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Business News of Monday, 22 June 2020

Source: thebusiness24online.net

Coronavirus: Slump in tourist arrivals pushes sector to the brink


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The COVID-19 pandemic has had far-reaching impacts on the country’s tourism sector—which saw one of its biggest booms after a successful Year of Return campaign last year.

The sector is heavily reliant on tourists from Europe and North America, but the pandemic has led to a drying up of this segment of the market.

International tourist arrivals fell in March, the first month of the pandemic in Ghana, by 40.4 percent to 43,366 compared with the same period in 2019. Compared with February, March tourist arrivals dropped by 45.4 percent.

The data, published in the Bank of Ghana’s latest Real Sector Developments Report, also showed that arrivals declined by 10.6 percent year-on-year to 211,599 in the first quarter of 2020.

Border closures, flights suspension impact tourism

The decline in the fortunes of the sector is the result of the border closures, travel restrictions, and the consequent halt in scheduled international flights servicing the country’s main Kotoka International Airport (KIA).

This underlines the fact that tourism is heavily dependent upon the aviation industry, and any change in aviation’s fortunes has a significant impact on tourism.

As at the end of May, international airlines flying to KIA—which are the main facilitators of tourists from Europe and America—had lost US$400m in potential earnings because of the travel restrictions. Operators estimate that if the border closure continues, an additional US$100m in potential earnings would be lost by the end of June.

The hotel industry has also been hit by the dwindling tourist arrivals, with occupancy rates plunging to depths never before experienced by the industry. The under-capacity has put thousands of jobs at risk.

Tourism receipts and domestic tourism revival

The crucial role of in-bound tourism in the sector’s fortunes was underscored by the increased tourism receipts recorded last year on the back of the Year of Return campaign.

The campaign, which commemorated the 400th anniversary since the first documented slave ship from Africa landed in the United States of America, boosted international tourist arrivals by 27 percent in 2019, taking arrivals to 1.13m. Accompanying tourism receipts hit US$3.3bn in the same period.

The average expenditure per tourist increased from US$2,708 in 2018 to US$2,931 in 2019, with accommodation expense accounting for 41 percent, food and beverages 21 percent, shopping 14 percent, local transport 8 percent, entertainment 5 percent, and other spending 11 percent.

Despite these impressive statistics, COVID-19 has served to remind policymakers of the need to diversify Ghana’s tourism offering—which mainly is centered on history and culture—and to embark on a rigorous campaign to increase domestic tourism.

Dr. Kobby Mensah, an academic and tourism marketing consultant, told Business24 that it is imperative for the sector regulator, Ghana Tourism Authority, to aggressively promote domestic tourism and gradually reduce reliance on in-bound tourists.

Barbara Oteng Gyasi, Ghana’s Tourism Minister has the difficult task of turning around the fortunes of a sector badly impacted by the COVID-19 pandemic.

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