Bench Blog

The crash in commodity prices will help tourism across Africa - Matthew Weihs

Jan 29, 2016

As a UNWTO affiliate member, Bench Events were honoured to participate in the 7th edition of Investour, the Tourism Investment and Business Forum for Africa on Jan 21st 2016.

Our goal is to support the UNWTO's promotion of increased public private partnerships in and around tourism infrastructure.  Investour is UNWTO's annual event in Madrid and with over 10 African Ministers of Tourism present, it allowed for plenty of engaging debate. 

I participated in a session entitled, "Africa - The Future is Now", led by Olivier Jager, CEO Forward Keys.  Also on the panel we had H.E Lahcen Haddad the Minister of Tourism of Morrocco, Tewolde GebreMariam CEO of Ethiopian Airlines and Greg Bakunzi from Amahoro Tours in Rwanda.  It was no surprise that, amongst the challenges affecting investment into Africa today, we instantly explored the impact poor air connectivity and lack of reliable market data was having on investment decisions.

     


According to JLL's 2016 Sentiment Report, around 75% of investments still come from intra-African markets.  African Governments are now looking outwardly for FDI.  This conversation promoted airline infrastructure and connectivity as being a starting point for Africa positive future.

Of course African countries have to look at their VISA entry issues, but they also need to somehow fly people there first.  The lack of connectivity and the lack of airline infrastructure means that prices remain high for the customer and out of reach for many intra-Africa travellers.  Considering we are expecting a boom of the African middle class and a rise in the aspirational youth across the continent - to make travel easier and cheaper would open up the skies indeed.  And what impact on hotel investment.   

It is one of the reasons why we are excited to be launching our inaugural Aviation Development conference, AviaDev, in October alongside our existing Africa Hotel Investment Forum (AHIF). If we are able to address some of the issues of air connectivity and its link with inward investment we can help future tourism development across the continent.

AviaDev will be the first time ever the aviation and investment communities will come together to determine how to build a co-ordinated approach to develop tourism infrastructure .  Such events have a huge significance for the whole of Africa.  It is pretty clear Africa has moved away from the "hopeless case" tag, but it still remains a difficult market to do business and invest.

AHIF's senior delegate community has highlighted many times over that Africa has to be treated as the 50+ countries that make it up, rather than one region.  Each country has to be understood and navigated.  However, at a perception level, Africa ends up feeling the full brunt of the media when issues such as the Ebola crisis, terrorism or other damaging images impact the whole continent rather than the location the story occurred.  

Olivier Jager, CEO of Forwardkeys, a data provider for the airline industry, clearly illustrated just how the ripples of such negative experiences can flow right across Africa. His example cited how the ebola crisis negatively affected airline bookings right across the continent. In Johannesburg, for instance, travel was down even though it was further from the outbreak than Madrid itself.  It was clear from the discussion that there is a continued need to work together as a continent (and supporters of the continent) to combat perceptions as much as acting on the issues in the first place.  

The session had a lively debate around diversification.  In an earlier panel, Peter Norman, senior VP of Real Estate and Development for Hyatt Hotels, said they chose countries to operate in that have strong diversified markets.  The falling prices in commodities has exposed many markets propped up on one or two key industries.  Although this has caused a very real economic wake up call, I see this as an unlikely opportunity to raise economic awareness of diversification into tourism.  With the crash has come the opportunity push tourism to the top of the agenda for many African countries, which is where we see AHIF and AviaDev offering essential value.

This offers a unique opportunity for tourism to become a pillar of a diversified economy.  This change in emphasis was concluded by an impassioned plea, led by Minister Walter Mzembi of Zimbabwe, who highlighted the need for further government investment in tourism promotion to compete with the major tourism powers of the world and spread the message of Africa’s potential.