VZCZCXRO1957
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHDR #0204/01 0861009
ZNR UUUUU ZZH
R 271009Z MAR 09
FM AMEMBASSY DAR ES SALAAM
TO RUEHC/SECSTATE WASHDC 8371
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHJB/AMEMBASSY BUJUMBURA 2847
RUEHKM/AMEMBASSY KAMPALA 3369
RUEHLGB/AMEMBASSY KIGALI 1296
RUEHDJ/AMEMBASSY DJIBOUTI 0004
RUEHNR/AMEMBASSY NAIROBI 1211
RUEHDS/USMISSION USAU ADDIS ABABA
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHLMC/MCC WASHINGTON DC

UNCLAS SECTION 01 OF 02 DAR ES SALAAM 000204 
 
SIPDIS 
 
DEPARTMENT FOR AF/E JLIDDLE, INR FEHRENREICH, AF/EPS 
STATE PASS USAID/EA, USTDA, USTR 
COMMERCE FOR BECKY ERKUL 
NAIROBI FOR FCS 
 
E.O. 12958: N/A 
TAGS: ECON EIND EINV PGOV TZ
SUBJECT: TANZANIA'S TOURISM SECTOR TAKING A HIT 
 
DAR ES SAL 00000204  001.2 OF 002 
 
 
¶1. Summary: Tanzania's tourism sector will be the hardest hit 
domestic industry during the economic downturn.  With its biggest 
tourist sources, primarily the U.S. and Europe, focused more on the 
bottom line than on climbing Mt. Kilimanjaro - times are going to 
get very tough.  While the true extent of the decline is difficult 
to forecast, a decline in bookings presages trouble for the industry 
through 2010.  A new governmental task force is a positive step, but 
likely will have limited ability to protect the sector or the 
broader economy. End Summary. 
 
¶2.  Tourism is one of Tanzania's most important industries, 
currently making up 20 percent of GDP.  The Tanzanian Tourism Board 
estimated that 840,000 visitors spent $1.3 billion in the country in 
¶2008.  Not only is it the largest source of foreign exchange, 
followed by gold, but the World Economic Forum estimated that in 
2007 the tourism industry employed almost 680,000 individuals. 
While most of the tourism is centered in Tanzania's Northern Circuit 
(combining the Serengeti, Ngorongoro Crater and Mt. Kilimanjaro), 
both the island of Zanzibar and Tanzania's Southern Circuit (mainly 
Selous Game Reserve and Ruaha National Park) are also popular 
destinations.  The combination of game viewing and hunting with 
beaches and scuba diving allows Tanzania to cater to a broad 
spectrum of travelers. 
 
Current Situation: Getting Tough 
-------------------------------- 
¶3.  Although the government and the private sector disagree over the 
extent of the decline, it is clear that tourism numbers are 
dropping.  Scott Coles, the local representative for Nomad Tanzania 
and the Vice Chairman of the Tourism Confederation of Tanzania 
(TCT), stated that he was seeing, "between a 17 to 30 percent 
downturn across the sector" for 2009.  Leopard Tours, one of the 
largest safari operators in the Northern Circuit, is projecting an 
average 41 percent decrease in March, April and May of 2009 relative 
to 2008.  Zanzibar appears to be faring even worse, with many saying 
they are seeing a 50 percent drop this year. 
 
¶4.  The government-run Tanzania Tourist Board remains more 
optimistic about the current situation.  Claiming that most clients 
book at least a year in advance, the board's Acting Director, Musa 
Kopwe, stated that he would "be hearing about it" if local operators 
were really having a hard time.  Confident that the situation in 
2009 would not drop by significant numbers, the tourism board only 
reduced its 2009 forecast by three percent - estimating that 921,500 
tourists would still come to Tanzania.  Even the Director of the 
Tanzania National Parks (TANAPA), Gerald Bigurumbe, seems to 
disagree with the Tanzania Tourist Board; TANAPA expects a 10 
percent drop in 2009 visitors on top of a 15 percent decrease in the 
last half of 2008. 
 
Future: Even Worse 
------------------ 
¶5. Everyone agrees that the second half of 2009 through 2010 will be 
very bad for the tourism sector, though how bad is unclear.  Samai 
Said, Chairman of the Zanzibar Association of Tourism Investors 
(ZATI), said forecasting right now is "like throwing a spear in the 
dark."  He knows the numbers will be down, but he has no frame of 
reference to calculate how the changes in the world market are going 
to impact Tanzania.  Jo Bertone, the co-owner of Naipenda Safaris, 
stated that although her numbers for 2009 were holding, her bookings 
for 2010 were down 25 percent and she did not expect that to 
improve.  Leopard Tours expects a "gradual increase staring in July 
2009," but this is relative to its 41 percent downturn in early 2009 
and is based on two price reductions.  Big properties, such as the 
Serena group of lodges, are dropping prices in the hope of 
attracting late bookings - at a time when they would normally be 
fully booked. 
 
Government Intervention - Too Little, Too Late 
--------------------------------------------- - 
¶6.  Many in the business community have been clamoring for a 
decrease in the government park fees.  According to an analysis 
conducted by TCT, Tanzania's fees on average are the highest in the 
region - almost three times that of Kruger National Park and 25 
percent higher than the Masai Mara in Kenya.  Tanzania bases these 
fees largely on the high operating budgets for managing and 
protecting the animals in the parks.  The GOT carefully crafted the 
fees to draw high-end tourists; by encouraging tourists with a lower 
 
DAR ES SAL 00000204  002.2 OF 002 
 
 
budget to skip the major attractions tourism's environmental 
footprint on the major parks is decreased and visitors feel like 
they are having a more private experience.  (Comment: We do not 
support a decrease in park fees, which, in addition to having at 
best a slight short-term benefit for tourist numbers, would further 
undercut TANAPA's dire budget situation.  TANAPA already is 
hamstrung in its essential anti-poaching and maintenance activities. 
End comment.) 
 
¶7.  To its credit, the GOT has called together a task force to help 
the tourism industry during the economic downturn.  Comprised of 
industry and government officials, the task force has already held 
one meeting and will present a plan of action to the Ministry of 
Tourism and Natural Resources in April.  Because TCT's market 
analysis showed that in 2006 Tanzania's average room rates were USD 
112 compared to USD 104 in South Africa and USD 84 in Kenya (both of 
which in general have better tourist infrastructure and higher 
service standards), high park fees are not the only issue facing 
Tanzania in an increasingly competitive travel market. 
According to Richard Rugimbana, the Executive Secretary of TCT and a 
task force member, the task force is wisely putting together a plan 
that includes both governmental and business solutions. 
 
¶8. Comment.  As a relatively immature and expensive tourism market, 
Tanzania will be hard pressed to respond quickly and effectively to 
the global slowdown, especially in comparison to its better 
developed regional competitors.  Any government-led action plan at 
this point is going to be too little and too late to have a 
significant impact.  A substantial decline in this sector is going 
to tough for an already weak Tanzanian economy.  Jobs are going to 
be lost and only those businesses with high cash reserves are going 
to be able to survive.  Tanzania's tourist sector can only hope for 
a rapid rebound in the global economy. 
 
ANDRE