VALUE CHAIN OF TOURISM: PROBLEMS OF TOURISM TO CONTRIBUTE FOR ECONOMIC GROWTH OF ETHIOPIA Prepared by: Bayebegn Zewdie A Senior Essay Submitted in Partial Fulfillment of the Requirements for Degree of Bachelor of Arts in Economics Advisor: Ato Atlaw Alemu Addis Ababa University Faculty of Business and Economics Department of Economics July, 2008
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VALUE CHAIN OF TOURISM: PROBLEMS OF TOURISM TO CONTRIBUTE FOR ECONOMIC
GROWTH OF ETHIOPIA
Prepared by: Bayebegn Zewdie
A Senior Essay Submitted in Partial Fulfillment of the Requirements for Degree of Bachelor of
Arts in Economics
Advisor: Ato Atlaw Alemu
Addis Ababa University Faculty of Business and Economics
Department of Economics
July, 2008
Acknowledgment
I am faithful to the Almighty God for every thing He has dome to me.
I extend my special thanks to my senior essay advisor Ato Atlew Alemu
for his valuable comments and suggestions in undertaking this study.
I would like take this opportunity to express my heartfelt and special
appreciation to my brother Ato Abeje Zewdie and Dr. Wubaye Walelgn
and his wife Wro. Abeba Mengesha, for their moral and financial as well
as material assistance not only in my stay in the university but also in all
way to wards my achievement.
I would like to extend my gratitude to the CTTI Liberalist, Ministry of
Culture and Tourism of Ethiopia’s workers, National Bank liberalist etc…
for providing me necessary material that helped me for the preparation of
the study.
Last but not least, I would like to extend my thanks to my father Blata
Zewdie Tewlatu, my mother Wro Ziyn Alene and my brother Bayreyegn
Zewdie to their contribution in my achievement and to the typist
Wublame Haile.
Bayebegh Zewdie
Table of Content
Page
CHAPTER ONE
1. PROBLEMS AND ITS SETTINGS ................................................ 1
Table 4.4.3 (a) Number of star hotels, recommended hotels,
ownership, and new additions until 2005 ....................... 39
Table 4.4.3 (b) Distribution of hotels in general and star hotels by
region (end of 2005) ...................................................... 41
Table 4.4.3 (c) Tourism Rating of Hotels and restaurants ..................... 42
Table 4.4.4 Average Ratings of Tourism Products by Tourists .............. 43
Table 4.4.5 Summary of International Tourist by Purpose of Visit
from 1991-2005 ................................................................ 44
Table 4.6.1 Level of Education and Training amongst Hotels and
Tour Operators .................................................................. 47
Table 4.7 Arrivals and Receipts From 1991-2005 via Addis Ababa
Airport and Other ................................................................ 48
Table 4.8 Arrivals by Age and Gender Group for 2003,
2004 and 2005 ..................................................................... 50
Acronyms
UNIDO United Nation Industrial Development Organization
WTO World Tourism Organization
UN United Nations
LDCs Less Developed Countries
CSA Central Statistic Authority
GDP Gross Domestic Product
UNESCO United Nations Educational Scientific and Cultural
Organization
AU Africa Union
ECA Economic Commission for Africa
CTTI Catering and Tourism Institute
ETC Ethiopian Telecommunication Corporation
1
CHAPTER ONE
1. PROBLEMS AND ITS SETTINGS
1.1 Background
Half a century ago, history shows that the role of tourism as an economic
sector was negligible and until the global tourism statistics was not even
compiled. However, since 1950s it has showed a dramatic performance
and in recent years it has manifested itself as abundant industry
recording remarkable achievements in job creation, foreign currency
earning, and redistribution of income and generation of tax revenue.
(Theodros, 2002)
WTO (1994) stated that:
“Tourism sector is the most productive sector in the world and acconts
for 12 % of the world GDP”
Ethiopia is one of the sub-Saharan countries which is endowed with
natural and man made resources, which can be exploited for the
improvements of its economic performances and changing its images.
The country has a number of interesting and wonderful tourist attraction
sites. She is endowed with wildlife and game parks, ancient building and
historical traditions, magnificent scenery and pleasant weather etc…
(Ajebush,2004).
Despite this huge potential, the annual inflow of tourists in to the
country is low. In fact, Ethiopia’s share of the African Tourism market in
the year 1998 was only 0.5%, while that of the East Africa was only 1.7%
(Abebech, 2001).
2
The trend of tourism contribution to GDP shows continuous increment,
but there was a slight decline in 1998 and 1999 due to the reduction of
tourist arrivals to Ethiopia following the Ethio-Eritrean war. In 1992 the
sectors contribution was 0.28 which is very insignificant, in 1997 it
reaches 0.67%, however, this increment in trends of tourism’s share to
GDP is negligible (Hawaz, 2006).
Previous statistics shown that,Ethiopia with relative to great potential of
both natural as well as man made tourist attraction sites, the economic
benefit from this sector and the contribution to national income is
insignificant. This is due to problems with in the value chain of tourism
at that time.
Tourism value chain cuts across many sectors, such as retail, housing
construction, hotels and restaurants telecom and transportation, and
activities like market promotion, tourism sector policy, political situation,
(Abebeh, 2006). It also includes tour operation activities human
resources development related to tourism profession and travel agents,
tour operators, conference organizers etc. (Mekonnen, 2006).
There for this paper investigates the value chain of tourism and identify
where the main problems for the low contribution of tourism with in the
value chain exists.
The statements of the sub-problems are:
(i) To investigate the existing value chains of tourism of Ethiopia.
(ii) To identify where the main problems exist with in the value chain of
tourism of Ethiopia.
1.2 Research Question
The basic questions that this paper addresses are the following:
3
(i) What are the major factors that are included in tourism value
chain?
(ii) Where the bottlenecks of tourism development are with in the
value chain exists?
1.3 Delimitations
On this paper, attempt is made to treat value chain of tourism industry
and problems with in the value chain of tourism industry exist. This
includes stock of resources like National parks, sanctuaries and Game
reserve’s; promotion and advertisement; tourist accommodation and
infrastructural like transportation that is road, rail, air, water;
accommodation that is hotels and conference facilities; national tourism
policy like budget allocation,and visa and exit tax; telecommunication;
tour operations and guides; skilled man power; social and political
stability; attitudes and habits of the visitors and the suppliers; and state
of technical knowledge.
Some of the sectors with in the value chain of tourism face quantitative
data constraints due to lack of organized and effective statistical system
in the country.
1.4 Definition of Important Terms
1. Arrivals are visitors who travel to a country or within a country
other than that in which she/he has his/her usual residence but
outside his/her usual environment for a period not exceeding
twelve months and whose main purpose of visit is other than the
exercise of an activity remunerated from with in the country
visited. (WTO, 2000)
2. Domestic tourism receipts are defined as expenditures of internal
inbound visitors including their payment to national carriers for
domestic flight. They should also include any other prepayments
4
made for goods/ services received in the country. This also defined
as expenditures and payments by the domestic travelers with in
their country to visit historical and natural sites. (Ministry of
culture and Tourism annual bulletin, 2006).
3. International tourism receipts are defined as expenditure of
international inbound visitors including their payment to national
carriers’ for domestic flight. They should also include any other
prepayments made for goods/services received in the destination
country. They should in practice also include receipts from same
day visitors except in cases when these are so important as to
justify a separate classification. It is also recommended that, for
the sake of consistency with the balance of payment
recommendation of the international monetary fund, international
fare receipts be classified separately. (Ministry of Culture and
Tourism anural bulletin, 2006).
4. Number of rooms refers to the total capacity in room of
establishments offering accommodation
5. Number of bed refers to the total capacity of beds in the
establishments offering accommodation.
6. Tourism is defined as the process, activities and out comes arising
from relationships and the interactions among tourists, tourism
suppliers, hot government, hot communities and surrounding
environments that are involved in attracting and hosting of
visitors. (WTO, 1995).
7. Value chain is defined as a sequence of productive (value-added)
activities leading to and supporting end use, (Sturgeon T.J, 2001)
and an alliance of enterprise, working vertically to achieve amore
rewarding position in the market place. (K.H. Lei, 2002).
5
1.5 Assumptions
(i) Ethiopia wants to fully use its tourism potential properly and
efficiently.
(ii) Ethiopia wants to achieve rewarding position in world’s tourism
market share in both absolute and comparative terms.
1.6 Importance of The Study
In the world of full of competition, expanding tourism sector has become
a relatively better alternative by many developing countries as a means of
promoting their economic development and overcoming balance of
payment deficit as well as debt repayment.
Since Ethiopia is one of the developing countries, analyzing the problems
of tourism sector has significance for the development of the sector,
which contributes to the growth of national income.
The method used in this paper that is value chain analysis is also use
full for linking a sequence of actives which are use full for the growth of
the tourism sector and problems with in the activities with their
solutions. This paper also contributes to further research by introducing
new method of analysis to those persons who are doing their work by
this method and source of information to those who work their paper on
tourism. In general, this paper can be used as an important source of
information for further studies.
6
CHAPTER TWO
2. REVIEW OF THE RELATED LITERATURE
2.1 Historical Development of Tourism
Tourism deals with the movement of people away form their normal
residence for holiday, recreation and leisure activities, business, meeting,
visiting relatives and other purposes.
Half a century ago, tourism was a particular little industry mainly in
West Europe and USA. It was viewed largely as frivolous endeavor largely
with in the domain of those with a lot of time and money of their part
with better to spend it. As standard of living, levels of education and
means of transportation and communication improved, the ability and
willingness of the world upper, middle class to travel increased.
Currently,tourism becoming the leading sector and major employer in
the world and expanding at a steady rate. The sector being an important
sector in its own right hand received considerable attention, especially in
the 1960’s (H. Robinson, 1997). The first step towards international
recognition of tourism appeared in UN conference, “On international
travel and Tourism” held in Rome in 1993. By the year, 2000 tourism
was expected to become the largest industry in the world and will
constitute the biggest component of international trade.
As indicated by WTO 2000 report, the volume of world tourism in 1996
was 459.2 million and the number had reached 546.3 million in 1998.
However, the benefits of these developments were skewed towards
Europe and USA as current trends may reveal. For instance in 1994
about 60% and 28% of world tourists visited Europe and USA
respectively. While 50% of the total world tourism receipts went to
Europe and 27% to USA.
7
All in all, international tourism is not developing at the same rate and
unevenly distributed in different regions of the world. In LDCs weak
development of tourism due to lack of infrastructure and super structure
to develop their tourism sector (Martin, 2002).
2.2 Classification of Tourism
Tourism can be classified in different ways by different scholars and
organizations. Tourism can be divided in to two broad categories. These
are mass tourism and alternative tourism.
The following figure show different types of tourism briefly.
Figure 1 types of tourism
Source: the alternative tourism (after Mieczhowstes, (1995:459) and cited
by Stephen, 2000).
Tourism
Mass tourism (conventional, standard large scale tourism)
Alternative tourism
Cultural Educational Scientific Adventure Agri- tourism
Nature or eco-tourism
8
Mass Tourism
Mass tourism is generally seen as being an overarching term for tourism
that is undertaken by the majority of travelers. This thesis, in exploring
the specific of particular tourist experience in depth, may contribute
towards an understanding of not only the significant divergences and
convergence that exist between both mass tourism and alternative
tourism, but also the subtle nuances that subtend these tourist
experiences. Therefore, it is to not simply a matter of differentiation, in a
binary fashion, between a general category of mass tourism and the
derivation of niche elements with in it.
Alternative tourism
The common feature of alternative tourism is the suggestion of an
attitude diametrically opposed to what is characteristically viewed as
mass tourism. Alternative tourism often is presented as existing in
fundamental opposition by attempting to minimize the perceived negative
environmental and socio-cultural impacts of people at leisure in tourism
promotion of radically different approaches to tourism. Examples include
eco-tourism, green tourism, nature oriented tour, soft tour and defensive
tourism.
Another classification is made by the world tourism organization (WTO
and the Conference on Travel and Tourism Statistics in 1995), the
following three major forms of tourism are outlined.
i. Domestic tourism- involving residents of the given area traveling (as
visitors) only with in that area
ii. Inbound tourism- involving non-residents traveling (as visitors) in a
given area.
iii. Out bound tourism-involving residents traveling (as visitors) in area
other than the given area.
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2.2.1 Special forms of Tourism
There are different forms of tourism. Amongst them some are as follows;
I. Adventure tourism involving travel in rugged regions, adventurous
sport mountaineering, and hiking or tramping.
II. Agro-tourism-farm based tourism, helping to support the
agricultural economy.
III. Cultural tourism-includes urban tourism, visiting historical or
interesting cities and experiencing their cultural experiences, such
as art, museum during the tour, or opera tourism when one sees
many operas or concerts during the tour.
IV. Ecotourism-sustainable tourism which has minimal impact on the
environment, such as safaris and rainforests, or national parks.
V. Heritage tourism-visiting historical or industrial sites such as old
canals, rail ways, battle grounds, etc…
VI. Health tourism-usually to escape from cities or relieve stress,
perhaps for some ‘fun in the sun’ etc. often to ‘Health spas’.
VII. Hobby tourism-tourism a lone or with groups participate in
hobby. Example might be garden tours, or square dance cruises.
VIII. Medical tourism for what is illegal in one’s own country eg.
Abortion, euthanasia, for non-citizens is provided by “Dignitas” in
Switzerland for advance care that is not available in one own
country.
IX. Perpetual tourism-wealthy individuals always on holidays, some
of them for tax purpose, to avoid being residents in any country.
X. Regional tourism-tourism bundle of few countries as the transit
point. (http://en.wikipedai.org/wik/touism)
2.3 Sustainable Tourism Development
The UN Burundtland Report of 1987 cited by Theodros; 2002 offers the
following definition;
10
“Sustainable development is development, which meets the requirements
of the present generation with out endangering the requirements of the
future generation”. This requires a development with out over
exploitation of natural resources and with out destroying the basis of
existence. The goal must be to make growth possible in the mid and long
term while energy consumption and environmental stress under go
absolute decrease.
The world tourism organization (WTO, 1993), in which Ethiopia is a
member, has defined sustainable tourism as follows:-
“Sustainable tourism development meets the needs of present tourists and host regions while protecting and enhancing opportunities for the future. It is envisaged as leading to management of all resources in such a way that economic, social, and aesthetic needs can be fulfilled while maintaining cultural integrity, essential ecological processes, biological diversity, and life support system.”
The sustainable tourism development principles are there fore derived
from the sustainable development principles. The deference lies on the
scope. Tourism is part and parcel of sustainable development with in the
broad frame work of sustainable development. Sustainable development
of tourism has three basic principles as pointed out by WTO (1993).
i. Ecological sustainability ensures that development is compatible with
the maintenance of essential ecological processes, biological diversity
and biological resources.
ii. Social and cultural sustainability ensures that development increases
peoples control over their lives compatible with the culture and values
of people affected by it, and maintains and strengthens community
identity.
11
iii. Economic sustainability ensures that development is economically
efficient and that resources are managed so that they can support
future generation. Tourism is not smoke less any more. The increased
movements of people due to high living standard (high income and
free time) in the north, there is high air and water pollution from the
exhaust fumes of aircrafts, motor cars and motor pleasure boats,
threatening the physical environment. These are the reasons, which
brought about the emergence of the idea of sustainable tourism
development.
2.4 What is Value Chain?
Value chain has several definitions and some of the important definitions
are:
Schmitz (2005), define value chain as a sequence of activities required to
make a product or provide a service. The second definition provided by
Keplins R. and Morris M. is that value chain describes the full rage of
activities which required to bring a product or a service form conception,
through the deferent phases of production involving combination of
physical transformation and the in put of various produces and services,
delivery to final service customers, and final disposal after use.
Value chain also defined as a sequence of productive (i.e. value-add)
activities leading to and supporting end uses (Stugesn T.J, 2001) and a
complex web of companies and other actors that affect the production to
consumption (Blowfield M. sited by denial Roduner, 2004).
The last definition presented on this paper is the definition given by
Agriculture and food council, Canada, is that value chain is an alliance of
enterprises, working vertically to achieve a more rewarding position in
the market place. (K.H.Lei, 2002)
12
In generals, value chain describes the full range of activities like
- which are required to bring a product or services from conception
- through the deferent phases of production
- delivery to final customers
- to final disposal after use
Unit of analysis is not a company, a country, or a region, but a net work
of companies embodied in the internal and external governance system,
and the analysis focuses on who adds value where in the chain that is
the leading sector in the value chain. (Denial Roduner, 2004)
2.4.1 Global value Chain
A value Chain is the sequence of activities required to make a product or
provide a service (Schmitz, 2005). In itself value chain is a simple idea.
But the idea of a value chain becomes useful for analytical and policy
purposes. It includes three further features Schmitz pointed. These are:
firstly the activities are often carried out in different parts of the world,
hence the term global vale chain. Secondly, some activities add more
value and are more lucrative than others (the policy-makers’ concern is
to help local enterprise to move in to the lucrative activates). Thirdly,
some actors in the chain have power over the others. The powerful actors
are often called the ‘lead firm’ who seek to govern the chain. The set
and/or enforce the terms under which the others in chain analysis is to
“unpack” the relationships between global lead firms and local producers
and the opportunities and constraints that result form entering such
relationships.
13
2.4.2 The Importance of Value Chain Approach for
Policy Makers and Practitioners
As stated by Schmitz, (2005) coming up with good economic policy
appropriate to the level of development in an industry and country
require and understanding of how local enterprises fit in to the global
economy. This way is to focus on the sectors in which the local
enterprises specialize and then ask how the global market for products
from this sector, is organized. As panted out before, often these markets
are not free for all open spaces. The spaces are coordinated by global
buyers who source different products and services form around the
world. There is increasing integration between internationally dispersed
activities.
The general point to be made here is that value chain is important, not
only for the entrepreneurs, but also for the policy makers. Understanding
value chains in an industry allows policy makers and practitioners to
provide relevant and appropriate support to local enterprises.
As pointed out by Schmitz, (2005) public policy aimed at the private
sector typically tries to influence decisions of entrepreneurs (owners and
managers) of the industry. So that, they can grow and improve their
performance. However, entrepreneurs are skeptical of the advice they
receive from government agencies or consultants employed by local or
foreign support institutions. Entrepreneurs do, however, listen to their
customers. If policy makers and practitioners start with this fact, they
can more productively engage with the private sector.
2.5 Value Chain of Tourism Industry
Tourism is one of the largest growing sectors and the fastest growing
sectors in the world and a major driver of growth for developing
14
countries. Their tourism market shares have actually increased markedly
over the past two decades. Tourism industry cuts across many sectors,
such as retail, housing construction, hotel, restaurants, telecom and
transportation. Serious policy issues in one of these sectors may threaten
the whole tourism value chain. This makes that analysis of the sector
complex but crucial as it could be the catalyst for widespread reforms of
over looked issues (e.g. Land market) (Diagnostic methodology check list,
2007).
As recommended by diagnostic methodology checklist for tourism study
(2007), tourism value chain analysis includes identifying the main
tourism segments based on countries comparative advantages,
benchmark the countries economic performance on these key segments
with relevant international good practice, policy and institutional issues
which may constrains investment and growth, and then design station.
2.5.1 Identifying the Main Sources of Growth of
Tourism
The identification of the main sources of growth emanates form a five fold
exercise involving profile of the tourism sector, a stock taking of existing
and potential new sources of growth and comparative advantage, scope
of sources of markets. These exercises will ultimately bring about sub set
of tourism products in which the country has a comparative and
competitive advantage.
A. What is the tourism profile?
The profile has four parts that is the macro setting, the demand and
supply side and the institutional framework of tourism sector. For this
task the balance of payments statistics (IF/National Bank), the world
travel organization and world travel and tourism council provides good
data points (ibid).
15
Macro
As stated by Diagnostic Methodology check list for tourism study, this
includes three important elements that are important for tourism value
chain. They are:
- Basic macro back ground of the economy (structure-
manufacturing, service etc… GDP per capita level and growth,
private and foreign investment as share of GDP);
- Tourisms contribution to the economy-share of GDP and growth
trend: contribution to growth, exports and foreign exchange
earnings; fiscal effect-taxes fees and incentives; job creation;
- Structure of the tourism industry-number of firms, owner ship and
management, employment, direct and indirect, fulltime/per time,
seasonality.
Demand
As stated by Diagnostic methodology checklist for tourism study, (2007)
the demand part of tourism value chain includes: number of foreign
tourists, average length of stay and average daily expenditure, percentage
of tourists return (level and grow trends), main categories of foreign
tourists by socio-demographic profile and country of origin as well as
seasonality’s, revenue by main tourist categories and market shares
(regional and global).
Supply:
As stated by Diagnostic methodology check list for tourism study (2007)
the supply part of tourism value chain also include; main tourist
attraction and circuits, size and structure of industry of hotels and other
accommodation, structure of key services sectors in tourism (such as
restaurants, bars, good transportation), structure of key activities service
providers in tourism (such as diving, horse back riding, guide tours,
fishing adventure activities, main tourist project in the pipeline).
16
Policy and Institutional Framework
As stated by this Diagnostic Methodology check list for tourism it can be:
public institutions (ministry, statuary body, etc.), Private institutions
(business associations and business councils), tourism legislation-laws
and regulatory practices (licensing, classification, inspection), does a
country rely on a planning frame work-at what level, national, regional or
local, inventory of relevant policy issues, reforms under way or being
discussed are included.
B. Potential and recognized sources of growth and
comparative advantage
As stated by Diagnostic methodology checklists for tourism study, some
summary of the main sources of comparative advantage of tourism as
follows. These includes cultural assets, natural assets, labourassets,
reliably secured environment, access to world class health care,
education, low access cost (to and with in country), low labor cost,
low/and cost, and proximity to major/growing sources of tourists (ibid).
C. The current and potential tourist products where the
country could be competitive.
As stated by Diagnostic methodology checklists for tourism study, this
includes sun, sand and sea; other natural offerings (e.g. game reserves,
national parks, water falls, mountains); natural events (e.g, volcano
eruptions, eclipse); eco-tourism; sport events; sport offerings (eg. Golf,
rafting, diving, horse back riding, fishing, bird watching and hunting),
adventure activities; festival events; religious events; visiting friend and
families; boating; cultural offerings (e.g. land marks/heritage; theme
parks, museums, archeology, opera, music and dance); other cultural
events and offerings (e.g. spa, serenity, dining, night life, shopping,
gambling, leading hotels); stop on regional circuits; learning facilities
ineffective commercial courts, problematic enforcement of courts
decisions, lack of alternative dispute resolution , access to finance
issues (e.g. lack of mortgages and secured lending), fiscal issues (high
taxes and/or unequal enforcement), and administration barrier issues
(business registration and inspections).
III. Sector specific policy issues as stated by Diagnostic Methodology
checklists for tourism study, it includes in adequate environment and
conservation policies, licensing policies and practices for key products
or services (e.g. hotels, restaurants, taxis, etc), restrictive policies
(and/or unequal enforcement) in retail and other entertainments (e.g.
opening hours, zoning, price regulations), standard certification
issues (policies and unequal enforcement for key services. (eg hotels,
restaurants, taxis, diving and nursing), and telecom sector policy and
enforcement issue leading to poor internet and mobile services. (ibid)
19
CHAPTER THREE
3. DATA AND TREATMENT OF THE DATA
The study will be conducted based on secondary data to show the value
chain of tourism and problems with in the value chain. This includes
data on the stock of resource of Ethiopia which is one of the value chain
of tourism, like number of national parks and their area as well as
regional distribution, game reserves and sanctuaries with their area as
well as regional distribution which constitutes some of profile of tourism
base of Ethiopia. The next data is the national tourism policy related
which includes budget allocation and visa and exit tax price by
comparing with neighboring country Kenya and problems related with
this value chains.
This paper in addition, include tourist accommodation and
infrastructure which is the third with in the value chain of tourism that
include data’s on transportation like major sites and their accessibly by
road to show the quality of road, cost of ticket by bus and distance from
the capital city, and major sites and their accessibility by air to show the
quality, size of the plane and cost of flight whether comfortable to
tourists or not. This value chain of tourism also includes data on
accommodation like distribution of hotels by region, star and
recommended hotels for tourists, ownership as well as new additional
hotels under construction to investigate the quality and quantity of
hotels, besides the general evaluation of tourists facilities, it is important
to see how the services provide look like in the eyes of tourists. This was
shown by the data on tourism rating of hotels and restaurants and
average rating the tourism products by tourists.
This paper also uses data on Ethiopia’s market share in the world
tourism market in both arrivals and receipts to show the effect of
20
promotion and advertisement on tourism which is within of the value
chain of tourism and problems with in this to low performance of this
industry.
The paper has in addition data related with the level of education and
training among hotels and tour operators to show the quality of facilities
which the country offered to the tourists arrived to the country. This
data is an indicator within the value chain of tourism that is skilled man
power and problems related to skilled man power.
The data on arrivals and receipts from 1991-2005 via Addis Ababa and
other ports also used to investigate the political and social stability of the
country which is within the value chain of tourism and data on arrivals
by age and gender group for 2003, 2004, and 2005 to investigate the
attitudes and habits of the people to visit with in the value chain of
tourism, are used in the paper. This shows the effect of gender and age
on the people’s behavior to visit or to move for pleasure.
The last data this paper uses is that the basic telecom statistic to show
the level of development of telecommunication in the country which is
within the value chain of tourism, and problems with in telecom services.
The above data’s are obtained from National Bank of Ethiopia i.e data’s
on arrivals and receipts form 1991-2005 via Addis Ababa airport and
other ports; Ministry of Culture and Tourism which is a place where
much of the data obtained for this paper i.e. data’s like budget allocation
for tourism, number of hotels, recommended hotels, ownership, and new
additions, distribution of hotels and stars, level of education and training
amongst hotel and tour operators, arrivals by age and gender group for
2003,2004 2005; World Tourism Organization which the paper gets data
on Ethiopia’s market share in the international tourism market form
21
1991 to 2003; Central Statistic Authority (CSA) which contributes some
data to this paper like data on number of national parks, game reserves
and sanctuaries with their area coverage in square kill meters as well as
their regional distribution; Ethiopian Road Transport Authority which
contributes data on major sites and their accessibility by road for the
fulfillment of this paper; Ethiopian Airline which the paper takes major
sites and their accessibility by air; at the last Ethiopian
Telecommunication which the data like summery of basic
telecommunication statistics are obtained from it.
With regard to the methodology the paper focuses on the value chain
analysis i.e. a sequence of activities that includes main tourisms
segments, bench mark the countries economic performance on these key
segments with relevant international good practice, policy and
institutional issues which may constrains investment and growth, and
then design solution; and descriptive analysis supported by statistical
fools such as tables, percentage, and ratios.
Figure 2 Value Chain of tourism
Stock of resource
- national parks
- game reserves
- sanctuaries
- other cultural
and natural attraction sites
Promotion
and
advertisement
Tourist services
- visa and exist
price
- transportation
like, road, air etc
- telecom
Accommodation
- hotels
and
restauran
ts
- conferen
ce
Tour operation
- guider (training of it)
22
CHAPTER FOUR
EMPIRICAL ANALYSIS
With wide resource base for tourist attraction resources, Ethiopia has the
potential to establish tourism industries that can assist the effort in
achieving a major economic transformation. With the existing resources,
it is also believed to pay a vital role in the poverty reduction endeavors of
the country and meeting the Millennium Development Goals (MDGs) by
absorbing a large number of labor force both skilled and unskilled with
gender consideration thus making the economic independence of woman
possible.
In this chapter there will be a brief discussion of value chains of tourism
and problems with in the value chain of tourism in Ethiopia.
4. Value Chains of Tourism and Problems with in the Value
Chain in Ethiopia
Even though there are numerous sectors and services with in the value
chain of tourism sector this paper focuses on some of the value chains of
tourism in Ethiopia that affects more the tourism industry of Ethiopia.
Thus, what follows a particular treatment of the sectors with in the value
chains of tourism with grater importance and problems with in the value
chain.
Figure 3. Value chain of tourism of Ethiopia
Stock of resource
- national parks
like Awash, Omo,
semen mountain etc…
- game reserves
like Balo, Gambela
Mango etc…
- sanctuaries
like Harer, Yabelo
- other cultural and
natural attraction sites
like Gonder castle,
Axum obelisks,
lalibela, lower Awash
etc…
Promotion and advertisement
By using
- ETV, Ethiopia
Radio, FM, News
Papers,
Magazines etc…
Tourist services
- visa and exist payment
- transportation like,
road, air etc
- telecom etc
ETC
Accommodation
- hotels and
restaurants
like star,
recommended etc
- conference
facilities
like African Hall
etc…
Tour operation
- guider
(Training of it)
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4.1 The Stock of Resources
Economic activity depends first and for most on the stock of resources
available to use as factors of production. In traditional economic terms,
these include the resources of land, labor, capital and entrepreneurship.
Tourism calls on particular resources concerned with land and its
attributes, and the uniqueness of simple possession of these attributes
can ultimately dictate whether or not an economy is likely to be able to
support the sector.
The role and activities of modern tourism however demanded more than
land attributes. Most tourism involves some elements of services, which
requires a competent and willing labor force. According to Dekadt (1997)
whilst many jobs in the industry may not require a very high level of
traditional skills and qualifications, the presence or absence of a pool of
labor with a positive attitude towards tourism and tourists has of vital
importance.
4.1.1 Profile of Tourism Resource base in Ethiopia
All in all, Ethiopia has natural attraction sites i.e eight national parks
with total area of 11570 sq.km which accounts 1.04% of the total land
area of the country, ten game reserve possessing an area of 26600sq.km
that accounts 2.39% of the total land area of the country and
sanctuaries which possesses 7200 sq.km that accounts 0.6% of the total
land area of the country.
And also the country is endowed with cultural heritages like Axum
Oblisque, Gonder Castle, Lalibela Rock hewen churches, Awash Valley
(Hadar), Omovalley, Jegol (Harer) wall, and Tikel Dengay(Tia), and other
natural attractions like Lake Tana and its monasteries, Tis Issat, Sofemer
Cave, Eartali active Volcano, Rift valley and biodiversities with in the Rift
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vally and attractive wild animals like Walia, Nyala, simen fox (Red Fox),
Zebra, birds and others. In addition to the above, the country endowed
with various nations and nationalities with diversified cultures and
colors which is attractive for tourists.
In general, Ethiopia with its vast area above 1,112,000 sq.km is endowed
with various tourist attraction sites including parks, game reservers,
sanctuaries, cultural heritages and others.
Table 4.1.1 (a) National Parks
National Parks Region Area sq.km Awash Afar 750 Simen mountain Amhara 150 Rift vally Oromia, SNNP 650 OMO SNNP 3,450 Denakil Afar 2000 Mango SNNP 700 Nechisar SNNP 700 Total area 11,400 Source: CSA