Tourism Revenue: How Domestic Travel Contributed 97% in 2016?
By Olukayode Kolawole
The data presented in the recently published hospitality report on the Nigerian hospitality sector by Jumia Travel has finally cleared the air on the argument that Nigeria doesn’t have enough tourist destinations to attract people’s interest to spend their holidays in the country instead of traveling to some popular holiday destinations abroad.
It’s fair to say that without the economic woes that plagued the country last year which placed lots of pressure on people’s spending habit, no one would have fully understood how much the country can generate from the tourism sector.
Meanwhile, the 2014 & 2015 World Travel & Tourism Council (WTTC) reports indicated that domestic travel had always contributed more than two-third of tourism’s contribution to the country’s GDP.
For instance, in 2014, domestic travel spending generated 95.8% of direct Travel & Tourism GDP compared with 4.2% for international visitor exports (money spent by foreign visitors to a country), and was forecast to grow by 2.7% in 2015 to NGN2, 544.3bn. In 2015, domestic travel increased slightly to 97% while international visitor export went below 4%.
Despite the huge revenue generated in the last 3 years, the tourism sector doesn’t seem to reflect this massive income. There are two reasons why this is so.
First, the revenue generated primarily reflects the activities of industries such as hotels, travel agents, airlines and other passenger transportation services (excluding commuter services). But it also included, for example, the activities of the restaurant and leisure industries directly supported.
Second, there was an ‘indirect’ contribution which encompassed the GDP and the jobs supported by travel & tourism investment spending – an important aspect of both current and future activity that includes investment activity such as the purchase of new aircraft and construction of new hotels; Government ‘collective’ spending, which helps travel & tourism activity in many different ways as it is made on behalf of the ‘community at large’ – e.g. tourism marketing and promotion, aviation, administration, security services, resort area security services, resort area sanitation services, etc; Domestic purchases of goods and services by the sectors dealing directly with tourists – including, for example, purchases of food and cleaning services by hotels, of fuel and catering services by airlines, and IT services by travel agents. The ‘induced’ contribution measures the GDP and jobs supported by the spending of those who are directly or indirectly employed by the Travel & Tourism sector.
Bruce Prins, a renowned hospitality consultant for over two decades shares fascinating trends that will shape the sector in 2017 (this year).
”More recreational facilities and services will be required; better reservation systems that are 24 hours and easy to action will be the deal-breaker; ease or disease of air travel will affect everything; renovation and maintenance will make a hotel, and the lack thereof will break a hotel; and social media is, and will be even more so the most powerful marketing tool,” stated Mr Bruce.
The current President of the National Association of Nigeria Travel Agencies (NANTA), Mr. Bankole Bernard offered some suggestions on how to take the travel and tourism sector to the next level. In his prescription, he mentioned four major quick fixes; government endorsement of policies that favor the industry in terms of forex request from CBN; aviation fuel supply to ease operations within the industry; improved infrastructure at airport terminals; and privatization of the aviation industry. According to him, once all of these are implemented, the sector will grow unstoppably.
There are also some insightful data on the state of e-tourism in the country. First, Nigeria is among the leading countries with the highest smartphone penetration in Africa. In 2016, there were 15.5 million smartphone users in Nigeria.
Second, the success of e-commerce in the country can also be a consequent of the increase in the number of smartphone users, which is forecast to reach 18 million users in 2017.
Third, internet penetration stood at 52% (97, 210,000) of the country’s population (186,879,760) as at June 2016.
Fourth, e-commerce is estimated to be worth US $13billion by 2018. However, the country is still lagging behind African countries such as Morocco, Egypt, and Kenya.
Fifth, globally, the number of hotel bookings made online stand at 148.3 million while the percentage of same day hotel reservations via smartphone stand at 65%.
Olukayode Kolawole is the Head of PR & Marketing at Jumia Travel NG.
Emirates Forward Bookings Remain Robust on Strong Customer Demand
By Modupe Gbadeyanka
The Chief Commercial Officer of Emirates, Mr Adnan Kazim, has said the airline’s forward bookings have remained robust amid a strong customer demand, spurring the company to ramp up its operations across continents.
According to him, in the past months, the airline has planned and executed the rapid growth of its network operations, reintroducing services to five cities, launching flights to one new destination (Tel Aviv), and adding 251 weekly flights onto existing routes and continuing the roll-out of service enhancements in the air and on the ground.
It was disclosed that Emirates has continued to scale up its A380 operations with the reintroduction of the iconic double-decker across its network: Glasgow (from 26 March), Casablanca from (15 April), Beijing (from 01 May), Shanghai (from 04 June), Nice (from 1 June), Birmingham (from 1 July), Kuala Lumpur (from 01 August), and Taipei (from 01 August).
“Emirates is working hard on several fronts – to bring back operating capacity as quickly as the ecosystem can manage while also upgrading our fleet and product to ensure our customers always enjoy the best possible Emirates experience.
“So far, four of our A380 aircraft have been completely refurbished with our new cabin interiors and Premium Economy seats, and more will enter service as our $2 billion cabin and service enhancement program picks up pace,” Mr Kazim added.
He noted that in the coming months, established routes to Europe, Australia and Africa would be served with more Emirates flights, while in East Asia, more cities are seeing route restarts.
Emirates had upcoming route enhancements by regions, including in Europe, Australia and New Zealand, East Asia, as well as in Africa which covers Cairo: from 25 to 28 weekly flights by 29 October; Dar es Salaam: from 5 flights a week to daily flights starting 01 May and Entebbe: from 6 flights a week to daily flights starting 01 July.
Mozambique Okays Visa Exemption for 28 Countries, Snubs Nigeria
By Kestér Kenn Klomegâh
A number of African countries are focusing on promoting extensively inbound tourism. They are luring potential external investors to the tourism industry.
The latest in the southern African region is Mozambique, which has approved a visa exemption for 28 countries for tourism and business.
As the Council of Ministers approved the decree in mid-March, the exemption applies to visitors holding ordinary passports and allows for a 30-day stay, renewable to an additional 60 days.
The model adopted by the Mozambican government is similar to the United States visa waiver program in the sense that it requires travellers to register on a platform for pre-screening at least 48 hours before travelling and to pay a processing fee of MZN-650 (equivalent £8.50).
In the list released, Nigeria, which prides itself as the giant of Africa and the largest economy on the continent, was missing.
The approved countries for this programme are Belgium, Canada, China, Denmark, Finland, France, Germany, Ghana, Indonesia, Israel, Italy, Ivory Coast, Japan, The Netherlands, Norway, Portugal, Russia, Saudi Arabia, Senegal, Singapore, South Korea, Spain, Sweden, Switzerland, Ukraine, United Arab Emirates, the United Kingdom and the United States.
The visa exemption is a follow-up to the launch of a platform last December that allowed prospective visitors to apply for an electronic pre-authorization to travel into the country. The introduction of e-visas has seen an increase of over 30 per cent in the number of travellers entering the country compared to the same period in the previous year.
The e-visa platform commits the country to respond to applications within five days, but general feedback places an average response at 24 hours, and the few issues reported are usually created by users not uploading the required documentation.
President Filipe Jacinto Nyusi, since August 2022, has taken steps containing 20 reform measures aimed at delivering to visitors and potential investors a path for a more competitive and more accessible country. Mozambique, with an approximate population of 30 million, is one of the 16-member Southern African Development Community.
Foreign Airlines Unable to Repatriate $743.7m from Nigeria
By Adedapo Adesanya
The International Air Transport Association (IATA) has said that foreign airlines’ blocked funds in Nigeria have risen to over $743.7 million.
In a letter dated March 14, 2023, and signed by the Area Manager for West and Central Africa, Dr Samson Fatokun, it was disclosed that the blocked funds rose from $549 million in December 2022 and $662 million in January to $743.7 million.
IATA noted that for over a year, Nigeria had been the country with the highest amount of airlines’ blocked funds in the world.
According to the association, the increasing backlog of international airlines’ blocked funds in Nigeria is a potential threat to foreign direct investment into the country and could affect the operations of airlines leading to job losses.
While appealing to the Minister of Aviation, Mr Hadi Sirika, to intervene in resolving the issues, the association also called on President Muhammadu Buhari to clear all airlines blocked funds before leaving office.
Meanwhile, at a meeting with the IATA and foreign airlines operators in Abuja to discuss the issues, Mr Sirika said the issue of blocked funds sits with the Central Bank of Nigeria and is not what the ministry can handle alone.
He urged international airline operators to be very considerate when dealing with the issues bearing in mind the effects of COVID-19 and the recession the country had experienced.
Recall that in August 2022, IATA’s Regional Vice-President for Africa and the Middle East, Mr Kamil Alawahdi, expressed his disappointment with Nigeria over the amount of airline money blocked from repatriation by the Nigerian government, which was around $464 million then.
“IATA is disappointed that the amount of airline money blocked from repatriation by the Nigerian government grew to $464 million in July.
“This is airline money, and its repatriation is protected by international agreements in which Nigeria participates. IATA’s many warnings that failure to restore timely repatriation will hurt Nigeria with reduced air connectivity are proving true with the withdrawal of Emirates from the market,” he said.
Latest News on Business Post
- Unilever Nigeria Rejigs Business Model to Reduce Exposure to Naira Devaluation, Liquidity March 21, 2023
- US Threatens Sanctions Over Voter Intimidation at Lagos Guber, Others March 21, 2023
- Nigerian Banks Immune to Global Banking Jitters—Emefiele Assures March 21, 2023
- Russia’s Politics of Writing Off Africa’s Debt March 21, 2023
- To Make e-Payments More Acceptable, Nigeria Needs to Curb Fraud March 21, 2023
- CBN Hikes Interest Rate to 18% to Tame Inflation March 21, 2023
- Cote d’Ivoire Launches Startup Act to Support Ecosystem March 21, 2023
- Outrage as NNPC Appoints French-Swiss National to Head Oil Trading Business March 21, 2023
- Currency in Circulation in Nigeria Drops to N982.09bn in February March 21, 2023
- NGX RegCo Sanctions Infinity Trust Mortgage Bank Over Price Sensitive Info March 21, 2023