There are incredible deals available for tourist investors in East Africa right now, but everyone is sitting on their hands waiting for a crucial report due out in the next couple weeks.

The world famous Davos meeting of the World Economic Forum (WEF) ended several weeks ago with headliner Bill Gates announcing the “Decade of Vaccines” to help Africa.

But the East Africa tourism industry is still biting its nails waiting for WEF’s 2010 report on the risks of investing in their economies.

WEF considers there are about 130 countries in the world where tourism investment shows the greatest potential. The East African countries have always been in this list, mainly because the return on investment is so high in East Africa… when things go well.

When things don’t go well, well, it’s a bottomless well. We call it “peaks and valleys,” and while that dynamic is unlikely to attract George Soros, it’s great for small investors who gauge the entry and exit points correctly.

This annual report has been a deal-breaker in East Africa in years past. The large Fairmont Hotels chain made their historic investment in Kenya after a positive report. Fickle Sheraton Hotels has been known to buy and sell its management contracts days after the report was issued.

And smaller investors, often from South Africa, have plunged in and out in Spring time right after the reports were issued.

The tourism industry in East Africa is seriously depressed right now. No way but up? This is a situation ripe for the bottom feeder investor, someone with some ready cash to sweep in and collect near bankrupt properties.

Kenya has always been WEF’s best bet in East Africa, except in 2008 which followed the incredibly turbulence of the 2007 elections. But it quickly regained its position as one notch above Tanzania for 2009 (97 in the list; Tanzania was 98; Uganda was 111).

WEF looks to the investment environment more than the investment potential. It’s up to the investor to gauge the potential. But what WEF has consistently said for more than two decades (except for 2008) is that Kenya provides the best investment environment in East Africa.

Part of that might be that Kenya has the largest industry, and also the most accessible. Twice as many tourists visit Kenya annually as Tanzania, but an average week’s trip in Tanzania costs $1600; in Kenya it’s only $800.

(Those figures, by the way, are NOT what the consumer pays, rather the revenue collected locally.)

The difference in large part has to do with Kenya’s large beach vacation industry: half of Kenya’s tourists never leave the beach, and that’s a much less expensive routine.

Nevertheless, Tanzania’s prices have increased much more quickly than Kenya’s in the last three years. That figure alone will discourage an investor who much prefers a gradual but sustainable price increase over the mid-term.

So presuming that both Kenya and Tanzania will hold their own in the 2010 report, what companies in East Africa will investors be looking at?

I’ll discuss that in tomorrow’s blog.