New targets for leuisure tourism in Ghana help achieve sector development goals

Abundant greenery, an unspoiled coastline, diverse cultural and historical heritage, and a friendly and welcoming population are some of the main attributes underlining Ghana’s attractiveness as an African tourist destination. That said, these assets remain largely underexplored by foreign visitors, many of whom have come to the country to investigate business opportunities.

Foreign arrivals have been primarily driven by investment in the hydrocarbons sector, particularly following the Jubilee oil field discovery in 2007, which briefly turned Ghana into one of the world’s fastest-growing economies. Investments in the hospitality industry flourished as a result, with a number of international and local hotel brands opening up in the country’s main urban centres, including Accra and Takoradi.

Investment, however, has remained limited outside of business-related facilities. Moreover, the past couple of years have proven particularly challenging for Ghana’s tourism industry as a whole, with the global decline in energy prices, the Ebola outbreak in West Africa and heightened uncertainty associated with regional instability weighing heavily on foreign arrivals.

Nevertheless, the nation’s relative stability, combined with its favourable business environment and the 2016 general elections, should help speed up economic recovery and provide investors and policymakers with a boost in their efforts to realise the sector’s development goals.

National Strategy

National priorities to develop Ghana’s tourism industry are outlined in the country’s National Tourism Development Plan (NTDP). Running from 2013 to 2027, the strategy aims to boost the annual number of visitors to Ghana to 4.32m and increase tourism revenues to $8.38bn annually by 2027. The plan also seeks to develop high-value tourism segments and encourage private sector involvement. Overseeing these developments is the Ghana Tourism Authority (GTA). Established in 2011, the GTA replaced the Ghana Tourism Board. The agency aims to exercise oversight over the sector, while promoting closer collaboration with private investors.

Funding

The sector continues to grapple with limited government spending. In 2015 tourism was allocated a budget of GHS33.3m ($8.1m), which is relatively low compared to the GHS799.6m ($206.3m) allocated to the Ministry of Petroleum. To supplement government spending, the Tourism Development Fund was established in 2012. Financed primarily through a 1% levy on hospitality and tourism enterprises – from hotels and restaurants to car-hire companies and nightclubs – the fund looks to accelerate the sector’s development by channelling resources into tourism-related activities and projects, such as marketing, training and infrastructure. As of October 2015, the fund had raised GHS15.5m ($4m) from levies that had been collected across more than 3000 certified facilities, according to government reports. Collected funds have been used to support international tourism fairs and exhibitions attended by the GTA, for instance, as well as support the expansion of the GTA locally.

Performance

In 2015 the direct contribution of travel and tourism to GDP stood at GHS4.45bn ($1.1bn), or 3.3% of GDP, according to the World Travel & Tourism Council (WTTC), while the total contribution reached GHS10.5bn ($2.7bn), or 7.8% of GDP. Since 2014 the sector has been grappling with a slowdown in business, induced by the Ebola outbreak and the decline in commodity prices. The discovery of oil at the Jubilee field in 2007 brought with it a flurry of investment and business travellers up until the oil crash of 2014, which led to a decrease in visitor numbers. This was further exacerbated by the outbreak of Ebola in 2014, after which the Ghanaian government suspended all planned conferences and exhibitions to limit the risk of contagion. As a result, the number of foreign nationals visiting the country declined from 589,861 in 2013 to 571,786 in 2014 and 548,031 in 2015, according to government data.

In revenue terms, leisure spending – comprising inbound and domestic expenditure – accounted for 57% of direct travel and tourism GDP in 2015, while the remainder came from business travel spending. Tourism has become one of the country’s main foreign exchange earners, along with gold, cocoa and oil, and is increasingly being viewed as a steadier source of income in the face of volatile global commodity prices. In 2015, for instance, visitor exports generated $952m, or 8.1% of total exports, while crude oil revenues only generated $396.2m for the year.

Visa Regulations

Europeans, Americans and the Ghanaian diaspora have traditionally formed the bulk of visitors to Ghana. However, a recent decision to issue visas on arrival to African Union citizens, which started in August 2016, should help bolster the number of continental visitors. While ECOWAS citizens can already travel without a visa to Ghana, non-African visitors still need to apply for visas in advance and lack the ability to access a regional visa for ECOWAS – something that if enacted could potentially boost arrivals further.

According to Hendrik Du Preez, manager at Emirates Ghana, broader cooperation mechanisms and the development of single visa schemes among regional blocs across Africa could be one method of increasing inflows. Such efforts have the potential of boosting tourism revenue and job creation by between 5% and 25%, according to the “Africa Tourism Monitor” October 2015 report.

Source Markets

International tourist numbers to Africa have increased from 17.4m in 1990 to 65.3m in 2014, and this number has been forecast to rise to 134m visitors by 2030, according to the UN World Tourism Organisation (UNWTO). Ghana is looking to grab a share of the pie and attract more tourists to its various natural, historic and cultural sites.

China is one major market it is currently eyeing, with Chinese tourists now the world’s biggest spenders on foreign travel. Though only 6% of Chinese nationals hold a valid passport, travellers in 2014 spent a total of $165bn, higher than the $111bn spent by the US, where 46% of the population possess a passport. Ghana is seeking to build closer collaboration with the Asian giant in a bid to attract some of its residents to the country’s most celebrated sites and help it achieve its goal of generating over $8bn in foreign exchange by 2027. To that end, local tour companies, including SunSeekers Tours and Apstar Tours, are partnering with the GTA to help meet these objectives. In early 2016 Ethiopian Airlines sponsored the trips of Chinese tour operators to Ghana in partnership with the aforementioned local tour agencies. The aim of their visit was to familiarise the Chinese operators with some of the country’s major attractions, such as the UNESCO World Heritage sites of Cape Coast and Elmina Castle, and the protected Kakum National Park.

Attractions

The potential for expanding leisure tourism is significant, given that Ghana benefits from a wide array of natural assets and has a long list of cultural and heritage sites. These include a number of national parks and protected areas, such as Kakum National Park, Mole National Park and Shai Hills Resource Reserve. Natural hotspots include Mount Afadjato, the country’s highest mountain, and Wli waterfalls; and famous historic sites include a number of forts and castles scattered along the country’s coast, such as Fort Apollonia in Beyin and Fort Prinzenstein in Keta.

Many of these have been designated UNESCO World Heritage sites, including the Asante traditional buildings in and around Kumasi, as well as many of the castles and forts in Elmina and along the coast. In September 2016 UNESCO designated Lake Bosomtwe a biosphere reserve site – a label given to protect unique natural areas. Located in the Ashanti Region, Lake Bosomtwe is Ghana’s only natural lake and is home to over 50,000 inhabitants and diverse wildlife. Ghana is also looking to achieve UNESCO heritage status for Mole National Park, which was established in 1964 and is one of the country’s largest and most popular protected areas. Located in the Northern Region, it extends over 4840 sq km of land and is home to a variety of plant and animal species.

Modernisation Projects

Ghana is set to benefit from a number of rehabilitation and modernisation projects currently under way in different parts of the country, which are expected to draw in more tourists. The village of Nzulezu, for instance, is set to benefit from an agreement signed in January 2016 between the UNWTO, the Korean Tourism Organisation and the Sustainable Tourism for Eliminating Poverty Foundation. Located in the Western Region, Nzulezu is a village on stilts with the potential to become a major tourist attraction. Limited visitor facilities and services, however, have impeded its development. The UNWTO’s agreement therefore focuses on upgrading facilities and raising awareness on sanitation and waste management. These include the installation of 10 toilets, upgrading the village’s walkway and performance stage, and the addition of 20 litter bins to discourage waste disposal into the water. The project is expected to attract more visitors to the village and result in additional job opportunities for the local population.

Another project involving one of Ghana’s iconic sites is the Marine Drive Tourism Development Plan. Though still in the planning stages, the project seeks to develop the area extending from Osu Castle – a fort dating back to the 17th century – to the Accra Arts Centre, rehabilitating and modernising the capital’s waterfront and establishing a number of facilities, such as hotels and mixed-use real estate developments.

Similarly, other projects that have been planned to revamp and renew the country’s coastline include a deal in early 2016 – between the Tema Metropolitan Assembly and US-based, development group Transatlantic BDR – to construct a $6.5bn sports, tourism and cultural centre along Tema’s coastline. The project includes a FIFA-certified, 60,000-seat football stadium, a convention centre, hotels and residential and commercial real estate. According to local media sources, the project is expected to represent one of Africa’s most strategic oceanfront attractions once completed.

Additional infrastructure, such as roads and railways, are also slated to benefit from the upgrades. Roads are responsible for the transportation of 95% of Ghana’s passengers and freight, and the country had over 71,000 km of roads with plans to expand. These include the Accra-Tema motorway, as well as ongoing improvements to the Central, Eastern and Coastal Corridors (see Transport chapter). However, with just 30% of the roads paved, access to some of the country’s main attractions can be challenging.

Ecotourism

Ghana’s extensive forests and abundant wildlife bode well for the future development of ecotourism (see analysis). According to the GTA, more than 5% of the country’s territory is under official protection, spanning 16 national parks and protected areas, although illegal activities related to mining, wildlife trade and urban sprawl are also on the rise.

Cognisant of the economic dividends such activities can potentially yield, the country is in the process of developing Accra Eco Park, a dedicated ecotourism park within the capital city. Estimated to cost $1.2bn, the project is designed to promote ecotourism and preserve natural resources.

Festival Tourism

The country has also sought to use cultural, historical and religious festivals to attract visitors. Among the most popular is the Homogeneous Festival, most commonly referred to as Homofest. Carried out by the Ga-Adangbe ethnic group, the festival showcases the country’s rich cultural diversity and creative talents through the promotion of food, dance and music. At the launch of its third edition in October 2016 in Accra, authorities announced that they planned to rebrand festivals in Ghana to make them more attractive to overseas visitors and promote them abroad. The move is aimed at boosting investment and creating new business opportunities to support local community development. Another celebration that has been singled out for promotion is the Kente Festival held each September, which showcases the unique, handwoven African Kente fabric in the south-eastern town of Agortime-Kpetoe, known to have the highest concentration of Kente weavers in West Africa.

Domestic Tourism

According to the WTTC, domestic travel spending generated 52.3% of direct travel and tourism GDP in 2015, while foreign visitor spending accounted for the remaining 47.7%. In 2016 domestic spending is forecast to rise by 5%, generating GHS4.25bn ($1.1bn) and increasing thereafter by 6.4% a year through to 2026. These figures are supported by a growing middle class, expanding purchasing power and a number of initiatives carried out in recent years to promote domestic tourism. These include the Ministry of Tourism, Culture and Creative Arts’ Explore Ghana domestic tourism initiative, launched in 2015 to encourage more Ghanaians to discover their country. Digital and social media campaigns are also picking up. For example, in March 2016 the #MyGhana campaign was launched by Jumia Travel – one of Africa’s largest hotel booking sites, founded in 2013 – to promote destinations through pictures of the main landmarks posted on both Facebook and Twitter. Lastly, the See Ghana project consists of monthly excursions and weekend road trips devised by Tourism Marketing Alliance Ghana, a local organisation that promotes domestic tourism. The campaign primarily targets Accra residents, encouraging them to visit the country’s various cultural and historical sites.

Accommodation

There has been an increase in quality supply in recent years, driven by the arrival of a number of international hotel chains, such as the Kempinski-branded, five-star Gold Coast City hotel in 2015, which followed on the heels of other recent international entrants such as Mövenpick and Golden Tulip. More projects are in the pipeline, with a Marriott hotel scheduled to open in Accra in the second quarter of 2017.

The drive to invest in Ghana’s hospitality sector has been primarily motivated by the rise in business travellers arriving to the country following the Jubilee oil discovery in 2007. The decline in oil prices, however, has seen business travel ease since 2014, dragging down both occupancy levels and average room rates (see analysis). For now the road to recovery is likely to depend on the country’s overall economic health.

Training

According to the WTTC, the sector’s direct contribution to employment stood at 292,000 jobs in 2015, accounting for 2.6% of total employment. The industry’s total contribution, however, totalled 716,500 jobs, representing 6.5% of all employment. While the number of people working in the industry has been deemed sufficient, skills still lag behind and hotels are often compelled to provide new employees with additional training. To bridge this gap, the GTA is planning to establish a tourism school to bring skills in line with the needs of the industry for qualified labour. According to local media sources, the school will run intensive courses with a particular focus on practical work. The project, however, is still in the planning stages and details as to when construction will begin had yet to be announced at the time of publication. In the meantime, the GTA has launched a nationwide training programme in the hospitality and catering industries to upgrade skills and improve the quality of service delivery. The programme consists of in-house training at various tourism facilities and primarily targets front office, restaurant and bar staff. According to local media sources, as part of a pilot project to improve skills with courses devised by the Council for Technical and Vocational Education and Training in a variety of sectors, including transport, hospitality and catering, the GTA had trained more than 25,000 people as of September 2015.

At the International Tourism Bourse Berlin in March 2016, Ghana entered into a partnership with the International Air Transport Association, a trade association uniting 269 airlines, to supply training in the hospitality industry. Courses will consist of six months of training in a number of activities, notably ticketing and hotel reservation.

Connectivity

Ghana is served by a number of international airlines, including South African Airways, British Airways, Turkish Airlines, KLM, EgyptAir and Ethiopian Airlines. The latest newcomer to the industry is Brussels Airlines, which launched its services to Accra in the last quarter of 2015, operating four flights a week.

The Ghanaian government began talks to explore the potential of establishing a national carrier, after the collapse of Ghana International Airlines in 2010 left the country without one. “Current talks have focused on the national carrier being more of a regional carrier feeding into Ghana,” Du Preez told OBG. “I believe this would be the right strategy and would support all international airlines currently serving the country. Further down the line, they can look at launching international operations.”

Challenges related to fuel and operating costs, however, still need navigating. “Charges at Kotoka International Airport are among the highest in the region, and the situation has been exacerbated by the devaluation of the cedi over the past two years,” added Du Preez.

Though the state announced a 20% decrease in the cost of fuel in August 2016, in a bid to make flight costs more competitive, prices remain high when compared to surrounding countries.

Tourism Safety

Concerning security and safety challenges across the continent, Du Preez told OBG, “Ghana has been much more stable in this area, and we have not seen an impact locally.” He added, “Ghana, in general, is probably one of the safest countries in Africa.”

Though it has not been exposed to any major incidents similar to attacks in neighbouring Burkina Faso and Côte d’Ivoire in 2016, security measures have nonetheless been tightened. In early 2016 at the UNWTO’s High Level Meeting on Tourism and Security in Madrid, Ghana’s then-minister of tourism, culture and creative arts, Elizabeth Ofosu-Adjare, reiterated the importance of security in improving the competitiveness of the tourism industry. She stated that one of the measures carried out in Ghana has been stricter control over travel and car rental agencies. Other areas highlighted included air transportation and credit card fraud. An initiative to establish police posts at tourist sites across the country has also been suggested. The idea was put forth during the Tourism Safety and Security Initiative’s exhibition that took place in May 2016 to promote tourism “through safety, security and clean environment”.

Such efforts will be buttressed by the GTA’s planned establishment of a data centre to track visitor inflows, provide better oversight and deliver reliable statistics. The system will also serve to showcase the country’s reputation as a safe tourism destination. Its exact delivery date has not been announced; however, local media sources report that its establishment is “far advanced”.

Outlook

According to figures from the UNWTO, international tourism grew by 4% year-on-year in the first half of 2016. International arrivals to Africa increased by 5%, with arrivals to sub-Saharan Africa rising by a substantial 12%. This is good news for the region, and Ghana in particular, given its political stability, safety and friendly people. According to WTTC projections, overall international visitor numbers to the country are expected to reach approximately 1.3m in 2016.

In the short to medium term, projects in the leisure segment will continue to be rolled out and connectivity enhanced. The ability to attract more private capital and ensure sustained spending on infrastructure remains a priority. Addressing prices constitutes another priority, allowing Ghana to become a more affordable destination compared to its African peers. A new 15-year tourism development plan was one of the promises made by former President John Dramani Mahama as part of his re-election campaign, offering an open window to consider and address such challenges.