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Regions
Uganda: Tourism to Be Battered By Credit Crisis
Posted: Tuesday December 09, 2008 10:12 AM BT
Kampala - Tourism earnings are expected to drop following a global recession that has made intending tourists cancel travel plans. According to industry players, the tourists from Europe and the US who contribute a bulk to Uganda's tourism revenue are likely not to travel.
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Edwin Muzahura, the marketing and public relations manager of Tourism Uganda, said: "Uganda earned $475m (sh942.8b) last year and this year, it may be less due to the economic meltdown." Historically, all recessions have the same fundamental cause. An unregulated or under-regulated market fuels speculative and unsecured investments, which leads to false share values and ultimately a slump when the real value of shares and investments is found wanting. So, thousands of businesses and millions of individuals who have been sucked into the maelstrom lose their financial shirts. Tourism is vulnerable to economic uncertainty and volatility because it involves discretionary expense. During tough economic times, people prioritise their spending on essentials like food. Muzahura says Uganda should look at other places to market her tourism like Asia. "Though the Chinese are particular and it would be costly for us to start marketing Uganda aggressively, it is a choice we are looking into." He adds that they have not given up on Europe completely. "We are looking into marketing the country in Denmark, Norway and Sweden." However, this does not mean that tourism stops. The trend we have learned from past crises whether economic or the global tourism scare resulting from the 9/11 attacks is that people continue to travel but they will travel differently. In the short to medium-term, travellers are likely to spend less. Muzahura urged the Government to support tourism and believes that the missing support would further dent chances of marketing Uganda. "The private sector has been trying their best but without government support, we are not going to move." Leopold King, the unit manager of Gorilla Forest Camp, said Uganda would be affected in a big way because the country is overly dependant on the US and European market, which were hardest hit by the credit crunch. "Tourism is a luxury. Already, there are a lot of cancellations of bookings," he said. King said October is usually a good month for Uganda, but this year, the number was just slightly above half of the bookings and he expects the situation to worsen. He said marketing Uganda to Asia may not have a positive impact. "The US and Europe get their supplies mainly from Asia, and now, with the financial crisis, supplies from Asia will be choked, meaning less exports for Asia in the long run." According to an International Air Transport Association (IATA) statement, passenger traffic declined by 2.9%, while cargo traffic dropped by 7.7% compared to the same month in 2007. International load factors tumbled by 4.4% in August to 74.8% in September. "The deterioration in traffic is alarmingly fast and widespread. We have not seen such a decline in passenger traffic since SARS in 2003," Giovanni Bisignani, the IATA chief executive, said. "Even the good news that the oil price has fallen to half its July peak is not enough to offset the impact of the drop in demand. At this rate, losses may be even deeper than our forecast $5.2b this year," Bisignani said. |
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