Renewed optimism as tourism jobs rebound

Dar es Salaam. Tanzania’s tourism sector is now steadily recovering from job losses caused by Covid-19 pandemic that disrupted travel and other economic activities around the world.

The sector was Tanzania’s leading foreign exchange earner by 2019, when it generated $2.6 billion in that year.

Tourism was also increasing job creation until the pandemic turned the tables for both private and public players hitting hard revenue. Sector’s revenue dropped from $2.6 billion in 2019 to $1.06 billion in 2020, according to the Bank of Tanzania (BoT), closing many businesses and causing massive layoffs.

Tourism was also overtaken as the leading foreign exchange earner by gold mining, the value for which significantly increased when the financial markets were shaken by the pandemic.

A recent report by the Controller and Auditor General (CAG) shows that the total number of jobs created by tourism sector in Tanzania decreased from 509,077 in 2019 to 206,956 in 2020 when economies were hit by the pandemic.

The sector is now recovering with the number of jobs slightly increasing to 307,564 in 2021, the audit report shows.

“For three years from 2017 to 2019, the trend showed increase of employment created in tourism sector. In 2020, there was rapid drop on employment created in tourism sector due to eruption of Covid-19,” the report states.

Tourism is considered one of the strategic sectors in boosting national economies. It accounts for over 17 percent of the Tanzania’s economy (GDP).

The number of international visitors dropped to 620,867 in 2020 from 1.5 million in 2019. The government had targeted to attract three million visitors by June 2022. However, the industry players say the pandemic pulled the industry a step back in growth.

“The pandemic abruptly cut hotel revenue streams due to cancellations and so the operators had to make difficult decisions,” says the chief executive officer of the Hotels Association of Tanzania, Mr Kennedy Edward.

“Some hotels retrenched and others were forced to close shop altogether,” he says. According to him, the hotel operators were found “between a rock and a hard place” when it comes to retaining their workers. “By then, if you were to tell employees to come to work, there was nothing do, business was down, and at the end of the month they would need their salaries. If they were to stay home, they still had to be paid.”

“At the end of the day, we had to resolve through collective bargaining where some employees were forced to go for unpaid leave and others were retrenched,” he says.

The tour operators also share a similar story, following the outbreak of the Covid-19 pandemic.

“Some companies went totally bankrupt and others retrenched 50-80 percent of employees,” says the Tanzania Tour Operators Association chairman Mr Willy Chambulo. “There is not much help from the government and banks run away,” he says, adding that there is need for political will to prioritise tourism.

“I’m saying there is no help from the government because during Covid-19 outbreak, authorities increased tourism charges and collected licence fees while we had not done any business for about two years,” he adds.

However, the government said it had taken several measures to cushion the impact of the pandemic in the sector.

The former minister for Tourism and Natural Resources, Dr Damas Ndumbaro, said last year that the government had allocated Sh90 billion to offset the impact of Covid-19 in the sector.

According to him, part of the money would be spent on training private sector players on how to fight and survive the impact of Covid-19. Tanzania is also implementing a recovery strategy for 2020/21 to 2024/25 which seeks to take the sector’s performance to pre-Covid levels.

Tanzania, which has 33,872 confirmed cases of Covid-19 by May 9, is also rolling out vaccination since last year. The East African country, which has estimated population of close to 60 million, has vaccinated about five percent of the target population.

The decline of the tourism jobs derails Tanzania’s quest to align with the domestic and global goals.

The Sustainable Development Goal number eight (8) highlights that, in order to have a better and more sustainable future for all, by 2030, it is important for governments to devise and implement policies for promoting sustainable tourism that creates jobs and promotes local culture and products.

As the tourism sector transitions gradually into recovery with the rest of the world, last year the World Bank urged authorities to look towards its future resilience by addressing long running challenges that could help position Tanzania on a higher and more inclusive growth trajectory.

Areas of focus include destination planning and management, product and market diversification, more inclusive local value chains, an improved business and investment climate, and new business models for investment that are built on partnership and shared value creation.

The World Economic Forum’s Travel and Tourism Competitiveness Index ranks Tanzania 1st in Africa and 12th worldwide for the quality of its nature-based tourism resources, and 32nd in Africa and 112th in the world for its cultural resources.

However, the World Bank says Tanzania’s tourism sector is vulnerable to external shocks because of its dependence on international leisure tourists and because most tourism-related businesses are small entrepreneurs, who have limited capacity to cope with financial stress.

This story was produced in partnership with the ONE Campaign, a global campaign and advocacy organisation