Tourist Board, which had come to be seen as fragmented. The GTA, by contrast, has a strong mandate and financing, and oversees the sector as a whole. It places a strong emphasis on cooperation with the private sector, with the Ghana Tourism Federation represented at board level, and has a remit to reach out to the global tourism industry. The GTA works directly with investors to encourage them to bring new tour companies, hotel chains, products and services to Ghana.
One of the most significant aspects of the GTA is its relationship with the Tourism Development Fund (TDF), which was established by the same act of parliament. The TDF is financed largely through a 1% levy on tourism enterprises currently being rolled out, as well as some government seed capital, and is intended to finance a range of activities including site development, infrastructure, marketing, training and capacity-building, and to support entrepreneurship.
The organisation has found its feet and is already scaling up, both centrally and at the regional level, where it is establishing a strong presence and emphasises engagement with local people rather than top-down directives from Accra. “We have brought on board more people to join the organisation, increased capacity and established district offices where there is tourism potential,” Donkoh said. “In these districts we are working with the community and mobilising the community to develop tourism resources.”
The government has emphasised the potential of tourism as a means of creating jobs and alleviating poverty, particularly in rural areas. Yet the emphasis on community engagement in tourism development is intended not only to ensure that more of tourism revenues go to the areas that are visited, but to strengthen the authenticity of Ghana’s tourism products. The GTA is also incubating links between the private sector and communities in areas with tourism potential. The private sector is expected to take the lead in some areas, including product development, with the support of the GTA. The authority also hopes that the private sector will become increasingly active in marketing and promotion, enhancing Ghana’s image and engaging with foreign operators to bring more international tourists to the country.
The sector’s growth path is in theory charted by the National Tourism Development Plan (NTDP), which was published in November 2012 and runs from 2013 to 2027. It sets a goal of attracting 2.45m visitors by 2022 and 4.32m in 2027. The plan also targets more than doubling tourism revenues by 2022, to $4.69bn, rising to $8.38bn in 2027.
The Ebola crisis and economic issues meant that the target of 1.09m visitors in 2014 was not met, but the GTA seems confident that the 1.2m forecast for 2015 can be significantly exceeded. Arguably, the importance of the plan lies not in its numerical targets but in the strategic course it charts, as it places an emphasis on developing high-value tourism segments and increasing private sector involvement.
The NTDP foresees a three-stage process of development that builds on a solid base and expands tourism across the country and into new market segments. The first phase, from 2013 to 2017, focuses on consolidation, strengthening core markets such as business travellers, domestic tourists and the diaspora. The second phase would see “rapid market and product growth,” maintaining core markets and competitive strengths, while attracting a broader range of visitors – demographically and geographically – including the meetings, incentives, conferences and exhibitions (MICE) segment, backpackers and cultural and adventure tourists. The final phase would emphasise sustainability, while aiming to maintain rising numbers of visitors.
As the market deepens and broadens, the NTDP also envisages tourism development first focusing on core attractions, including the Accra-Kumasi-Cape Coast “Golden Triangle,” and then turning to more niche destinations. Some of the latter are already being upgraded in preparation for long-term growth.
At times, emerging markets draw up ambitious strategic documents for the years ahead, but implementation is lacking. Yet the GTA and the Ministry of Tourism are determined that the NTDP is pushed forward with more concrete projects.
For example, as of mid-2015 the ministry was in the process of finalising the establishment of a tourism school, while work was under way on planning Marine Drive in Accra. The latter would be a development of Accra’s waterfront, including some of its beaches, featuring hotels and mixed-use real estate developments, taking advantage of the city’s seaside setting.
The GTA has also been working closely with the ministry and a range of people and organisations in the tourism sector to enhance tourism offerings and boost promotion, particularly through social media. Examples include the promotion of paragliding on the coast, a cocoa chocolate festival in Accra, and the National Festival of Arts and Culture. There has also been an emphasis on the Eastern Region and its lakes, hills and waterfalls. The aim now is to increase publicity for these attractions on the international market.
Message & Market
Ghana’s tourism promotion strategy focuses on the range of sites within a relatively small country, and the four main messages of natural beauty, historical and cultural heritage, hospitality, and safety and stability. The concept is to promote Ghana as a safe, friendly destination where one can enjoy a package of both natural and cultural sites. Major selling points include beaches; the castles of the coast; the forests, lakes and rivers of the interior; and a range of cultural events.
Ghana’s traditional inbound tourism markets are Europe (particularly the UK, Germany, the Netherlands and Spain) and the US. While the Ghanaian diaspora is an important part of the inbound market – as indeed are other people of African heritage – the range of visitors is broader. While intensifying promotion in these core markets, the GTA has also started to look at the potential of fast-growing emerging markets. The authority’s attendance at the China Outbound Travel & Tourism Market in April 2015 was intended as a step towards wooing more Chinese visitors to the country. It is also ramping up campaigns in the Middle East, Malaysia, Singapore and Japan.
Ghana may not yet be as prominent as Kenya and South Africa as a tourist destination on the continent, but it is growing in stature. The country’s profile has been enhanced considerably in recent years, and it has established a reputation as a place that is safe, friendly and varied, making it ideal for first-time visitors to Africa, and somewhat off the beaten track, thus attracting more adventurous travellers. Many of the latter will spend more money per head than mass tourists will.
In November 2014, British Airways (BA) ranked Ghana on its “Hot List 2015” of countries to visit, ranking alongside destinations such as the UK, Malaysia and Brazil. The airline cited the country’s range of 19th century architecture and “increasingly interconnected citizens”, and highlighted the July 2015 Pan African Historical Festival (Panafest). The biennial Panafest aims to bring together Africans and people of African descent to confront the issues raised by slavery. Events including theatre, dance and music – as well as sporting, educational and commemorational programmes – take place around the country. BA also talks up Ghana’s beaches, national parks and cosmopolitan culture. Ofosu-Adjare said that BA’s recognition indicated the importance of Ghana taking advantage of its tourism potential.
Accra also featured in The New York Times’ “The 46 Places to Go in 2013”, at fourth in the list. The newspaper cited the country’s economic growth as a driver for tourism, and highlighted its beaches and cuisine. Citations like this are a significant boost for Ghana’s brand overseas and give the country an extra marketing edge. However, “destination of the year” lists do not suffice on their own, and Ghana’s recognition among tourists is still considerably lower than the authorities and the private tourism sector would like.
For years, a common complaint of visitors to Ghana was the poor choice and quality of the hotels on offer. This is now changing rapidly, with several international chains established or expected to set up, while quality local hotels are also flourishing.
Projects have continued to push ahead despite the slowdown in 2013, which affected business tourism in particular. The disputed election in late 2012, economic cooling and slower progress on important energy projects all dampened enthusiasm. The regional Ebola crisis in 2014 hit the broader tourism sector, pushing down occupancy rates at many upperend hotels. Nonetheless, in mid-2014 top establishments in Accra and Takoradi (the centre of the oil industry) were able to post rack rates of $350 and $250, respectively, albeit often offering discounts.
Despite some concerns about overcapacity as new hotels have opened, Donkoh said that capacity “is on the low side,” given the need to accommodate rising numbers of arrivals. Switzerland-based luxury chain Kempinski is due to open its five-star Gold Coast City hotel in Accra by the end of 2016. It will have 269 rooms – including 22 luxury suites and two presidential suites – along with a spa, a 1750-sq-metre conference centre and a high-end retail area.
Elsewhere, Carlson Rezidor is due to open its Radisson Blu Accra Airport in 2017, offering 207 rooms on a 75,000-sq-metre mixed-use development, as the company looks to expand its presence in Africa through its regional base in Cape Town.
In March 2015, Industrial Development Corporation (IDC), a South African government institution, announced that it was investing $130m in two hotels in Ghana and Uganda. The former will be Accra’s first Marriott; IDC was behind financing of a planned 170-room Marriott in Accra some years ago, and plans seem finally to be coming into fruition. Hilton and Shangri-La are also reported to be considering opening hotels in Ghana. The newcomers will provide competition for established players such as Holiday Inn Accra (168 rooms), Golden Tulip (238 rooms), Best Western Premier Airport (109 rooms) and the 260-room, five-star Mövenpick, which was seen as a breakthrough for Ghana’s hotel market and a sign of the country’s rising prominence for business tourists when it opened in 2011. Local brands include the 104-room Labadi Beach Hotel; the African Regent, on the Accra-Tema motorway; and the Fiesta Royal, also on the motorway, with 100 rooms. Meanwhile, outside the capital, demand is particularly strong in Takoradi and Kumasi, and in the three-to-five-star segment. The 200-room Best Western Plus Atlantic Hotel opened in Takoradi in 2013.
While tourism coverage tends to focus on foreign visitors, 55% of the revenues of Ghana’s travel and tourism sector come from the domestic market, according to the WTTC. While this will include Ghanaians and Ghana-based expatriates travelling to visit friends and family elsewhere in the country, many of these will spend money at tourist-oriented sites and businesses. There are also substantial bona fide domestic leisure and business tourism segments. With its tourism sector still in the relatively early stages of development, Ghana has been able to incorporate the expectation of – and need for – increasing domestic tourist traffic into its long-term strategy. Internal tourism by Ghanaians and expatriates is at the heart of Ghana’s short- to medium-term growth plan. Tourist sites and local associations have been advised to focus on domestic tourists and consider their needs, as much as on big-spending foreign visitors. This is particularly important in those areas which are outside the tourist hotspots of the Golden Triangle.
The growth of the Ghanaian middle class, with disposable income for leisure and an increasing curiosity in their own country, should see the market continue to grow. The expansion of the oil and gas industry, as well as broader investment in Ghana – now picking up again after a lull – and the growing strength of Accra as a regional centre, means that there is also a pool of expatriates keen to explore their temporary home.
Domestic business tourism is another factor to consider in the segment. Economic growth has aided the expansion of business across the country.
With these factors in mind, it is perhaps little surprise that industry players have been telling OBG for some years that there is particular potential for two-and three-star hotels catering to domestic business travellers and the middle class. By developing sites for a domestic market initially, Ghana’s tourism offering can be strengthened for the international market. The aim is also to encourage Ghanaians and the Ghanaian diaspora to become word-of-mouth tourism ambassadors for their country. “Domestic tourism is seen as very important,” Donkoh told OBG. “The view is that people must know their country before it can be promoted internationally.”
The NTDP highlights Mole National Park as an example of a site with great potential that has been underdeveloped. The GTA, backed by the TDF, is looking to invest in ecotourism accommodation and other infrastructure in the area.
Donkoh highlighted a number of less-well-known attractions that he sees as having particular potential. They include the Brong-Ahafo Region in the west, Ghana’s “breadbasket,” with waterfalls and monkey sanctuaries; the Upper East Region, where the GTA is investing in facilities; the Wechiau Community Hippo Sanctuary in the Upper West Region; and Kakum National Park, a rainforest area in the south. In the Greater Accra Region – and thus accessible for those visiting for a short time – are the Shai Hills, with a range of flora and fauna. In the Eastern Region, the cocoa industry presents niche tourist interest, while the Ashanti Region has its unique culture to offer. The GTA aims in the longer term to have at least one world-class site in every state. These could then be linked on longer tours of the country.
Business & Mice
Business travel is a substantial and growing part of the industry, accounting for 37.2% of tourism and travel’s contribution to GDP in 2013, according to the WTTC. Following the discovery of oil, Ghana became one of the fastest-growing economies in the world and foreign investment accelerated, bringing more business travellers to the country. While growth has cooled, the medium-term outlook looks solid, particularly given Ghana’s political stability, and the business segment will remain central to the tourism industry. Due to this, many top new hotels are primarily aimed at business travellers. Patrick Fares, CEO of Royal PF Holdings, told OBG, “In spite of a challenging economic environment, beginning early last year, we saw a resurgence in business tourism, which we expect to continue over the coming months.” The GTA also sees MICE tourism, particularly international conferences, as a niche with particular potential. Ghana’s stability and safety are important factors in its favour, and conference facilities are improving. Thus far, Ghana has focused on the regional market and events that dovetail with its own economic strengths, such as hydrocarbons conferences. International organisations also hold regional meetings in the country, while companies come for off-site events. Competition in the region is strong, however, and Gambia in particular has attracted some of the market for Nigerian companies holding out-of-country events from Ghana.
As the NTDP notes, conference facilities need to be upgraded and expanded. The main facility at present is Accra International Conference Centre, which can accommodate 1600 people in the main auditorium.
The segment would benefit from better airline connectivity. Ghana has lacked a national airline since 2010, although the government is launching a new carrier (see transport chapter).
Meanwhile, some of the slack has been taken up by airlines from elsewhere, particularly South African Airways (SAA). In August 2015 SAA launched flights to Washington, DC, from Accra – the only flight between the two cities – and the Johannesburg-based carrier continues to eye Accra as a formal hub for West Africa. This would be a boon for Accra’s connectivity, potentially aiding leisure tourism as well as strengthening the city’s position as a regional business centre. Other airlines serving Ghana include Turkish Airlines, BA, KLM, EgyptAir and Ethiopian Airlines.
While the GTA is confident that it can achieve the target of 5m visitors by 2027, setbacks like those of 2013 and 2014 show that unforeseeable obstacles can slow progress. While the targets are ambitious, it is the direction of travel that matters, and Ghana has a road-map for tourism development. The steps being taken by the authorities to develop regional destinations and marketing are a sign of serious intent. The growth of international hotels also shows that investors have confidence in the future.
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