Site icon

CAN GAMBIAN TOURISM SURVIVE AFTER COVID 19 PANDEMIC?

BY SHEIKH TEJAN NYANG,

TOURISM CONSULTANT.

The tourism industry in The Gambia has been hard hit by unfolding events from November to date with the Thomas Cook sage , The three years “ jotna “ and the  latest devastating COVID-19 pandemic which   has brought the entire tourism industry at a standstill.  The entire closure of hotels, small and medium size businesses at every level within the industry is having a catastrophic ripple effect, hitting employees and suppliers across the board. The resultant effect of all these events on revenue, employment both direct & indirect, and foreign exchange earnings among others and its impact on the industry is devastating to the country’s economy.

In addition, the industry faces unprecedented threats apart from the Covid-19 made up of false media offensives, climate catastrophes, bankruptcies of international tour operators and economic slowdown in our source markets which will continue to impact the sector.

The total number of employees in the industry is about 139,000 both direct and indirect. (WTC).This figure includes employees of SMEs in the sector and the informal operators. According to the above table the total contribution to government revenue annually is estimated at D1, 400,029,780. The above figures are those contributed by only members of the Hotel and Tourism associations. There are other operators who are not members of the two organisations mentioned above that have not been accounted for. In addition, information on Social Security contributions, tax on dividends, etc are not included in the matrix above even though cumulatively they constitute a significant amount. Notwithstanding, the overall contribution of the sector is quite significant.

The situation of the industry is very volatile, and the future continues to be uncertain due to the following reasons:

The tourist industry has still not recovered from the Thomas Cook sage as there is a huge outstanding debt amounting to D 350 M owed to Gambian hotels.

My question is can a seasonal tourism industry survive with such huge debts without tax incentives?

According to World Travel & Tourism in 2018, contribution of travel and tourism to GDP as a percentage for Gambia was 20.4 %. Though Gambia contribution of travel and tourism to GDP fluctuated substantially in recent years, it tended to increase through 1999 – 2018 period ending at 20.4 % in 2018.

An analysis of the sectors annual contribution to revenue and job creations as provided below is significant.

Contribution of the Sector to Revenue

An assessment of the sector’s annual contribution to revenue has been estimated as follows:

Corporate Tax D 150,000,000
PAYE D 36,000,000
VAT D 845,000,000
Municipal Rates D 10,000,000
GTB License D 9,029,780
NAWEC D 350,000,000
Total 1,400,029,780

The total number of employees in the industry is about 139,000 both direct and indirect. (WTC).This figure includes employees of SMEs in the sector and the informal operators. According to the above table the total contribution to government revenue annually is estimated at D1, 400,029,780. The above figures are those contributed by only members of the Hotel and Tourism associations. There are other operators who are not members of the two organisations mentioned above that have not been accounted for. In addition, information on Social Security contributions, tax on dividends, etc are not included in the matrix above even though cumulatively they constitute a significant amount. Notwithstanding, the overall contribution of the sector is quite significant.

NEGATIVE IMPACT

Hotels, tour operators, restaurants, airlines, suppliers and employees are just a few of the hardest hit that suffer the most immediate repercussions, as the outbreak is occurring during the winter months, the busiest travel season.

The estimated arrival figure for this season was estimated to be 289.000 and the drop in the number of arrivals due to outbreak is estimated at 101,930. Estimated revenue loss due to ground handlers, landing fees, lighting, temporal air services due to Civil Aviation and other charges from projected arrival figures amounts to USD 8.3M. All these amounts are lost revenue that was due to GIA, GCAA, NCAC, and GT Board.

In addition, the average out of pocket expenditure is estimated at USD 924 per tourist. Given that the shortfall in the arrival figures is about 101,930 the estimated loss is USD 94, 183,320

The estimated total loss is about US 184m. This does not include VAT, fuelling and not to mention the SMEs who are key players in the sector.

AVERAGE OF 24 HOTELS:

Industry average full occupancy         – 95%

Variance – 46%

Industry Present average occupancy    – 49%

In monetary terms the variance of 46% at an average room rate of USD45, the industry loss is estimated at USD90m given the fact that the anticipated arrivals is pegged at a conservative figure of 200,000.

The nature of our operations also possesses a great risk, as all contracts with Tour Operators are designed in such a way that hotels pre-finance the service delivery for tourists upon arrival and invoices are sent for payment once the guests have checked-out.. At present some of hotels have unsettled invoices dating back to December 2019. About D350 million is owing to the hotels by International Tour Operators.

FORWARD

Concerned with the inevitable economic impact, the Gambia Hotel Association and the Tourism Travel Association of the Gambia representing the Tourism, Hospitality and Allied sectors are therefore calling on government to include tourism as priority in the crisis response recovery plans and actions to be implemented and introduce measures that would provide effective support to the industry.

While we applaud the Gambia Government for being quick to respond with promises of help, the majority of businesses still have no idea how to access these potentially life-saving facilities.

Given our high level of exposure, we propose a five-point plan for government to take to combat the devastating effect of Covid-19:

  1 Immediate intervention from Government

As a matter of urgency, we demand from Government to factor the Tourism, hospitality and Allied Sectors in the emergency fund received from donors with immediate recovery assistance.

  1. Employee Support
  1. Licences and Municipality Rates
  1. Taxes
  1. Employee Support
  1. Licences and Municipality Rates

LONG-TERM INTERVENTIONS

The situation on the ground warrants us to be more proactive in consolidating existing geographic existing markets. The need to focus on the much talked about all year-round tourism policy is more necessary than ever before

Seasonality

Although the general consensus exists that the Gambia is potentially an attractive and safe short-and long- haul holiday destination for many new potential markets such as the ECOWAS region (e.g. Nigeria), Southern Europe (e.g. Spain), Eastern Europe and those new emerging source markets, the reality is that the destination is in urgent need of rejuvenation and repackaging Products and market segments are in need of diversification.

Over the years the emphasis on the regional market was focus mainly on the attendance of the Akwaaba Fair in Lagos, Nigeria which is the only tourism professional fair in the Sub-region… The engagement of P.R Agents in strategic source markets to promote the destination was realised through the support of the Tourism Marketing Committee funded World Bank Project which has now been faced out. The proposal to attend other festivals in Nigeria as part of the overall promotional strategy could not be fulfilled due to inadequate funding.

The competitive advantages our destination has to capture the regional market includes

The consolidation of the markets in Scandinavia, Netherlands, , Spain and other markets need to be enforced not only by attendance of fairs but more of interactive programs with schools, universities and religious groups, festivals  among others.

All these measures together could save a vital sector that brings in essential foreign exchange, inward investment, create jobs opportunities and above all stimulates every sector of our economy.

References:

# This paper is an extract from a report commissioned by The Gambia Hotel Association and Gambia Tourism & Travels Association. Conducted by Sheikh Tejan Nyang & Kebba Njie .

 

 

 

 

 

 

 

Exit mobile version