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Tanzania Tourism and Recession

Recession taking its toll on Tanzania tourism as thousands of jobs get axed

Adam Ihucha, eTN Staff Writer  Jun 24, 2009

Arusha, Tanzania (eTN) - As the impact of the ongoing economic crisis hits Tanzania's fragile tourism industry, nearly 1,160 breadwinners have lost jobs.

A lion share of the disappeared jobs was held by men, who worked as tour guides in Tanzania, pushing thousands of women in Tanzania’s northern tourism circuit to be the primary breadwinner.

Tour operators have opted to pay out millions in redundancy payments to thousands of workers rather than retain them as the recession worsens.

Around 30 percent of 3000 Tanzania tour guiding workforce, nearly 900 jobs evaporated since the recession began late 2008, sending economic woes and anguish into homes of affected families.

Figures show that Thomson safaris, a leading American associated tour firm, had laid off 45 workers out of its 140 Arusha staff, leaving behind an employment blow in Tanzania’s northern tourism circuit.

The 95 remaining workers had since May been enduring 10 percent cut from their usual monthly salary packages.

A written notice to affected workers says the move was inevitable. “Due to dramatic events outside our control in the world financial markets, as a result of a recession that has devastated tourism industry worldwide,” the notice stated.

The company says tourist’s bookings had plunged by as much as 40 percent, sustaining a “serious economic blow” to the tour firm thus calling for measures to cut down overhead costs.

The first measure was to retrench staff from various departments, according to the directive sent to workers by the general manager, Elizabeth McKee.

Salaries cutback move is also embraced by most of tour firms, among them the probably, East African giant tour firm, Leopard Tours, where all workers including the Managing Director had opted to endure a certain percent wage cuts in an effort to retain its entire workforce.

Environment-friendly Nomad Adventure Tours, had also retrenched nearly 35 workers, as safari bookings shrinking due to great recession.

UK-affiliated Abercrombie & Kent Tours is understood to have been cuts nearly 30 jobs, while Tanganyika Expeditions is also laid off around 10 professionals with Ndutu Lodges sending home 15 workers as they struggle to survive in the face of the economic crisis.

Impala Hotel Groups comprising Naura Springs Hotel, Ngurdoto Mountain Lodge and Impala Hotel are reported to have sent off nearly 50 of its workers as the hotel’s marketing fail to fill hundreds of empty hotel rooms in the face of recession.

Sources close to the multi-millions-dollars says the 1155 retrenched figure is only a tip of the iceberg because the hardest hit hotels sub-sector could have been secretly sent home double of the figure.

Executive secretary for Tanzania Tour Guides Association (TTGA), Michael Pius, is brokenhearted to witness his men either being retrenched or placed under an indefinite “waiting list.” “This is very difficult moment in life! Unfortunately enough some of the tour companies have been capitalizing on the recession to either exploit or retrench tour guides at their will even when it is not necessary,” Pius said.

The TTGA chief is also restless over the growing tendency to among tour operators of keeping thousands of tour guides under probation period for years, compelling them to survive on tourists’ tips.

Tourists allure lost glory
The wildlife, tropical climate and white sandy beaches of Tanzania for the time being have lost their attraction for long-distance visitors facing recession and unemployment as a result of the global credit crunch.

Briton tourists Joshua Simpson and Martin Thomas agonized for six or seven months before deciding to take their dream holiday in Tanzania--the Kilimanjaro mountain climbing tour. "A lot of people I know are staying home or taking holidays at camp sites in the UK. I’ve got friends who, in the past few years, would have gone overseas but a tent holiday is far cheaper than booking four seats on a plane," Simpson said.

Thomas failed to hoard his feeling, when he said: “Tanzania has unsurpassed tourist’s attractions across the African continent, but it is fairly expensive destination particularly in the face of recession.”

Analysts say the downturn is threatening to plunge the revenues and majority of people in Africa back into poverty and thwarting efforts to meet the target of halving the share of the population living on less than a dollar a day by 2015.

TANAPA trim down earnings
This might be true because Tanzania’s National Parks Authority (TANAPA) had forced to trim down its 2009 tourism earnings forecast by 32 percent.

Expectations were high that this year TANAPA could reap nearly US$75.7 million (about Tshs 100bn/-) from 574,000 visitors, but now it would pocket merely US$51.5million (nearly Tshs 68bn/) due to the global economic downturn.

This implies that national parks custodian would record a slump of US$24.2 million (nearly Tshs 32bn/-) equivalent to 32 percent fall in tourism earnings, as the raising heat of global economy downturn continues to scorch.

“Our tourism revenues will shrink from Tshs 100 billion (nearly US$75.7million) to 68 billion (about US$51.5million), ” the director general for TANAPA, Gerald Bigurube said.

Tanzania Tourist Board (TTB) also trimmed down its tourism earnings projection for 2009 by 3 percent, according to its managing director, Peter Mwenguo.

TTB cut down the 2009 tourism earnings forecast of US$1 billion (nearly Tshs1, 320 billion) from 950,000 visitors, by about 3 percent also due to the global economic downturn.

However, a Bank of Tanzania (BoT) statement shows that, tourism receipts recorded an increase of $14.5 million (about Tshs18 billion) from US$510.8 million (about Tshs 675 billion) during the first half of 2007/08 to US$535.3 million (nearly Tshs 706 billion) in 2008/09.

The increase is partly associated with efforts by the government and other stakeholders in promoting Tanzania as a unique tourist destination.

In its Monthly Economic Review for January 2009, BoT reveals that travel, which accounts for 60.3 percent of total service receipts rose to US$1.2 billion (over Tshs1,320 billion) in 2008 from US$1.5 million (nearly Tshs 198 million) recorded in 2007.

Tourism is vital sector in Tanzania contributing 17.2 percent to the Gross Domestic Products (GDP).

Tanzania’s the economy earned close to US$ 1.3 billion in 2008 from about 840,000 visitors. Tourism is the country's leading foreign exchange earner.

The second largest economy in East Africa, targets to hit a million tourists arrivals in 2010, and if its target succeeds, the industry would add an extra US$1.7 billion in 2010.

Recession taking its toll on Tanzania tourism as thousands of jobs get axed
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