OPPORTUNITY STUDY INCLUSIVE TOURISM PROGRAMME

Transcription

1 OPPORTUNITY STUDY INCLUSIVE TOURISM PROGRAMME UGANDA INCLUSIVE TOURISM October 2011 Prepared by Dr. Frederic Thomas Mrs. Grace Barya Mr. Celestine Katongole

2 Table of contents TABLE OF CONTENTS 2 ACRONYMS 4 LIST OF TABLES 6 LIST OF FIGURES 8 EXECUTIVE SUMMARY 9 1. INTRODUCTION COUNTRY PROFILE ITC IN UGANDA INCLUSIVE TOURISM PURPOSE AND STRUCTURE OF THE STUDY TIMEFRAME AND OBJECTIVES OF STUDY METHODOLOGY AND LIMITATIONS METHODOLOGY LIMITATIONS TOURISM DEVELOPMENT IN UGANDA KEY TOURISTIC RESOURCES AND ATTRACTIONS TOURISM STATISTICS TOURISM ECONOMICS IN UGANDA TOURISM MANAGEMENT AND PLANNING RECENT AND ON-GOING TOURISM INITIATIVES EU - UGANDA SUSTAINABLE TOURISM DEVELOPMENT PROGRAMME UNDP ( ) / UNCTAD ( ) THE USAID/STAR PROJECT THE WORLD BANK PAMSU PROJECT COMMUNITY PROJECTS OR ASSOCIATIONS SITUATION ANALYSIS TOURISM COMPETITIVENESS COMPARATIVE ADVANTAGE COMPETITIVE ADVANTAGE SWOT ANALYSIS SWOT ANALYSIS FOR THE TOURISM SECTOR IN UGANDA SWOT ANALYSIS FOR THE CRAFT SECTOR IN UGANDA TOURISM DEVELOPMENT PLAN PERCEPTION AND SATISFACTION REGARDING UGANDA S TOURISTIC ATTRACTIONS AND SERVICES TOUR OPERATORS PERCEPTION OF TOURIST RESOURCES AND ATTRACTIONS VISITOR SATISFACTION WITH UGANDA S TOURISTIC ATTRACTIONS AND SERVICES UGANDA TOURISM VALUE CHAIN THE VISITORS VISITOR DEMOGRAPHICS MEANS OF TRANSPORTATION AND NUMBER OF COUNTRIES VISITED TRAVEL PARTY ACCOMMODATION AND FOOD EXCURSIONS AND GUIDES TRANSPORTATION 60 2

3 5.5. CRAFTS, VISUAL ARTS AND ENTERTAINMENT DEFINITION OF THE POOR AGGREGATED TOURISM EXPENDITURES AND PRO-POOR INCOME TOTAL AND LOCAL ECONOMIC IMPACT OF TOURISM ON THE UGANDAN ECONOMY PRO-POOR IMPACT OF TOURISM ON UGANDA ECONOMY PRO-POOR IMPACT IN THE ACCOMMODATION SECTOR PRO-POOR IMPACT IN THE SOUVENIR SECTOR PRO-POOR IMPACT OF TOURISM IN UGANDA OPPORTUNITIES FOR PRO-POOR INTERVENTIONS SUSTAINABLE TOURISM SECTOR DEVELOPMENT SUSTAINABLE TOURISM-RELATED SECTORS DEVELOPMENT HOLISTIC APPROACH WITHIN A SUSTAINABLE PARTNERSHIP FOR INTERVENTIONS SUMMARY OF ITC INTERVENTIONS 88 CONCLUSION 90 ANNEXES 92 ANNEX 1: ADDITIONAL TABLES 92 ANNEX 2: VISITOR ARRIVALS BY COUNTRY OF USUAL RESIDENCE ( ) 95 ANNEX 3: OBJECTIVES, STRATEGIES AND INTERVENTIONS OBJECTIVE FOR THE TOURISM SECTOR - NATIONAL DEVELOPMENT PLAN ( ) 96 ANNEX 4: AREAS IN WHICH THE OPPORTUNITY STUDY WAS UNDERTAKEN 100 ANNEX 5 UGANDA: CULTURAL AND RELIGIOUS SITES 102 ANNEX 6 LIST OF INTERNATIONAL ORGANISATIONS INVOLVED IN SUSTAINABLE TOURISM DEVELOPMENT 105 ANNEX 7 NON-EXHAUSTIVE LIST OF NATIONAL ORGANISATIONS INVOLVED IN SUSTAINABLE TOURISM DEVELOPMENT 110 ANNEX 8 LIST OF CONTACTS 112 ANNEX 9 DETAILED SWOT ANALYSIS 113 3

4 ACRONYMS ACP Agricultural Commodities Programme AGOA American Growth Opportunities Act AUTO Association of Uganda Tour Operators CBOs Community Based Organisations COBATI The Community Based Tourism Initiative CPAE Consumption Per Adult Equivalent DfID UK Department for International Development EBA Everything But Arms EPII Employee ProPoor Income Impact FIT Free Independent Travellers GIT Group Inclusive Tour GTZ/KFW Gesellschaft für Technische Zusammenarbeit/Kreditanstalt Für Wiederaufbau ICBTs Ugandan Women Informal Cross Border Traders IFAD International Fund for Agricultural Development IT Inclusive Tourism ITC International Trade Centre KAFRED Kibale Association for Rural and Environmental Development LEI Local Economic Impact MICE Meetings, Incentives, Conferences and Events MTTI Ministry of Tourism, Trade and Industry MTW Ministry of Transport and Works MWTA Ministry of Wildlife, Tourism and Antiquities NAADS National Agricultural Advisory Services NACAU National Arts and Crafts Association of Uganda NAWOU National Association for Women Organisations in Uganda NAWOU National Organisation of Women Associations in Uganda NDP National Development Plan NGOs Non Governmental Organisations NTF II Netherlands Trust Fund PACT II Programme for Building African Capacity for Trade PSFU Private Sector Foundation of Uganda ROI Return on Investment RVR Rift Valley Railways 4

5 TA TEI TLB TO TSIs UCOTA UDTA UEPB UHOA UMA UN UNDP UNCTAD USAID USSIA UTB UTODA UWA UWEAL WTO WTTC Technical assistance Total Economic Impact Uganda Transport Licensing Board Tour operators Trade Support Institutions Uganda Community Tourism Association Uganda Development Theatre Association Uganda Export Promotion Board Uganda Hotel Owners Association Uganda Manufacturers Association United Nations United Nations Development Programme United Nations Conference on Trade and Development United States Agency for International Development Uganda Small Scale Industries Association Uganda Tourism Board Uganda Taxi Drivers Association Uganda Wildlife Authority Uganda Women Entrepreneurs Association World Trade Organisation World Travel and Tourism Council 5

6 List of tables Table 1: Size of tourism supply chain and sample - Uganda Table 2: Origin of visitors to Uganda Table 3: Basic tourism indicators Table 4: Arrivals and departures from main border checkpoints (2009) Table 5: International tourist arrivals to National Parks - Uganda (2009) Table 6: Visitors to national parks (2009) Table 7: Share of primary growth sectors in GDP and growth performance Table 8: Annual turnover by industry (millions shillings), Table 9: Employment, median earnings and average weekly hours of work Table 10: Strategic actions for improving the quality of public physical infrastructure Table 11: Tourist Arrivals, receipts and purpose of visit in East Africa (2008) Table 12: Ease of doing business rank (out of 183 economies) Table 13: WTTC tourism competitiveness index Table 16: Expenditure framework under the NDP Table 17: Market size of different regions for Uganda based TOs Table 18: Main reasons for not selling Uganda provinces Table 19: Difficulty to sell the main attractive factors by region Table 20: Level of satisfaction for touristic attractions and services Table 21: Favourite activities in Uganda Table 22: Concept and structure of the tourism value chain Table 23: Nationality and origin of respondents Table 24: Main purpose for visiting Uganda by region of origin Table 25: Specific purposes of visit Table 26: Age by country of origin Table 27: Age bracket by country of origin Table 28: entry and exit points of interviewees Table 29: Travel party, frequency of visit and ALOS Table 30: Country of origin and travel party Table 31: Travel party and package tour Table 32: Travel party by purpose of visit

7 Table 33: Distribution of hotels and restaurants by region in Uganda Table 34: Employment in hotels and restaurants Table 35: Accommodation capacity for selected hotels in Uganda, occupancy rates and guest nights in 2003/2005/ Table 36: Contribution of hotels and restaurants subsector to Uganda s GDP Table 37: Poverty statistics in the UNHS 2005/ Table 38: Comparison of poverty estimates by region Table 39: In-country spending per person per day and per stay by purpose of visit Table 40: Distribution of expenditures by supply chain and purpose of visit Table 41: Breakdown of operating costs for the accommodation and restaurant sector.. 70 Table 42: Percentage of both cost of various food items in total food products and locally sourced products (accommodation facilities) Table 43 : Handicraft and imported purchases level Table 44: Breakdown of interviewed workers and average monthly salary Table 45: Poverty profile and salary distribution in the accommodation sector Table 46: Pro-poor Impact by supply chain Table 47: Pre-identified interventions for sustainable tourism sector development Table 48: Average amount of underspending by purpose of visit Table 49: Opportunities in the crafts sector Table 50: Percentage of locally purchased products and volume of imports Table 51: Pre-identified interventions for the sustainable development of tourism-related sectors Table 52: ITC logical framework Table 53: Main attracting factors by region Table 54: Weaknesses and strengths of each Ugandan region Table 55: Categories of hotels and restaurants where international tourists stay Table 56: Suggestions from tour operators to encourage tourism benefits for local communities Table 57: Main reasons and specific purposes to visit Uganda Table 58: Mean age by category Table 59: Average expenditure for accommodation per night by country of residence

8 List of figures Figure 1: Uganda Poverty rates (2005) Figure 2: Areas of expertise in inclusive tourism projects Figure 3: Monthly visitor arrivals to Uganda ( ) Figure 4: Tourist arrivals to Uganda and visitors to national parks ( ) Figure 5: Diagram of the Tourism Value Chain/visitor journey Figure 6: Problem tree of main issues related to tourism in Uganda Figure 7: SWOT Analysis of Tourism in Uganda Figure 8: Specific SWOT Analysis for the crafts sector Figure 9: Map of Uganda showing exit points Figure 10: Number and types of businesses in the accommodation sector Figure 11: Impact concept for tourism Figure 12: Simplified Tourism Value Chain Figure 13: Economic impact of tourism by supply chain Figure 14: Conway's approach for calculating the poverty profile of tourism staff Figure 15: Traditional barriers to PPT Figure 16: Priorities for an inclusive tourism development in Uganda Figure 17: Priorities for a sustainable tourism-related sector development Figure 18: Different steps of the production process Figure 19: Simplified value chain steps for the crafts sector Figure 20: UN agencies partnership Figure 21: Survey itinerary

9 Executive summary This paper presents the findings of an opportunity study which focused on the possible linkages between (i) agriculture, and (ii) creative industries (crafts/visual arts/dance/music) and the tourism industry in Uganda. The survey was undertaken between August and October 2011 by an international inclusive tourism expert, in tandem with two national experts, and in straight collaboration with the Ministry of Tourism, wildlife and heritage, the Uganda Tourism Board (UTB) and the Uganda Export Promotion Board (UEPB). Thanks to the UNDP s funding, it was possible to hire 10 additional national consultants to conduct a visitor survey at all exit points, thereby providing the team with a clear understanding of both the Tourism Value Chain in Uganda and the existing opportunities for vulnerable populations to benefit more from a rapid increase in international arrivals. While tourism development offers significant potential for increased incomes in Uganda, it has also been contributing to a rise in conflicts between the communities adjacent to national parks and the local authorities. The human-wildlife conflict is becoming a serious threat to the survival of many endangered species in Uganda. In areas where either these human-wildlife conflicts exist or the population suffers from resilient poverty, inclusive tourism development now appears as a key factor to provide new or alternative sources of livelihood. The results of the opportunity study and visitor survey show several challenges to the development of an inclusive tourism in Uganda. The management of tourism, and more particularly the attractiveness of the destination, was highlighted as the main challenge by visitors and the private sector. Road quality and access was the main area of concern on the supply and demand sides. The absence of incentives to investment, especially regarding middle range businesses, was also considered as detrimental to a rapid expansion of the tourism sector through a diversification and an improvement of its products and services. Furthermore, Uganda suffers from weak in-country and external communication strategies towards both tourists and investors. However, the low occupancy rate for most of the accommodation providers (31%) cannot solely be explained by an inappropriate marketing strategy. It is mostly due to an incorrect understanding of the tourism market by most private investors. It appears also that lowtourism skilled managers or owners operate a majority of tourism businesses - especially in the middle range and low-end segments. Uganda suffers from a very heterogeneous quality of services and products, in the tourism sector as well as in other sectors, including creative industries and agriculture. This opportunity study highlights the lack of capacities of both the crafts and agricultural sectors in profiting from the tourism expansion and in being able to fulfil the needs of the tourism sector. Added to this weakness, with few very notable exceptions, the private sector s lack of concern over making tourism a tool for development was noted. It is therefore recommended that local producers consistently supply tourism businesses with competitive products, and that tourism businesses engage themselves in supporting 9

10 local producers with a minimum rate of local purchases. To address these issues (in both areas of interventions), the following actions are recommended: - Design support and brand creation (craft) / increase-enhance production of diversified/specialised products (agriculture) - Business development and other types of training - Market placement and sales opportunities To conclude, the survey evidenced unexploited markets and products. As products, processed food (jam, honey, juice) and crafts (wood carvings & sculptures, clothing, jewellery, textiles, fashion accessories and scarves) were identified as most promising backward linkages with a high level of economic opportunities (high demand, potential import substitution). The project will not only contribute to poverty reduction but the findings of the opportunity study could help the Ministry of Tourism define strategic options to increase tourism in Uganda. Acknowledgements: ITC wishes to thank the staff of the Ministry of Tourism, the Ugandan Tourism Board and the Ugandan Export Promotion Board for their extremely helpful support without which this Opportunity Study exercise would not have been possible. It was very much appreciated that UNDP Uganda funded under the Support for Development of Inclusive Markets in Tourism project the undertaking of a visitor survey, providing a clear understanding of the Tourism Value Chain in Uganda and the existing opportunities for vulnerable populations to benefit from it as well as the funding of the validation roundtable in November 2011 to disseminate the Opportunity Study findings and further project development. 1. Introduction 1.1. Country profile Uganda has a 765 km border with the Democratic Republic of Congo to the west, a 933 km border with Kenya, a 169 km border with Rwanda, a 435 km border with south Sudan to the north and a 396 km border with Tanzania to the south. The country s total area is 241,550.7 square kilometres, of which 41,743.2 sq. km are covered with open water and swamps. Land area is 199,807.4 sq. km, of which 99,018.4 sq. km is cultivated land. In total there are over 113 districts and Kampala has the highest population (over 1.6 million people). The central region has about 16 districts, the eastern region has 24 districts, the northern region has 21 districts and the western region has 19 districts. The climate is tropical for most of the country, it is generally rainy with two dry seasons (December to February, June to August), and it is semiarid in the northeast. Uganda has substantial natural resources, including fertile soils, regular rainfall, small deposits of 10

11 copper, gold, and other minerals, and recently discovered oil. Agriculture is the most important sector of the economy, employing over 80% of the work force. The main threats are the draining of wetlands for agricultural use, deforestation, overgrazing, soil erosion, water hyacinth infestation in Lake Victoria and widespread poaching. Uganda has made enormous progress in reducing poverty, slashing the countrywide incidence from 56 % of the population in 1992 to 24.5 % in And, at 12 %, the reduction of poverty in urban areas has been even more marked. Notwithstanding these gains, however, poverty remains firmly entrenched in the country s rural areas, home to more than 85 % of Ugandans. About 40 % of all rural people some 10 million men, women and children still live in abject poverty. Figure 1: Uganda Poverty rates (2005) Source: UBOS (2005) 11

12 Who are Uganda's rural poor people? Uganda s poorest people include millions of subsistence farmers living in remote, scattered areas throughout the country. Remoteness makes people poor insofar as it prevents them from benefiting from the country s steady economic growth and dynamic modernisation. Taking into consideration the increasing number of visitors to Uganda every year and the geographically dispersed key tourism sites, pro-poor tourism orientation in key areas can have a strong impact on poverty reduction in the country. Where are Uganda's rural poor people? The poorest regions are the north and northeast of the country, where outbreaks of civil strife and cattle rustling have disrupted small farmers lives and agricultural production. The northeast particularly is a fragile, dry and sub-humid region where the extreme variability of rainfall and soil fertility means that farming presents a challenge. Production falls short of minimum household needs, rendering the inhabitants particularly vulnerable to food insecurity. For instance, the region experienced a dry spell of over three years in the last four years. Even when rain falls, it only happens four months scattered between February and July, with some in-between months which are extremely dry. While other regions of the country have two rainfall seasons in a year, the northern region has only one season which lasts about six months ITC in Uganda The International Trade Centre (ITC) is the technical cooperation agency of the United Nations (UN) and the World Trade Organisation (WTO). Taking into account its business lines 1, ITC designs projects aimed at developing export strategies, increasing the competitiveness of sectors and enterprises, producing and disseminating trade intelligence, improving the capacity of trade support institutions as well as strengthening business and trade policies. In Uganda, ITC works with exporters, policy makers and trade support institutions (TSIs), such as the Uganda Export Promotion Board (UEPB). Among the implemented projects in Uganda, some do not directly target the country but rather the region. This is the case with the Programme for Building African Capacity for Trade (PACT) II 2 project, for which the objective is to achieve diversified and expanded exports within and outside of Africa, thereby contributing to sustainable economic and social development. Within this broader context, the objective is to build the capacity of the COMESA Secretariat as well as TSIs in the COMESA to use market analysis tools and methods to prioritize export sectors and markets with due consideration to poverty reduction, women and environment impact. Implementation was done in the following areas: learning about the use of market analysis tools to assess export performance of products and selecting 1 Business and Trade Policy, Export Strategy, Strengthening Trade Support Institutions, Trade Intelligence and Exporter Competitiveness 2 9 projects 12

13 markets COMESA regional Trade Flow Analysis 3 ; providing an effective interface between the COMESA REC Secretariat and the private sector in the region 4 ; strengthening regional trade support networks, including businesswomen s networks 5 ; strengthening regional trade information networking in the leather sector; improving access to international market information sources 6 ; setting up an inter-regional web-based platform with reference materials for regional trade development 7 ; developing a sustainable supply chain sourcing between COMESA producers and major international leather industries; increase intra-regional trade flows; and diversifying the offer of products in the Ethical Fashion 8 market segment. Under the Agricultural Commodities Programme (ACP) 9, ITC assists stakeholders to design, programme and coordinate multi-agency and multi-year development activities to respond to their commercial market and socio-economic development objectives in agricultural commodity sectors. ITC supports cotton associations and trade support institutions to identify and evaluate specific markets, and equally builds capacity through training and counselling of country counterparts to support African countries to understand and apply quality requirements and address other supply impediments (e.g. reduction in contamination, improved cotton consistency and delivery). It is expected that the Netherlands Trust Fund (NTF II) 10 project will build sustainable exporter competitiveness in the coffee sector in Uganda. The project outcome focuses on strengthening the effectiveness of umbrella institutions and farmer organisations in the coffee sector in accessing the EU market. Other projects carried out in Uganda have the following aims: to help women derive greater economic benefit from their participation in export-oriented value chains 11 ; to create a Pan-African trainers and advisers network for African exporters and their supporting IOs 12 ; to strengthen the international competitiveness of microenterprises from the developing world - through a form of global partnership 13 ; to enhance the capacity of Ugandan Women Informal Cross Border Traders (ICBTs) to increase their exports to neighbouring countries by reducing and eliminating trade facilitation impediments at points of entry and exit Inclusive Tourism ITC s Inclusive Tourism (IT) programme is an innovative trade promotion approach which aims to integrate local community producers into promising tourism industry 3 COMESA Market analysis and sector prioritization, ( ) 4 COMESA Networks of national and regional TSIs, ( ) 5 COMESA Regional private sector apex bodies for public-private dialogue, ( ) 6 COMESA Regional trade information networks, ( ) 7 Pan Africa e-based repository of trade tools and services, ( ) 8 COMESA Leather sector regional export development, ( ) 9 3 projects: Coordination Team, ( ); Cotton sector strategy development, ( ); Cotton sector strategy implementation, ( ) 10 2 projects: NTF II Management, ( ) and NTF II Uganda, ( ) 11 Women and trade - Empowering women in the coffee sector, ( ) 12 Empowering the African Private Sector network to strengthen the international competitiveness of small and medium-sized enterprises (SMEs), (2011) 13 Poor Communities and Trade Program, ( ) 14 Trade facilitation - Facilitating women informal cross border trade in Uganda, ( ) 13

14 value chains, to harness their entrepreneurial capacities and to generate income and employment for the poor. Inclusive Tourism is understood as a sustainable approach to tourism development. By adopting a local approach to economic development, it identifies products and services supplied by poor communities that have the potential to be integrated into the tourism value chain and thus generate income for the poor. Inclusive Tourism creates and strengthens linkages between local producers (particularly women) and the tourism markets by integrating local producers into existing tourism value chains and by reconfiguring these value chains to ensure more equitable redistribution of revenue. Inclusive Tourism works with both the producers and the tourism industry (tour operators, hotels, tourism boards etc.) to improve supply capacity on the one hand, and to create awareness for win-win situations on the other hand. The linkages created enable the poor rural communities to export their products, first on local national markets through the channel of tourism, and then on international markets, while creating value-addition along the value chain. Inclusive Tourism focuses on poverty impacts as well as on the promotion of gender equality/empowerment of women, thereby complementing the more environmental focus of much Corporate Social Responsibility and Sustainable Tourism work. To achieve these impacts, ITC focuses on market-oriented business issues. Figure 2: Areas of expertise in inclusive tourism projects Tourism Marketing Environmental Management Specific Service Provision Artisanal Product and Artistic Services Development Enhancing local communities development Linking Agriculture to Tourism Tourism Hospitality Management 2. Purpose and structure of the study The aim of this Opportunity Study was originally to identify suitable project interventions through which ITC s technical expertise could make a pro-poor change within a project timeframe of three to five years. The involvement of two other UN agencies (UNDP and UNCTAD), both in favour of a sustainable development of the tourism sector in Uganda, has encouraged ITC to broaden the scope of the opportunity study which initially only 14

15 focused on enabling artisans that work as micro producers along with Ugandan artists to reach tourists. The study is divided into three distinct phases: Phase 1: Diagnosis of current situation and context: This phase includes tools to map the tourism economy of the selected destination, and the participation of the poor within it. The purpose is to understand financial flows and how the tourism sector currently works. Phase 2: Project opportunities, prioritisation and feasibility: This phase includes a systematic approach to develop a long list of project options. It then guides to move towards a short list of high priority interventions for poverty reduction. Phase 3: Project planning: This phase is used to package proposed interventions into a project document for future interventions Timeframe and objectives of study The project is based on the request of the Government of Uganda to develop an approach to tourism that is able to strengthen the capacities of potentially competitive microenterprises that provide work and income generating opportunities for some of the most marginalised communities of the country. The request is based on the acknowledgment that certain indirect effects of tourism (purchase of products and souvenirs by tourists, purchase of supplies, general services and so on) can be disproportionately more propoor if compared with direct employment generated by tourism itself. Based on stakeholders feedback, ITC started to develop a project aimed at enabling artisans that work as micro producers along with Ugandan artists to reach tourists by selling four kinds of products: Ethical fashion products, i.e. accessories (and maybe basic garments) that are designed and conceived by international and local designers and are sold to tourists in hotels and top resorts; The market of lifestyle products (homeware and high street fashion), i.e. products with a design component but cheaper and for larger distribution, sold not only in hotels and resorts but also in local shopping centres and tourist hubs; Visual arts, to be sold in hotels, resorts and galleries; Music to be performed at tourist locations and CDs to be sold to tourists. In order to avoid duplication of works, and therefore to benefit all stakeholders involved in a sustainable development of the tourism sector in Uganda, it was decided to extend this opportunity study to a full value chain analysis of the tourism sector. With additional financial support from the UNDP in Uganda, the number of interviews conducted among 15

16 international tourists and tourism stakeholders was extended to be more statistically representative of the sector and to offer a better understanding of where interventions would be most efficient Methodology and limitations Methodology A team of three consultants (national and international) worked under the overall supervision of the ITC/ Sector Competitiveness Trade Promotion Adviser and with the support of the Uganda Export Promotion Board and the Uganda Tourism Board. Throughout the research, the team consulted widely with stakeholders in several tourist destinations (see itinerary Annex 4). Discussions were held with government departments, namely: The Uganda Tourism Board (UTB), The Uganda Wildlife Authority (UWA) and the Uganda Export Promotion Board (UEPB). A first stakeholders workshop was organised in Kampala to present both the opportunity study objectives and itinerary to tourism professionals and government officials. Heads of the Association of Uganda Tour Operators (AUTO), Uganda Hotels Owners Association (UHOA), Department of Industrial Art and Design of Makerere University, Uganda Tourism Board and National Crafts and Arts Association of Uganda (NACAU), the Uganda Community Tourism Association (UCOTA) and the representatives of the USAID/STAR project attended this meeting. The team also met with local associations and communities such as the Boomu women s group, the Kyaninga community, the Albert Nile Conservation and Tourism Association, the Mubako local women Craft Association, the Nyabwina women groups, The Kibale Association for Rural and Environmental Development (KAFRED), the Njara Muslim women group, the Kikongoro women community tourism group, the Katwe community, the Buhoma community rest camp, the Bunyoni community, the exposure Africa project, etc. Furthermore, face-to-face interviews were held with representatives of tourism businesses such as hotels, safari lodges, resorts, tour operators, handicraft vendors, wholesalers and restaurant managers. Table 1: Size of tourism supply chain and sample - Uganda 2011 Categories Actual Survey Accommodation 28 Restaurants 21 Food producers 5 Souvenir shops & wholesalers 29 Tour operators 15 Staff 117 Community projects 11 NGOs 3 Tourists 335 In total, 28 hotel managers and owners from Kampala, Paraa and Packwach, Bunyaruguru amongst other regions - as well as 117 members of their staff were interviewed to 16

17 determine the pro-poor income in the accommodation/food sectors. These tourism establishments ranged from safari lodges, hostels, and hotels to resorts, and accounted for a total of 800 rooms. Apart from the 28 establishments mentioned above, 21 additional restaurant owners were interviewed to complement the data/information in the food and drink sub-chain. These ranged from small food stalls to restaurants serving over 100 meals per day. A total of 15 tour operators specialized in Western tourists were interviewed to give insight into the current functioning of tour operators (TOs) in Uganda, and to assess the excursion sub-chain. In addition, some informal discussions with other TOs completed these interviews. Interviews and focus groups were held with 29 handicraft producers/sellers (basketry, wooden products) and dance performers in all of the visited destinations. Within the crafts sector, recommendations notably targeted innovation and processed food. Over a period of 5 days, a total of 335 international tourists completed a survey aimed at defining international tourist travel behaviour, as well as satisfaction and average daily spending while visiting Uganda. The interviews took place at the main exit points of Uganda (Entebbe, Busia, Mutukula, Katuna and Malaba), in order to cover all different categories of tourists visiting the country. For a summary of the survey categories refer to table Limitations Although this study attempts to provide a comprehensive tourism situation analysis for Uganda, it was not possible to travel to all the main tourist destinations within the amount of time spent in Uganda. In addition, high-end businesses, especially in the accommodation sector and tour operators, were not all very cooperative with the team. The fact that high-end hotels are mostly foreign-owned made it difficult for the local managers to accept sharing financial and other sensitive information. Many operators (especially small and medium ones) did not have the relevant data on income, operating costs, etc. and although cooperatives, they sometimes provided conflicting information. The absence of sector regulation, leading to a high level of informality, also impeded the data collection process. The exit survey at the airport is representative of the international tourists visiting the country at the period of the survey only. Strong variations exist within the year in Uganda regarding visitor arrivals and their characteristics. Moreover, tourism statistics are either not coherent or simply non-existent. The data collection system concerning the size of the tourism sector (number of operators, number of rooms, employment, etc.) is in process under the current leadership of UTB. It is therefore difficult to accurately extrapolate the results from the Opportunity Study. 17

18 3. Tourism development in Uganda Commercial tourism in Uganda began in the 1950s, though significant growth was only registered between 1962 and During this period, the tourism industry experienced a 34% annual growth rate (Ministry of Wildlife Tourism and Antiquities (MWTA), 1996) with 1970 recording the highest earnings of Uganda shillings: million (US$ 18 million). At that time, average per capita spending was US$ 2,306 and the industry was Uganda s third largest foreign exchange earner after coffee and cotton. However, due to the political instability of , the industry declined by 13.8% annually. In 1980 only 1,000 tourists were received down from 85,000 in During this period, wildlife conservation areas were heavily poached to the extent that some species of wildlife became extinct and others came to near extinction. Hotels, infrastructures and most facilities were destroyed as government neglect of the sector was at its peak. Following attainment of political peace by the current National Resistance Movement government in 1987, Uganda adopted a structural adjustment programme that revamped the tourism industry. The Tourism Master Plan of 1993 had projected that tourism would grow at an annual rate of 13%, but a 53% annual growth rate was registered by Compared to 1980, when only US$ million were earned, the 1995 earnings had reached a level of US$ 90 million. Despite some setbacks over the last few years, resulting from the political instability in the Great Lakes Region, tourism has remained one of the fastest growing sectors of the economy with an annual growth rate of 21% over the years In 2010 Uganda recorded a total of more than 946,000 tourists, spending over US$662 million (Uganda Bureau of Statistics, 2011) Key touristic resources and attractions For the government of Uganda, the current Ugandan tourist products are nature-based and centred on distinct geographic areas. Several of these are linked to national parks, wildlife reserves, forest reserves or specific attractions, and activities such as white water rafting at the source of the Nile in Jinja. Other attractions include Eco-Tourism, Cultural Heritage, Faith-Based Tourism, Community Development Tourism and Meetings, Incentives, Conferences and Events (MICE). Game viewing: Likely to be the main reason for visiting Uganda for a majority of leisure tourists. Uganda comprises 10 national parks in which the big five mammals of Africa can be found (lion, leopard, elephant, rhino and buffalo) and several natural reserves. A majority of the parks are in the western part of the country. Eco-tourism: The greatest unique attractions in the so-called area of «eco-tourism» include: gorilla tracking, viewing chimpanzees, golden monkeys and Patas monkeys, (nature) guided walks, community walks, butterfly viewing and bird watching. Additionally, Uganda s position as a plateau astride the equator has given it a niche in the variety of bird life with over 1060 bird species. Cultural Heritage: Uganda is endowed with diverse heritage and cultural treasures that attract both foreign and domestic visitors. The archaeological treasures which 18

19 open a window into the beginning of mankind, the monarchical leadership that predated the early explorers, the living culture and the history manifested in Idi Amin s leadership, are all touristic products that Uganda can capitalize on (see annex 5). However, Uganda s tangible cultural heritage is vanishing fast. Faith-Based Tourism: In Uganda, the Namugongo Martyrs Shrine stands out as a site of pilgrimage, as do the hills housing the important symbols of Catholic, Anglican, Bahai, Pentecostal and Islamic faiths. The National Development Plan states that the current policy and practice has however not integrated tourism in the development and promotion of these sites. Community and Development Tourism: Thanks to the efforts of some individuals and/or organisations, community-based tourism is slowly expanding in Uganda but efforts from the private sector to include community based activities remain limited. This is a growing source market that has not been specifically targeted through policy and practice. Meetings, Incentives, Conferences and Events (MICE): It is estimated that the growth of the urban hotel industry in Kampala, Entebbe and Jinja is largely attributed to this segment. With 20% of visitors officially travelling to Uganda for business purposes, the MICE market represents a growing source of income at each level of the tourism value chain Tourism statistics The total number of tourists entering the country has steadily increased from 468,000 in 2005 to 946,000 in But in 2009 there was a 5 % decline in the number of tourists - from 844,000 in 2008 to 806,000. About 50 % of these visitors travelled to the country to visit friends and relatives, while 21 % travelled to Uganda for business purposes and about 16 % travelled to Uganda for leisure and holiday. Table 2: Origin of visitors to Uganda Africa 624, , ,774 Kenya 249, , ,170 Rwanda 181, , ,043 Tanzania 45,276 48,948 42,289 America 53,950 56,131 65,175 USA 42,418 37,971 45,856 Asia 33,532 29,656 41,200 India 16,236 12,946 16,747 Europe 106,020 79, ,870 UK 51,812 35,716 39,171 Germany 8,083 6,778 8,650 Middle East 7,995 7,698 13,695 Source: MTTI 2010, UBOS,

20 A large number of tourists come by road (61 % of total arrivals in 2010), although the growth in terms of arrivals by air appears to be picking up much faster (57 % growth between 2007 and 2008). Table 3: Basic tourism indicators Source: Uganda Bureau of Statistics (2010) As seen above, visitors from Africa represent the main source market with 78.2 % of total arrivals. Uganda s main overseas source market is Europe, which made up for 12 % (113,000) of the tourist arrivals in From this source market, the UK accounted for 35 % (39,171) see Annex 2. According to the Ministry of Internal Affairs and the Uganda Bureau of Statistics, males represented 73 % of international arrivals to Uganda in 2009 (796,009 out of 1,092,970). There is low volume of tourists from key source markets in Europe and North America. This is possibly due to inadequate marketing and weak positioning of Uganda in these markets. However, there is a positive growth trend in the volume of visitors from Europe, America and the Middle East. With better marketing, this trend is likely to further increase. 20

21 Figure 3: Monthly visitor arrivals to Uganda ( ) Monthly visitor arrivals to Uganda ( ) Uganda tourism has a growing peak season in July and August. Monthly arrivals by nationality and purpose of visit would allow us to understand whether this growing peak coincides with the growing number of holiday segments or not. It has been observed that a sizeable number of overseas visitors to Uganda (38 %) pass through Entebbe International Airport, and that in the five year period of it has handled 247,000 tourists on average. Possibly a consequence of the international financial crisis, there was a 24 % decline in the number of tourist arrivals through Entebbe International Airport in There are however more overseas visitors who leave the country by road than those who enter by road (Table 4). The table below also indicates that these four main entry points account for the majority of arrivals in the country. Table 4: Arrivals and departures from main border checkpoints (2009) Ugandans Port of Entry Port of entry/exit Entebbe Mutukula Malaba & Busia Entebbe Port of exit Mutukula Malaba & Busia Resident 104,738 64,286 59, ,547 72,337 68,875 Non resident 18,530 5,373 3,858 15,005 4, Total 123,268 69,659 63, ,552 76,342 71,922 Resident 34,982 6,563 17,940 37,872 5,427 15,879 Western Europe 65,916 2,773 2,783 64,548 4,276 4,400 Non- Ugandans Other Europe North America 39,457 2, ,398 2,500 3,283 COMESA 66, , ,530 62, , ,904 Other Africa 38,821 23,602 22,863 33,961 24,288 21,392 Other not stated 39,171 2, ,821 3,117 4,206 Total 287, , , , , ,377 Grand Total 410, , , , , ,299 Source: UBOS (2010) 21

22 The figures in the table above show that overall visitors arriving through Entebbe International Airport mainly come from distant destinations in Europe and America. Few visitors arrive by air from Kenya, Rwanda or Tanzania. However, in the COMESA region as a whole, air travellers have been increasing over the last five years. The key message in these trends seems to be that the visitors who arrive at the airport are long haul tourists, and the increase over the last five years has not been as big as that for the entire sector. That is, about one third of visitors to Uganda arrive by air. It is noted that, overall, not all people who entered Uganda as tourists in 2009 returned during the same period. Table 5: International tourist arrivals to National Parks - Uganda (2009) Circuits Western & Southern Circuits Fort Portal & Kasese Kibale National Park and Bigodi 6,490 7,741 8,440 7,733 8,247 Queen Elizabeth National park 48,720 43,885 51,749 53,921 62,513 Bwindi Impenetrable National Park 9,012 10,176 9,585 10,128 11,806 Mgahinga Gorilla National Park 1,910 2,071 2,676 3,244 1,886 Rwenzori Mountains National Park ,583 2,020 1,281 Semliki Valley National Park 1,949 2,584 1,940 2,701 2,701 Lake Mburo National Park 16,181 12,508 14,264 16,539 17,521 Lake Bunyonyi Eastern Uganda Mount Elgon National Park 3,751 2,964 3,472 3,708 2,943 Northern Murchison Falls National Park 39,133 26,256 32,049 36,752 39,237 Kidepo Valley National Park ,558 2,924 Total 128, , , , ,068 Source: UWA (2010) From the table above, we can observe that not all international tourists in Uganda visit the national parks. The two main visited parks are Queen Elizabeth National Park in the western part of Uganda, which received more than 60,000 tourists in 2009, and the Murchison Falls National Park, found in one of the poorest areas of the country, with almost 40,000 visitors in Interestingly, the number of visitors to national parks increased for the year 2009, when arrivals to Entebbe airport went the opposite. 22

23 Figure 4: Tourist arrivals to Uganda and visitors to national parks ( ) Tourist arrivals and visitors to National Parks ('000's) Non-resident Tourist arrivals through Entebbe Airport Visitors (Citizens and Foreigners) to National Parks (000 s) Total Non-resident Visitor Arrivals in Uganda Source: UBOS (2010) The majority of visitors to national parks are non-resident foreigners (40 %), followed by students (28 %) and Ugandan Nationals (20 %). A survey among tour operators, made by the Ministry of Tourism, Trade and Industry (2008), showed that most of the tourists they handled preferred to visit Queen Elizabeth Park, followed by Bwindi, Murchison falls, Kibaale National park, Lake Mburo national park and Rwenzori National park, in that precise order. Overall, the above six tourist areas attracted 71% of the tourists during the period. Within the same survey, gorilla tracking and game views emerged as the most preferred attractions of tour operator clients. The other preferred attractions were chimpanzees, landscapes, mountain climbing and bird watching. Table 6: Visitors to national parks (2009) Source: UBOS (2010) 3.3. Tourism economics in Uganda 23

24 According to the Uganda Bureau of Statistics (UBOS), hotels and restaurants contributed 4.1 % to the total GDP at current prices (revised to 4.3%) in 2009/10, representing 1,487 billion Shillings at current prices (US$ 571 million). The growth performance of the sector (12.5 %) is the second behind the post and telecommunications sector (39.6 %) Table 7: Share of primary growth sectors in GDP and growth performance Source: National Development Plan (NDP, ) Tourist expenditures were estimated at US$ 564 million for the year 2009, surprisingly less than the amount spent in hotels and restaurants indicated below in table 8. Knowing that hotel and restaurant categories usually represent 40% to 50% of visitors expenditures, the total tourism-related spending in Uganda could therefore be at least twice more than officially recorded. Basically, the journey of a tourist does not solely boil down to accommodation and catering. Other items, such as excursions and souvenirs, to cite a few, must be taken into account in the balance of payments. Figure 5: Diagram of the Tourism Value Chain/visitor journey Source: Peter Lanes With an annual turnover of 137,302 million Shillings (US$ 52.8 million) for the hotel sector in 2009, the table below confounds the understanding of tourism economics in Uganda. First, it is far below the data announced in other tables of the 2010 Statistical Report. Second, the turnover for the hotel sector was two times higher in 2009, while a decrease of about 5% in the number of tourists was observed. One explanation for the increase of revenues from hotels can however be found in the fact that the overall PPI- 24

25 H&R 15 rose by 13.5 % in 2009: prices for accommodation and catering services rose by 15.7 % and 11.0 % Table 8: Annual turnover by industry (millions shillings), Source: Uganda Revenue Authority According to WTTC, tourism contributed 7.4 % of total employment direct and indirect - (420,000 jobs). The hotels and restaurants sub-sector has shown strong growth in their contribution to employment from 13,898 jobs in 2001/02 to 32,796 jobs in 2006/07. Wildlife based tourism and conservation programmes in Uganda directly employ over 80,000 persons. However, the average level of salary is the lowest among other economic sectors, whereas workers have the highest average of working hours per week (see below). Table 9: Employment, median earnings and average weekly hours of work Source: Uganda Bureau of Statistics (2010) 15 The PPI-HR is an Output Price Index that measures the change in the prices that Hotel and Restaurant Service Providers receive for the Services they provide. These Services include: Accommodation, Conference Facilities, Food, Drinks 25

26 3.4. Tourism management and planning The Uganda Wildlife Policy (1999), the National Tourism Policy ( ) and, nowadays, the National Development Plan ( ), have consecutively guided the tourism sector. The legal framework that governs the development and regulation of the tourism industry includes: the Tourism Act (2008), the Uganda Wildlife Act (2000), the Game Preservation and Control Act (2000) and the Historical Monuments Act (1967). The tourism sector policy is stipulated in the Tourism Policy for Uganda (MTTI, 2003). The tourism policy expired in 2010 and effort is underway to develop a new one by the Ministry of Tourism Wildlife and Heritage. The major objective of the outgoing policy was to translate tourism into a major economic sector; this is also a key objective of the NDP. According to the NDP, the government intends to put in place a policy and operational framework to fulfil the potential of the tourism sector. The tourism policy stipulated that the sector should be developed in such a way that the communities and people of Uganda participate in and benefit from the sector (MTTI, 2003). The policy aimed at developing and promoting eco-tourism, community development and sustainable conservation. The tourism policy ( ) highlighted a number of key objectives: Economic objectives: to derive greater revenues from an increasing number of leisure tourist arrivals and to promote longer lengths of stay and higher daily expenditure. Also, to distribute revenue earnings widely, with the large-scale participation of communities and districts in tourism. Environmental objectives: to channel tourism revenue towards the conservation of natural resources, to use protected area entry fees to generate interest in environmental protection and to generate revenue for local governments and communities. Cultural objectives: to emphasise tourism development based on Uganda's rich culture and history, and on the diverse traditions and hospitality of its people (e.g. museums, performance arts, monuments), to forge a Ugandan identity and encourage cultural pride. To complement the aspirations in the tourism policy, the NDP ( ) focuses on two key strategic interventions: developing and reviewing tourism policies, legal and regulatory frameworks of the sector, and increasing the contribution of tourism to GDP and employment. In the NDP, tourism is earmarked as the third primary priority sector for eradicating poverty after agriculture and forestry. To further assimilate these broader goals into its strategic mandate, the Uganda Tourism Board (UTB) has developed a strategic plan which has the following specific objectives: Position Uganda as a premier East African holiday and ecotourism destination, with a variety of quality experiences to both inbound and national tourists by 2016 Diversify Uganda s tourism product range Generate, mobilise and utilise finances to enable execution of its mandate 26

27 Mobilise, develop and support private sector operators to become sustainable and competitive along the entire sector value chain Develop and equip the human resource and institutional capacity to meet the competitive demands of the organisation Become a research-driven proactive planning and decision-making organisation Adopt innovative and modern technological tools in the tourism sector operations The Uganda Wildlife Authority (UWA) is charged with conserving, sustainably managing and economically developing the resources in Uganda s national parks, in partnership with neighbouring communities and other stakeholders, for the benefit of the people of Uganda and the global community. The UTB constitutes the other main agency of the Ministry of Tourism, Wildlife and Antiquities. The UTB is a statutory organisation established by the Uganda Tourist Board Statute in According to the new Tourism Act (2008), UTB's mandate is to promote and popularize Uganda as a viable holiday destination both locally and internationally in order to increase the contribution of tourism earnings to GDP, improve Uganda's competitiveness as an international tourism destination, and increase Uganda's share in the African and World tourism market. Owing to the institution s inability to execute its mandate since it was created, the current management team has decided to draft the first ever strategic plan and business plans. These tools are to help UTB play its role in positioning the sector in the NDP. The plan is in the final stages of its development, and if adhered to, its impact is likely to be high. The strategies highlighted in the national development plan should help the tourism sector to achieve broader development objectives including: decentralisation of tourism sector responsibilities to lower local levels, institutional and human resource capacity building, product development, improved marketing and promotion, improved research and planning, and overall infrastructure development. The government recognises the insufficient resource allocation to the sector and has allowed for the tourism levy to be operationalised by UTB (Tourism Act, 2008). Although not yet implemented, this levy must form the key funding for tourism marketing and training activities. The government has also promised to provide financial support through the Ministry of Finance and Economic Development. Despite these objectives, tourism promotion and marketing activities are nowadays still very limited because of insufficient government funding, combined with the poor financial situation of the private sector. Since June 2011, Uganda s Ministry of Tourism, Trade and Industry separated into the Independent Ministry of Tourism - Wildlife and Antiquities and the Ministry of Trade and Industry. It is now expected that strong efforts will be devoted to the sector s growth and sustainability. In the National Development Plan ( ) the government of Uganda announces that actions should be taken to improve the quality of public infrastructures. 27

28 Table 10: Strategic actions for improving the quality of public physical infrastructure Additionally, the World Bank has recently funded sustainable development tourism plans for four districts in Western Uganda. Each of the plans was created independently, and prepared as four different development plans. These districts contain the UNESCO World Heritage site of Mgahinga Gorilla National Park, Bwindi Impenetrable National Park, Ruwenzori Mountain National Park, Kibale Forest National Park and Queen Elizabeth National Park protected areas that are important watersheds for Africa and which harbour the largest number of primate species in the world. In the National Development Plan, as well as the outgoing Tourism Policy, the private sector is expected to play a leading role while the government provides an enabling environment. The government observes that the private sector needs to develop a strong organisational structure with the participation of all major stakeholders, and that the sector s actors need to improve their professionalism and general capabilities. The private sector is further expected to undertake the necessary investments. The private sector should however be provided with market data and statistics, and should be provided with financial incentives to develop new tourism products. While the government has positively articulated intent to prioritise and strongly support the tourism sector, resource allocation and strategic prioritisation have not favoured the sector over the years, until the expiry of the Tourism Policy in For instance, in the financial year 2009/2010, the government allocated about UGX 2 billion (US$1 million) budgetary support to the sector, yet in the same year the sector contributed more than half a billion dollars to the economy, employed close to half a million people (compared to 263,854 in civil service in 2010) and contributed 4.3% to the GDP (UBOS, 2010; MFPED, 2011; PSFU, 2010). Efficiency of the sector is hampered by poor road networks in the tourist circuits (it takes over 6 hours to cover a 76 km distance from Bwindi to Kabale), inadequate technical skills of tour guides and hospitality facilities, Uganda s bad image in the international tourism market, uncompetitive hotel charges and ungraded hotel facilities, lack of an operational tourism policy and 18% VAT levied on safaris to Uganda, among others (PSFU, 2010). For the private sector, it still needs to be seen whether the government will commit to its promises towards the sector, all the more so as an independent Ministry for Tourism was created in

29 3.5. Recent and on-going Tourism initiatives EU - Uganda Sustainable Tourism Development Programme Completed at the end of September 2007, the main objective of the UGSTDP was to contribute to the growth, development and diversification of the Ugandan economy through sustainable growth and development of the tourism sector. The Programme s specific objective, or central purpose, was to create additional sustainable economic and financial benefits to stakeholders in the tourism sector. The Programme also sought to build on past interventions in the tourism sector by the European Commission and initiatives by other development partners, such as the World Bank, United States Agency for International Development (USAID), GTZ/KFW, UK Department for International Development (DfID) and other non-governmental organisations (NGOs). The four result areas were as follows: 1) Uganda s image in the tourism market improved; 2) Range and quality of tourist attractions and services improved; 3) Effectiveness of public and private sector actors in the tourism sector increased; and 4) Involvement of local communities in tourism-related activities increased. The Programme did not have an adequate M&E system in place to satisfactorily monitor progress and assess the impact that it had both during its implementation and after the Programme ended UNDP ( ) / UNCTAD ( ) In the process of being implemented, the UNDP s project aims at supporting the development of markets in tourism, and at focusing on the participation of the poor and local communities in the tourism sector as entrepreneurs, employees and consumers. This will contribute to increased benefits for the poor in terms of improved access to labour and markets, increased opportunities for decent work, income, choice and affordability for essential goods and services. The project aims to achieve the above results by engaging specialised agencies like UNWTO, ITC, UNCTAD and others, to provide expertise in the form of technical assistance. This technical assistance (TA) will be short term and might take on a phased approach depending on the output area. In particular, short term international technical advisors will be provided in the following areas: market development, product development and institutional capacity development. One UNV, which will have technical expertise in the implementation of tourism projects, will also be sourced to support the project manager/implementing partner (UTB) in the overall implementation and for the duration of the project. 16 See Annex 6-7, a synoptic matrix that brings together the main players/actors? in tourist promotion and development. 29

30 The USAID/STAR project The overall objective of the STAR program is to strengthen sustainable tourism in the Albertine Rift by supporting biodiversity conservation. STAR intends to improve the competitiveness of Uganda s tourism industry through the following major strategic initiatives: Renew and upgrade the Albertine Rift tourism product through market-driven product development opportunities; Increase awareness and demand for Ugandan tourism products; Create linkages between tourism, natural resource stewardship and biodiversity conservation; Establish and foster business-to-business linkages and investments; Improve local capacity through training, while enhancing the quality of local tourism offerings and artisan products; Connect small enterprises and community-based entrepreneurs in Uganda to the global market place; Monitor, and where possible, mitigate the social, cultural, and environmental impacts of tourism development; and Strengthen national and local government, civil society, as well as private sector capacity to develop and manage tourism offerings in a sustainable way The World Bank PAMSU Project The five year project, which ended in 2007 and is now under evaluation, was supposed to put up new offices for the Uganda Wildlife Authority, work on infrastructure in the 10 national parks and 12 wildlife reserves, build staff quarters in all the parks, demarcate all the parks and reserves, procure equipment such as tractors for road maintenance in parks, procure vehicles, radio equipment, as well as construct boreholes and plant trees around Mt. Rwenzori and Mt. Elgon National Parks. In the end, PAMSU was supposed to boost UWA s revenue collection, minimise poaching of key species, lead to the increase in the population of key mammal species in Queen Elizabeth, Murchison Falls and Kidepo, among others. The program was stopped and it is still under investigation for the misuse of US$ 33 million Community projects or associations UCOTA The Uganda Community Tourism Association (UCOTA) was established in July 1998 to empower local communities in sustainable development through small-scale tourism and handcraft enterprises, also known as Community Tourism. To date, UCOTA has grown into 50 member-groups countrywide, representing about 1200 individuals of whom 63% are women and 37% men. The groups operate small enterprises ranging from accommodation, guiding services, and restaurants to craft shops, music, dance and drama 30

31 performances. Most of the groups fund a community project, such as clinics, schools, water sources and literacy programmes. The association empowers the communities through capacity building, offering in-kind grants, marketing for community services by making brochures, making presentations at exhibitions, and linking communities to the private sector, as well as through advocacy at all levels. The communities benefit further through UCOTA s efforts to network them with development organisations, resource mobilisation and link them with technical volunteers and interns. Amongst the communities, women are generally in charge (at 99%) of production and sales of handicrafts. These women are mainly located in rural impoverished communities that depend on subsistence farming and opportunities. Challenges for UCOTA communities: i) Lack of exposure ii) iii) iv) Lack of initiative to have a collective marketing of products Duplication of handicraft products by other communities Lack of availability of raw materials like natural dyes used as input in basketry and tie/dye textiles. Example: KIKORONGO WOMEN COMMUNITY This community is located along Fort portal Mbarara highway, just 30 km south of Kasese town at the Bwera road junction. The project was started in 2007 with 12 women but has grown to 63 members in It was registered in 2009 with the intervention of the USAID- STAR project as a way of restraining the community from poaching for survival. The community is involved in 3 main activities: a) Crafts. The community group conducts crafts training workshops during the peak season (June August) at the Simba Safari Lodge. Usually each group of tourists pays 160,000 UGX for a maximum of 3 hours training in basket weaving and bead work. This is spent as follows: room hire at Simba Safari Lodge - 20,000 UGX, the community receives 28,000 UGX while the 2 instructors both receive 112,000 UGX. This community mainly makes hats and baskets with the main raw materials (palm leaves and raffia) from the Lake Katwe area and from Congo. On average, a basket will take 3 weeks (part-time) to be completed and will be sold at 20,000 UGX. It was observed in their register that from July 2010 to July 2011, 5 out of 8 groups of tourists visiting the community attended the training workshops. From these statistics, the implication is that during the high season - between June and August - the community is able to get a gross income of 800,000 UGX from the training. b) Drama. The community has a drama group which also performs for tourists. The tourists usually come in groups of 5 to 10 people and each person pays 31

32 20,000 UGX for this entertainment. During the low season of September to October, the community receives an average of 8 tourists per month. From July 2010 to June 2011, it was observed from the community s register that a total of 188 tourists visited the community. If each of them paid at least 20,000 UGX for a performance or training session, the community earned a gross income of 3,760,000 UGX. c) Bee keeping. The Kikorongo women community has 12 male members. These were recruited to help women manage the 30 beehives that the community owns. Bee keeping has been done for 1 year now and the first harvest was in the last week of July The group has so far harvested only 10 litres (12kg) of honey, of which 1kg is sold for 6,000 UGX. Recently, UCOTA, in partnership with the STAR project, has launched pearls of Uganda to promote authentic cultural community attractions and experiences located throughout Uganda () COBATI The community based tourism initiative A Ugandan social entrepreneur called Maria Baryamujura started the community tourism initiative in The purpose of this initiative was to empower and involve Ugandan communities into fully participating and benefiting from tourism in their communities. This was paused to be achieved through enhancing the capacity of local people to harness and fulfil the tourism potential within their reach. All this was seen as a means to improve livelihoods amongst the communities. This initiative therefore strives to empower communities to develop and utilise community tourism as a tool for income generation. COBATI has promoted the benefits of community tourism to target communities through mentoring, on-spot training and outreach visits. This has particularly been carried out in the central and western regions of the country, including Luwero district, Mbarara, and the Bushenyi and Kanungu districts. This initiative has three main strategies for community poverty reduction: a) Encouraging the development of a network of homesteads across Uganda by establishing homestead and village tourism. The idea of homestead and village stays was developed in order to enable the traveller to experience the true lifestyle of rural Ugandans. There are 2 main homesteads: i) The Bombo Village includes 3 homestays, a women s handicraft group, traditional dancers and a mini cultural centre. This cluster involves over 600 people, although 65 women are the main participants in the activities. A number of activities are carried out in this village, including hair braiding and henna painting, a traditional greeting ceremony, local food cooking lessons, storytelling, and basket weaving lessons, all of which are charged 10,000 UGX and last 1 to 2 hours. 32

33 Accommodation for one night is 30,000 UGX, while the traditional meal, Nubian coffee and Nubian snacks each cost an average of 10,000 UGX, depending on one s choice. ii) The Ishanyu Village is another Nubian community in the Mbarara Municipality, involving about 200 members, and which offers tourists an opportunity to experience Nubian family hospitality along with an opportunity to participate in some great activities including milking, ghee making, cleaning traditional milking pots, making local yoghurt, weaving and braiding. As the Nubians in Bombo, this community also charges 10,000 UGX per activity, carried out for a period of 1 to 2 hours. Their accommodation fee is 30,000 UGX per night. b) The initiative also offers an opportunity for the HOMESTEAD EXPERIENCE; here the tourists participate in the activities of the host family, which becomes their guide during the stay. Some of the activities offered to the travellers include village walks, canoeing, listening to traditional stories from the elders, watching how food is prepared under hot stones, games with village children, helping with village chores and, if one is lucky, attending a local wedding ceremony. c) Community training is one of those activities offered by the initiative. This is provided to Ugandan communities and individuals who are interested in understanding the basics of community tourism and how to participate in its development. Participants are empowered to be able to establish and provide tourism-related services and products from their homes and communities. On average, COBATI handles 2 of such trainings per month, with an average of 15 participants per session. Training is tailor-made and the cost usually ranges from 25,000 UGX per person to 100,000 UGX, depending on the audience. Such trainings have so far been arranged for the Bwindi conservation trust in Buhooma, the UNDP/private sector development programme in the districts of Bushenyi and Soroti, UCOTA, SNV Uganda etc. Exposure Africa Exposure Africa was started in 1998 by a group of handicraft producers in the areas of basketry, textile, sculpture and woodcarving, which together with the Uganda Small Scale Industries Association (USSIA) bore an initiative of cluster marketing for their products. The group of about 15 women grew to what holds over 35 stalls and employs about 140 persons directly, and another 450 persons indirectly through supplies and related business. Initially this market was created: 1. To show case the products as a production hub for Ugandan products. Today the market has grown to a cosmopolitan market, displaying products from various 33

34 parts of Africa, including Madagascar, Zimbabwe, Kenya, Congo, Rwanda and Ethiopia. 2. To enhance quality improvement, so that different producers are able to see and analyse what others produce and how it is done. This should create healthy competition thereby resulting in good quality. 3. To enable producers to plan and arrange for national and international exhibitions, as these are channels and platforms for the marketing of Ugandan products. The market boasts collective high sales throughout the year with June, July, August, December and January as their peak business months. On average, a stall owner in this area is able to sell items worth 2,800,000 UGX (US$ 1,000) during these high peak months, and will sell items worth 600,000 UGX (US$ 230) in the very low peak months. Most of the buyers in the market are tourists who are led there by designated tour companies that the management of Exposure Africa has approached and who have agreed to do so. This is an initiative that is greatly boosting the market. There is no register for Exposure Africa, but one of the leaders revealed that the market receives a daily average of respectively and tourists per day in high and low seasons. Challenges: 1. Market saturated by handicraft items from neighbouring countries. 2. Unsystematic pricing structure which sways off buyers (e.g. when the price of an item varies in 3 or more ways from one stall to another). 3. Inconsistency of product quality from suppliers. 4. Lack of specialisation of display in the stalls. Out of 35 shops only one stall selling bark-cloth products is PRODUCT SPECIFIC. 5. Many stalls display products from other countries, therefore taxation, fluctuation of the US dollar, coupled with market dues, are a big hindrance to the business in the market. 6. With the revival of the East African community and the likelihood of a future free movement of goods and a free trade zone within the region, the local and indigenous products are facing a big threat. Strengths: 1. Exposure Africa has the project to build a crafts centre, grouping local producers in one place to respond to a huge demand. 2. Exposure Africa has built an international network of students, researchers and volunteers providing support to local producers all year round. 34

35 The National Theatre The crafts centre was started in 1993 by a group of lecturers from the School of Industrial and Fine Arts of Makerere University. Reasons for establishment: 1. The university lecturers use this area to exhibit both their works and those of their students. 2. With its proximity to the National Theatre, this area is generally a good tourist stop-shop centre for Ugandan made handicrafts. This crafts village previously specialised in batiks and tie-dye materials, as these were not traditional styles but rather new and academically developed styles. Today the crafts village has 42 stalls many of which still display batiks, textiles and traditional bead work, but nearly all the stalls have started selling products from other regions of the country, such as animal masks, traditional musical instruments, traditional games (the omweso -board game) as well as China beads and Chinese textiles, together with a host of products from Kenya, Rwanda, Madagascar etc. Challenges: 1. Uniformity, consistency, workmanship or a professional touch are not apparent in the products on display. 2. There is much duplication of the products from one stall to another. Every stall displays what is on the next or previous stall. 3. There is a limited amount of Ugandan crafts that are eye-catching! Everything that looks nice is often imported. 4. There are no specific Ugandan souvenirs being promoted. It is difficult to find a good Ugandan product to take home. Strengths: 1. Compared to Exposure Africa, this area has better chances of being visited by tourists because of its proximity to the National Theatre. 2. About 50 schools drop and pick their children up from the park in this area. Therefore the population in the area is high and offers a big turnover for the crafts village. 3. This area does not seem crowded, it therefore gives the buyer an opportunity to peruse or browse through the products with minimal interference. 4. A section of the market specialises in metal fabrication and carvings. This is an edge over other producers and can attract the development of a production cluster there. 35

36 5. During the high season (June to August and December to January), the village is visited by an average of 60 tourists per day. In the low season, the numbers do not drop so much but could have an average of 35 tourists per week. This is because the theatre area is an affiliation of researchers, drama groups and trainers that come throughout the year. 6. The products in this area have a better-improved quality than those of Exposure Africa. As a result, they get better prices. On average, a stall is able to make 2,500,000 UGX (US$ 950) during high season and 1, 200,000 UGX (US$ 450) during low season. Ndere/UDTA NDERE CENTRE is Uganda s cultural ambassador which strives to market the country so that foreigners will cease to attribute havoc to the country but rather see its beauty. This centre, which was conceived in 1984, sells Uganda through its cultural image, building on the country s languages which are used to create cultural diversity. The centre, which operates under the Uganda Development Theatre Association (UDTA), boasts 2084 member groups in the country which have been able to create employment, promote handicraft production and position themselves in various ways, serving: a) As a platform for marketing Uganda s cultural products. b) As a cultural conduit for annual festivals to bring groups together from village level to sub county, district and national levels (including the Ketwu Festival which has existed since 1997). c) As a hub for the art of fashion, so as to create a unique Ugandan brand. Although manpower is available in terms of cultural trainers, financial issues are a challenge as the centre depended so strongly on funds particularly from the private sector and the Austrian Agency - which are no longer available. The management and planning structure are there but require to be improved so that the centre s cause could be adjusted to best suit the situation and timing. 4. Situation analysis The following chapter examines the environment in which the Uganda tourism business operates and the key factors that influence how the tourism business is developed, marketed and managed over time. We will start with an analysis of the tourism competitiveness, including its comparative and competitive advantages. Then we will study the SWOT of both the tourism and the crafts sectors, before looking at the policy objectives and strategies to manage the development of the sector. Finally, we will conclude the chapter with the perceptions and levels of satisfaction of respectively the tour operators and the visitors. 36

37 The figure below summarizes the main identified issues by these tourism stakeholders. These matters of concern can be classified within three broad categories: the lack of access to information - both inside and outside of Uganda - for the visitors and private companies of the sector, the low level of product and service competitiveness and the weak management of the tourism sector. Figure 6: Problem tree of main issues related to tourism in Uganda Situation analysis Communication & Marketing Products and services competitiveness Tourism management Gaps in information channels Low quality and product diversification Weak regulation / standardisation of the tourism sector Infrastructure and attractiveness Low awareness of tourism-related opportunities Low access to market for promissing CBT products and services No classification and pricing system Poor roads and access to power 4.1. Tourism competitiveness The competitiveness of the tourism sector can be analysed from three different perspectives: its competitive and comparative advantages as an economic sector, and its contribution to the development of the non-tourist economy through economic linkages. Comparative advantage relates to things such as climate, beautiful scenery, attractive beaches, wildlife etc. Comparative factors are close to the primary tourism supply (natural, cultural and social attractiveness); and Competitive advantage relates to tourism infrastructure, the quality of management, the skills of the workforce, supporting industries and the role of government policy. To understand the competitiveness of Uganda, we should consider both the basic elements of its comparative advantage as well as the more advanced elements that constitute its competitive advantage Comparative advantage 37

38 The visitor survey made at exit points shows that game viewing is not the main reason why international leisure tourists visit Uganda. This is of serious concern when most efforts seem to be devoted to national parks. Actually, the interviewees expressed a broad range of reasons for visiting the country (see table 55 in Annex 1). Therefore, the question is about the real comparative advantage that national parks can offer to Uganda over its neighbouring countries, since international tourists are interested in a variety of activities and the five big mammals also live throughout the subregion (Kenya, Tanzania, etc.). Simply relying on the image of high-end safaris to generate international tourist flows in Uganda is a high-risk strategy. Similarly, to keep giving such emphasis to a small population of gorillas, which can be enjoyed at an expensive rate only, could equally associate Uganda to an exclusive destination. Additionally, the limited number of visitors that the gorilla population can withstand and the geographical limitations that are associated with these visits are not favourable to a better distribution of the tourism rent. Actually, with 1060 bird species and other non-exploited cultural and natural resources, Uganda has the opportunity to differentiate itself from its neighbouring countries. It does not mean that safaris and gorillas should be neglected. A clear understanding of the real comparative advantage of Uganda can be obtained through a long-term involvement of a dynamic private sector and regular assessments of the attractiveness of Uganda on the basis of individual visitors perception Competitive advantage Uganda does not yet perform favourably in East Africa despite the fact that it reports increased tourist arrivals. As an example, 90% of tourists in Tanzania visit for leisure compared to 52% in Kenya. In both countries tourists visiting friends represent less than 12%. It is further shown that over 78% of Uganda s tourists come from Africa, a region known to be economically disempowered and generally unviable as a tourist market. While over 48% and 34% of tourists respectively to Kenya and Tanzania originate from Europe, in Uganda European tourists only represent 10% of the total tourist inflow. Table 11: Tourist Arrivals, receipts and purpose of visit in East Africa (2008) Uganda Kenya Tanzania Arrivals (000 ) Receipts (US$ million) , Market share Europe 9.8% 48% 33% Africa 78.3% 24% 48% Americas 6.9% 14% 9% Asia 3.6% 12% 4% Other 0.0% 2% Purpose of visit Holiday 14.9% 52% 90% Business 20.7% 18% 4% VFR 50.4% 12% 0% Other 13.3% 18% 6% 38

39 No. of tourists in hotels 665,000 Source: UTB, 2011 From the table above, it is seen that Uganda receives more tourists than both Kenya and Tanzania (806,000, 729,000 and 714,000 respectively) but benefits the least from the sector. In 2008 Uganda earned about US$ 564 million, Tanzania earned over US $1.1bn and Kenya US $767 million. In 2004, a survey carried out with 41 tour operators in the UK, US, Italy, Germany and the Netherlands, rated Uganda the lowest in terms of tourist awareness and destination appeal among four other Eastern and Southern African countries 17. Amidst the reasons behind the low interest that Uganda arouses in international tourists, a weaker attractiveness in terms of doing business does not encourage the private sector to invest and therefore to create its own image. In order to attract foreign capital and therefore new experiences and knowledge, which later on will lead to an increase of competitiveness, Uganda needs to ease or to provide incentives in doing business in the country. Table 12: Ease of doing business rank (out of 183 economies) TOPIC RANKINGS DB 2011 Rank DB 2010 Rank Change in Rank Starting a Business Dealing with Construction Permits Registering Property No change Getting Credit Protecting Investors Paying Taxes Trading Across Borders Enforcing Contracts Closing a Business Source: World Bank (2011) The World Bank report of doing business (2011) places Uganda at the rank of 137 in starting a business out of the 183 economies ranked by the financial institution. The 2010 report had put Uganda at 129th out of the 183 economies, thus indicating that instead of improving, Uganda slipped backwards by eight places. Coupled with the WTTC tourism competitiveness index, it appears that Uganda mostly suffers from both a lack of infrastructure compared to Kenya and a deficit in terms of natural and cultural resources when compared to Tanzania. Table 13: WTTC tourism competitiveness index 2011 Travel and tourism competitiveness index Uganda Kenya Tanzania Rank Score Rank Score Rank Score 2011 INDEX T&T regulatory framework Policy rules and regulations Environmental sustainability Safety and security Health and hygiene Prioritisation of T&T strategies T&T business environment and

40 infrastructure Air transport infrastructure Ground transport infrastructure Tourism infrastructure ICT infrastructure Price competitiveness in T&T industry T&T human, cultural, and natural resources Human resources Affinity for travel and tourism Natural resources Cultural resources Source: WTTC (2011) 4.2. SWOT Analysis Before looking at the strengths, weaknesses, opportunities and threats of the tourism sector in Uganda, a number of issues were identified during the fieldwork. We therefore propose below a non-exhaustive list of these issues for each of the tourism stakeholders. Central and local governments o Tourism management and competitiveness (costing, pricing, standardisation) o Effectiveness of tourism marketing and communication (internal and external) o Effectiveness of tourism funds management (park entrance fees) o Weak infrastructure in some areas (roads, power, telecommunications, access to water) o Weaknesses in the decentralisation process. Tourism is managed at central government level, and not assimilated within local government plans; district commercial offices are not empowered o Lack of effective awareness of and sensitisation on general issues pertaining to tourism Private sector o Competitiveness of middle range/low-end supply (low cost/value products) o Needs support for the establishment of linkages with local communities o Low general level of salaries / absence of contracts o Absence of regional leadership o Needs to desist from recruiting non-professional and unqualified personnel o Weak, disjointed and uncoordinated o Opportunistic approach to business Local communities 40

41 o Low benefits from the tourism rent (share of expenditure going to the poor) o Lack of skills and capacities (innovation, empowerment) o Lack of knowledge and appreciation of tourism development and potential/opportunities o Exploitation by the private sector due to disparity caused by high poverty o Conflict with wildlife (vermin) NGOs and CBOs Tourists o Lack of capacities and technical skills for product diversification and innovation o Lack of funds o Not coordinated with other actors to create strong linkages between tourism and other sectors; e.g. none have sound framework with the National Agricultural Advisory (NAADS) to promote agricultural products consumed in hotels and other establishments o Successful CBOs can have high impact on the local economy; e.g. KAFRED o Lack of information about community-based activities o Lack of information on product origin and poverty reduction opportunities SWOT analysis for the tourism sector in Uganda The SWOT analysis of the tourism sector in Uganda is summarized in the table below. Basically, Uganda owns unique cultural and natural resources, however, a low level of services and management are weakening the commercial exploitation of these assets in a sustainable manner. The first table below concentrates on the SWOT analysis of tourism only. Then, we propose an in-depth evaluation of the crafts sector, which is of more interest to ITC in the frame of this project. 41

42 Figure 7: SWOT Analysis of Tourism in Uganda 18 Strengths - Unspoiled and unexplored natural resources - Unique cultural and religious resources - Good climate - Existing community-based initiatives - Existing handicrafts skills and production - Existing tourism networks and associations Weaknesses - Poor state of Infrastructures - Weak public-private partnership frameworks - Absence of qualified skills - High costs and access to energy (Water, electrictiy, petrol, etc.) - Poor production quality and diversity - Unreliable production and services - Weak tourism management and regulation - Weak competitiveness (WTTC and world bank indexes) Opportunities - Growing demand for Africa - Increased intra-regional and international air services - The creation of the East African Common Market - Prevailing peace and security in the region vs. instability in the Maghreb region - Increased UN and donor recognition of the sector as key for poverty reduction Threats Fragility of biodiversity - Increasing effectiveness of competitors - Instability of international tourism - Weak image of African destinations An analysis of strengths, weaknesses, opportunities and threats in Uganda revolves around the issue of improving the linkages between all tourism stakeholders and developing good policies and frameworks to manage (regulate, standardise, promote) the tourism sector. However, good policies on their own are meaningless if there is no capacity to implement the strategies that are designed to achieve them. Presently Uganda has devoted many efforts and invested much in the preservation of its biodiversity. A share of the entrance fees to national parks (20%) is thus transferred to local districts, offering the opportunity for the local population to submit project proposals. However, a lack of both skills and forward thinking impedes the 18 See annex 9 for a detailed SWOT analysis table 42

43 implementation of projects which are more likely to offer economic alternatives to these populations. As a consequence, project proposals are often similar from one village to another. They respond more to a recurrent problem (vermin) without proposing innovative solutions that would help diversify livelihood. Apart from a competitive high-end offer, Uganda tourism and tourism-related products and services are disorganised, uncompetitive and often inappropriate on a world market basis. A majority of tourism and tourism-related stakeholders are not aware of international visitors expectations. The vision, and consequently the price, for the locals is often reduced to the beauty of the adjacent natural resources; gorillas have a dramatic influence on prices no matter what the quality of services or products is. Thus, the pricing of products and services is often set on uncommon indicators which make customers strongly unsatisfied. Although, UTB has planned to regulate the tourism sector using the criteria for standardisation of hotels, restaurants, and other tourist accommodation facilities of East Africa, the lack of central government support to this issue of utmost importance considerably weakened the initiative. In the middle of an improving political environment, Uganda also benefits from beautiful landscapes in which the land is highly fertile. With a regular growth in visitor arrivals and a better product differentiation (building a new image of Uganda), the local population when accompanied will definitely gain benefit from a growing demand for their products. The initiatives are numerous but technical skills and funds are a prerequisite to the sustainability of these projects SWOT analysis for the craft sector in Uganda Uganda has a wide array of handicraft products such as basketry, mats, ceramics, beads, pottery, hand textiles, woven products, toys, jewellery, bags, ornaments, leather products, batiks and wood crafts, among others. These items are produced in almost all the districts and regions of Uganda, using locally available raw materials, with limited product differentiation. Handicraft production in Uganda is cultural, traditional and predominately a cottage industry, engaged in by youths of both gender (though largely by women), to supplement household incomes. The tradition is to hand over craftsmanship and skills from generation to generation. With time, tradition has waned, however, despite the fact that the number of craftsmen has considerably decreased, master craftsmen can still be found. In recent years, handicraft production has taken position as a major industry that has a potential business opportunity for sustainable income generation. This has resulted in the attraction of more artisans, traders and exporters. However, because of the urge to earn quick money, artisans produce in fragmented environments with no appreciation of market requirements, quality, design, standards and systematic organisation of markets. Innovations, design and product adaptations are limited, given the low skill capacities of the producers, and, as a result, the appreciation of Ugandan handicrafts, especially by tourists, becomes insignificant. 43

44 According to the Uganda Handicrafts Export Strategy (2005), the development of the sector is severely inhibited by the supply side (production) and marketing constraints, including: Production Limited access to and inadequate supply system of raw materials Fragmented, unstructured and individualised production systems Low level equipment application Low production levels Nil or minimum access to capital Lack of specialisation Inconsistent product standardisation Low designs and quality Inadequate design skills Inadequate production, vocational and business development training Inadequate model incubator projects along organised production systems Organisation and Marketing Lack of a vibrant National Exporters Association Insufficient market information and dissemination Lack of appreciation of market preferences and requirements Inadequate support for marketing and promotion Poor or no packaging Lack of organised district, regional or national handicraft exhibitions to facilitate district or regional specialisation Lack of sector supportive and adaptive policy Lack of cooperation and programme coordination among handicraft business support organisations There are many organisations engaged in handicraft promotion activities though in a very fragmented and disjointed manner. Such organisations include the Uganda Export Promotion Board (UEPB), Uganda Women Entrepreneurs Association (UWEAL), American Growth Opportunities Act Office (AGOA), Uganda Small Scale Industries Association (USSIA), National Organisation of Women Associations in Uganda (NAWOU), National Arts and Crafts Association of Uganda (NACAU), Private Sector Foundation of Uganda (PSFU), Uganda Community Tourism Association (UCOTA), Sustainable Tourism in the Albertine Rift project (USAID, STAR) and many others. 44

45 Figure 8: Specific SWOT Analysis for the crafts sector Strengths Availability of abundant and unique local raw materials, e.g. raffia, bark-cloth, banana fibre, animal skin, etc. A wide range of traditional production knowledge derived from indigenous knowledge Current and potential internal markets based on tourism Unique products rooted in the country s diverse culture Availability of cluster production in typical homesteads and traditional activities Weaknesses Unstructured and individualised production systems Limited capitalisation and low investment Limited technical skills, capacity, technology integration and innovation Limited resources for production, distribution and marketing Disjointed and duplication of efforts by stakeholders in capacity building, research, training and products Handicraft sector not mainstreamed into national planning priorities Opportunities An increasing flow of tourists who provide markets for products Tourist interest in watching artisans and craftsmen at work Increased coordination of marketing and industry participation The creation of the East African Common Market Increased UN and donor recognition of the sector as key for poverty reduction and income generation Threats Competition from countries like China, Kenya, Zimbabwe, Rwanda and Congo, which produce cheap and good quality crafts 4.3. Tourism development plan Tourism has not been developed as expected, despite the fact that the country has many potential tourist attractions. The strength of tourism in Uganda is the unspoilt wilderness, the gorillas, the rich culture and the special combination of nature and culture. As indicated in the National Development Plan (2010), the identified constraints to the performance of the tourism sector are: 1. Inadequate public and private institutional capacity to initiate meaningful tourism development. The private sector on the other hand is fragmented, small and lacks sufficient public sector support. 45

46 2. Inadequate policy frameworks to conserve Uganda s cultural heritage, which is presently threatened with extinction. 3. Limited funding: tourism promotion is costly yet the sector experiences serious shortages in resource allocation to effectively compete with other tourist destinations. 4. Lack of adequately skilled human resources particularly in tourism promotion, hotels and restaurants, tours and travel, leisure and hospitality. 5. Negative perception of Uganda due to past insecurity; this has affected Uganda s attractiveness as a secure tourist destination. In addition, the over-reliance on foreign tourists makes the sector highly vulnerable to external shocks. 6. Inadequate physical infrastructure support: a network of good roads and availability of affordable air charters are essential for the comfort, safety and security of tourists. Some existing tourist attraction facilities are inaccessible due to the poor conditions or absence of the requisite transport infrastructure. The supply of water, communication facilities and electricity are equally necessary. 7. Inadequate research and development of the tangible and intangible heritage. 8. Narrow product diversity: the country s touristic activities are largely based on wildlife, despite the existing potential in culture, community, faith-based conferences and business tourism. 9. Inadequate research on emerging trends, markets and consumer surveys, as well as irregular statistical information required to inform decision makers, investors and tourists. Despite a clear understanding of the existing constraints for the tourism sector to both become competitive at an international level and to provide alternative sources of livelihood in rural areas, the forecasts concerning the share of annual budget allocated to tourism over the next five years limit dramatically the possibilities to observe tremendous changes in this sector. Table 14: Expenditure framework under the NDP Source: NDP

47 4.4. Perception and satisfaction regarding Uganda s touristic attractions and services Tour operators perception of tourist resources and attractions Only 15 tour operators agreed to answer partially or fully to the questionnaire. Based on the provided data, they have had slightly less than 20,000 customers for the year Difficulties were met with others in understanding the objectives of the research and its anonymous nature. Therefore, names of companies will not appear in this document in order to respect the agreement we have with them. Tour operators were asked about the market size of the different regions of Uganda (northern, southern, western, eastern and central) and the reasons for selling them or not. All interviewed tour operators sell the western region, which constitutes their main source of income (70%), far above all others. Table 15: Market size of different regions for Uganda based TOs Selling Package Average Regions Market size Western 100% 70% Eastern 85% 4% Northern 85% 10% Central 85% 9% Southern 79% 7% The reasons for not selling one or more regions of Uganda vary from one area to another. According to those who answered this question, only the eastern region strongly suffers from a lack of demand market. They consider it as probably linked with the lack of information about the area. The northern region particularly suffers from the lack of accessibility and poor road quality. To conclude, the lack of information and activities, associated to a low standard of quality, are the predominant factors highlighted by the tour operators. Table 16: Main reasons for not selling Uganda provinces Eastern Region Northern Region Central Region Southern Region Do not know much about the area Very specific location - not a lot of demand for it 2 1 No awareness or need for our customers to go 2 1 No demand market 4 1 Only sell specific packages Expecting a better promotion from hotels Some of our packages go through this province, but there are not enough developed activities that people can really do There s not enough demand to make it worth the effort for us 1 2 Lack of accessibility & road quality Low standard of quality (hotels, restaurants ) Existence of negative issues with locals 1 47

48 Tour operators were then asked to give their opinion about the strengths and weaknesses of each province ( no answer and did not know were classified as other, and represent the remaining percentage in the following table). With regards to their answers, the provinces of Uganda have more strengths than weaknesses, which means that all provinces have a real potential to attract international tourists. These answers differ by province for some of the items. It should however be noted that only the western province shows an important difference between its weaknesses and strengths (see table 52 in Annex 1). The top weaknesses for each of the regions are by order of importance: Northern region: The cost/value for money, the means of transportation, the authentic way of life, the scenery; Eastern region: The range of existing activities, the cost/value for money; Western region: The cost/value for money, the means of transportation; Central region: The wildlife, the scenery; Southern region: The hotels and services, the cost/value for money, the means of transportation. We note that the main weaknesses raised by tour operators are mostly linked with the value/cost for money and the means of transportation to the destinations. While some external items cannot be changed, opportunities to increase the competitiveness of the regions of Uganda exist. First of all, the majority of regions are not price-competitive. Most of the interviewed tour operators considered that the value for money is among the main weaknesses. The provinces should improve the level of services and offer more choices as well as more information for visitors. With the exceptions of the western and central regions, where most of the tourists go, hotels and services are rated low by an important number of tour operators. It was also observed that the wildlife is always considered as the most attractive tourism asset, more attractive than local communities (see Table 51 in Annex 1). It is obvious that tour operators mostly focus on wildlife as a main triggering factor for international tourists visiting Uganda. This is a surprising conclusion when wildlife is finally difficult to sell in most of the provinces. 48

49 Table 17: Difficulty to sell the main attractive factors by region Difficulty to sell Wildlife Local communities Local crafts Local entertainment Western region 25% 60% 40% 83% Eastern region 100% 50% 100% 50% Northern region 71% 63% 75% 25% Central region 75% 40% 40% 40% Southern region 29% 25% 50% 100% The difficulty to sell some tourism assets can first be explained by the lack of either supply or quality. Secondly, it is also possible that some categories of tourists are not interested in local crafts or entertainment. With the exception of the southern region, and probably due to the existence of several projects promoting the local communities such as the Batwa experience, it seems that local communities are currently difficult to sell for at least half of the tour operators in other regions Visitor satisfaction with Uganda s touristic attractions and services Visitors were asked about the places they had visited and their experience or level of satisfaction. Central Uganda (Kampala) is definitely the main region visited by tourists. It could notably be explained by the high percentage of business tourists (51%) among the visitors responding to the questionnaire. A Likert Scale of 1 to 5 was used to rate the level of satisfaction by circuits or regions. The scale works as follows: 1. = Strongly unsatisfied 2. = Somewhat unsatisfied 3. = Undecided 4. = Somewhat satisfied 5. = Strongly satisfied The level of satisfaction was rated the highest for the Northern circuit, including Murchison Falls National Park (4.2), the Eastern region was rated the lowest (3.3) before Central Uganda (3.7), and the Western circuit was rated 3.9. Therefore, only one region benefits from a rating above 4.. The lack of in-country information on destinations was rated the lowest among the different categories proposed to the visitors (when evaluating their level of satisfaction). It confirms evidence and testimonies gathered during the fieldwork. The choice of transportation options (3.5) and the value for money tours/travel (3.5) are, similarly as with the tour operators, among the lowest sources of satisfaction. 49

50 Table 18: Level of satisfaction for touristic attractions and services Average level of satisfaction Do not know Did not use Behaviour of local souvenir sellers % 17.8% Choice of different activities/things to do/attractions % 18.8% Availability of local cuisine % 8.3% Value for money - restaurants/food choices % 1.2% Tour guides % 36.8% Value for money - local souvenirs % 21.0% Value for money - accommodation % 7.1% Value for money for transport % 16.1% Availability of local souvenirs % 19.5% Convenience when buying local souvenirs % 20.2% Choice of transport options to destinations % 7.2% Value for money - tours/travel % 28.9% In-country availability of information on destinations % 22.2% Interestingly, international visitors were rather satisfied with the behaviour of local souvenir sellers (3.9) as well as with the price of local souvenirs (3.8), but less satisfied with their availability (3.6) or with convenience when buying them (3.6). Nevertheless, 70% of the interviewees considered that the currently available shopping facilities met their expectations. To conclude, it should be noted that none of the ratings was above four, which seemed to indicate that the majority of international tourists were not disposed to express their satisfaction. Table 19: Favourite activities in Uganda Favourite activities in Uganda % Sightseeing 23.6 Game viewing 14.5 Gorilla tracking 13.6 Bird watching 13.2 Other 11.8 Community based activities 8.6 Mountaineering 7.7 White water rafting 6.8 Tourists were also asked to provide their three main activities during their stay in Uganda. Interestingly, visitors preferred sightseeing to other activities, including game viewing or gorilla tracking. This information reflects that Uganda holds many wonders just waiting to be discovered. Based on the comments from both the tour operators and the visitors, the road conditions were however at odds with the needed comfort for enjoy sightseeing. Tourists were also given the opportunity to express their view on tourism services in Uganda. Road conditions and traffic jams were the most popular issues cited as 35.9% of respondents proposed improving the accessibility and quality of the roads. 10.7% of tourists were not happy with accommodation and hotel conditions. They suggested lowering the price for accommodation by constructing new facilities, or to improve the 50

51 quality and conditions in the hostels and develop customer services. The question of availability of tourism information was rated as an important issue by 7.7% of respondents. They proposed developing websites, maps and improving tourism information booths at entry/exit points and tourist information centres. 6.8% of respondents were not satisfied with the quality and organisation of the tours. Better trained guides, binoculars to see wildlife better, and white rafting expeditions were some ways suggested to improve this service. Other improvements in Uganda s tourism industry could be made by developing cheaper and safer transport services (5.8%), reducing corruption rates (3.9%), cleaning up the city (2.9%) and solving the problem of inadequate power and water supplies (1.9%). 5. Uganda Tourism Value Chain Tourism is generally understood as a service product based industry. The value chain delivers a tourism product to the tourist as a consumer. However, tourism is quite complex insofar that it has a double structure to it. People consume tourism products from the global supply of holiday providers (i.e. buying a holiday to Uganda from a tourism company). Then, when in destination, the second level of market supply comes into play. Tourism consumers (or their tourism providers) buy and consume products and services in the destination market place deriving from the multiple service and goods based supply chains. It is in this second market that local economic impact is actually generated. The primary market providers (tourism operators) are critical to generate demand in the secondary market by virtue of their action, which is to channel consumers to the destination. Each tourism product is therefore a packaging of sub-products from multiple value chains. A pure value chain analysis looks at the end-to-end expense of a particular product (from the overall package price paid in the source market, including the retailer profit and overheads, air fares, travel insurance and other items unrelated to in-country expenses ). Many value chain based studies focus on the high degree of leakage. It is now widely viewed that the leakage is typically less relevant than the levels of linkages within a country. It is in the nature of the industry that a high part of a package price goes towards airfares / shipping fees etc., but this is of no concern to the destination country. What concerns the governments, industry and people of a country is how much is spent in the country, what stays in the country, and what benefits whom (i.e. distribution by economic status, geography, ethnicity, gender, etc.). Therefore, this report deliberately avoids the package price breakdown approach for the most part, and looks at expenditure in country and the net benefits of this expenditure. 51

52 Table 20: Concept and structure of the tourism value chain Key: Non-Tourism Sectors Tourists Direct Service Providers Support Institutions Source: Mitchell and Lee (2007) 5.1. The visitors Visitor demographics As mentioned earlier in this report, an exit survey (airport and border checkpoints) was undertaken in early October to gather information on the segmentation of international tourists in Uganda. A total of 335 persons were randomly interviewed, providing a statistically significant sample of the current tourist population. Table 21: Nationality and origin of respondents Nationality Origin AMERICA KENYA EUROPE UNITED KINGDOM TANZANIA RWANDA ASIA-PACIFIC 15 9 OTHER AFRICA 13 6 CONGO SUDAN 8 12 MIDDLE EAST 5 2 Out of the 335 respondents, only 318 provided their nationality. The main nationality of persons visiting Uganda was North American (60 American and 11 Canadian). However, the main country of origin for the respondents was Kenya. Approximately 41% of respondents came from neighbouring countries, namely the Democratic Republic of Congo, Kenya, Rwanda, Sudan and the United Republic of Tanzania. 52

53 A crossed analysis of the country or region of origin with the main purpose of visit allowed us to establish that visitors from neighbouring countries (Kenya, Tanzania, Congo) mostly entered Uganda for business purposes. Visitors from Rwanda and Southern Sudan did not provide all the information concerning their purpose of visit, which prevented us from drawing conclusions on their characteristics. Table 22: Main purpose for visiting Uganda by region of origin Main purpose for visiting Uganda Business Holiday VFR Volunteer Educational purpose (student) Other UNITED KINGDOM 45.5% 31.8% 13.6% 0.0% 4.5% 4.5% EUROPE 42.1% 18.4% 5.3% 5.3% 10.5% 10.5% AMERICA 40.0% 26.7% 15.0% 16.7% 0.0% 1.7% ASIA-PACIFIC 66.7% 11.1% 11.1% 0.0% 0.0% 0.0% MIDDLE EAST 0.0% 25.0% 50.0% 0.0% 0.0% 0.0% OTHER AFRICA 33.3% 0.0% 16.7% 0.0% 33.3% 0.0% CONGO 60.0% 10.0% 10.0% 0.0% 0.0% 20.0% KENYA 71.3% 9.2% 8.0% 0.0% 4.6% 3.4% RWANDA 20.8% 16.7% 33.3% 4.2% 0.0% 16.7% SUDAN 26.7% 6.7% 6.7% 0.0% 20.0% 26.7% TANZANIA 70.4% 3.7% 14.8% 0.0% 3.7% 3.7% Total 51% 16% 13% 6% 6% 9% It is also interesting to observe that a majority of visitors from Europe and America were equally in Uganda for business purposes. It should be noted that within the month of October, being fairly low season compared to months June-September which are high season, the types of visitors surveyed did not particularly follow the pattern of all visitors to Uganda. Besides business travellers, family visits represented the main reason for visiting Uganda. Studies and voluntary work were the second motives. Table 23: Specific purposes of visit Specific purposes of visit % Family visit 22.5 Study/Internship/Volunteer work 15.8 Round Trip 12.5 Game viewing 9.2 Gorillas 8.3 Other 8.3 Local communities 4.2 Bird watching 4.2 Spiritual holiday 3.3 Cultural holiday 3.3 Honeymoon 2.5 Adventure 2.5 Festivals 1.7 Eco-tourism holiday 1.7 Spa/wellness

54 A majority of respondents were male (70%), although the ratio of males to females varied across the types of visitors. The share of male and female visitors was however more balanced among holiday takers (59% / 41%). Table 24: Age by country of origin Average Male Female CONGO AMERICA EUROPE ASIA-PACIFIC UNITED KINGDOM OTHER AFRICA MIDDLE EAST SUDAN RWANDA TANZANIA KENYA The mean age of visitors varied considerably across nationalities, gender, and according to the category of interviewees (see Table 56 in Annex 1). The average age of respondents was 43.1 years for international visitors and 36 years for regional visitors. In general, Congolese (48.7 years) visitors to Uganda were older than other visitors. In contrast, Kenyan visitors (35.3 years), who represented the majority of visitors, were on average the youngest. Female visitors tended to be younger than their male counterparts. With the exception of American and Congolese visitors, the majority of female visitors were under 40 years of age in all groups of nationalities. Volunteers, students and VFR (Visit Friends and Relatives) were more likely to be under the mean age. Table 25: Age bracket by country of origin < >60 UNITED KINGDOM 0.0% 17.6% 11.8% 11.8% 23.5% 23.5% 11.8% 0.0% EUROPE 18.4% 10.5% 2.6% 10.5% 5.3% 7.9% 34.2% 10.5% AMERICA 5.4% 10.7% 10.7% 16.1% 8.9% 12.5% 19.6% 16.1% ASIA-PACIFIC 0.0% 12.5% 12.5% 25.0% 25.0% 0.0% 25.0% 0.0% MIDDLE EAST 25.0% 0.0% 25.0% 25.0% 0.0% 0.0% 0.0% 25.0% OTHER AFRICA 0.0% 0.0% 60.0% 0.0% 20.0% 0.0% 20.0% 0.0% CONGO 0.0% 22.2% 11.1% 0.0% 11.1% 0.0% 22.2% 33.3% KENYA 9.9% 29.6% 14.8% 14.8% 16.0% 6.2% 7.4% 1.2% RWANDA 0.0% 38.1% 23.8% 14.3% 4.8% 9.5% 4.8% 4.8% SUDAN 0.0% 38.5% 7.7% 23.1% 7.7% 7.7% 7.7% 7.7% TANZANIA 18.2% 13.6% 27.3% 22.7% 13.6% 4.5% 0.0% 0.0% For all neighbouring nationalities, with the exception of the Congolese, the main age bracket was below the age of 35. In contrast, European and American visitors were more likely to be over the age of 50. Therefore, the majority of westerners (European and American) were not a public of adventurers. 54

55 Means of transportation and number of countries visited A majority of respondents (70%) entered Uganda by air via Entebbe International Airport, while the others entered by car or bus through one of the border checkpoints in Kenya, Tanzania, Rwanda, Congo or Sudan. Figure 9: Map of Uganda showing exit points Source: UBOS 2010 The exit points slightly differed from the entry points. Table 26: entry and exit points of interviewees Border Entry Exit checkpoint point point ENTEBBE 70% 73% MALABA 6% 1% KATUNA 6% 9% BUSIA 9% 10% CYANIKA 1% 0% MUTUKULA 5% 5% LWAKHAKHA 0% 0% NIMULE 1% 2% OTHER 3% 1% 55

56 According to the survey, 41.9% of visitors to Uganda were on a multi-country trip, travelling to an average of 2.4 countries (including Uganda). A majority combined a trip to Kenya (64) and / or Tanzania (44). For those on a multi-country trip, their average length of stay was longer in Tanzania (6.7) than in Kenya (4.3) Travel Party A majority of visitors to Uganda travelled alone (62.7%) and came more often to Uganda than group visitors did. Moreover, the frequency of visit was especially high in Uganda. It could be explained by the high number of both business tourists and tourists visiting friends and family. Table 27: Travel party, frequency of visit and ALOS Travel party Frequency ALOS of visit Alone 62.7% With friends 12.2% Couple 7.2% Group tour 6.9% With family 3.9% Total 100% The average length of stay (ALOS) was particularly low for interviewees travelling with their family. The table below details that most visitors from this category (travelling with family) were from neighbouring countries, which could explain this trend. Table 28: Country of origin and travel party Frequency ALOS Travel party Alone With family Couple With friends Group tour UNITED KINGDOM % 0% 9% 9% 9% EUROPE % 0% 11% 16% 21% AMERICA % 5% 10% 10% 10% ASIA-PACIFIC % 0% 11% 11% 0% MIDDLE EAST % 0% 0% 25% 0% OTHER AFRICA % 0% 0% 0% 0% CONGO % 0% 0% 40% 0% KENYA % 3% 6% 13% 3% RWANDA % 8% 8% 13% 0% SUDAN % 7% 0% 7% 7% TANZANIA % 4% 7% 0% 7% Total % 3.9% 7.2% 12.2% 6.9% Visitors from the following neighbouring countries - Tanzania, Kenya, Sudan and Rwanda - and some international visitors (United Kingdom) mostly travelled unaccompanied. Westerners (European, American), and more particularly Congolese visitors, also travelled with friends, or in a group tour. The frequency of visit was higher for the neighbouring countries but the length of stay was not. Therefore, we observed an opposite relationship between the frequency of visit and the ALOS when taking into 56

57 account the distance from the country of origin to Uganda. The sample size of visitors from Asia-Pacific (9) does not allow any conclusions to be made on this group of nationalities. From the data it was difficult to provide a breakdown of visitors using the common classification of FIT (Free Independent Travellers) and GIT (Group Inclusive Tour). Respondents who reported travelling with their friends sometimes belonged to large groups, though they did not consider being part of a group-tour. Definitively here, visitors travelling alone were more likely to not be considered as GIT (Group Inclusive Travel), i.e., not on a package tour. Travel party Table 29: Travel party and package tour Are you on a package tour or prepaid trip? No Yes Number of people travelling with respondent Alone With friends Couple With family Group tour A breakdown of visitors could be made as follows: - Group inclusive - people who pre-pay and travel in a group on a predetermined itinerary; - FIT pre-paid - small group (e.g. 4 friends) who have an itinerary which is tailormade for them, but still pre-pay large elements (accommodation, some meals, some tours) to a travel agent in their home country; - FIT - book elements independently and pay on the ground for all services consumed. The table above also details the average number of people travelling with respondents. On average, people travelling with their family travelled with slightly less people (1.1) than people travelling with friends did (1.3). The number of friends and family accompanying respondents varied across regions and countries of origin, with no discernable definitive patterns. As expected, visitors travelling on group-tours did so with a larger number of people (4.5). International visitors to Uganda for the holidays mostly travelled alone or independently as a couple. Whatever the purpose of visit, the majority of respondents travelled alone. Table 30: Travel party by purpose of visit Business Holiday VFR Volunteer Educational purpose (student) Alone With friends Group tour With family Couple other 57

58 5.2. Accommodation and food In the early days of the industry, the government spearheaded the development of hotels with minimal private sector participation. However the privatisation and liberalisation of the economy since 1987 have attracted private companies to invest in new hotels, resorts, lodges and other tourist accommodations. The hotel and restaurant businesses output grew from 6.5% to 10.7% between 2004 and In 2001, Uganda had about 60 hotels with about 1789 rooms and 50 wildlife accommodation facilities, with a combined capacity of 972 rooms. In 2009, 1138 accommodation establishments were registered in Uganda (see figure below). Today the sector contributes about 4.3% to GDP and employs about 7% (430,000) of the total non-farm workforce. Figure 10: Number and types of businesses in the accommodation sector Number of accommodation businesses (2009) Rooms Establishments Source: UBOS 2010 According to the Uganda Bureau of Statistics and the Private Sector Foundation current Business Register (2007), there is a total of 3,411 registered businesses in the category of hotels and camping sites, as well as bars and restaurants in Uganda. The register is restricted mainly to businesses employing 5 or more persons. The register indicates that 65% (2,228) of the enterprises in the sector are restaurants and bars, compared to only 35% (1,183) of hotels and camping sites. Among the enterprises in the hotel and restaurant sub-sector, 180 enterprises employ fewer than 4 people, 2365 enterprises employ 5-9 people, 647 employ people, 186 employ people and only 33 enterprises employ more than 50 people. A regional distribution of businesses in the hotels and restaurants sector shows that close to 40% (1315) of the businesses are found in Kampala, as shown in the table below: Table 31: Distribution of hotels and restaurants by region in Uganda Kampala Central East North West Total Hotels & camping sites Bars and restaurants Total Source: Business Register Update 2006/07, (UBOS & PSFU). 58

59 In Kampala, 74% of the businesses are restaurants and bars, and only 26 % are hotels and camping sites. The western and northern regions each have 20% of the hotels and camping sites. Furthermore, a majority of businesses (77%) are owned by Sole Proprietors. Out of the 180 enterprises with fewer than 5 employees, women own about 66% (119) of the enterprises in that sub-category, and the annual turn-over of most of these firms is less than UGX 50 million. Women also own 15% of enterprises that employ over 50 employees. Table 32: Employment in hotels and restaurants Businesses Male Female Total Average Hotels and camping sites ,925 14, Restaurants and bars ,737 18,100 8 Total 3,411 15,134 17,662 32, Percentage Source: Business Register Update 2006/07, (UBOS & PSFU). Year According to the table above, the hotel and restaurant sub-sector employs more women (53.9%) than males (46.1%) and, on average, a hotel employs 12 people while a restaurant employs 8 people. In any given restaurant or hotel, one would expect at least 10 employees. Table 33: Accommodation capacity for selected hotels in Uganda, occupancy rates and guest nights in 2003/2005/2008 Accommodation capacities # Rooms # Bed spaces Room occupancy Guest nights Occupancy rates Room nights sold Bed nights sold Foreign Domestic Room Bed Bed/room occupancy ratio , , , , , , , , , , , , ,255,175 1,656, , , , The information in the table above was based respectively on 51, 72 and 72 hotels in 2005, 2005 and 2008 information compiled by the Uganda Bureau of Statistics. The table shows that the accommodation sector has been growing rapidly over the years. However, while the number of rooms available for sale has grown from about 534,000 in 2005 to over 1,2055,000 in 2008, and as bed spaces have correspondingly increased, room occupancy has fallen from 44.6 % in 2005 to 30 % in Bed occupancy also fell from 33 % in 2005 to 28.7 % in These negative relationships between room, bed space growth and occupancy levels are indicative of a lack of information on the investment climate. Without statistically significant data on the sector but with a growing trend in visitor arrivals, investors can consider the Ugandan tourist sector as very healthy. However, Uganda is still receiving a low proportion of leisure tourists. We can however observe that the recent investments 59

60 in the tourism sector are more associated with small tourism investors than linked with one of the major international tourism brands. Table 34: Contribution of hotels and restaurants subsector to Uganda s GDP Hotels & restaurants (GDP, billion shs) , ,666 Air transport (GDP, billion shs) Hotels monthly earnings ( 000 shs) Tour operators (employment) 3424 Source: UBOS, 2011; MTTI, 2009 In the table above, we may observe that the contribution of the hotels and restaurants subsector to Uganda s GDP has doubled from UGX 818 billion in 2006 to UGX 1666 billion in Also the contribution of air transport has increased from UGX 125 billion to UGX 217 billion over the same period. Tour operators in Uganda employ approximately 3424 people Excursions and guides In a survey among tourism stakeholders, looking at the promotional means used in marketing their enterprises, the results reveal that Internet was the most commonly used mode of promotion. Out of 39 responses, 32 respondents (82%) ranked the Internet as their number one mode of promotion. Personal selling (by word of mouth) ranked number two, followed by brochures, trade fairs and exhibitions. On average, each tour operator interviewed in 2008 by the Ministry of Tourism, Trade and Industry was found to be employing about 16 people, although with an uneven distribution among the various operators. Most of the guides were certificate holders (42%) while those who had degrees and diplomas represented 23% and 33% respectively. In 2008, the earnings from 47 tour operators amounted to UGX billion Transportation Kampala, which accounts for 64% of the total transport businesses, has the highest proportion of transport businesses in Uganda. This dominance is due to the fact that Kampala is the main business centre of the country. The Eastern region has 18% of the transport businesses, while the rest of the other regions have less than 10% each (UBOS, 2011). According to UBOS (2011), the transport sector employs close to 15,000 persons. A majority of these employees (84%) are males and are mostly concentrated in the land transport subsector. The Private Sector Foundation (2010) reports that the country has a total of 10,965 km of roads, of which about 30% are paved. Most of these roads - paved or not - have potholes. This limits easy access to tourism areas and causes delays due to unnecessarily long travel times. The poor state of roads is the second leading infrastructure constraint identified by private firms (PSFU, 2010). 60

61 The railway network, which could potentially serve as an alternative, has almost collapsed and efforts to attract a new investor have not been successful since the Rift Valley Railways (RVR) consortium failed. The transport business is regulated by the Ministry of Transport and Works (MTW). The Uganda Transport Licensing Board (TLB), a branch of the MTW, is responsible for regulating the use of public transport vehicles, private omnibuses, goods vehicles and the producer/sellers vehicles throughout Uganda. The Board is the only agency in Uganda that grants routes for bus operations. It undertakes inspection and licensing of Public Service Vehicles, conducts biannual public inquiries to consider applications for omnibus operators (bus routes) and monitors bus services on routes to ensure compliance, among other activities. Although what is cited above are reported as being activities performed by the TLB, there were no up to date reports from which secondary information could be obtained about the transport sector. TLB claimed not to have the necessary resources (equipment and staff) to appropriately accomplish its mission. Technical control was limited to the visual inspection of vehicles and the number of vehicles, and their allocation to public transport routes was decided without reference to transport planning studies. The different public transport operators have different associations. These associations control specific stages and routes, and collect dues from the vehicles that use the routes. The associations have total control over the bus parks but pay annual subscriptions to the city and town council authorities. Because of the need for more dues collections from public transport vehicles, any potential candidate easily meets the technical and legal conditions that are required to enter the transport business. For instance, to become a bus operator, all that is required is a vehicle, no matter its condition and age. Because the responsible government agencies are under-staffed and not equipped to carry out the planning, regulation and monitoring functions, these associations set fares, allocate routes and carry out self-enforcement on their operations. According to the Uganda Taxi Drivers Association (UTODA) - the entity in charge of regulating, monitoring and allocating routes to public taxis - there is a total of about 50,000 taxis in Uganda. Most of these vehicles are reconditioned, and ownership varies/ranges from individuals to companies. There is freedom of entry and exit into this business as long as one has a vehicle and has attained a Passenger Service Vehicle License (PSV). Estimates with the leadership of UTODA indicated that these taxis employed up to 100,000 people directly as drivers and conductors and employed thousands of others indirectly (all at different stages: mechanics, fuel pump attendants, traffic guides, UTODA officers, etc.). This business was able to generate up to UGX 2,500,000,000 daily (for the economy) and contributed greatly to other businesses such as fuel retailers facilitating movement of labour force from places of residence to work. The chairperson Boda Boda (motorcycle) Association revealed that there was a total of more than 100,000 commercial motorcycles in Kampala. The distribution of these motorcycles was as follows: 61

62 Kampala City Division Stages No. of boda bodas Challenges faced Rubaga ,500 Insecurity High interest rates when they need to borrow (10-15% per month from non-commercial banks) Ever increasing prices for fuel Makindye ,000 Insecurity Are being used by politicians No training centres for boda boda cyclists Kawempe ,000 Insecurity in the area for both boda boda riders and other people Vicious cycle of poverty which pushes boda boda drivers to borrow money from which they do not benefit. The cost of the permits is too high (e.g. licenses, psvs) They pay money for insurance but when they have accidents they are not compensated. Sensitization on lack of boda boda training (e.g. on HIV) Health security like ambulances, etc. Kampala central ,000 Parking is not organised They do not have helmets, driving permits or licenses, thus they offer disorderly services The costs of getting these requirements are expensive (e.g. insurance). The license costs UGX 195,000; almost as much as a car. No training school for the boda bodas Do not get immediate assistance in case of accidents Total 1, ,500 The contribution of boda bodas to the economy was noteworthy. This business directly employed over 100,000 people in Kampala city, most of whom were youths. Conservative estimates (assuming daily earning of UGX20,000) indicated that this sub-sector of transport contributed up to UGX 2,030,000,000 net income daily (US$ 780,000), which translated to UGX 50,750,000,000 (US$ 19.5 million) per month. Boda boda cyclists estimated daily fuel consumption at two litres per motorcycle, which would translate into a monthly fuel expenditure of UGX 38,570,000,000 (US$ 14.8 million). They also claimed to provide business to food sellers, mechanics, spare parts sellers and importers. With regard to bus services, the survey found a total of 15 bus companies that provided regional and international transport services. There were buses travelling to Kenya, Tanzania, Rwanda, Burundi, Sudan, the Democratic Republic of Congo and beyond. Foreigners owned more than 80% of these companies, mainly from within the region. Each bus carried an average of 66 passengers (per trip) and the fares varied by destination and season of year. Some of the bus companies offered executive services and others provided ordinary economy class services. Each bus company had a fixed schedule within which some had up to three shifts per day, while others had only one shift per day. International bus companies had an average of 3-5 stopover points on their journeys. 62

63 The local bus companies were more than 50 in number and Ugandans owned nearly all of these. Some companies owned up to fifty buses and some owned only one bus. They only operated long routes, connecting Kampala to the different parts of the country. Due to lack of stop-over points many would stop at fuel stations for passengers to relax and they often stopped at roadside markets to allow passengers to buy refreshments and snacks. A few of the bus companies operated executive services and charged some extra money; many of these services were available to night travellers. The booking system was still manual, and it was not possible to book for a return journey. There were claims of widespread ignorance of the fares among travellers as the charge often depended on the passenger s bargaining power. For all the transport businesses described above, the peak season starts in November up to early January. April is also a peak season. During these seasons transport fares often double, as demand tends to be higher due to people travelling upcountry for the Christmas and Easter celebrations. The rest of the months are reported as average months Crafts, visual arts and entertainment As seen earlier, Uganda has a variety of handicraft products ranging from basketry, mats, ceramics, beads, pottery, hand textiles, woven products, toys, to jewellery, bags, ornaments, leather products, batiks and wood crafts, among others. These items are produced in almost all the districts and regions of Uganda, using locally available raw materials like papyrus, raffia, palm leaves, jute fibre and recycled materials like paper and plastic straws. These items have limited product differentiation based on culture, history and traditions. The sector is dominated by women, youths and the disabled, all selling mainly to the country s tourists. The main market for Uganda s handicraft products include the EU-25 gifts and decorative articles under EBA (Every thing But Arms) - and the USA under AGOA (American Growth Opportunities Act), both of whom offer preferential treatment for Uganda s handicraft products. Currently most of the handicrafts are sold domestically to local buyers and tourists, with a few being exported to the USA, Canada, Australia, Germany, Denmark, Italy, the UK and Japan. Other existing markets for Uganda s crafts are Ugandans in the Diaspora and Kenyan traders who buy and blend Ugandan craft pieces and re-export them to Europe and the USA. HANDICRAFT MARKETS IN KAMPALA Markets for handicrafts in Kampala include two major enclosures of Exposure Africa at Buganda road and the National Theatre crafts market. These are places which are commonly accessed by high-end tourists due to their proximity to the 5 star hotels in the city. There are 2 other weekly markets that bring different communities every Friday: one at Makerere roundabout yard and another along 6 th Street in the industrial area. These are mainly wholesale markets from whom most retailers purchase their crafts for re-sale. A 63

64 good number of tourists, especially those in caravans and backpackers, have found these types of craft markets favourable. In this category we also find the seasonal Railway Parking Yard Market, which community producers utilise to exhibit their products usually upfront to the festive seasons like Easter, Christmas and New Year s Day. Banana Boat is the only chain crafts store in Kampala with 3 outlets at Kisementi Shopping Centre, Lugogo Mall and Garden City Shopping Mall. All Serena Hotel guests that take home souvenirs and cannot find them in the hotel s craft shop in the lobby are only directed to these stores, basically because of their high quality products and their super packaging capabilities. Every high-end tourist visits one of these stores while in Kampala. The Uganda Manufacturer s Association (UMA), in collaboration with the Private Sector Foundation of Uganda (PSFU), The Uganda Women Entrepreneurs Association (UWEAL) and the Uganda Investment Authority organises annual trade fairs. It is during this period, usually in the month of October (to coincide with the independence celebrations) that artisans, craft producers, design schools and schools of Art showcase their products. The trade fair is accessible to the general public and especially to business people from the COMESA and East African Region, 85% of whom carry back home craft products and souvenirs. More recently, communities around Kampala, especially those in the slum areas such as the Acholi quarters in Kireka, Kinawataka, Namuwongo, Kisenyi and Katwe, each with a population of over 3,000 people, have become the main producers of handicrafts from recycled products such as paper and plastic straws. They are entering the market for tourists and are becoming major sources of craft articles and souvenir producers. There are other organised women and community groups that have leadership which connects directly to the export market. Such groups include the National Association for Women Organisations in Uganda (NAWOU), which organises items from different communities, exports them on their behalf and later works out the financial logistics required. These target the North American market. Uganda Crafts 2000 Ltd is another of such organisations. It is a Fair Trade craft wholesaler and retailer which collaborates with international organisations from Canada, Denmark and England in the handicrafts trade. Over the past 2 years ( ), hawkers and street sellers of handicrafts have emerged especially along the heavy traffic routes such as Jinja, Wandegeya and Kampala roads. These are able to sell a few souvenirs, batik art pieces and woodcrafts to both locals and foreigners. 6. Definition of the poor Looking at poverty distribution in Uganda, Robert et al. (2006) have explored a novel approach in which they combine household survey data with a suite of environmental variables that are either direct measures of key climatic variables, descriptor variables of key ingredients of poverty-generating processes (such as agricultural production systems) or proxies for constraints on the health and well-being of the human 64

65 populations. The International Fund for Agricultural Development (IFAD) for which the authors were doing the poverty mapping has identified eight broad classes of poverty: 1. Material deprivation 2. Lack of assets 3. Isolation 4. Alienation 5. Dependence 6. Lack of decision-making power 7. Vulnerability to external shocks 8. Insecurity Most commonly, poverty measurement is based on material deprivation that is generally linked to the inability of incomes or expenditures to meet basic needs and nutritional needs, as defined by a consumption-based poverty line. Using the full sample of 2005/06, the UBOS estimated 31.1 % of Ugandans to be poor, corresponding to nearly 8.4 million persons. The table below provides more detailed statistics, broken down by region and rural-urban areas. Table 35: Poverty statistics in the UNHS 2005/06 Source: UBOS 2010 While on a national level the population below the poverty line is 31.1%, the poverty incidence is highest in the northern region (at 60.7%), followed by the eastern region (at 35.9%), then the western region (at 20.5%) and finally the central region (at 16.4%). The high incidence of poverty in the north is attributed to the insurgence which disrupted economic activities. The P0 indicator is a headcount ; the percentage of individuals estimated to be living in households with real private consumption per adult equivalent below the absolute poverty line for their rural or urban sub-region. The P1 indicator is the poverty gap. This is the sum of the poverty line and the shortfall in the private consumption per adult equivalent of individuals below the absolute poverty line, divided by the absolute poverty line. One way to interpret the P1 is that it gives the per capita cost of eradicating poverty as a percentage of the poverty line if money could be targeted perfectly. 65

66 Consumption expenditure data (Consumption Per Adult Equivalent: CPAE) can also be used to characterise chronic poverty. It shows that the consumption per adult equivalent is inversely correlated to the level of poverty. In the poorest area of Uganda, the northern rural region, the average consumption per adult equivalent is equal to 20,500 UGX per month (US$ 7.26). Table 36: Comparison of poverty estimates by region Source: UBOS (2006) 7. Aggregated tourism expenditures and pro-poor income From a yield perspective there are three main measures which help assess the contribution that tourism makes to an economy: Total Economic Impact (TEI) i.e. all the in-country spending from tourism. Local Economic Impact (LEI) i.e. all the in-country spending from tourists staying in the country. Poverty Impact money generated through tourism jobs and incomes which goes to the poor and near poor. In Uganda, the benefits that poor communities make from tourism can be mostly summarised as follows: - Direct benefits o 20% of park entrance fees are given to local district authorities. The communities have to present a project proposal in order to get access to these funds. o Community projects (10 micro-projects under the umbrella of the STAR project) o Community tours o Employment - Indirect benefits o Supply of fruits, vegetables, fish and meat to tourism stakeholders. o Supply of crafts and performances to tourism stakeholders. The following figure provides a description of the different levels of impact, highlighting how the tourist spending flows inside the economy. 66

67 Figure 11: Impact concept for tourism Source: PI (2010) Recent research work has stated that with the exception of wages, most of the income generated through direct effects within the tourist economy goes to hotel and restaurant owners, namely local or international elites. By contrast, the income generated through indirect effects trickles down to the lower income layers of the economy. Since most of the industries that supply the tourism economy are non high-tech, and are labour intensive, the majority of backward linkages are forged by smaller unskilled producers. 19 A simplified Tourism Value Chain Figure 12: Simplified Tourism Value Chain Accommodation Catering Souvenirs Transport Trips and expeditions Other Hotels/Hostels/Campsites/Ba ndas/safari lodges Supplies, taxes, electricity, wages, maintenance... Hotels, Hostels, Campsites, safari lodges, Restaurants, Bars Supplies, taxes, electricity, wages, maintenance+ Food and Drinks: Wholsale dealers, Markets, Grocery Stores, Supermarkets, Food Production Hotels, Hostels, Campgrounds, Souvenir Shops, Markets, shops, Craftsmen, Supplies, taxes, electricity, wages, maintenance+ manufactured goods and raw materials (Craftsmen, Wholesale dealers) Interurban Bus, Taxi, Rentals Taxes, petroleum, credit Urban/rural Mototaxi, bicycle, rentals, carts Entrance fees to National parks salaries, utilities, etc. Agencies and foreign, national and local people Guides, Travel agencies, Tour operators Taxes, tips, donations. Taxes, petroleum, credit, maintenance Accommodation, transport, food, taxes, wages, electricity 19 Lejarraga and Walkenhorst (2006) 67

68 The study of operating costs for all tourism stakeholders provides a coherent indicator in order to understand where to intervene. For each of the operating costs, the likelihood to impact the poor is different Total and local economic impact of tourism on the Ugandan economy In-country visitor expenditures The visitor survey conducted in early October 2011 shows that accommodation is the main category of expenditures (44%), followed by souvenirs (16%), meals and drinks (15%), transport (12%), excursions (8%) and others (7%). In the others category are included the expenditure in casinos, spas and nightlife. The high proportion of business travellers, along with several testimonies, emphasises the existence of sexual tourism in Uganda. On average, tourists spend $ 855 per person per trip. The categories with the main average of expenditure per person per trip are both visitors on holiday and those visiting friends and relatives ($ 1082). Volunteers spend less than all the other categories with $ 711 per person per trip. The main spenders per day are however those visiting friends and family ($ 155) and the business travellers ($ 146). Table 37: In-country spending per person per day and per stay by purpose of visit Purpose of travel Expenditure per person per stay Expenditure per person per day Average length of Stay Business $794 $ Holiday $1082 $ VFR $1082 $ Volunteer $711 $ Educational purpose (student) $887 $ Average $855 $ The total amount of visitor expenditure in Uganda ($ 778 million) is equal to the average level of expenditure per person per day ($ 132), multiplied by the average length of stay (6.5) and the number of tourists for the year 2010 (910,714). Figure 13: Economic impact of tourism by supply chain Economic impacts of tourism on Uganda US$ 778 millions Accommodation US$ 343 m (44%) Restaurants US$ 115 m (15%) Souvenirs US$ 115 m (16%) Excursions US$ 62 m (8%) Transport US$ 91 m (12%) Others US$ 5 m (7%) including expenses for local food products US$ 35 m (75%) including local products US$ 37 m (39%) 68

69 The high number of business tourists plays an important role in either reducing or increasing the overall size of some items in the distribution of expenditures. For example, excursions are not gone on by business tourists and are therefore among the smallest area of revenues in the value chain, at around $ 62 million per year. Table 38: Distribution of expenditures by supply chain and purpose of visit Accommodation Meals and Drinks Transport Excursion Shopping Other Business 52% 15% 8% 0% 19% 4% Holiday 52% 11% 6% 21% 9% 1% Visit friends & relatives 31% 12% 21% 7% 14% 10% Volunteer 27% 18% 22% 18% 14% 1% Educational purpose 29% 13% 6% 6% 25% 5% Other 46% 26% 12% 5% 5% 1% It should be noted that 24% of all respondents underspent their budget during their time in Uganda. The main reasons for this under spending in souvenirs were: lack of variety (32% of respondents), time limitation (24%), low quality (20%), affordable prices (8 %), did not shop (4 %), were not interested in souvenirs (4%), acted according to budget (4 %) and were not available for shopping (4%). 18% of tourists overspent their budget during their time in Uganda. 23.8% of them noticed that the prices for products were high, 19% were satisfied with the variety of products, 14.3% spent more money on things such as tours and antiquities, 9.5% of respondents enjoyed the process of shopping and being in Uganda, 4.7% acted according to their budget, 4.7% had currency exchange problems, 4.7% were not satisfied with the quality of products (while the same percentage of people were happy with it), 4.7% of respondents saw the strong value of the dollar as their main reason for overspending and 4.7% of them tried to support poor people. The remaining 58% of tourists spent within their budget. 33.3% of them acted according to their budget, 33.3% enjoyed staying in Uganda and 33.3% were not interested in spending more. Local economic impact of in-country expenditures Local food products The analysis shows that about $ 35 million are used for the purchase of local foods by the accommodation and catering sectors. This represents 33% of economic return in Uganda. On the other hand, the value of imported food products stood at $ 7.6 million or 25% of the food consumed by accommodation and catering facilities, according to the interviews conducted among 28 hotels and 20 restaurants all around the country in order to see, through the breakdown of their operating costs, the local economic impact of these expenditures. Observing operating costs for tourism stakeholders enables us to understand how the money spreads into the economy. Salaries is the first expenditures category for the 69

70 accommodation and restaurant sectors. Indeed, this category is usually where the propoor impact of tourism is likely to be the highest. Table 39: Breakdown of operating costs for the accommodation and restaurant sector Categories of operating costs Breakdown for Accommodation Breakdown for Restaurants Salaries and wages 40% 19% Utilities (alec., water ) 4% 4% Hygiene and cosmetics 3% 2% Food costs 9% 14% Beverages costs 4% 17% Rent (loan) 2% 17% Sales and marketing 0% 19% Tel & Internet 1% 2% Maintenance 23% 2% Transport for goods 2% 1% Souvenirs 1% Taxes, licenses 1% Other 1% 2% A closer look into the origin of products, especially in the food sector, reveals that approximately 55% of food products were sourced locally (within 20 km). Out of US$ 35 million spent by the hotel and restaurant sector on food products in 2010, US$ 19.2 million went to local communities. Despite a few exceptions, it seems that all businesses follow the same trends which appear in their category (high-end, middle range, low-end). The most important categories in terms of value are cereals, vegetables, meat, fruit and fish. Their shares of food expenditures are as shown in the table below. Table 40: Percentage of both cost of various food items in total food products and locally sourced products (accommodation facilities) Meat Fish Cereals Vegetables Fruit Condiments Processed food and juices Product s share of total food costs % of locally sourced products Value of imported products 19.7% 20.8% 22.5% 14.3% 11.7% 8.4% 2.7% 76% 73% 71% 82% 91% 60% 45% $1,428,183 $1,654,197 $1,975,963 $756,939 $317,081 $1,009,197 $435,290 The main sources of leakages for local communities, which were also identified during the fieldtrip, in terms of relative and absolute values, are respectively processed food and juices (65% of imported products) and cereals ($ 1.9 million per year). These leakages are mostly due to the non-existence of local production for these items. To explain the percentage of locally sourced products for the other items, it refers either to the nonexistence of products at a local level (particularly in the northern region and more generally due to a lack of access to water) or the lack of confidence in the quality of products because of the use of chemical fertilisers in some districts. 70

71 Concerning the meat and fish categories, information concerning the provenance of these items is limited. High-end businesses managers, who mostly claimed to buy these two product categories in the main supermarkets of Kampala, were not sure about their real provenance. Interviews with several supermarkets indicated that beef was solely bought from a local firm called Top Cuts, which in turn said that they bought their animals from farmers in different parts of Uganda. For pork, farmers said they directly supplied the supermarkets on a daily basis (they supply caucuses using the JIT method). Chicken was supplied by farmers from different parts of the country, though mainly from inside and around Kampala. Fish was bought directly from the fish processing factories in and around Kampala. They bought their fish from local people (fishermen and locals with ponds). Local handicraft products The local share of the souvenir sector profit is 39%. Out of 25 souvenir wholesalers and retailers, it appears that most of them have wood carvings and clothing as their main purchases products with a high rate of import. The value of basketry in the purchases of souvenir sellers is the second lowest, which shows that all efforts to train communities in this segment for the last 10 years were not particularly economically fruitful. Table 41 : Handicraft and imported purchases level Categories % of imported products % in purchases of wholesalers/retailers Opportunities / Value of imported products Wood Carvings, sculptures 60% 22.7% $ 12,845,124 Clothing 55% 17.2% $ 8,921,129 Art (paintings) 5% 12.0% $ 566,077 Jewellery 82% 10.4% $ 8,032,070 Antiques 96% 9% $ 7,908,694 Textiles (silk, batik) & embroidery 91% 7% $ 6,214,439 Basketry, weaving 2% 5.6% $ 106,427 Copper / silver crafts 100% 5.1% $ 4,791,177 Fashion accessories handbags and belts 75% 4.8% $ 3,399,745 Fashion accessories scarves 96% 3.5% $ 3,168,103 Local specialities & processed food 89% 1.7% $ 1,447,109 Music instruments 1% 0.9% $ 8,869 Total 39% 100% $ 57,408,963 Local resources In Uganda, the guides and transporters are mostly locals, however the vehicles and the petrol are imported. Eight out of fifteen interviewed tour operators were 100% locally owned. The others were shared or foreign-owned Pro-poor impact of tourism on Uganda economy The UNWTO (2004) has identified seven different ways in which spending associated with tourism can reach the poor: 71

72 1. Employment of the poor in tourism enterprises; 2. Supply of goods and services in tourism enterprises by the poor or by enterprises employing the poor; 3. Direct sales of goods and services to visitors by the poor (informal economy); 4. Establishment and running of tourism enterprises by the poor (SMMEs or CB enterprises); 5. Taxes or levies on tourism revenues or profits with proceeds benefiting the poor; 6. Voluntary giving of resources (money, goods, time) by tourists and enterprises in ways which benefit the poor; 7. Investment in infrastructures which provide livelihood benefits to the poor. This report assesses how much of tourist expenditures reached the poor in 2010 and attempts to see what insight this can bring to governments and donors to improve this as part of a strategic intent to improve tourism yields. Some attention also needs to be given to issues impacting those who are not getting benefits from the tourism sector. These issues may include: - Inflation price inflation for land and food are common negative impacts for local people, and may price them out of their homes. - Social disturbances crowds of (noisy / rude) tourists causing a disturbance, litter, setting a bad example to the local young people with different cultural norms (e.g. drinking, smoking, promiscuity etc.). - Overloading of the carrying capacity this may impact both tourism assets as well as infrastructure (roads, boats, planes, electricity supplies etc.). Basically, the pro-poor impact of tourism can mostly be studied through the linkages between the tourism stakeholders and the local producers, and by looking at pro-poor employment. Concerning the latter, we proposed to apply an approach developed by Conway for the IFC-MPDF (2007) to the total number of employees in the tourism sector. It observes the poverty background of tourism workers while taking into account qualitative and quantitative variables. Figure 14: Conway's approach for calculating the poverty profile of tourism staff 1. Interviewees (tourism workers) who moved to the destination too long ago to have an accurate recall of household income and / or so long ago that the income estimates would have to be adjusted for inflation were removed from the list; 2. The reported income (household income = tourism worker + other household members) was multiplied by 1.1 to obtain an estimate of household consumption. It was then possible to compare estimated consumption to the poverty line, rather than compare income to a consumption poverty line; 3. The results were divided by the number of people in the household to obtain an estimate of per capita consumption; 4. This consumption estimate was compared to the international consumption poverty line (US$ 1.25/person/day); 72

73 5. To the count of poor households were added those who report having suffered from food shortage for the past year; 6. Any remaining cases for which we had neither a pc income estimate nor data on roof and wall material were finally removed from the list; 7. The number of poor households was divided by the number of total households left after non-valid households had been removed in steps (1) and (5) above. All interviewed workers are split into two categories poor and non-poor - and then we look at the sum of incomes for each category in order to determine its share of the salary bill. Doing so, we obtain a poverty profile by supply chain and a salary distribution by supply chain and poverty profile (split of total tourism based wage incomes across income groups). It is important to note that this methodology only represents the Employee Pro-Poor Income Impact (EPII) of the tourist expenses or job-based income. In order to obtain the full pro-poor impact, it is necessary to add the sales-based incomes by poor local producers (tourism supplier pro-poor impact and direct seller pro-poor impact). As we lacked the time needed in order to interview a representative sample of local producers and farmers, we have used the average poverty rate of Uganda as a proxy to calculate the indirect pro-poor impact of in-country spending Pro-poor impact in the accommodation sector The pro-poor impact of accommodation is considered here as the sum of the employee pro-poor income and the pro-poor linkages between the sector and the local producers. We first observe the pro-poor employee income impact, which consists in evaluating the poverty profile of the sector s workers. The average level of salary is around $ 50 per month for low skilled salaries in the accommodation sector. 86% of interviewees had food as a benefit in addition to their salary. Respectively 30%, 28% and 24% had accommodation, transport and medical care too. Table 42: Breakdown of interviewed workers and average monthly salary # of interviews Categories Monthly Salary 18 Cleaning related services UGX $51 14 Head of categories UGX $91 15 Reception UGX $47 4 Sales and marketing UGX $ Guest services UGX $53 2 Travel consultant UGX $232 3 Management UGX $137 7 Administration UGX $106 7 Transporters UGX $66 We observe that among the interviewed tourism workers in the accommodation sector, 73% have a poor background. Since the number of interviews for each category was not sufficient, it was impossible to study the poverty profile by category. Making the assumption that low-skilled jobs should however be more pro-poor, and looking at the average monthly salary for each category, we can assume that a major share of salaries is likely to go to the non-poor. 73

74 Table 43: Poverty profile and salary distribution in the accommodation sector Categories Poverty profile in the accommodation sector Salary distribution in the accommodation sector Poor 73% 69% Non-poor 27% 31% Looking at the employee pro-poor income impact for the accommodation sector, we can confirm that a majority of tourism workers are from a poor background. Concretely, 27.5% of tourist expenditures in accommodation outside of Kampala went to workers from a poor background for the year 2010 (EPII-Employee Pro-poor Income Impact). The second round of impact would then include the pro-poor impact of the tourism stakeholders expenditures. For the accommodation sector, the linkages with the local producers are especially true for the food component, towards which 9% of expenditures go. If we simply apply the average poverty rate in Ugandan rural areas as a proxy data (25.9%), then 1.7% of tourist expenditures in the accommodation sector would indirectly reach poor local farmers. Therefore, using the international indicator of US$ 1.25 per person per day as a poverty threshold, an approximate of the total pro-poor impact of tourist expenditures in the accommodation sector (including the multiplier effect) is 29.1% Pro-poor impact in the souvenir sector A similar approach can be conducted for all shares of tourist expenditures. However, the evaluation of the pro-poor impact is more difficult for the souvenir sector. A majority of souvenir stores are family-owned and the number of employees is therefore very low. Knowing that tourists generally buy their souvenirs in Kampala (Exposure Africa, National Theatre Market), the pro-poor impact of the souvenir sector is thus mostly on the second round of expenditures when souvenir wholesalers and retailers purchase items to local communities and producers. Outside of Kampala, tourists can either buy their souvenirs at hotel shops or along the road. Considering that tourists mostly visit national parks, we can decide to undertake an approach by region; - Northern region: there are no facilities for local communities to currently display their souvenirs at Murchison Falls National Park. Some hotels offer local crafts but a majority of items are imported from neighbouring countries. The existing craft shops or street sellers are insignificant in terms business activities. The local producers mostly depend on traders to buy and sell their products. - Western region: Fort Portal represents an important hub for tourists visiting Queen Elizabeth National Park and others. There are currently four souvenir shops in town but local communities are not all linked with the tourism market. Again, a majority of products, especially fabrics and sculptures are imported, but few organisations encourage the production and sales of locally made crafts. The Katunguru crafts area (with eight souvenir shops) is also a major stop over for tourists around this national park. 74

75 - Southern region: in Buhoma (Bwindi National Park) the village counts almost fifteen souvenir shops, most of which display exactly the same crafts. Therefore, average incomes per month struggle to reach 200,000 Uganda shillings for each shop. In areas of Kabale and Lake Bunyonyi, village communities have organised themselves into craft cluster producers but they hardly have access to the hotels and resorts in their vicinity due to the lack of networking opportunities with the owners and proprietors. Their products also require a lot of product development, as they are rarely attractive to the potential buyers. - Eastern region: Jinja town is the main conduit for souvenir sales in the region because of the proximity to the source of the Nile and the much desired water rafting and bungee along the Nile. Jinja has over 38 souvenir stalls along the main street, 15 stalls at the source of the Nile and 5 at Bujagali with many others spreading out along other streets in the town. The town being a major stop over en-route to Sipi falls, Elgon National Park, Tororo Rock and Soroti Hills in the further east, it becomes a focal point for souvenir sales. Much as some of the products here are imported, youths and the elderly on site make a good number of them, such as leather articles, beads, and tie/dye, as well as pottery items locally. - Central region: this is where a majority of tourists purchase their souvenirs but also where the poverty rate is the lowest (see section 5.5). However, tourists on the western circuit usually stop en-route at the Equator stop over which has about 14 souvenir shops, and at Kinoni Craft Centre which has just 2 stalls. Basically, employees from the souvenir sector in secondary destinations are likely to follow the same trends as those working in the accommodation sector. The rate should be higher when including the street sellers. We will however keep the same rate for the Employee Pro-Poor Income Impact (79%). An approximate of the total pro-poor impact of tourist expenditures in the accommodation sector (including the multiplier effect) is 10.4 % Pro-poor impact of tourism in Uganda The indicator chosen to evaluate the poverty profile of tourism workers was the international poverty line of US$ 1.25 per person per day. Categories Table 44: Pro-poor Impact by supply chain Employee pro-poor Impact Tourism supplier pro-poor impact Pro-poor Impact Accommodation 27.4 % 19.3 % 29.1 % Restaurant 13.1 % 24.9 % 16.5 % Shopping 2.1 % 10.1 % 10.4 % Transportation 8.1 % - - Excursion 5.2 % - - Total 15.5 % 2.5 % 17.9 % 75

76 The direct impact on poverty is 15.5 %, and rises to 17.9 % when its indirect impact is taken into account - i.e. the second round of tourist expenditures within the local economy. The method used in calculating the levels of poverty is absolute, in the sense that it establishes a level of income per day per person, below which a person cannot cover their basic needs. 8. Opportunities for pro-poor interventions It is basically known where the traditional barriers to pro-poor tourism are, but there is a need to prioritise interventions using the following criteria: the Pro-Poor Impact, the level of feasibility and the level of Return On Investment (ROI). Figure 15: Traditional barriers to PPT Lack of tourist awareness about handicraft s origin and inclusive tourism Low quality, design and presentation to match international tourist demand Lack of supply capacities from local producers High level of imported products and raw materials, leakages and imperfect competition Lack of linkages between producers and local selling points (hotels, information centres, etc.) Lack of market access (including road access) and access to finance Non-registered individuals and businesses The combination of the fieldwork study and the evidence brought by the quantitative survey offers a clear situation analysis (see figure 6) which helps both draw a list of potential interventions and of the impact that these interventions could have on local communities. The existence of several UN agencies (ITC, UNDP, UNCTAD) willing to work on the sustainable development of the tourism sector in Uganda encourages us to propose a holistic approach in which each Agency can benefit from and complement the work of the other. The main identified axis for tourism and tourism-related interventions are: Communication and Marketing Plan: o Improve available information inside and outside the country o Improve tourism marketing and promotion strategies 76

77 Branding and visibility Public-private partnerships Products and services competitiveness (linkages of poor communities to tourism) o Improve quality and quantity of tourism and tourism-related services and products o Encourage market-oriented tourism business development: Capacity building and training (including peer to peer training) Responsible tourism product development and diversification, reinforcement of tourism value chain linkages and clusters development Tourism Management: o Improve tourism sector destination planning, development and management: Encourage a decentralisation process for both the private and public sectors Improve data collection systems Improve the tourism sector s regulation and standardisation Capacity building at all levels of government (central, regional, district) Infrastructure development Improve destination attractiveness for investors (incentives to private sector) 8.1. Sustainable Tourism Sector Development To increase the pro-poor impact of tourism, the first level of intervention aims to ensure the sustainability of the sector at the three levels (economic, social and environmental). It is expected that interventions will encourage more tourists to visit Uganda and especially to participate in community-based activities. In-country and external communication strategies are key factors to differentiate Uganda from its neighbouring countries. To differentiate one destination from another it is necessary to develop a comparative advantage. However, price competitiveness, and therefore the certainty that tourists get a good value for their money, is critical. 77

78 Figure 16: Priorities for an inclusive tourism development in Uganda Communication and Marketing Access to reliable statistics and information for foreign investors Products and Services Competitiveness Access to reliable information for visitors(inside and outside Uganda) Image / branding of Uganda and its assets Regulation of tourism and tourism related activities Addressing quality insurance Standardisation Human resources and tourism products development Management and Planning Tourism attractiveness for both tourists and private sector (incentives, cultural mgt.) Human resources development & Decentralisation Acknowledgment of tourism as a main source of local economic development To both reach a high level of satisfaction and improve the number of international leisure visitors to Uganda, the government needs to acknowledge the economic importance of tourism towards massive investments in tourism and tourism-related infrastructures. There is a need to accelerate the decentralisation process by giving local authorities more capacities to respond to immediate needs. The building of capacities of tourism and tourism-related government officials at both local and national levels is a prerequisite to the decentralisation process. Other axes of intervention - in which the government needs to be particularly active and involved - concern the improvement of tourism products and services competitiveness. The lack of regulation mechanisms added to the absence of a standardisation system are both harmful to a sustainable development of tourism in Uganda. There is additionally a need to build the capacities of local human resources in order to reach international standards for most tourism businesses operating in Uganda. Both inside and outside of Uganda, the access to valuable information is limited. Reliable information is essential for tourists when preparing their trip and for investors when evaluating the investment opportunities and their possible financial return. A non-exhaustive list of interventions is offered in the table below, including the possible outputs and impacts for each intervention individually. 78

79 Table 45: Pre-identified interventions for sustainable tourism sector development Themes Outcomes Location Context and Rationale Outputs Impacts Communication and marketing Improved access to information for visitors, traders and investors Improved and increased image of Uganda internationally Kampala / Uganda Kampala / Uganda - Weak in-country and external access to information for tourists, traders and investors - Lack of available information on prices and activities Uganda has not yet been able to differentiate its assets from neighbouring countries Uganda has unique, nonexploited products and comparative advantages (birds, the Nile, etc.) Lack of activities outside game viewing - Development of a website including a classification of tourism businesses and rates by location (identify and select a reliable web hosting service) - UTB reinforcement of capacities: training on marketing / information systems / website management - Assist UTB in collecting information on prices / services and activities all around Uganda Brand Uganda - Marketing of destination s unique assets (birds, communities: beyond wildlife) - Workshop with TO and use of VCA results (tourist survey) - Survey among domestic tourists (identify expectations of domestic tourists) Possibility to organise a national competition to brand Uganda (and therefore to encourage locals to discover their country) Develop and organise new activities for tourists (trekking, mountain biking, hot springs, CBT, etc.) Improvement of visitor satisfaction Increase of arrivals Increase of investments A new image of Uganda is created Increase of arrivals Increase of investments Tourism products and services competitiveness Increased number and quality of leisure activities Development of stop-over areas Bunyoni, Kamonjora, etc. Kafu, Equator point (Kikorongo) Low involvement of local communities in tourism economics Non-commercially and sustainably exploited natural and cultural resources Absence of Western standard stop-over areas and long road trips between destinations Low quality of products and services - Training of guides - Capacity building of local communities / access to credit & market - Support strategies to bring tourists to the products (improve linkages between CBT s activities and tour operators) Improve in-country travelling experience - New stop-over areas offering clean toilets, food and crafts Diversify and improve the quality of food products available at stop-over areas - Create linkages with local communities and producers Training of trainers in the accommodation and catering sectors Increased number of activities Increased number of tourism beneficiaries Increase visitor satisfaction Quality improvement Product development and income generation Poverty reduction

80 Themes Outcomes Location Context and Rationale Outputs Impacts Tourism management and planning Regulation and standardisation of the tourism sector Decentralisation of tourism management for both public and private sectors Uganda Uganda Low level of services for the middle range and low-end tourism stakeholders Issues with pricing and costing Low benefits and salaries for local staff Lack of responsiveness to local tourism issues by national government Lack of collaboration at local level to market the secondary destinations accordingly Support UTB in the finalisation of the tourism sector census (n of actors, n of tourism employees, etc.) to communicate on the importance of tourism for the national economy Support UTB in the finalisation of the implementation of a standardisation system (three levels: quality insurance team of inspectors, grading, capacities of local authorities) Assist in transferring decision-making process at regional level Capacities building of local/regional administration and associations Quality improvement Better working environment and benefits for local population Increased visitor satisfaction Better management of tourist sites Faster responses/reactions/solutions to local issues Increased destination attractiveness for investors Uganda Heavy taxes and administrative processes for middle range and low-end foreign-owned businesses Dynamism and experience brought by foreign individuals in the middlerange and low-end segments Incentives to private sector (not staff only owners) Assist in products development in secondary destinations Improve access to secondary destinations Growing supply and choices in the middle range and low-end segments, resulting in better services through competition Increase number of visitors in secondary destinations Increased local economic impact 80

81 8.2. Sustainable tourism-related sectors development To ensure a sustainable development of tourism in Uganda, as anywhere else, the improvement and management of local tourism-related sectors products and services helps to provide local communities with alternative sources of income, and therefore to improve living standards and to decrease the risks of harassment towards international visitors. The opportunities for inter-sectorial linkages between tourism-related sectors and tourism can be simplified into the same three layer approach (see figure below). Basically, there is a need to strengthen the local capacities to offer and market adequate products and services to the domestic and international markets: 1. Improve supply quantity, quality and consistency, and enhance linkages between farmers producing fresh fruits & vegetables and processed food (including organic) with tourism businesses 2. Increase supply capacity of local crafts, visual arts and entertainment in terms of quantity, quality, product variety and timeliness for the tourism market. Figure 17: Priorities for a sustainable tourism-related sector development Communication and Marketing (Market Placement & Sales Opportunities) Consumer Awareness on inclusive tourism Products and services competitiveness (Design Support, Innovation & Brand Creation) Human resources development Management & Business Development Access to local products for both tourists and traders /tourism businesses Addressing quality insurance Standardisation Products development Awareness of the environment & biodiversity standards Understanding of products identification mechanisms Finance, Management and sales competencies Regulation of the crafts sector Interventions are expected to happen at each level of both the supply chain and the production process. Inside the production process, the training of capacities to reach international standards is essential to fulfil a growing demand. This consists in training and accompanying local communities in all of the steps of the production process, which implies a strong understanding of the environmental impact of their activities and the respect of Uganda s biodiversity.

82 Figure 18: Different steps of the production process Conception & design Production Quality control Marketing and distribution channels Purchase and customer reception Impact As an example, research has shown that community projects mostly concentrate their efforts on a limited group of handmade products, with basket weaving as the main category. However, the results from the study indicate that other opportunities exist in the crafts sector. Figure 19: Simplified value chain steps for the crafts sector Analysis of visitors expenditure Share of expenditure in souvenirs Amount and percentage of under spending by tourists Categories of products visitors would have bought if available Analysis wholesalers/retailers expenditure (operating costs) Share of souvenirs in their operating costs Products purchase breakdown by category Analysis of local producers production process and operating costs Provenance of raw materials Evaluation of local capacities (business management, products quality, sustainability, etc.) Looking at opportunities (new products, products improvement, packaging, etc.) In fact, it was observed that 24% of all respondents underspent their budget during their time spent in Uganda. The average level of underspent money varies from one category to another, with regional traders ready to spend the most per head. The business market, as the main source of visitors, represents a real opportunity for Uganda with two main categories: the business conference market and the regional traders. The first one is more interested in local/african products while the second one is rather looking for innovative products with a Western design/appearance. 82

83 Table 46: Average amount of underspending by purpose of visit Categories % Underspend How much they were ready to spend Market size (ITC visitor statistics) Market size (UBOS visitor statistics) Western business visitors 17.3% $178 $4,940,855 Regional traders 24.4% $176 $12,124,586 $9,437,562 Holiday 21.8% $83 $2,797,990 $2,651,488 Visit Friends & Relatives (VFR) 10.3% $113 $2,542,345 $9,701,588 Volunteer 9.0% $110 $2,031,310 $3,112,806 Educational purpose (student) 7.1% $142 $666,095 Other 9.0% $150 $1,779,611 Two main markets stand out in this analysis: the business and the VFR markets. The amount of underspending for these markets varies with the choice of breakdown for the categories of visitors. Definitively, the business market, especially the regional traders, represents real opportunities for the local market. In average, business travellers were ready to spend an additional $ 177 per head in Uganda (representing between $ 9 and $ 17 million per year). Knowing that visitors mostly underspend because of a lack of variety, we have studied the sort of souvenirs they expected to find and the amount of money they would have been ready to spend for these items. These data were then crossed with the share of expenditure for each product s category for the wholesalers. The percentage of imported products within each category gave us a clear understanding of the existing products and financial opportunities. Table 47: Opportunities in the crafts sector What sort of souvenirs/crafts did you expect to find? Average share of expenditure for souvenir wholesalers Value of souvenirs sales per year Sales value of imported crafts products per year Wood carvings, sculptures % $ 21,408,540 $ 12,845,124 Jewellery % $ 9,795,208 $ 8,032,070 Clothing % $ 16,220,234 $ 8,921,129 Basketry, weaving % $ 5,321,340 $ 106,427 Music instruments % $ 886,890 $ 8,869 Antiques 9 9% $ 8,238,223 $ 7,908,694 Bark clothes 9 - Copper / silver crafts % $ 4,791,177 $ 4,791,177 Local specialities & processed food % $ 1,625,965 $ 1,447,109 Art (paintings) % $ 11,321,535 $ 566,077 Pottery 6 - Handbags and belts % $ 4,532,994 $ 3,399,745 Other 5 Fashion accessories/scarves % $ 3,300,107 $ 3,168,103 Textiles (silk, batik) & embroidery 3 7% $ 6,829,053 $ 6,214,439 The results shown in the above table emphasise the necessity to look at other products than those (e.g. basketry) usually supported by NGOs and produced in most Ugandan communities over the last ten years. On the one hand, tourists are looking for other types 83

84 of products (wood carvings, jewellery, clothing), and on the other hand, the products that visitors expected to find are also those with the highest economic opportunities. The next step is therefore to validate these results with the support of all tourism stakeholders in order to ensure the feasibility of the interventions described below (table 51); interventions that would aim at increasing the local production of these items. A similar approach can be developed for the food sector, especially for the processed food category. It appears that the majority of hotels and restaurants have indicated that the products within this category were mostly imported (see below). Table 48: Percentage of locally purchased products and volume of imports Hotel categories Less than $20 % local meat % local fish % local cereals % local fresh vegetables and tubers % local fresh fruits % local fresh condiments % local processed food and juices 95% 90% 100% 83% 83% 77% 100% $21 - $50 95% 100% 100% 100% 100% 100% 100% $51 - $100 68% 48% 71% 80% 100% 62% 48% $101 - $250 55% 23% 8% 80% 52% 70% 35% > $251 74% 61% 66% 78% 77% 21% 30% Total 76% 73% 71% 82% 91% 60% 45% Sector size $ 5,617,188 $ 5,912,431 $ 6,407,359 $ 4,068,440 $ 3,321,624 $ 2,395,430 $ 755,447 Import or opportunities $ 1,361,933 $ 1,577,463 $ 1,884,303 $ 721,826 $ 302,372 $ 962,383 $ 415,098 Evidence from the fieldwork has shown that jam, honey and fruit juices are mostly imported while the ingredients exist locally. The amount of imported products for the entire processed food categories reached $ 415,098 in 2010, offering spectacular opportunities for the vulnerable communities. Other opportunities need to be studied conjointly with the private sectors. Not all regions lack local products (meat, fish, etc.). A similar reasoning can be made for all promising interventions. Below is a nonexhaustive list of potential interventions for the development of tourism-related sectors. 84

85 Table 49: Pre-identified interventions for the sustainable development of tourism-related sectors Themes Outcomes Location Context and Rationale Outputs Impacts Communication and marketing (market placement and sales opportunities) Tourism products and services competitiveness Raised consumer awareness on impact of purchases and spending Increased number of linkages between tourism and tourismrelated stakeholders Increased share of Ugandan souvenirs in visitors expenditure Increased linkages between tourism and tourism-related stakeholders Uganda Uganda Murchison Fall NP, Kikorongo, Kampala Uganda. Lack of knowledge about purchase impact and product origin by tourists High % of imported products Weak linkages between tourism stakeholders and local producers Low level of local production for some categories of products Lack of opportunities to display local products to tourists / low market access High amount of imported crafts in markets and souvenir shops Lack of skills and capacities (innovation, empowerment) Low involvement of local communities in tourism economics Low quality of products and services Lack of financial and technical means Existence of local raw materials Raising awareness activities towards tourists (international and domestic) Branding Ugandan products Access to market for local communities (linkages) Creation of MOUs between local producers and tourism stakeholders Marketing local cuisine Capacity building for local producers (understanding the tourism life cycle, quality and other requirements) New and suitable infrastructures and channels for selling crafts: - Create a boutique at the ferry (Murchison Fall NP) - Duplicate a similar concept as Igongo Cultural Centre at both the Equator point (Kikorongo) and Kafu (on the way to MFNP from Kampala) Public/private sector partnerships - Support Exposure Africa in the settlement of a crafts hub (warehouse) in Kampala Training of trainers (design and innovation) Refreshment of/innovation in «original» Ugandan crafts, using local crafting capacities masks, basketry, paper beads Support to National Competition on crafts, visual arts, cuisine and entertainment with the final objective to identify and evaluate both the needs and the capacities of local communities Support and development of the Katwe community (packaging, shower, etc.) Improvement of visitor satisfaction Increased local economic impact Poverty reduction Increased local economic impact Poverty alleviation Increased visibility and sales of local products Increased local economic impact and poverty reduction Enhanced competitiveness Increased number of activities/products Increased number of tourism beneficiaries Product improvement Improvement of health and working conditions

86 Themes Outcomes Location Context and Rationale Outputs Impacts Tourism products and services competitiveness Decreased impact of locally produced items on the environment Uganda Non-commercially and sustainably exploited natural and cultural resources ITC knowledge in ethical fashion Growing international demand for ethical products Creation of innovative environmental/ethical/pro-poor labels and packaging - Capacity building (innovation, products development, business development, peer to peer training for the use of natural raw materials and dyes such as the Nyabwina Women Group in Fort Portal) - Assist in strategies to bring the products to the tourists - Develop pro-poor and ethical packaging with local material (elephant paper) for various items including souvenirs and processed food (honey, jam, salt) Quality improvement Product development and income generation Poverty reduction Management and business development Improved ability for product identification and development Uganda Low level of services for the middle range and low-end tourism-related stakeholders Low level of linkages Issues with pricing and costing Low diversity of souvenirs Low benefits and salaries for local staff Create linkages with tours and markets Develop a catalogue of souvenirs and items for the business tourism sector (corporate and business gifts): market size: 171,500 business tourists in Develop agricultural products at local level (chicken farms, fish ponds, organic vegetables, processed food: jam, honey, salt) Develop handmade products (masks, ethical fashion products such as bags, recycled items, etc.) Enhanced backward linkages of the tourism sector to local clean and organic agriculture producers & silk craft producers Quality improvement Better working environment and benefits for local population Increased visitor satisfaction Decreased impact of human activities on biodiversity Uganda High incidence of poaching activities Plans for oil extraction in Albert Rift region Major role of biodiversity in sustainable development Education about the central role of biodiversity in sustainability - Assist the UWA and government in raising awareness activities on the central role of biodiversity. - Support local communities in identifying opportunities and writing project proposals for fund raising (from 20% of park entrance fees) Better management of tourist sites and preservation of biodiversity Better use of tourism rent and improvement of livelihoods 86

87 Themes Outcomes Location Context and Rationale Outputs Impacts Management and business development Tourism-related sectors become regulated and standardised Uganda Low level of tax collection from tourism development/businesses Better tourism management in return of an increase in taxes Legalisation and registration of SMEs - Finance, management and sales training - Assistance to registration - Clusters creation and reinforcement Better access to credit for registered companies or individuals Increase of tourism receipts 87

88 8.3. Holistic approach within a sustainable partnership for interventions Three UN agencies, the International Trade Centre (ITC), the spell out (UNCTAD) and the spell out (UNDP) agreed to share experience and knowledge for a sustainable tourism development in Uganda. Figure 20: UN agencies partnership ITC "Inclusive Tourism" UNCTAD "Train for Trade" UNDP "Support for Development of Inclusive Markets in Tourism" The areas of intervention for each agency will depend on several criteria. To simplify how these agencies will collaborate, a simple framework was presented to a representative from the Ministry of Tourism during an SCTD meeting held in Geneva in October The Ministry of Tourism is particularly focused on the development of incubation centres in Uganda. - Among others, UNDP could support the Ministry of Tourism in formulating a business plan, promotion strategies or in creating incentives to attract private investors; - UNCTAD could build the capacities of government(al) officials at national and local levels to facilitate the development of public-private partnerships; - ITC could support local communities in providing high-standard crafts products to the incubation centre. The validation workshop will help to agree on how each agency is going to support the development of inclusive markets in tourism Summary of ITC interventions Among all interventions highlighted above, some are particularly relevant to the ITC s mandate (especially in the tourism-related sector interventions). Below we describe the different areas where the ITC is likely to intervene within the ITC logical framework.

89 Table 50: ITC logical framework Intervention logic Indicators Means of verification Assumptions Impact: 1. Increase the income of current producers and vulnerable local communities 2. Enhanced competitiveness and world market integration by sustainable development 1.1 Increased sales of locally produced crafts 1.2 Exports of craft products 1.3 Increase in productivity and resource efficiency 1.4 Increase in jobs and incomes of rural producers generated from the sales of crafts 1.5 Enhance biodiversity conservation Independent midterm/final programme evaluation Annual reports Case studies Survey and feedback data Statistical information (UN, WB etc.) Continued growth of tourist arrivals Support from private and public stakeholders Outcome 1: Enhance skills, production and sales mechanisms Increased value of locally produced crafts Increased access to local products Quantity and value of craft items sold to tourists through different channels - Customer satisfaction survey - Amount of products bought by high-end shops in Kampala - The project follows a holistic approach - Sustainable practices and better environmental management Output 1.1: Product development and diversification from raw materials to packaging (including pricing and costing): jams, honey, salt Output 1.2: Upgrading quality and production of (selected) commercially viable products (ex: peer to peer training for the replacement of imported raw materials and learning on natural dyes) Output 1.3: Training on sustainability and business development (including business plans) for women association groups and community based projects Output 1.4: Assistance to registration and fund raising (incl. project proposal writing) Output 1.5: Assistance in setting up (spaces/)areas to sell food, processed food and souvenirs Outcome 2: Enhance backward linkages Minimum rate of local products and/or content in souvenir shops. - Sector value chain analysis Cooperative private sector Decrease in leakages 89

90 Output 2.1: Capacity building to increase production and to better respond to the needs of sellers/market Output 2.2: Develop a corporate and business pro-poor product catalogue (folders, bags, etc.) for the business tourism sector in Kampala Output 2.3: Support a national competition on crafts, visual arts, entertainment and cuisine (Ketwu Festival) Output 2.4: Agreements are signed between the private sector and local producers Conclusion As noted earlier in this document, this opportunity study was originally designed to identify suitable project interventions through which ITC s technical expertise could make a pro-poor impact within a project timeframe of three to five years. The involvement of two other UN agencies (UNDP and UNCTAD), both in favour of a sustainable development of the tourism sector in Uganda, has encouraged ITC to broaden the scope of the opportunity study, which initially only focused on enabling artisans that work as micro producers along with Ugandan artists to reach tourists. The study included both qualitative and quantitative methodologies looking at the flow of visitor expenditures into the local economy, how it benefits local communities and where opportunities exist to increase these benefits exponentially. Amongst the main conclusions from this study, we have observed the need for a strong leadership to be taken by the Ministry of Tourism, but also for the Government of Uganda to acknowledge the role that tourism can play in improving peoples livelihoods. It is subsequently essential that the Ministry of Tourism takes conjointly with the development agencies the lead in identifying the priorities for the tourism sector. For the Ministry of Tourism to take the lead role in sustainable tourism development in Uganda, it is perceived as essential that capacities be built at all stages of the intervention and management processes. An improvement of tourism benefits towards local communities also means a proper engagement of both local communities and tourism businesses in working for each other. Although the study has identified a number of risk factors regarding the projects success (see SWOT analysis), a number of strategies exist in order to avoid any kind of impediment. Among others, peer to peer education strategies are a sensible one. However, it is absolutely necessary to readdress the stream of priorities using evidence drawn from the research. Interventions must follow a 90

91 strategic approach paying a particular attention to market segments, substitution to importation, existing capacities, etc. The next step following the distribution of this report is to undertake a validation workshop aiming at defining strategic interventions for the tourism industry to better benefit local communities. A long list of evidence-based objectives and interventions will be presented to all tourism stakeholders (government: national and local, private sector, international organisations, local communities, etc.) to determine their costs, feasibility, impact and return on investment. It is then recommended that each stakeholder involved voluntarily or not in either a project or an intervention ensures to participate in a direction that corresponds simultaneously to the government s and the project s objectives. 91

92 ANNEXES ANNEX 1: Additional tables Table 51: Main attracting factors by region Wildlife Local communities Local crafts Local entertainment Western Region Most attractive Second most attractive Eastern Region Most attractive Second most attractive Northern Region Most attractive Second most attractive Central Region Most attractive Second most attractive Southern Region Most attractive Second most attractive Other Table 52: Weaknesses and strengths of each Ugandan region Regions Western Eastern Northern Central Southern Weakness Strength Weakness Strength Weakness Strength Weakness Strength Weakness Strength Cost / value for money 20% 40% 27% 27% 40% 27% 13% 40% 33% 27% Destination appeal 0% 67% 7% 40% 7% 60% 0% 40% 0% 60% Existing products appeal 0% 53% 20% 20% 13% 47% 7% 40% 7% 47% Availability 0% 47% 7% 33% 0% 27% 0% 13% 0% 20% Range of existing activities 0% 53% 33% 27% 7% 47% 20% 27% 13% 40% Hotels and services 13% 40% 20% 27% 27% 33% 7% 40% 40% 20% Geographical location 13% 40% 20% 33% 20% 40% 0% 40% 13% 33% Means of transportation 20% 33% 20% 33% 40% 27% 13% 40% 33% 20% Wildlife 0% 67% 20% 20% 0% 67% 40% 13% 7% 53% Authentic way of life 20% 33% 7% 40% 13% 33% 7% 33% 20% 27% Scenery 20% 33% 7% 47% 13% 40% 27% 33% 0% 53% Adventure tourism 0% 60% 7% 53% 20% 27% 20% 20% 7% 33% Online bookings 7% 67% 13% 13% 7% 27% 0% 33% 7% 27% Total 9% 49% 16% 32% 16% 38% 12% 32% 14% 35% 92

93 Table 53: Categories of hotels and restaurants where international tourists stay Categories of accommodation Categories of restaurants Less than $20 18% Less than $5 18% $21 - $50 23% $5 - $10 31% $51 - $100 19% $10 - $20 30% $101-$250 21% > $20 14% > $251 11% Do not know 7% Do not know 8% Table 54: Suggestions from tour operators to encourage tourism benefits for local communities Western Region Eastern Region Northern Region Central Region Information dissemination and marketing Tour product development Branding strategy Increase safety and security Provide and stimulate infrastructure development Increase spending opportunities Improve product quality Improve services quality Encourage awareness by the community of natural & cultural assets Enhance management and stewardship of natural resources Skills enhancement (guides training, languages, ) Building capacities of local communities Foster empowerment Other suggestions: Southern Region Table 55: Main reasons and specific purposes to visit Uganda Specific purpose Business Holiday Main reasons for visiting Uganda Educational purpose (student) Visiting Friend or Relatives Volunteer Other Total Round Trip Festivals Family visit Honeymoon Spiritual holiday Local communities Spa/wellness Cultural holiday Game viewing Eco-tourism holiday Study/Internship/Volunteer work Gorillas Adventure Bird watching Others Total

94 Table 56: Mean age by category Business Holiday VFR Volunteer Educational purpose Other (student) Male Female Table 57: Average expenditure for accommodation per night by country of residence Less Do not $21 - $50 $51 - $100 $101-$250 > $251 than $20 know UNITED KINGDOM 0% 19% 19% 31% 19% 13% EUROPE 9% 0% 34% 31% 9% 17% AMERICA 11% 15% 25% 21% 11% 17% ASIA-PACIFIC 14% 14% 14% 43% 14% 0% MIDDLE EAST 67% 0% 0% 33% 0% 0% OTHER AFRICA 33% 50% 0% 0% 17% 0% CONGO 43% 57% 0% 0% 0% 0% KENYA 16% 31% 17% 20% 14% 2% RWANDA 35% 18% 18% 18% 12% 0% SUDAN 13% 38% 13% 13% 0% 25% TANZANIA 33% 50% 0% 11% 6% 0% 94

95 ANNEX 2: Visitor arrivals by country of usual residence ( ) 95

96 ANNEX 3: Objectives, strategies and interventions objective for the tourism sector - National Development Plan ( ) Objective 1 - Develop and review the policy and the legal and regulatory framework for the sector Strategy 1: Review the tourism policies and plans Intervention Description i) Review the Tourism Policy. ii) Review the Tourism Master Plan. iii) Review the Uganda Wildlife Policy. iv) Formulate a Museums and Monuments Policy. Strategy 2: Update relevant legal and regulatory framework Intervention Description i) Review the National Wildlife Act. ii) Enact the Uganda Wildlife Education Centre (UWEC) Act. iii) Review the Museums and Monuments Act. iv) Develop and implement the wildlife sub-sector regulations (fire arms, sport hunting, farming, ranching, ecotourism, scientific and educational use and extractive utilisation) for the protected areas. v) Domesticate CITES. vi) Review Uganda Wildlife Training Institute (UWTI) Act. vii) Review Hotel and Tourism Training Institute (HTTI) Act. Objective 2 - Increase the contribution of tourism to GDP and employment. Strategy 1: Operationalise the Tourism Development Levy and Fund. Intervention Description i) Develop and disseminate guidelines for the collection of the levy. ii) Establish structures and mechanisms for levy collection. iii) Develop and make operational a framework for the Tourism Development Fund. Strategy 2: Develop marketing tools packaging Uganda as the preferred tourism destination. Intervention Description i) Review the National Tourism Marketing Strategy. ii) Enhance marketing tools. Strategy 3: Develop and implement the Meetings, Incentives, Conferences and Events (MICE) strategy Intervention Description 96

97 i) Establish a functional MICE bureau/centre. ii) Develop a MICE marketing strategy. iii) Build capacity of the MICE industry through training and market support. Strategy 4: Strengthen the tourism and wildlife information system, including the development of the Tourism Satellite Account (TSA) Intervention Description i) Develop a tourism management information system. ii) Develop the Uganda Tourism Satellite Accounts (TSA). iii) Undertake international niche market surveys and other data collection activities. iv) Strengthen the animal wildlife database. v) Develop and implement guidelines on wildlife trade and enterprises. vi) Strengthen the museums, monuments and antiquities database. Strategy 5: Secure international and domestic source markets for tourism Intervention Description i) Strengthen presence in existing tourism source markets. ii) Identify and nurture new tourism segments. Strategy 6: Diversify tourism products. Intervention Description i) Implement four (4) zonal tourism plans and produce zonal plans for four (4) other ecological zones. ii) Habituate and avail new gorilla, chimpanzee and monkey groups for tourism. iii) Re-introduce chimpanzees and rhinos into wildlife. iv) Develop the souvenir, arts and crafts industry through the support of arts and crafts groups with necessary equipment and training. v) Develop cultural centres through provision of concept and infrastructure support to cultural groups and companies. vi) Develop water based tourism resources through provision of concept and infrastructure support to water based tourism resources. vii) Promote other new tourism products such as butterfly viewing, caving, bird watching, canopy walk and wilderness camping. Strategy 7: Regulate tourism products development Intervention Description i) Develop and implement quality inspection and licensing framework. ii) Undertake the monitoring and evaluation of the sector s activities. iii) Monitor and regulate tourism in mining, hydropower, oil and gas, and wildlife conservation areas. Strategy 8: Support development of tourism enterprises Intervention Description i) Research and package new tourism enterprise opportunities. ii) Enhance capacity of tourism sector SMEs, including putting into place a seed capitalisation fund and information centres for SMEs in tourism. 97

98 iii) Support community based tourism enterprises around wildlife protected areas. Strategy 9: Develop tourism human resources Intervention Description i) Review the tourism and wildlife manpower training curricula, including upgrading the quality of the tourism and wildlife training tools. ii) Enhance capacity of tourism and wildlife tertiary institutions through staff in-service training in areas of tourism development, wildlife, museums, culture, arts and craft enterprises. iii) Strengthen the Uganda Hotel and Tourism Training Institute. Strategy 10: Develop tourism support infrastructure Intervention Description i) Develop and implement a framework to facilitate development of convenient tourist stopovers along major highways and tourist circuits. ii) Construct a tourism house to accommodate tourism sector institutions. iii) Identify and develop critical transport networks leading to protected areas and other tourist sites. iv) Construct ranger out posts in Queen Elizabeth National Park (QENP), Murchison Falls National Park (MFCA), Bwindi and Mugahinga Conservation Area (BMCA) and Rwenzori National Park (RNP). v) Upgrade/renovate campsites, signage, information/interpretation centres, gates, walk ways and game viewing tracks in key wildlife areas. vi) Construct/Build Museums at Kabale and Hoima and finalise plans for Soroti and Jinja, and support renovation of key cultural and religious sites. vii) Re-design and develop the Jinja source of the Nile tourist site. viii) Procure and title prime land to support construction of tourist accommodation facilities, and produce ready for implementation architectural design works for model tourism developments. ix) Upgrade mountain climbing and rescue facilities in Rwenzori, Elgon, Muhabura and Kadam. This will include putting in place trails, rest points, accommodation facilities, and safety and rescue services. x) Establish a tourist circuit on Lake Victoria (botanical gardens, Lutembe Beach, Ngamba Island, UWEC). This will include the development of two landing sites, a migratory bird observatory at Lutembe Beach, a/the UWEC floating restaurant and the acquisition of three boats. xi) Upgrade Uganda Wildlife Education Centre (UWEC) by constructing an education and information complex, increasing the animal exhibits and recreational facilities and stone paving the trail and road network. xii) Establish satellite Wildlife Education Centres for the four (4) regions of Uganda. xiii) Construct a dining hall, a dormitory, 10 staff houses and a museum block at the Uganda Wildlife Training Institute (UWTI) - and retool the Institute. xiv) Construct an extension of the National Museum to expand its operations and modernise its interpretation facilities by establishing ICT/database aided interpretation equipment and tools. xv) Establish interpretation centres at 10 cultural and archaeological sites. xvi) Revive the Uganda Institute of Ecology (UIE). Strategy 11: Develop strong public and private sector institutional linkages Intervention Description i) Establish and support tourism and wildlife associations. ii) Support district commercial and environment offices to handle wildlife conservation, museum 98

99 and monument matters. iii) Support the development of tourism private sector apex body. Strategy 12: Undertake research to support the development of tourism, wildlife resources and cultural heritage Intervention Description i) Create a wildlife resources data bank for Uganda. ii) Conduct tourism specific studies on trends, inventory and problem analysis to enrich the database. Strategy 13: Develop a public-private partnership (PPP) framework for the management of tourism, wildlife and cultural heritage attractions Intervention Description i) Register and train private wildlife management entrepreneurs countrywide. ii) Support tourism development in local governments. Strategy 14: Improve human-wildlife relationships Intervention Description i) Formulate national guidelines for wildlife veterinary interventions. ii) Resettle and/or compensate people residing in key tourism and wildlife conservation areas. These include: Majelli community in Ajai, Benetcommunity in Elgon and Mbwa Tract in Bwindi. iii) Negotiate and acquire land for migration corridors in Aswa Lolim. iv) Carry out evaluations on the existing human-wildlife conflict mitigation measures with a view to improve them. v) Implement problem animal deterrent and scare measures (trenches, walls, thunder flashes, crocodile barriers, pepper and live fence) to reduce incidents of human-animal conflict. vi) Carry out electric fencing of 118 km boundaries of Lake Mburo to address the problems of animals around the park as a pilot project. vii) Carry out electric fencing of 100 km part of Queen Elizabeth National park. Strategy 15: Effective participation in international decision making Intervention Description i) Clear accumulated subscriptions to WTO and other international bodies. ii) Support private sector participation and advocacy in regional and international meetings. Strategy 16: Enhance security and safety for tourists and tourism resources Intervention Description i) Develop and implement a national safety and security plan for tourists and tourism resources. ii) Strengthen law enforcement in wildlife conservation areas to guarantee the security of tourists and wildlife resources. 99

100 ANNEX 4: AREAS IN WHICH THE OPPORTUNITY STUDY WAS UNDERTAKEN Figure 21: Survey itinerary Source: KAMPALA: selected hotels, tour companies, airport and bus terminals together with craft markets, including Exposure Africa, the National Theatre Market, Banana Boat and Ndere Cultural Centre. KAFU LOCAL COMMUNITY STOP-OVER, KAMPALA-GULU HIGHWAY: focus group discussion with market vendors and their leaders. PACKWACH: Anyayo Hotel, Global Village Hotel, Albertine Conservation and Tourism Association, Packwach Rural Environmental Agro Forestry, Pacer Village Black Smiths Community, Bero Pamungu Community Based Organization, Bero Pamungu Drama and Farmers Group. MURCHISION FALLS NATIONAL PARK: Boomu women s group community tourism, Red Chili Hideaway Camp, Paraa Lodge, Mubako Community Integrated Association, Uganda Wildlife Authority Office. FORT PORTAL AND RWENZORI AREA: Kyaninga Lodge, Kyaninga Community Group, Nyabwina Women and Cultural Group, Nubian-Njara Muslim Women Catering and Hiring Services Group, Whispering Gardens Camping Centre, Kbarole Tourism Association and Kabarole Tours and Travel. 100