Important trip: With backing from the state, marketing and promotional efforts should help to drive growth across a range of niches

After cocoa exports and gold mining, tourism is the top foreign currency earner in Ghana’s economy. The sector generated some $694m of foreign currency for the government in 2012. Though tourism’s status as the third-highest earner may soon be challenged by other sectors, it will remain an industry with high potential for growth and an important source of employment for thousands of Ghanaians. Indeed, according to figures from the World Economic Forum (WEF), tourism’s contribution to GDP is likely to double to 5.4% between 2013 and 2023, and the World Travel & Tourism Council (WTTC) forecasts that tourism will grow at a rate of 4.5% over the same period.

Achieving such strong growth will depend on the sector remaining a competitive destination for tourism development. The WEF 2013 Travel and Tourism Competitiveness Index ranked Ghana 117th, a slight slip on its ranking of 108th in 2011 in its index of countries based on their attractiveness to tourism investments. Of the ECOWAS countries, Ghana ranked only behind Senegal (107th) in overall competitiveness.

BY THE NUMBERS: According to the WEF, Ghana’s travel and tourism sector was worth $2.1bn in 2012 and expected to contribute 5.4% of GDP by 2023. The WTTC takes an even more optimistic view in its “Travel and Tourism Economic Impact 2013 Report” for Ghana, projecting that tourism will directly contribute 6.7% to GDP in 2013. Tourist arrivals in Ghana grew by 15.5% between 2009 and 2011 reaching 1.09m arrivals in 2011. Furthermore, the number of Ghanaians employed in the tourism sector is also set to rise at a rate of 27% in the coming decade. Currently, the sector employs some 359,000 workers. The number of licensed hotels throughout the country increased from 1400 in 2006 to 1600 by 2010, based on figures from the Ghana Tourism Authority (GTA), with 42% located in Greater Accra.

Ghana’s tourism industry can be said to have significantly kicked off in the late 1980s, and with the establishment of the Ministry of Tourism in 1993. Shortly thereafter, the government and the ministry developed a 15-year plan for the sector with the help of the UN Development Programme (UNDP) and the World Tourism Organisation. The plan, which was originally intended to run from 1996 to 2010, was subsequently extended through 2012. This plan has been followed by a new 15-year National Tourism Development Plan (NTDP), which runs from 2013 to 2027, and involves continued partnerships with international organisations, including the EU, UNESCO and the US Agency for International Development. The plan outlines both public and private goals for the sector and works to build on the improvements made under the previous plan. The objectives include raising the sector’s gross contribution to GDP to 5.7% by 2027, developing local tourism options that encourage visitors to visit rural communities, and improving Ghana’s attractiveness as a tourism destination in the North American and European markets as well as expanding promotional efforts elsewhere. Part of this process includes a review of the current tourist visa regime.

Such reforms may be necessary for Ghana to live up to its tourist potential. Financing difficulties have been a challenge to the development of Ghana as a tourist destination in West Africa. While tourism projects offer investors long-term profitability, they often must compete with commodity sector investments, which are popular among investors today (and indeed fuelling Ghana’s business boom).

TOURISM ACT: In an effort to promote the sector, the government passed the Tourism Levy Regulations (LI 2185). The Tourism Act 817 went into effect in May 2011. The new regulation stipulated that all transactions in the sector – be they ticketing, tours, hotels or restaurant transactions – are subject to a 1% tax of the total cost of the transaction, to be paid into a new fund to support promotion efforts. To collect the funds of this tax, the Ghana Tourism Board was reorganised into the GTA in May 2011. This new status gives the GTA the right to collect this levy and use those funds to promote and develop the sector. During the first six months of the levy, GHS1m ($514,100) was generated in revenue. The act also calls for a publicprivate partnership forum to better coordinate development of the sector between relevant parties.

Since the tax is to be paid in cedis instead of dollars, the initiative will also boost the government’s goal of de-dollarisation of the sector and the wider economy. Certain hotels, tour operators and rental agencies have traditionally listed their prices in dollars, though this practice is typically allowed only with a waiver from the Central Bank of Ghana. The increased emphasis on using the cedi in the economy should also help boost the domestic tourist sector.

NEW MARKETS: In 2013 the tourism ministry was renamed the Ministry of Tourism, Culture and Creative Arts. This reorganisation brought under the ministry’s wing several cultural departments and entities, including the Ghana National Museum and Monument Board, the National Theatre, and the Hotel, Tourism and Catering Training Institute. The government has also begun rebranding as part of an effort to highlight Distribution of international passengers by region, 2012 that Ghana is not only a destination for visiting historic sites and national parks, but is also a diverse, multicultural and sustainable tourist destination.

WHERE THE SUN SHINES: Beach resorts, for example, offer an attractive investment opportunity. Many beaches, like Busua west of Takoradi, have conditions ideal for surfing and other water sports, as do Ada and other beaches near Accra that have yet to reach their tourist potential. For investors willing to invest in greenfield projects, there are many prime beach locations to be developed east of the capital that could be easily reached by international visitors arriving from Accra’s Kotoka International Airport or for those arriving from Togo. Similarly, exotic fishing trips are a potential boom niche industry. Over the last decade, Ghana has become a major destination for large blue marlin fishing, and many consider its waters one of the prime places to catch the large Atlantic blue marlin, as well as the yellow fin and big eye tunas. “The probability of catching a blue marlin in the waters of Ghana is one of the highest in the world” Kwame Ansong, CEO of Sunseeker Tours told OBG.

BRANCHING OUT: The GTA and the Ghana Tourist Federation (GHATOF) are keen to raise the profile of Ghana in new markets beyond North America and Europe. More immediately, Ghana is trying to position itself as a weekend destination for visitors from Nigeria, its neighbour with a population of 165m. New road infrastructure projects in the region, such as the completion of an international highway linking Lagos and Dakar, could give a boost to Ghana’s efforts in raising the number of overland visitors. Currently, 10% of international tourists who arrive in Ghana come via motor each year, with Nigerians being a growing source market. Indeed, according to Ghana Immigration, Nigerians made up 19% of foreign visitors in 2012, up from 8% in 2000. The distance from Lagos, Nigeria’s largest city, to Accra by car is just 461 km, and at present the trip can be completed in roughly six hours. Furthermore, as citizens of an ECOWAS state, Nigerians do not need visa’s to visit Ghana. Finally, Ghana’s ongoing Eastern Corridor project, which will also improve the country’s links with Togo and Burkina Faso, will make it easier for Nigerian drivers to travel to Ghana.

Further afield, South Africa and Brazil are seen as target markets for attracting tourists. “Brazil’s booming economy and the fact that it is home to 70m Brazilians who are members of the African diaspora make it a country from which we’d like to attract more tourists in the future,” David Nana Anim, president of GHATOF, told OBG.

Ghana has sought to position itself as a destination for the 145m-strong African diaspora in North and South America. The country’s profile rose further when US President Barack Obama visited Ghana in July 2009. Obama highlighted Ghana’s strong democracy and security during, and took the time to visit some of the country’s top tourist destinations, such as Cape Coast Castle. Not surprisingly, given the growing attention, tourism arrivals from the US have grown, and US ranks as the top market for Ghanaian tourist arrivals outside of the African Union. According to data collected by the GTA, Americans make up the largest contingent of non-continental visitors to Ghana, followed by visitors from the UK, Germany, Netherlands and the Scandinavian countries. In the long term, the tourism body hopes to attract visitors from China, East Asia and the Middle East as part of its 15-year development plan. Such objectives could be given a boost in the near future as East China Airways, Royal Jordanian Airways and Qatar Airways are all looking to expand into Accra, according to the NTDP.

TRAINING: According to the WTTC, the percentage of the Ghanaian workforce employed in the tourism industry peaked at 3.5% in 2007, prior to the global financial crisis of 2008. Employment in the sector is once again on the rise, growing at a rate of 9.7% in 2012, according to figures from the GTA, driven by the hotel boom and emphasis on domestic tourism. The need to develop a skilled workforce capable of meeting the sector’s demands is once again a highlighted issue. One of the most important institutions for training tourism sector workers has been the Hotel Catering and Tourism Training Centre (HOTCATT), which was founded in 1991 ahead of a meeting of the Non-Aligned Movement in Accra. Working under the Ministry of Tourism, Culture and Creative Arts, HOTCATT continues to play a stopgap role in meeting the immediate training needs of the sector. In May 2013 the GTA collaborated with HOTCATT to reintroduce its mobile instructional unit initiative with the aim of boosting industry education and helping retrain tourism industry workers in modern modes of service provision. These mobile units provide current employees on-the-job training in a wide range of aspects, from front-office management, to housekeeping, to food and beverage services.

MORE OPTIONS: Beyond HOTCATT, there are four institutions and seven polytechnic campuses that offer tourism and hospitality programmes. Of these, the University of Cape Coast offers perhaps the most extensive training, even offering doctoral-level studies on the subject. However, the GTA believes there is a growing need for even more institutions that can meet the immediate service and hospitality training needs for those working in Ghana’s new hotels and tourist attractions. As such, in January 2013 the government launched a steering and evaluation committee for skills development and job creation in the tourism sector, which seeks to train 10,000 youth in skills relevant to the hospitality sector.

As the needs of the sector continue to grow and become more specialised, the skills level of local workers is becoming ever more important. For example, WINHMS, a global-standard hotel management software system used by the Holiday Inn and Best Western chains, was recently adopted in 2013 by OurGhana.com, a hotel and tourism-focused information technology company.

The new system is meant to improve hoteliers’ effectiveness and efficiency to promote better revenue management and cost efficiency. Ensuring that local tourism employees are capable for keeping pace with advances in the industry and operate at international service levels is crucial for sector growth.

ALL BUSINESS: The global commodities boom over the last decade has bolstered Ghana’s economy and raised the number of business travellers arriving to the country. Despite high prices – the WEF 2013 Travel and Tourism Competitiveness Index ranked Ghana sixth in the world in terms of hotel price – the nation’s largest four- and five-star hotels average occupancy rates of 80%, largely due to the increased volume of business travel to Ghana. To meet growing demand, new hotels are being planned in both Accra and Takoradi, which has been the centre of the oil industry, where shifts have largely been seen towards accommodating the business traveller.

Ghana is also aiming to position itself as a destination for international economic and political conferences. However, the country has not hosted a major conference since 2008, when it was the site of the UN Conference on Trade and Development (UNCTAD) XIII in Accra in April that year. That same conference Direct & indirect employment in the tourism sector, 2005-12 also served as the first World Investment Forum, spearheaded by then trade minister, Alan Kyerematen.

The first Ghana Economic Forum was held in 2012, and the event is expected to turn into an annual international gathering. The African Development Bank has also signalled its willingness to in hold one of its annual global meetings in Ghana in the near future.

VISA STRATEGY: Stringent visa policies could be an obstacle in the country’s foray into the international meeting and convention industry, as well as in its general attempt to promote tourism. Presently, the process for acquiring a visa can cost European and North American visitors anywhere between $100 and $200 (similar to other ECOWAS countries). Although this poses a hindrance to some segments, the high fee and requirement to apply for visas in advance of a visit suits the package tourism segment, given the need for advanced preparation for such trips, and that they are organised by intermediaries that often provide preferential visa treatment services due to economies of scale. Developing along these lines, Ghana may in fact be able to position itself as a destination for all-inclusive beach holidays. Given the current political unrest in nearby countries like Tunisia an Egypt, which historically have attracted many European visitors, Ghana may be able to attract those holidaymakers now wary of travelling to North African destinations. The flight from many European capitals to Ghana is only a few hours longer, and its sandy beaches offer opportunities for surfing and other water sports not available along the Mediterranean’s southern coast.

However, the creation of a visa-on-arrival option for visitors from the top source markets could further increase arrival numbers and would encourage visits from independent travellers and the business community. The government has conducted some initial studies towards a liberalisation of the visa regime, as well as the development of e-visa services to make the process easier for those applying in areas where no Ghanaian consulate or embassy is present. A visa liberalisation programme might shift the type of arrivals to Ghana. For example, following the start of Rwanda’s visa-on-arrival policy for all African Union citizens in January 2013, African arrivals to Rwanda rose 24%.

DESTINATIONS: While Ghana offers many beach, ecological and cultural activities, one of the sector’s key aspirations is repackaging attractions and marketing them to meet different interests. The NTDP calls for grouping tourist attractions into convenient circuits. Many of the nation’s most visited tourist attractions lie a short drive from each other, such as the jungle canopy walk at Kakum National Park, the Cape Coast Castle and the larger Elmina Castle, which are the sites most visited by non-resident tourists.

The top six tourist destinations are Kakum National Park (topping the list for both resident and nonresident tourists), Cape Coast Castle, Elmina Castle, the Nzulezo Stilt Village, Wli Waterfalls and Manhyia Palace. Only at Kakum do foreign visitors outnumber domestic ones. According to figures provided by the GTA, a total of 201,532 foreign arrivals and 159,535 domestic tourists visited the park in 2011 (the most recent year for which data is available).

However, the fact that local visitors outnumber foreign ones at nearly all of Ghana’s tourist sites, even those located in remote locations, is a positive sign for the development of the domestic tourism industry. Ghana’s status as a lower middle-income country suggests that domestic tourists will become increasingly important. With a population of 25m, it is one of 23 African countries to reach middle-income status, and there is growing interest in further developing the domestic tourism potential. The NTDP shows that internal flight traffic rose 60% in 2011 as a result of more connections between Ghana’s five airports and falling ticket prices. According to the Ghana Civil Aviation Authority, the number of domestic airline passengers rose 174% between 2011 and 2012, from 199,073 to 544,583 (see Transport chapter). Expatriates are also a growing source of income for tourism, as the estimated 800,000 Ghanaians living abroad are returning to their country of origin for vacations, retirement and to start entrepreneurial endeavours.

ECOTOURISM: Another niche with potential for development is ecotourism. The country is home to 21 protected areas, including seven national parks and unique ecological attractions. Ghana ranked 91st out of 131 countries in Yale University’s Environmental Performance Index 2012, which puts it in good company among other regional countries, such as Congo (95), Senegal (98) and Nigeria (119), but well below the top-ranked African country, Gabon, at 40th. The WEF’s 2013 Travels & Tourism Competitiveness Index ranked Ghana 42nd in terms of the regulatory framework necessary to support environmental sustainability, putting it ahead of such wildlife tourism destinations as Sri Lanka and Indonesia.

Furthermore, Ghana also possesses the most extensive set of costal colonial-era fortifications in West Africa linked to the historical transatlantic slave trade. These, as well as Asante Traditional Buildings, are inscribed on UNESCO’s list of World Heritage Sites. In 2000, four cultural sites, as well as Mole National Park and Kakum National Park, were added to the tentative World Heritage List, and the addition of either of these to full UNESCO World Heritage status would provide another boost to the sector.

COTTAGE INDUSTRY: Despite Ghana’s status as a top coffee and cocoa exporter, most of the processing of these commodities is done internationally. Thus, tourists or business travellers arriving to Ghana often struggle to find local Ghanaian products, other than textiles, for purchase. This presents an emerging business opportunity for Ghana to support the artisanal development of cocoa and coffee products for the tourist industry. The visible marketing of these products internationally could also serve to indirectly boost community and cultural tourism, similar to Rwanda’s efforts to brand its coffee industry. Such an initiative seems likely given the government’s plan for the agricultural sector to provide greater support to the tourism industry by improving supply channels and by encouraging tourists to make longer stays in Ghana. In 2013 GTA’s Volta Regional Office resumed Ghana’s official home-stay tourism programme, first launched in 1995. This new programme will follow a model developed by tourism authorities in Malaysia. One of the challenges for this segment is marketing, a need partially met by the Ghana Rural Ecotourism and Travel Office (GREET), a community-based private sector organisation established to promote and monitor ecoand rural-based tourism. GREET aims to aid rural communities’ participation in the industry, working to help local communities take full ownership in the promotion, administration and monetisation of local tourism attractions in over 30 sites around the country. Such efforts are important in building up local tourism infrastructure and capacity because, like many of its neighbours, the majority of tourism businesses in Ghana (roughly 90%) can be classified as small and medium-sized enterprises (SMEs). Corporate and large business involvement in the sector has been confined to the transportation sector and large-scale hotels. Until capital becomes available to fund larger enterprises, SME opportunities and country branding will remain key to the growth of the sector.

OUTLOOK: In the short to medium term, the priority for the Ghanaian tourism and hospitality sector is providing for business travellers’ needs in a rapidly growing economy. Hotel development in Accra and Takoradi, is expected to continue to drive investment in the sector (see analysis). More long term, Ghana’s proximity to Europe and the fact that multiple cultural and ecological destinations are located on or within a short drive from the country’s coastal strip, are factors that continue to open new opportunities for investment. With the NTDP 2013-27 providing a solid framework for development, investors can expect much support in helping the sector to move forward.