Fewer Tourists/Prices Drop

Fewer Tourists/Prices Drop

The first hard indication of how much tourism in East Africa has been effected by the global downturn was revealed, today: Down 25-30%.

The announcement was made by Richard Rugimbana, a spokesman for the Tourism Confederation of Tanzania, during a conference in Dar-es-Salaam this morning.

Tourism numbers are very hard to get from East Africa and are generally skewed by the analyzer to promote a certain position. Earlier this year, for example, the Kenyan Tourist Board claimed that tourism was down only 10%. We all knew this was ludicrous.

I think Rugimbana’s numbers are more likely.

November is generally the latest date that hoteliers and transport operators announce their rates for the following year. EWT’s compilation of rates now shows a general decline of about 10% over the 2009 rates, but in fact, it could be much deeper.

Special offers by a host of hoteliers and local airlines are being constantly extended. These take various forms but the two most popular seem to be a 3- or 4-night stay for the cost of 2- or 3-nights, and an extension of low season rates into higher seasons.

The second form is more substantive and generally results in a discount of a third to a half. It also allows forward strategic marketing. The result is normally a long term rate reduction. We see this happening right now mostly among the smaller companies, although a few larger ones like Serena, are fiddling ever so slightly with the idea.

Anecdotal evidence is supporting a long-term reduction. Fairmont, Sopa, Cheli & Peacock, among many other major players, have been unable to reverse their serious job cuts, and &Beyond is reported to be considering closing indefinitely one of the three wings of Crater Lodge. Serena, which historically has offered very deep discounts for the local market, is reportedly extending a blind eye to foreign resellers paying them at these heavily discounted rates. None of these companies will confirm these rumors, but they are widely known on the street.