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VALUE CHAIN OF TOURISM:

PROBLEMS OF TOURISM TO CONTRIBUTE FOR ECONOMIC GROWTH OF ETHIOPIA

Prepared by: Bayebegn Zewdie

A Senior Essay Submitted in Partial Fulfillment of the Requirements for Degree of Bachelor of Arts in Economics

Advisor: Ato Atlaw Alemu

Addis Ababa University Faculty of Business and Economics Department of Economics

July, 2008

Acknowledgment
I am faithful to the Almighty God for every thing He has dome to me. I extend my special thanks to my senior essay advisor Ato Atlew Alemu for his valuable comments and suggestions in undertaking this study. I would like take this opportunity to express my heartfelt and special appreciation to my brother Ato Abeje Zewdie and Dr. Wubaye Walelgn and his wife Wro. Abeba Mengesha, for their moral and financial as well as material assistance not only in my stay in the university but also in all way to wards my achievement. I would like to extend my gratitude to the CTTI Liberalist, Ministry of Culture and Tourism of Ethiopias workers, National Bank liberalist etc for providing me necessary material that helped me for the preparation of the study. Last but not least, I would like to extend my thanks to my father Blata Zewdie Tewlatu, my mother Wro Ziyn Alene and my brother Bayreyegn Zewdie to their contribution in my achievement and to the typist Wublame Haile. Bayebegh Zewdie

Table of Content Page


CHAPTER ONE 1. PROBLEMS AND ITS SETTINGS ................................................ 1 1.1 Background ......................................................................... 1 1.2 Research Question ............................................................... 2 1.3 Delimitations ....................................................................... 3 1.4 Definition of Important Terms Assumptions ........................ 3 1.5 Assumptions ........................................................................ 5 1.6 Importance of the Study ....................................................... 5 CHAPTER TWO 2. REVIEW OF THE RELATED LITERATURE .................................. 6 2.1 Historical Development of Tourism ...................................... 6 2.2 Classification of Tourism ...................................................... 7 2.2.1 Special forms of Tourism.......................................... 9 2.3 Sustainable Tourism Development ...................................... 9 2.4 What is Value Chain? ........................................................... 11 2.4.1 Global value Chain .................................................. 12 2.4.2 The Importance of Value Chain Approach for Policy Makers and Practitioners ................................ 13 2.5 Value Chain of Tourism Industry.......................................... 13 2.5.1 Identifying the Main Sources of Growth of Tourism .. 14 2.5.2 Identifying the Key Policy and Institutional Constraints Affecting Performance ........................... 17 CHAPTER THREE 3. DATA AND TREATMENT OF THE DATA ..................................... 19 CHAPTER FOUR EMPIRICAL ANALYSIS .................................................................. 22 4. Value Chains of Tourism and Problems with in the Value Chain in Ethiopia ..................................................................................... 22

4.1 The Stock of Resources .................................................... 24 4.1.1 Profile of Tourism Resource base in Ethiopia ............ 24 4.2 Promotion and Advertisement............................................ 28 4.3 National Tourism Policy .................................................... 30 4.3.1 Budget Allocation for Tourism ................................. 30 4.3.2 Visa and Exit Tax Payment ..................................... 31 4.4 Tourist accommodation Facilities and Infrastructure ............ 32 4.4.1 Transportation ......................................................... 32 4.4.2 Telecommunication .................................................. 35 4.4.3 Accommodation ...................................................... 38 Hotels ....................................................................... 39 4.4.3 (a) Availability of Hotels and Ownership in Ethiopia . 39 4.4.3 (b) Distribution of hotels in Ethiopia ........................ 41 4.4.3 (c) Tourism Rating of Hotels and Restaurants .......... 42 4.4.4 Average Rating of Tourism Products by Tourists ...... 43 Conference Facilities ............................................... 44 4.5 Tour Operations and Guides ............................................... 45 4.6 Skilled Man Power ................................................................ 46 4.6.1 Human Resource Development in the Tourism Industry ............................................... 46 4.7 Social and Political Stability ................................................ 48 4.8 Attitudes and Habits ............................................................ 49 4.9 The State of Technical Knowledge ........................................ 51 CHAPTER FIVE 5. CONCLUSION AND RECOMMENDATION .................................... 53 5.1 Conclusions ......................................................................... 53 5.2 Recommendations ............................................................... 54 Bibliography

List of Table
Table 4.1.1 (a) National Parks .............................................................. 25 Table 4.1.1 (b) Game Reservers ............................................................ 25 Table 4.1.1 (c) Sanctuaries .................................................................. 26 Table 4.1.2 Other Major Tourist Attraction Sites by Region and Recognition by UNESCO ............................................. 26 Table 4.2 Ethiopias Market Share in the International Tourism Market from 1991 to 2003 ..................................................... 29 (Table 4.3.1) Budget Allocation for Tourism ......................................... 30 (Table 4.3.2) Visa and Exit tax Payment Comparison of Ethiopia to Keny (in USD) ................................................................... 32 Table 4.4.1 (a) Major Sites and their Accessibility by Road .................. 34 Table 4.4.1 (b) Major Sites and their Accessibility by Air ...................... 35 Table 4.4.2 Summary of Basic Telecom statistics (1993-1998 EC (2000/01-2005/06) ...................................................... 38 Table 4.4.3 (a) Number of star hotels, recommended hotels, ownership, and new additions until 2005 ....................... 39 Table 4.4.3 (b) Distribution of hotels in general and star hotels by region (end of 2005) ...................................................... 41 Table 4.4.3 (c) Tourism Rating of Hotels and restaurants ..................... 42 Table 4.4.4 Average Ratings of Tourism Products by Tourists .............. 43 Table 4.4.5 Summary of International Tourist by Purpose of Visit from 1991-2005 ................................................................ 44 Table 4.6.1 Level of Education and Training amongst Hotels and Tour Operators .................................................................. 47 Table 4.7 Arrivals and Receipts From 1991-2005 via Addis Ababa Airport and Other ................................................................ 48 Table 4.8 Arrivals by Age and Gender Group for 2003, 2004 and 2005 ..................................................................... 50

Acronyms
UNIDO WTO UN LDCs CSA GDP UNESCO AU ECA CTTI ETC United Nation Industrial Development Organization World Tourism Organization United Nations Less Developed Countries Central Statistic Authority Gross Domestic Product United Nations Educational Scientific and Cultural Organization Africa Union Economic Commission for Africa Catering and Tourism Institute Ethiopian Telecommunication Corporation

CHAPTER ONE 1. PROBLEMS AND ITS SETTINGS 1.1 Background


Half a century ago, history shows that the role of tourism as an economic sector was negligible and until the global tourism statistics was not even compiled. However, since 1950s it has showed a dramatic performance and in recent years it has manifested itself as abundant industry recording remarkable achievements in job creation, foreign currency earning, and redistribution of income and generation of tax revenue. (Theodros, 2002) WTO (1994) stated that: Tourism sector is the most productive sector in the world and acconts for 12 % of the world GDP Ethiopia is one of the sub-Saharan countries which is endowed with natural and man made resources, which can be exploited for the improvements of its economic performances and changing its images. The country has a number of interesting and wonderful tourist attraction sites. She is endowed with wildlife and game parks, ancient building and historical traditions, magnificent scenery and pleasant weather etc (Ajebush,2004).

Despite this huge potential, the annual inflow of tourists in to the country is low. In fact, Ethiopias share of the African Tourism market in the year 1998 was only 0.5%, while that of the East Africa was only 1.7% (Abebech, 2001).

The trend of tourism contribution to GDP shows continuous increment, but there was a slight decline in 1998 and 1999 due to the reduction of tourist arrivals to Ethiopia following the Ethio-Eritrean war. In 1992 the sectors contribution was 0.28 which is very insignificant, in 1997 it reaches 0.67%, however, this increment in trends of tourisms share to GDP is negligible (Hawaz, 2006). Previous statistics shown that,Ethiopia with relative to great potential of both natural as well as man made tourist attraction sites, the economic benefit from this sector and the contribution to national income is insignificant. This is due to problems with in the value chain of tourism at that time. Tourism value chain cuts across many sectors, such as retail, housing construction, hotels and restaurants telecom and transportation, and activities like market promotion, tourism sector policy, political situation, (Abebeh, 2006). It also includes tour operation activities human resources development related to tourism profession and travel agents, tour operators, conference organizers etc. (Mekonnen, 2006). There for this paper investigates the value chain of tourism and identify where the main problems for the low contribution of tourism with in the value chain exists. The statements of the sub-problems are: (i) (ii) To investigate the existing value chains of tourism of Ethiopia. To identify where the main problems exist with in the value chain of tourism of Ethiopia.

1.2 Research Question


The basic questions that this paper addresses are the following:

(i) (ii)

What are the major factors that are included in tourism value chain? Where the bottlenecks of tourism development are with in the value chain exists?

1.3 Delimitations
On this paper, attempt is made to treat value chain of tourism industry and problems with in the value chain of tourism industry exist. This includes stock of resources like National parks, sanctuaries and Game reserves; promotion and advertisement; tourist accommodation and infrastructural like transportation that is road, rail, air, water; accommodation that is hotels and conference facilities; national tourism policy like budget allocation,and visa and exit tax; telecommunication; tour operations and guides; skilled man power; social and political stability; attitudes and habits of the visitors and the suppliers; and state of technical knowledge. Some of the sectors with in the value chain of tourism face quantitative data constraints due to lack of organized and effective statistical system in the country.

1.4 Definition of Important Terms


1. Arrivals are visitors who travel to a country or within a country other than that in which she/he has his/her usual residence but outside his/her usual environment for a period not exceeding twelve months and whose main purpose of visit is other than the exercise of an activity remunerated from with in the country visited. (WTO, 2000) 2. Domestic tourism receipts are defined as expenditures of internal inbound visitors including their payment to national carriers for domestic flight. They should also include any other prepayments 3

made for goods/ services received in the country. This also defined as expenditures and payments by the domestic travelers with in their country to visit historical and natural sites. (Ministry of culture and Tourism annual bulletin, 2006). 3. International tourism receipts are defined as expenditure of international inbound visitors including their payment to national carriers for domestic flight. They should also include any other prepayments made for goods/services received in the destination country. They should in practice also include receipts from same day visitors except in cases when these are so important as to justify a separate classification. It is also recommended that, for the sake of consistency with the balance of payment recommendation of the international monetary fund, international fare receipts be classified separately. (Ministry of Culture and Tourism anural bulletin, 2006). 4. Number of rooms refers to the total capacity in room of establishments offering accommodation 5. Number of bed refers to the total capacity of beds in the establishments offering accommodation. 6. Tourism is defined as the process, activities and out comes arising from relationships and the interactions among tourists, tourism suppliers, hot government, hot communities and surrounding environments that are involved in attracting and hosting of visitors. (WTO, 1995). 7. Value chain is defined as a sequence of productive (value-added) activities leading to and supporting end use, (Sturgeon T.J, 2001) and an alliance of enterprise, working vertically to achieve amore rewarding position in the market place. (K.H. Lei, 2002).

1.5 Assumptions
(i) (ii) Ethiopia wants to fully use its tourism potential properly and efficiently. Ethiopia wants to achieve rewarding position in worlds tourism market share in both absolute and comparative terms.

1.6 Importance of The Study


In the world of full of competition, expanding tourism sector has become a relatively better alternative by many developing countries as a means of promoting their economic development and overcoming balance of payment deficit as well as debt repayment. Since Ethiopia is one of the developing countries, analyzing the problems of tourism sector has significance for the development of the sector, which contributes to the growth of national income. The method used in this paper that is value chain analysis is also use full for linking a sequence of actives which are use full for the growth of the tourism sector and problems with in the activities with their solutions. This paper also contributes to further research by introducing new method of analysis to those persons who are doing their work by this method and source of information to those who work their paper on tourism. In general, this paper can be used as an important source of information for further studies.

CHAPTER TWO 2. REVIEW OF THE RELATED LITERATURE 2.1 Historical Development of Tourism
Tourism deals with the movement of people away form their normal residence for holiday, recreation and leisure activities, business, meeting, visiting relatives and other purposes. Half a century ago, tourism was a particular little industry mainly in West Europe and USA. It was viewed largely as frivolous endeavor largely with in the domain of those with a lot of time and money of their part with better to spend it. As standard of living, levels of education and means of transportation and communication improved, the ability and willingness of the world upper, middle class to travel increased. Currently,tourism becoming the leading sector and major employer in the world and expanding at a steady rate. The sector being an important sector in its own right hand received considerable attention, especially in the 1960s (H. Robinson, 1997). The first step towards international recognition of tourism appeared in UN conference, On international travel and Tourism held in Rome in 1993. By the year, 2000 tourism was expected to become the largest industry in the world and will constitute the biggest component of international trade.

As indicated by WTO 2000 report, the volume of world tourism in 1996 was 459.2 million and the number had reached 546.3 million in 1998. However, the benefits of these developments were skewed towards Europe and USA as current trends may reveal. For instance in 1994 about 60% and 28% of world tourists visited Europe and USA respectively. While 50% of the total world tourism receipts went to Europe and 27% to USA.

All in all, international tourism is not developing at the same rate and unevenly distributed in different regions of the world. In LDCs weak development of tourism due to lack of infrastructure and super structure to develop their tourism sector (Martin, 2002).

2.2 Classification of Tourism


Tourism can be classified in different ways by different scholars and organizations. Tourism can be divided in to two broad categories. These are mass tourism and alternative tourism. The following figure show different types of tourism briefly. Figure 1 types of tourism Tourism

Mass tourism (conventional, standard large scale tourism)

Alternative tourism

Nature or ecotourism

Cultural

Educational

Scientific

Adventure

Agritourism

Source: the alternative tourism (after Mieczhowstes, (1995:459) and cited by Stephen, 2000).

Mass Tourism
Mass tourism is generally seen as being an overarching term for tourism that is undertaken by the majority of travelers. This thesis, in exploring the specific of particular tourist experience in depth, may contribute towards an understanding of not only the significant divergences and convergence that exist between both mass tourism and alternative tourism, but also the subtle nuances that subtend these tourist experiences. Therefore, it is to not simply a matter of differentiation, in a binary fashion, between a general category of mass tourism and the derivation of niche elements with in it.

Alternative tourism
The common feature of alternative tourism is the suggestion of an attitude diametrically opposed to what is characteristically viewed as mass tourism. Alternative tourism often is presented as existing in fundamental opposition by attempting to minimize the perceived negative environmental and socio-cultural impacts of people at leisure in tourism promotion of radically different approaches to tourism. Examples include eco-tourism, green tourism, nature oriented tour, soft tour and defensive tourism. Another classification is made by the world tourism organization (WTO and the Conference on Travel and Tourism Statistics in 1995), the following three major forms of tourism are outlined. i. ii. iii. Domestic tourism- involving residents of the given area traveling (as visitors) only with in that area Inbound tourism- involving non-residents traveling (as visitors) in a given area. Out bound tourism-involving residents traveling (as visitors) in area other than the given area.

2.2.1 Special forms of Tourism


There are different forms of tourism. Amongst them some are as follows; I. Adventure tourism involving travel in rugged regions, adventurous sport mountaineering, and hiking or tramping. II. Agro-tourism-farm based tourism, helping to support the agricultural economy. III. Cultural tourism-includes urban tourism, visiting historical or interesting cities and experiencing their cultural experiences, such as art, museum during the tour, or opera tourism when one sees many operas or concerts during the tour. IV. Ecotourism-sustainable tourism which has minimal impact on the environment, such as safaris and rainforests, or national parks. V. Heritage tourism-visiting historical or industrial sites such as old canals, rail ways, battle grounds, etc VI. Health tourism-usually to escape from cities or relieve stress, perhaps for some fun in the sun etc. often to Health spas. VII. Hobby tourism-tourism a lone or with groups participate in hobby. Example might be garden tours, or square dance cruises. VIII. Medical tourism for what is illegal in ones own country eg. Abortion, euthanasia, for non-citizens is provided by Dignitas in Switzerland for advance care that is not available in one own country. IX. Perpetual tourism-wealthy individuals always on holidays, some of them for tax purpose, to avoid being residents in any country. X. Regional tourism-tourism bundle of few countries as the transit point. (http://en.wikipedai.org/wik/touism)

2.3 Sustainable Tourism Development


The UN Burundtland Report of 1987 cited by Theodros; 2002 offers the following definition;

Sustainable development is development, which meets the requirements of the present generation with out endangering the requirements of the future generation. This requires a development with out over exploitation of natural resources and with out destroying the basis of existence. The goal must be to make growth possible in the mid and long term while energy consumption and environmental stress under go absolute decrease. The world tourism organization (WTO, 1993), in which Ethiopia is a member, has defined sustainable tourism as follows:Sustainable tourism development meets the needs of present tourists and host regions while protecting and enhancing opportunities for the future. It is envisaged as leading to management of all resources in such a way that economic, social, and aesthetic needs can be fulfilled while maintaining cultural integrity, essential ecological processes, biological diversity, and life support system. The sustainable tourism development principles are there fore derived from the sustainable development principles. The deference lies on the scope. Tourism is part and parcel of sustainable development with in the broad frame work of sustainable development. Sustainable development of tourism has three basic principles as pointed out by WTO (1993). i. Ecological sustainability ensures that development is compatible with the maintenance of essential ecological processes, biological diversity and biological resources. ii. Social and cultural sustainability ensures that development increases peoples control over their lives compatible with the culture and values of people affected by it, and maintains and strengthens community identity.

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iii. Economic sustainability ensures that development is economically efficient and that resources are managed so that they can support future generation. Tourism is not smoke less any more. The increased movements of people due to high living standard (high income and free time) in the north, there is high air and water pollution from the exhaust fumes of aircrafts, motor cars and motor pleasure boats, threatening the physical environment. These are the reasons, which brought about the emergence of the idea of sustainable tourism development.

2.4 What is Value Chain?


Value chain has several definitions and some of the important definitions are: Schmitz (2005), define value chain as a sequence of activities required to make a product or provide a service. The second definition provided by Keplins R. and Morris M. is that value chain describes the full rage of activities which required to bring a product or a service form conception, through the deferent phases of production involving combination of physical transformation and the in put of various produces and services, delivery to final service customers, and final disposal after use. Value chain also defined as a sequence of productive (i.e. value-add) activities leading to and supporting end uses (Stugesn T.J, 2001) and a complex web of companies and other actors that affect the production to consumption (Blowfield M. sited by denial Roduner, 2004). The last definition presented on this paper is the definition given by Agriculture and food council, Canada, is that value chain is an alliance of enterprises, working vertically to achieve a more rewarding position in the market place. (K.H.Lei, 2002)

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In generals, value chain describes the full range of activities like which are required to bring a product or services from conception through the deferent phases of production delivery to final customers to final disposal after use

Unit of analysis is not a company, a country, or a region, but a net work of companies embodied in the internal and external governance system, and the analysis focuses on who adds value where in the chain that is the leading sector in the value chain. (Denial Roduner, 2004)

2.4.1 Global value Chain


A value Chain is the sequence of activities required to make a product or provide a service (Schmitz, 2005). In itself value chain is a simple idea. But the idea of a value chain becomes useful for analytical and policy purposes. It includes three further features Schmitz pointed. These are: firstly the activities are often carried out in different parts of the world, hence the term global vale chain. Secondly, some activities add more value and are more lucrative than others (the policy-makers concern is to help local enterprise to move in to the lucrative activates). Thirdly, some actors in the chain have power over the others. The powerful actors are often called the lead firm who seek to govern the chain. The set and/or enforce the terms under which the others in chain analysis is to unpack the relationships between global lead firms and local producers and the opportunities and constraints that result form entering such relationships.

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2.4.2 The Importance of Value Chain Approach for Policy Makers and Practitioners
As stated by Schmitz, (2005) coming up with good economic policy appropriate to the level of development in an industry and country require and understanding of how local enterprises fit in to the global economy. This way is to focus on the sectors in which the local enterprises specialize and then ask how the global market for products from this sector, is organized. As panted out before, often these markets are not free for all open spaces. The spaces are coordinated by global buyers who source different products and services form around the world. There is increasing integration between internationally dispersed activities. The general point to be made here is that value chain is important, not only for the entrepreneurs, but also for the policy makers. Understanding value chains in an industry allows policy makers and practitioners to provide relevant and appropriate support to local enterprises. As pointed out by Schmitz, (2005) public policy aimed at the private sector typically tries to influence decisions of entrepreneurs (owners and managers) of the industry. So that, they can grow and improve their performance. However, entrepreneurs are skeptical of the advice they receive from government agencies or consultants employed by local or foreign support institutions. Entrepreneurs do, however, listen to their customers. If policy makers and practitioners start with this fact, they can more productively engage with the private sector.

2.5 Value Chain of Tourism Industry


Tourism is one of the largest growing sectors and the fastest growing sectors in the world and a major driver of growth for developing

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countries. Their tourism market shares have actually increased markedly over the past two decades. Tourism industry cuts across many sectors, such as retail, housing construction, hotel, restaurants, telecom and transportation. Serious policy issues in one of these sectors may threaten the whole tourism value chain. This makes that analysis of the sector complex but crucial as it could be the catalyst for widespread reforms of over looked issues (e.g. Land market) (Diagnostic methodology check list, 2007). As recommended by diagnostic methodology checklist for tourism study (2007), tourism value chain analysis includes identifying the main tourism segments based on countries comparative advantages, benchmark the countries economic performance on these key segments with relevant international good practice, policy and institutional issues which may constrains investment and growth, and then design station.

2.5.1 Identifying the Main Sources of Growth of Tourism


The identification of the main sources of growth emanates form a five fold exercise involving profile of the tourism sector, a stock taking of existing and potential new sources of growth and comparative advantage, scope of sources of markets. These exercises will ultimately bring about sub set of tourism products in which the country has a comparative and competitive advantage. A. What is the tourism profile? The profile has four parts that is the macro setting, the demand and supply side and the institutional framework of tourism sector. For this task the balance of payments statistics (IF/National Bank), the world travel organization and world travel and tourism council provides good data points (ibid).

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Macro
As stated by Diagnostic Methodology check list for tourism study, this includes three important elements that are important for tourism value chain. They are: Basic macro back ground of the economy (structuremanufacturing, service etc GDP per capita level and growth, private and foreign investment as share of GDP); Tourisms contribution to the economy-share of GDP and growth trend: contribution to growth, exports and foreign exchange earnings; fiscal effect-taxes fees and incentives; job creation; Structure of the tourism industry-number of firms, owner ship and management, employment, direct and indirect, fulltime/per time, seasonality.

Demand
As stated by Diagnostic methodology checklist for tourism study, (2007) the demand part of tourism value chain includes: number of foreign tourists, average length of stay and average daily expenditure, percentage of tourists return (level and grow trends), main categories of foreign tourists by socio-demographic profile and country of origin as well as seasonalitys, revenue by main tourist categories and market shares (regional and global).

Supply: As stated by Diagnostic methodology check list for tourism study (2007) the supply part of tourism value chain also include; main tourist attraction and circuits, size and structure of industry of hotels and other accommodation, structure of key services sectors in tourism (such as restaurants, bars, good transportation), structure of key activities service providers in tourism (such as diving, horse back riding, guide tours, fishing adventure activities, main tourist project in the pipeline). 15

Policy and Institutional Framework


As stated by this Diagnostic Methodology check list for tourism it can be: public institutions (ministry, statuary body, etc.), Private institutions (business associations and business councils), tourism legislation-laws and regulatory practices (licensing, classification, inspection), does a country rely on a planning frame work-at what level, national, regional or local, inventory of relevant policy issues, reforms under way or being discussed are included.

B. Potential and recognized sources of growth and comparative advantage


As stated by Diagnostic methodology checklists for tourism study, some summary of the main sources of comparative advantage of tourism as follows. These includes cultural assets, natural assets, labourassets, reliably secured environment, access to world class health care, education, low access cost (to and with in country), low labor cost, low/and cost, and proximity to major/growing sources of tourists (ibid).

C. The current and potential tourist products where the country could be competitive.
As stated by Diagnostic methodology checklists for tourism study, this includes sun, sand and sea; other natural offerings (e.g. game reserves, national parks, water falls, mountains); natural events (e.g, volcano eruptions, eclipse); eco-tourism; sport events; sport offerings (eg. Golf, rafting, diving, horse back riding, fishing, bird watching and hunting), adventure activities; festival events; religious events; visiting friend and families; boating; cultural offerings (e.g. land marks/heritage; theme parks, museums, archeology, opera, music and dance); other cultural events and offerings (e.g. spa, serenity, dining, night life, shopping, gambling, leading hotels); stop on regional circuits; learning facilities 16

(language, music, dance); retirement homes; nursing homes; weekend homes; and conferences.

D.

The potential target markets with in the value chain of tourism

As sated by Diagnostic methodology checklist for tourism study, they are young students, back packers, young professional bachelors, returning emigrants, expatriates, traveling business men, local business men, young families, upper in come foreign couple, and retirees.

2.5.2 Identifying the key policy and institutional constraints affecting performance
According to Diagnostic methodology checklists for tourism study and intuitional constraint include: I. Issues affecting tourists directly such as security concerns (social unrest, terrorism, crime/theft, harassment by people and/or policy, lack of regulations/enforcement on road traffic), health concern (HIV/AIDS,) food poisoning, tropical diseases, water safety, in adequate health care services, restrictive emigration policies (eg. Foreign retirees), issues with access to and ground services with in the country (in adequate infrastructure, policy and governance issues in the transportation sectors), payment issues (foreign exchange services, credit card facilities), and issues with management/governance of key tourist cultural land marks. II. Issue affecting investors directly as stated by Diagnostic methodology check list for tourism study, it includes difficult access to land (unsecured property rights, problematic access to government and customary land, issues with land use rights and development policies), issue with the work force (relative emigration policies for key workers, high minimum wages, social of security, hiring/firing training and regulations, unequal enforcement regulation,

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education issues, corporate social responsibilities and gender issues), restrictions on FDI for key products and services, barriers to trade for key imports (e.g. food products), contract enforcement issues (eg. ineffective commercial courts, problematic enforcement of courts decisions, lack of alternative dispute resolution , access to finance issues (e.g. lack of mortgages and secured lending), fiscal issues (high taxes and/or unequal enforcement), and administration barrier issues (business registration and inspections). III. Sector specific policy issues as stated by Diagnostic Methodology checklists for tourism study, it includes in adequate environment and conservation policies, licensing policies and practices for key products or services (e.g. hotels, restaurants, taxis, etc), restrictive policies (and/or unequal enforcement) in retail and other entertainments (e.g. opening hours, zoning, price regulations), standard certification issues (policies and unequal enforcement for key services. (eg hotels, restaurants, taxis, diving and nursing), and telecom sector policy and enforcement issue leading to poor internet and mobile services. (ibid)

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CHAPTER THREE 3. DATA AND TREATMENT OF THE DATA


The study will be conducted based on secondary data to show the value chain of tourism and problems with in the value chain. This includes data on the stock of resource of Ethiopia which is one of the value chain of tourism, like number of national parks and their area as well as regional distribution, game reserves and sanctuaries with their area as well as regional distribution which constitutes some of profile of tourism base of Ethiopia. The next data is the national tourism policy related which includes budget allocation and visa and exit tax price by comparing with neighboring country Kenya and problems related with this value chains.

This

paper

in

addition,

include

tourist

accommodation

and

infrastructure which is the third with in the value chain of tourism that include datas on transportation like major sites and their accessibly by road to show the quality of road, cost of ticket by bus and distance from the capital city, and major sites and their accessibility by air to show the quality, size of the plane and cost of flight whether comfortable to tourists or not. This value chain of tourism also includes data on accommodation like distribution of hotels by region, star and recommended hotels for tourists, ownership as well as new additional hotels under construction to investigate the quality and quantity of hotels, besides the general evaluation of tourists facilities, it is important to see how the services provide look like in the eyes of tourists. This was shown by the data on tourism rating of hotels and restaurants and average rating the tourism products by tourists. This paper also uses data on Ethiopias market share in the world tourism market in both arrivals and receipts to show the effect of 19

promotion and advertisement on tourism which is within of the value chain of tourism and problems with in this to low performance of this industry. The paper has in addition data related with the level of education and training among hotels and tour operators to show the quality of facilities which the country offered to the tourists arrived to the country. power and problems related to skilled man power. The data on arrivals and receipts from 1991-2005 via Addis Ababa and other ports also used to investigate the political and social stability of the country which is within the value chain of tourism and data on arrivals by age and gender group for 2003, 2004, and 2005 to investigate the attitudes and habits of the people to visit with in the value chain of tourism, are used in the paper. This shows the effect of gender and age on the peoples behavior to visit or to move for pleasure. The last data this paper uses is that the basic telecom statistic to show the level of development of telecommunication in the country which is within the value chain of tourism, and problems with in telecom services. The above datas are obtained from National Bank of Ethiopia i.e datas on arrivals and receipts form 1991-2005 via Addis Ababa airport and other ports; Ministry of Culture and Tourism which is a place where much of the data obtained for this paper i.e. datas like budget allocation for tourism, number of hotels, recommended hotels, ownership, and new additions, distribution of hotels and stars, level of education and training amongst hotel and tour operators, arrivals by age and gender group for 2003,2004 2005; World Tourism Organization which the paper gets data on Ethiopias market share in the international tourism market form 20 This data is an indicator within the value chain of tourism that is skilled man

1991 to 2003; Central Statistic Authority (CSA) which contributes some data to this paper like data on number of national parks, game reserves and sanctuaries with their area coverage in square kill meters as well as their regional distribution; Ethiopian Road Transport Authority which contributes data on major sites and their accessibility by road for the fulfillment of this paper; Ethiopian Airline which the paper takes major sites and their accessibility which the by air; at like the last Ethiopian of basic Telecommunication data summery

telecommunication statistics are obtained from it. With regard to the methodology the paper focuses on the value chain analysis i.e. a sequence of activities that includes main tourisms segments, bench mark the countries economic performance on these key segments with relevant international good practice, policy and

institutional issues which may constrains investment and growth, and then design solution; and descriptive analysis supported by statistical fools such as tables, percentage, and ratios. Figure 2 Value Chain of tourism
Stock of resource national parks game reserves sanctuaries other cultural and natural attraction sites

Promotion and advertisement

Tourist services - visa and exist price - transportation like, road, air etc - telecom

Accommodation - hotels and restauran ts - conferen ce

Tour operation guider (training of it)

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CHAPTER FOUR EMPIRICAL ANALYSIS


With wide resource base for tourist attraction resources, Ethiopia has the potential to establish tourism industries that can assist the effort in achieving a major economic transformation. With the existing resources, it is also believed to pay a vital role in the poverty reduction endeavors of the country and meeting the Millennium Development Goals (MDGs) by absorbing a large number of labor force both skilled and unskilled with gender consideration thus making the economic independence of woman possible. In this chapter there will be a brief discussion of value chains of tourism and problems with in the value chain of tourism in Ethiopia.

4. Value Chains of Tourism and Problems with in the Value Chain in Ethiopia
Even though there are numerous sectors and services with in the value chain of tourism sector this paper focuses on some of the value chains of tourism in Ethiopia that affects more the tourism industry of Ethiopia. Thus, what follows a particular treatment of the sectors with in the value chains of tourism with grater importance and problems with in the value chain.

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Figure 3. Value chain of tourism of Ethiopia


Stock of resource

national parks like Awash, Omo, semen mountain etc game reserves like Balo, Gambela Mango etc sanctuaries like Harer, Yabelo other cultural and natural attraction sites like Gonder castle, Axum obelisks,

Promotion and advertisement By using - ETV, Ethiopia Radio, FM, News Papers, Magazines etc

Tourist services - visa and exist payment - transportation like, road, air etc - telecom etc ETC

Accommodation - hotels and restaurants like star, recommended etc - conference facilities like African Hall etc

Tour operation - guider (Training of it)

lalibela, lower Awash etc

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4.1 The Stock of Resources


Economic activity depends first and for most on the stock of resources available to use as factors of production. In traditional economic terms, these include the resources of land, labor, capital and entrepreneurship. Tourism calls on particular resources concerned with land and its attributes, and the uniqueness of simple possession of these attributes can ultimately dictate whether or not an economy is likely to be able to support the sector. The role and activities of modern tourism however demanded more than land attributes. Most tourism involves some elements of services, which requires a competent and willing labor force. According to Dekadt (1997) whilst many jobs in the industry may not require a very high level of traditional skills and qualifications, the presence or absence of a pool of labor with a positive attitude towards tourism and tourists has of vital importance.

4.1.1 Profile of Tourism Resource base in Ethiopia


All in all, Ethiopia has natural attraction sites i.e eight national parks with total area of 11570 sq.km which accounts 1.04% of the total land area of the country, ten game reserve possessing an area of 26600sq.km that accounts 2.39% of the total land area of the country and sanctuaries which possesses 7200 sq.km that accounts 0.6% of the total land area of the country. And also the country is endowed with cultural heritages like Axum Oblisque, Gonder Castle, Lalibela Rock hewen churches, Awash Valley (Hadar), Omovalley, Jegol (Harer) wall, and Tikel Dengay(Tia), and other natural attractions like Lake Tana and its monasteries, Tis Issat, Sofemer Cave, Eartali active Volcano, Rift valley and biodiversities with in the Rift

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vally and attractive wild animals like Walia, Nyala, simen fox (Red Fox), Zebra, birds and others. In addition to the above, the country endowed with various nations and nationalities with diversified cultures and colors which is attractive for tourists. In general, Ethiopia with its vast area above 1,112,000 sq.km is endowed with various tourist attraction sites including parks, game reservers, sanctuaries, cultural heritages and others.

Table 4.1.1 (a) National Parks


National Parks Awash Simen mountain Rift vally OMO Denakil Mango Nechisar Total area Source: CSA Region Afar Amhara Oromia, SNNP SNNP Afar SNNP SNNP Area sq.km 750 150 650 3,450 2000 700 700 11,400

NB: sq.km- square killo meter

Table 4.1.1 (b) Game Reservers Game Reservers Awash kled Aledege Bale Gambela Mango Gewale Mnie Tenado Sendo Stefenie Chie Total Area sq.km Source: CSA Region Oromia Hareri Oromia Gambela SNNP Hareri Amhara Amhara SNNP Tigray Area in sq.km 800 2100 10,800 3,400 800 2000 1000 400 600 600 26,600

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Table 4.1.1 (c) Sanctuaries


Sanctuaries Harer Yabelo Region Hareri SNNP Total Area sq.km Source: CSA Ethiopia has national parks and Game reservers which are distributed among regions of the country. Omo national park which is found in SNNP is the largest covering an area of 3450 km.sq followed by Denakil National Park. When it comes to game reservers, Bale is the biggest with an area of 10,800 sq.km which is found in Oromia region and the last in area is sendo which is found in Amhara region. In Ethiopia the number of sanctuaries seems too small. One of the sanctuaries called Harrer found in Harreri region which covers an area of 6000sq.km and the other is Yabelo which is found in SNNP region, which covers an area 1200 sq.km. Table 4.1.2 Other Major Tourist Attraction Sites by Region and Recognition by UNESCO Major tourist attraction sites Region Recognized by UNISCO Gondar Castle Amhara Recognized Axum oblisks Tigray Recognized Lalibela Amhara Recognized Lower Awash (Hadar) Afar Recognized Jegol Wall Harreri Recognized Sofomer cave Oromia Unrecognized Tis Issat Amhara Unrecognized Omo Vally SNNP Recognized Tia SNNP Recognized The Islands monastires of Lake Amhara Unrecognized Tana Yeha Tigray Unrecognized Source: Ministry of Culture and Tourism Area in sq.km 6000 1,200 7200

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As we see from the table above, Ethiopia has different natural and man made tourist attraction sites which are distributed among the regions of the country and most of them are recognized by UNESCO as world heritage i.e. eight of them are recognized as world heritage by UNESCO. These include Axum Oblisks, Lalibela rock hewncharehes, Gonder Castle, Omo vally, Hadar (where lucy was discovered), Tias curved standing stone and Simen National Park, and Jegol wall is recognized as worlds heritage recently. From this Amhara region has possessed three of the eight sites recognized by UNESCO as worlds heritage and has high contribution to the development of tourism industry; and followed by SNNP. As a result the recognition of the above tourist attraction sites as world heritage is important for the development of tourism industry in Ethiopia by attracting large number of tourists to the country and used to change the image that was attached to Ethiopia in previous years i.e. drought and famine. Indeed, the above tourist attraction sites are not the only sites but they are major ones indicated by ministry of culture and Tourism. There are large number of tourist attraction sites which are not recognized as tourist attraction sites and not included in the table. This is due to the problem with in the value chain like lack of transportation, lack of promotion and advertisement, low level of technical skills and others. Moreover Ethiopia is unique among African countries to attract tourists due to the fact that: (1) Ethiopia is a cradle of man kind as evidenced by the Skelton of Lucy and Selam that were found in Afar by Prof. Johnson in (1974) and Zeresenay Alemseged in (2006) respectively, (2) The country have its own alphabet (script), (3) It has its own calendar which has 13 months

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(4) The Ark of the Covenant which is believed that God gave to Mosses is suspected to be placed in Ethiopia in Axum Tsiyion. Etc.

4.2 Promotion and Advertisement


Tourism promotion and advertisement in Ethiopia is expected to under take: Sustainable hotel services especially star hotels and other restaurants Effective tourist attraction areas and service promotion in the country. Hence, tourism advertisement and promotion are the basic elements of tourism marketing both in increasing the number of tourist arrivals and increasing the level of revenue from the industry. In Ethiopia the above mentioned activities are not well done because of inadequate financing given to the industry. As a result of this the country couldnt get sufficient market share in international tourism market. For instance as we see from the table 4.2 the market share of the country in international tourism market is almost negligible in both tourist arrival and receipts. Ethiopias share in receipts show ups and downs i.e. in 1991 its share was about 0.0074%, in 1995 it declines and reach 0.0064% and by 1997 it increases slightly and reaches the figure of 0.0099% and then decreases to 0.0073% in 1998. After 1998, it shows up ward movement i.e. in 1999 grows to 0.0075% then the market share in receipts nearly doubles and reaches to 0.0143% in 2000 and increased to 0.0172% in 2003. Ethiopias share interms of number of tourists arrived also shows up and down. As we see from the table below arrivals share of Ethiopia decreases from 0.0176% to 0.0165% in 1991 to 1992 and then increases to 0.0179% in 1993. It also decreases to 0.0178% in 1994 and the share

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increases from this on wards to 1997 and then decreases from 1997 to 2000. After this it shows increment i.e. increase from 2000 to 2003. This shows the instability of tourist flows into the country due to problems with in the value chain like inadequate promotion and advertisement activities. The promotion and advertisement activity to promote the countrys tourist sites was not sufficient in comparison with other countries. Moreover, very poor tourism promotion services have occurred. These problems have seriously affected the tourism market and image of the country. Table 4.2 Ethiopias Market Share in the International Tourism Market from 1991 to 2003
Description 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Arivals Receipts Arrivals Receipts Arrivals Receipts Arrivals Receipts Arrivals Receipts Arrivals Receipts Arrivals Receipts Arrivals Receipts Arrivals Receipts Arrivals Receipts Arrivals Receipts Arrivals Receipts Arrivals Receipts Thousands Millions us $ Thousands Millions us $ Thousands Millions us $ Thousands Millions us $ Thousands Millions us $ Thousands Millions us $ Thousands Millions us $ Thousands Millions us $ Thousands Millions us $ Thousands Millions us $ Thousands Millions us $ Thousands Millions us $ Thousands Millions us $ World total 466,044 271,827 503,617 308,596 519,045 324,090 550,471 353,998 565,495 405,110 596,524 435,594 610,763 435,981 535,485.00 450,556.30 549,175 450,181 685,500 476,400 684,000 464,400 703,000 482,300 691000 524200 Ethiopias share Amount 82 20 83 23 93 22 98 25 103 26 109 28 139 43 112 32.7 115 33.6 136 68 148,4 75 156.3 77.1 179.9 89.9 Percent 0.0176 0.0074 0.0165 0.0075 0.0179 0.0068 0.0178 0.0071 0.0182 0.0064 0.0183 0.0064 0.0228 0.0099 0.0209 0.0073 0.0209 0.0075 0.0198 0.0143 0.0217 0.0161 0.0222 0.0160 0.0260 0.0172

Source: World Tourism Organization

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4.3 National Tourism Policy


Tourism industry needs a properly formulated and sound tourism sector policy for its conducive development. In Ethiopia, although there are some policies related to tourism, one of the fundamental problems in tourism sector development is the absence of clearly specified tourism sector policy. Because of these policy problems, it is difficult to coordinate the various institutions and organizations directly or indirectly affecting the activities of tourism and to ensure the protection and development of the countries tourist attraction.

4.3.1 Budget Allocation for Tourism


One of the factors that affects the quality of services and success of the tourism industry is budget allocation to the sector i.e. the total budget allocated to the sector is generally low as compared to the other sectors of the economy such as agriculture and industry. (Table 4.3.1) Budget Allocation for Tourism Fiscal Year 1998/99 1999/2000 2000/01 Total 2001/02 2002/03 2003/04 Total Overall total Source: Ministry of Culture and Ttourism, CSA As (table 4.3.1) shows that there is a fluctuation with a declining trend in the budget allocated to the sector. The budget allocated in 1999/2000 Budget allocated (in USD) 64,252 65,058 260,858 390,168 121,329 93,240 93,240 307,809 697,977

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has shown an increase $806 than it was during the previous year. The budget in the new millennium has shown, a 400% rise than the year before, the next year shows a decline of $ 139,529 with constant decline in the following two years. This fluctuation implies that there is a problem of maintaining constant budget allocation standards leading to fluctuation to earnings from the sector thus its contribution to the national economy. Fluctuation in budgetary allocation can also affect development works in and around tourist sites, thus failure to handle tourists during peak seasons resulting in dissatisfaction among visitors contribution to the GDP. One of the main factors that can be sited to the lower number of tourist visits in Ethiopia is its reputation as a poor nation, which is affected by repeated drought and famine. Thus this requires undertaking a wide range of promotional activity on the part of the government. However, lower budget implies lower promotion of the tourism resources of the country and this means that a lot of tourists are curtailed from knowing what the country is really looking like and are not encouraged to visit.

4.3.2 Visa and Exit Tax Payment


Besides the natural and man made tourism endowments, visa and exit tax payments play a vital role in making a particular country interesting to a foreign visitor. If one wishes to visit a nation that doesnt have an embassy in his home town (capital city), then he needs to send his documents to that particular country in order to make his visit a reality. However this makes ones travel costly because there will be added postal and time costs. The number of countries from which visas are required also has its own bearing on the number of tourist inflow.

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(Table 4.3.2) Visa and Exit tax Payment Comparison of Ethiopia to Keny (in USD) Ethiopia Visa free (single entry) Air port tax Getting in and out Number of countries that do not require a visa Source: World Travel Guide The table shows that comparing the Ethiopian visa free for a single entry, air port tax and transit fees, with the neighboring country Kenya, which is claimed to be one of the successful countries in tourism, the fees are much higher in Ethiopia than in Kenya explaining one of the reasons behind Kenyas success in the sector. In considering the numbers of countries that do not require visa to enter a nation are 52 to Kenya and only 2 countries which do not require visa to Ethiopia, limiting the number of inflow of tourist. Thus leading to lower earnings in the Ethiopian case. 70 20 90 2 Kenya 57 0 57 52

4.4 Tourist accommodation Facilities and Infrastructure


Provision of efficient and standardized tourist accommodation and infrastructure is one of the essential services in tourism industry development. If there is a lack in all or some of these services such as provision of lodging and food, transportation etc, the tourism sector will collapse.

4.4.1 Transportation
Transportation for tourism is an essential element of the tourist product in two ways: it is the means to reach the destinations and it is necessary as a means of movement at the destination (Winhil et al, 1998).

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The most obvious way of analyzing by mode to denote the manner in which transports take place. There are four major modes of transport: road, rail, water and air. But in Ethiopia air and road transports are the most appropriate modes of transportations to reach major tourist attraction sites.

(a) Road Transport Road transport is dominated by the motor car and coaches. In deed, the car is almost the perfect tool for providing door-to-door flexibility, going views of the landscape and a means of transporting recreational equipment (Adrian, 1995). The number of tourist visit to a particular site is highly affected by its infrastructural facility and its accessibility by major means of transport particularly-road. As the table 4.4.1 (a) expresses the accessibility of different tourist sites by road interms of their distance from Addis Ababa or other major cities, the time it takes, the cost of round ticket by bus in birr, road quality and considers future plans to up grade the road for the betterment of the service below. As can be seen from the table the cost of transportation to get to the tourist sites is relatively cheaper to both foreigners and local tourists. However most of the roads are in poor conditions with the exception of the road to Hadar and Awash national park; and the road to Netchsar discouraging the use of land transport. The poor status of roads also means longer travel time ruling out the lower cost option of road transport. Most of the sites take between 1-3 days to reach from Addis Ababa due to poor status of the road.

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And as to the future plans, in nine out of twelve sites there in no plan of up grading the road to the sites while in 3 sites under consideration, up grading works have commenced but not completed.

Table 4.4.1 (a) Major Sites and their Accessibility by Road


Name of sites Distance from A.A or other sites (in km) 565 Time it takes Cost of round ticket by bus/birr Road quality Plan to up grade road

Bahir Dar and its monasteries

1.5 days

135.80

Partially good

Blue Nile falls Gonder

Semien mountains

Axum Lalibela

Harrer Jima Hadar Awash National park Bale mountains National park Netchisar National Park

32 from Bahir Dar 768 from A.A 83 from Bahir Dar 101 km to Debark $ 50 km from debark to the mountains 1005 from A.A 642 from A.A and 241 from Dessie 535 km from A.A 335 km from A.A 190 km from A.A 450 km from A.A 510 km from A.A

1 hr from Bahir Dar 2 days

150.80 200

Poor road 2/3 good 1/3 poor Gonder to Debark is poor and Debark to the park is rough road Partically good

Under the government action to up grade No -

2.25 days

250

No

25 days 2 days 200

No 400 km road is under constriction No Up grading has started No -

520 kms good $ 122 kms poor Good Up grading has started Very good Very good Partially good Very good

1 day 1 day 75 1.5 days 0.5 day 1 day 1 day

110 Not good 40 100 110

Source: Ethiopian Road Transport Authority (b) Air Transport The chief mode of travel to Ethiopia for tourist is by air, and the main carrier is the Ethiopian Airline. Major international carriers such as the Lufthansa, Alifalia and Saudi also land at Addis Ababa, the principal gate

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way to Ethiopia. Several other airlines are at various degrees of negotiation to fly to Ethiopia.

Table 4.41 (b) Major Sites and their Accessibility by Air


Time full Name of site Daily flight schedule Cost of (USD) Flight Residents Nonresidents Full Bahir Dar Twice day Full Gonder Twice day Full Full Full Axum Lalibela Diredawa to Harreg Full Arba minch Twice aweek in 65.6 146.6 1.2 52 seats 737 Once daily Once daily Once daily 107.6 82.6 80.6 245.6 187.6 181.6 2 1.05 1 52 seats 52 seats 52 seats 737 737 737 in a 82.6 187.6 1.4 52 seats 737 in a 62.6 140.6 1.5 52 seats 757 Time of flight/hrs Size of plane Carrier

Source: Ethiopian Airline Even though the above table shows that most of the flights are full which is shown in column, there need to be a plan to increase the number of flight time to each site so as to satisfy both residents and foreigners as shown in column three. Though there is a gap between the price for foreigners and residents are charged, they remain expensive to most of the residents that are at a low or average level of income. Thus there should be a means of reducing the cost for local travelers to encourage residents visits to different sites.

4.4.2 Telecommunication
Ethiopian Telecommunication Corporation (ETC) is the sole state owned telecom service provider in the country. According to the Annual Statistical Bulletin (2005/06), ETC provides national and international

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telecommunication services using various media of communication such as satellite, Micro wave, Digital Radio Multi- access system (DRMAS), VSAT, UHF, VHF, long line and HF Radio. Currently, ETC is serving the public with its 904 public and exchanges, which showed 4.85 percent annual growth vis--vis the precious years. Consequently, the total number of fixed telephone subscription

(residential, business, government and others) has increased from 610,347 in 2004/05 to 725,046 in 2005/06 revealing 13.25 percent annual increase over that of previous year. The number of waiting list for fixed telephone subscribers, however, has decreased by 5.41 percent from 58,755 in 2004/05 to 56,053 in 2005/06 (Table 4.4.2). At the same time, the number of mobile subscribers reached 866,700 in the review year demonstrating 100.13 percent growth over the previous year level of 410,630 subscribers. But the policy followed by Ethiopian Telecommunication Corporation (ETC) is not suitable for tourists to get mobile services. Due to telecommunication service is supplied by the government only, that is the rules and regulations followed by ETC are not suitable for tourists. In other countries like South Africa Kenya, North American countries and Europeans mobile service give to those persons even coming to their country for one day or two day conference. Out it is true opposite to LDCs (Mekonen, 2006). Even ETC began to provide mobile services to its citizens in 1991 E.C. (1998/99). i.e. it is a recent phenomenon as shown on the statistical Bulletin of ETC. It is only in 2000 E.C (2007/08) ETC provide for visitors of the millennium who are more interested visitors. Even ETC has no rules and regulations related to mobile service to visitors. In the related development, the number of internet subscription went up from 17,710 in 2004/05 to 25,724 in the review year registering 36

42.8 percent increase. Reflecting the increased performance in fixed telephone, mobile and internet subscription, the countrys telecommunication penetration rate (tele-density excluding mobile or the number of telephone subscribers per 100 inhabitants) has increased from 0.83 in 2004/05 to 0.98 in 2005/06. The penetration rate was higher (2.14 per 100 inhabitants) when mobile subscriptions are included. With respect to telephone traffic, the registered domestic traffic picked up by 13.44 percent from 2,341.99 million pluses in 2004/05 to 2,475.56 million pluses in 2005/06. Similarly the out going international telephone traffic calls has increased from 8.6 million in 2004/05 to 11.48 million in 2005/06.

In the countrys five year plan (development strategy) Plan for Accelerated and Sustainable Development to End Poverty, (PASDEP), it is planned to increase the number of fixed line subscribers from 830.000 in 2005/06 to 3.2 million by the end of 2009/10. The number of mobile subscribers and internet users, on the other hand, is expected to pick up to a respective 6.67 million and 193,100 by the end of the plan period from 1.465 million and 48,970 in 2005/06.

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Table 4.4.2 Summary of Basic Telecom statistics (1993-1998 EC (2000/01-2005/06)


Years No Item 2000/01 649 2001/02 700 2002/03 770 2003/04 784 2004/05 865 2005/06 904 Annual growth (%) 1 Public station and exchange 2 Telephone subscribers line 3 Waiting telephone 4 Mobile telephone 27532 42910 51234 155,534 410,630 866,700 100.13 list for 155208 139095 146662 156,963 58,755 56,053 -5.41 283683 353,816 404,790 484368 610347 725,046 13.25 4.85

subscription 5 Number of internet subscription 6 Domestic traffic (pulses) 7 International telephone traffic 8 9 10 Population Tele density Tele density including mobile 65.394 0.43 0.48 67.22 0.53 0.59 69.13 0.59 0.66 71.10 0.68 0.90 73.20 0.83 1.3 75.2 0.98 2.14 2.97 10.11 30.82 4.62 4.62 4.93 6.67 8.57 11.48 12.90 1253.41 1573.99 1896.337 2,225.14 2,341.99 2,475.56 13.44 4073 6740 9534 12155 17,710 25,724 42.80

Source: Ethiopian Telecommunication, Annual statistical Bulletin, 2005/06

4.4.3 Accommodation
Accommodation is a necessary component in the development of tourism with in any destination that seeks to serve visitors other than day trippers. The quality and range of accommodation available will both reflect and influence the range of Visitors (Copper, Frecher, Gillbert, Shepered and Wan hill, 1998)). According to Adrian (1995), accommodation might be classified into commercial sectors such as hotels, motels, gust houses, holiday campus, etc Among these, hotels and conference facilities are the most important elements of accommodation facilities in Ethiopia.

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Hotels
The development of hotels is necessary condition for the development of tourism industry. After hard travel, and site seeing tourists desire comfort when they return to their rooms in the evening. Thus if tourists are to be satisfied and tourism to grow, hotel rooms should be of a tourist standard and be able to accommodate guests during peak periods with reasonable prices.

(a) Availability of hotels and Ownership in Ethiopia The table below depicts the number of star and recommended hotels, ownership structure, and new additions.
Table 4.4.3 (a) Number of star hotels, recommended hotels, ownership, and new additions until 2005
Region No of hotel available No of rooms % of Government ownership New hotels under construction New rooms to be added Hotels recommended for tourist among available

Addis Ababa 66 3823 47 Afar 4 109 17 Amhara 51 1455 47 Benshangul 1 26 0 Gumuz Dire dawa 14 405 31 Gambella 1 222 100 Harrari 9 238 30 Oromia 148 4072 31 SNNP 61 1378 24 Somali 2 104 0 Tigriay 31 1018 15 Total 388 13105 Average 31.5 Source: Culture and Tourism Minister, CSA

0 0 6 0 0 0 4 4 3 0 2 15

0 0 271 0 0 0 401 401 93 0 128 893

5 0 5 0 2 0 15 15 5 1 8 46

As explicitly illustrated on the above table, there are only 388 hotels in the whole nation with 13105 rooms of which nearly one third of which are state owned. Regarding new additions there are only 15 hotels under construction, which are expected to accommodate additional 893 guests. And as to the regional distribution of hotels, 17% are situated in Addis 39

while 38% are in Oromia, 13% in Amhara, nearly 16% is situated in SNNP and 8% in Tigray etc In addition, from the total number of hotels of 388 only 46 of them are recommended for tourists which have adequate provision of lodging and food, transport accessibility like road to the hotel and adequate parking, clean water supply, sanitary facilities, security services, post and telephone services, electricity etc... The above fact shows that there is no enough accommodation facility in the country with the necessary facilities like telephone and a continuous supply of electricity and other facilities that ensure tourists satisfaction. Deeply, there is uneven distribution of hotels among regions with which shows that there is an imbalance between the number of visitors and available accommodation facilities. This can be seen in the case of Benshangul Gumuz, Gambela, Dire Dawa, Afar, and Somali in these regions there are many tourist attraction sites but totals are no more than 15 in each. Aneven worse scenario is the case of Benshangul Gumuz and Gamblla, where there is only one hotel in each, accommodating only 26 and 22 people respectively regardless of the quality of the service provided. The construction of 15 hotels does not necessarily mean that there will be enough tourist absorption capacity during peak periods. The fact that most of hotels being owned by the state implies that further development/construction works are subject to government budget to the sector which is not sufficient let alone to add new ones, to sustain the quality of the existing ones. This leaves the standard of hotels at low level, not deserving the star rating given to them and unworthy of the price charged for their services. Regarding the number of recommended hotels, it shows the low level of performance in hotel quality, which is not enough to fulfill tourist demand, since only 12% of the hotels are recommended for tourists.

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4.4.3 (b) Distribution of hotels in Ethiopia


Table 4.4.3 (b) distribution of hotels in general and star hotels by region (end of 2005)

Regional state Addis Ababa No hotels No rooms No beds Amhara No hotels No rooms No beds Dire dawa No hotels No rooms No beds Harari No hotels No rooms No beds Oromia No hotels No rooms No beds SNNP No hotels No rooms No beds Tigray No hotels No rooms No beds Somali No hotels No rooms No beds Gambela No hotels No rooms No beds

1-star

2star 16 432 480 1 45 93 2 67 105 2 44 54 7 236 280 3 116 217 3 96 150 0 0 0 0 0 0

3star 13 620 880 5 307 598 1 68 118 0 0 0 0 0 0 0 0 0 2 91 155 0 0 0 0 0 0

4star 4 337 497 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 168 207 0 0 0 0 0 0

5-sar

Classified

Not classified 5 221 313 27 523 641 6 189 252 6 152 164 113 2474 2834 42 712 770 17 432 455 0 0 0 0 0 0

Total

14 1002 1484 10 213 360 5 81 93 1 42 80 12 818 1920 12 342 492 8 210 240 2 81 179 1 41 79

2 695 1074 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

12 496 755 8 367 510 0 0 0 0 0 0 16 544 829 4 150 199 1 21 30 0 0 0 0 0 0

66 3823 5483 51 155 2202 14 405 568 9 238 298 148 4072 5863 61 1320 1678 31 1018 1237 2 81 179 1 41 79

Source: Ministry of Culture and Tourism, CSA

Table 4.4.3 (b) shows us the most important problem for tourism development in Ethiopia, which is uneven and inadequate distribution of hotels in the whole of the country. As we see from the table, most of the efficient and standardized hotels are found far from the tourist attraction sites of the country. Most of the hotels which have star are found in

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Addis Ababa, i.e. about 128 total with star hotels 49 are found in Addis Ababa, and the remaining are distributed in the rest of the regions. For example, Oromia which has the highest share in regional distribution of hotels contributes only 19 star hotels to the country. This shows high or large quantity but low quality hotels as well as low quality of services supplied to the tourist which affects the performance of the tourism industry.

4.4.3 (c) Tourism Rating of Hotels and Restaurants


Besides the general evaluation of the tourist facilities, it is important to see how the services provided look like in the eyes of tourists. The table below sows tourist rating of the facility provided by hotels and restaurants like rooms, quality of dining variety and other services in relation to its momentary value of the services.

Table 4.4.3 (c) Tourism Rating of Hotels and restaurants The quality of rooms and facility The quality and variety of dining 3.0 3.1 The quality of service Value for money 3.7 3.8 3.4 5=very

Total travelers 3.0 3.4 Low budget travelers 3.1 3.4 (<$40 per day) High budget travelers 2.9 2.6 3.2 (>$40 per day) Note: rating scale 1-5 with 1=very poor, 2-poor,3-average, 4=good good

Source: IF team survey with the support of Ministry of Culture and Tourism It can be seen that most of the services provided by hotels and restaurants and rated as average while the quality of rooms and verity of dining are rated poor by the high budget travelers indicating the needs for lot of work to upgrade the services provided so as to satisfy both high and low budget travelers. Monetary values for all the services are rated

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average revealing the belief of tourists that what they get is not worth what they paid, again indicating a disadvantage to future sectoral development.

4.4.4 Average Rating of Tourism Products by Tourists Table 4.4.4 Average Ratings of Tourism Products by Tourists The ability to use cash and credit cards Total Europe America America and Asia Average 2.2 2.55 3.6 3.15 2.5 3.0 3.6 3.0 and 2.0 1.9 Control of un official guides and beggars 2.3 2.1 3.6 3.6 Personal security The cost & regulation of taxis and buses 3.2 3..3

Source: IF team survey with the support of Ministry of culture and Tourism

Note: the rating system as follows 1=very poor, 2=poor, 3=average, 4=good, 5=very good In evaluating the tourist sector performance from the point of view of tourists, the above table shows that none of the tourism facilities or preparations has been rated above average. Actually only personal security and safety, and the cost and regulation of taxis and buses were rated average leaving the ability to use cash and credit cards and the control of unofficial guides and beggars at a poor level in the eyes of tourists. This fact will have an impact on the present conditions as well as the future prospects of the sector and its contribution to the national economy. Thus, efforts should be made to upgrade the facilities and

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services provided with in and around the tourist sites so as to maintain and sustain the earnings of the tourism industry.

Conference Facilities
Conference tourism is already a significant part of Ethiopias tourism product. The flagship facility of the United Nations conference center that can accommodate 1500 delegates and is a world class facility. There are also 20 other standard conference centers in star hotels and AU in Addis with total capacity of 6000. Of these Sheraton holds the greatest share with 1400 (w.w.w.eatil. org 1/2/2005).

Table 4.4.5 Summary of International Tourist by Purpose of Visit from 1991-2005


Year in Gc Business Vacation transit Conference Vesting realties (Diaspora) Not stated Total

1991 20042 1566 13166 7011 1992 20436 15974 13435 7768 1993 22896 17870 1984 8656 1994 27010 19522 10957 10264 1995 30538 19984 11610 12436 1996 28360 21446 15599 12127 1997 30494 23511 14952 13526 1998 26246 31143 8916 5983 1999 22646 28803 15425 6917 2000 27646 30768 18670 6689 2001 26577 41083 17216 5361 2002 32752 10612 49339 20113 2003 36571 11705 53315 31414 2004 35014 11379 56790 34129 2005 53873 42462 44576 25947 Source: Ministry of Culture and Tourism

5677 5789 6515 8690 9109 11866 12710 13272 13031 1589 14913 17779 19895 18209 24394

19419 19811 22151 21627 19659 19487 19539 5287 5037 10321 11288 25732 27010 28556 36146

81581 83213 93072 98070 303336 18885 139000 102000 115000 1359054 148438 156327 179910 184079 227398

Visitors who are coming for the purpose of attending conference, which are called conference tourists take the forth place. This is because Addis Ababa is a place where many international organizations like, AU, ECA and other international organization are found. Due to this many

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conferences take place in the capital city and as a result the number of tourists in flow in the case of conference becomes valuable for tourism growth in Ethiopia. From the table 4.4.5 the number of conference visitors shows ups and downs like business cycle that is it grows form 1991 to 1997 but it falls in 1998 due to the Ethio-Eritrean war, and then grows in 1999. It also shows a declining tend between 1999 to 2001 and then grows up to 2004 and falls in 2005. This type of movements in conference tourism affects the steadiness of the economy in general and tourism industry in particular.

4.5 Tour Operations and Guides


There are legal and illegal tour operators in Ethiopia. The legal tour operators are those that are licensed and can be classified in to two. The first class consists of those who fulfilled the qualification or criteria, and they are in rendering tourist services. The problems created by this class are, they dont make association, guides are not well trained, there are also situations in price changes and tourist left, they dont concern at quality of services, they make description out of their topic etc. The second class is those who have not full fill the qualification but they get license by cheating, most of them use the name as cover and are joined or evolved into other fields. They reduce the comfort of tourist services. They also do not have any publication on indicating tour programme and price as well as tourist attraction destination. In contrast to the above, the there are illegal tour operations that do to fulfill the qualification and they dont have license or by using the name travel agency as a cover but they are engaged in tour operation and disturb the work of the sector and they dont pay tax to the government.

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Moreover, there are individuals with out training and knowledge who calling themselves as tour operators and then robe and steal belonging of tourists. By doing so they create problems on tourists and tourism industry.

4.6 Skilled Man Power


Tourism industry needs both skilled and unskilled manpower. Furthermore, the dynamic nature of tourism implies that training of manpower to cope up with changes in tourism is of a great importance. Generally, the number and type of manpower engaged in tourism industry can influence the performance of the industry. In Ethiopia there is lack of skilled manpower because the training provided is mostly focused on primary services such as reception, catering and food preparation and it gives less attention to the important skills like tour operation, marketing analysis and promotion and advertisement personnel. This shows us, there is insufficient and inefficient tourism training center at higher education level. The other major problem facing the industry is that some of the employees of the sector are attracted by the private sectors which are not much significant for tourism industry growth. Because of the fact that private sectors pay higher salary compared with the salary prevailing in the industry which is low. This variation or differential in salary leads to shift skilled manpower form the industry which in turn leads to the shortage of skilled man power in the industry.

4.6.1 Human Resource Development in the Tourism Industry


The human resource that operates in the tourism sector interacting with tourists is as important as the physical tourist infrastructure. Figure in

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the table below shows that the hotel industry in particular is characterized by low education levels and poor training. In this sector only 22.5% of the employees have completed grade 12 and further i.e. college and 69.7% of the employees are at a level below grade 12. On the training side, only 15.8% have received any formal hotel training. In contrast, the tour operator sector is better equipped and better trained. On average, 51.3% of the tour operators have completed grade 12 and above and only 41.3% have no sector specific training. Most of those have received training got it from short term courses from the Catering and Tourism Training Institute (CTTI). Table 4.6.1 Level of Education and Training amongst Hotels and Tour Operators
Formal education Profile of hotel employees Profile of tour operators employees Training Profile of hotel employees Profile of tour operator employees Read& write (%) 9.8 0 Grade 1-6(%) 15 10.9 Grade 7-8(%) 16.3 7.6 Grade 9-12 (%) 36.4 30.2 Grade 12+ (%) 19 28.2 College (%) 3.5 23.1

None (%) 69.7 41.3

On job (%) 14.5 9.3

Short term (%) 3.8 45.6

CTTI (%) 12 3.8

Source: Ministry of Culture and Tourism The general view is that the human resource development in the tourism sector in general and the hotel sector in particular are poor with little investment to change this picture. This will have its own effect on the effort to generate a quality service and limits the ability to come up with creative means of improving the existing structure of the industry by learning form the experiences of other nations.

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4.7 Social and Political Stability


Non-economic factors particularly cultural and political ones have been recognized by economists as vital in determining the capacity and growth of sectors in an economy. In tourism this is especially important. As social and political conditions may be responsible for short term fluctuations either value of productive resources like the value of tourism sector. For example the value of tourism contribution to the national out put (GDP) in Ethiopia decreased due to Ehtio-Eritrean war. It shows decrease in both tourist arrival & receipts on the table below.

Table 4.7 Arrivals and Receipts From 1991-2005 via Addis Ababa Airport and Other Receipts in 1000 (birr) 1991 81581 81581 38824 1992 83213 83213 57763 1993 93072 93072 107822 1994 98070 98070 144315 1995 103336 103336 144972 1996 108,885 108,885 182665 1997 114732 24268 139000 27900 1998 90847 21153 12000 225000 1999 91859 23141 115000 252000 2000 108954 270000 378954 577800 2001 1116438 32000 148438 642000 2002 130947 25380 156327 676100 2003 166162 19748 179910 778000 2004 172954 11124 184078 991200 2005 187453 34110 22798 1177816 Source: Culture and Tourism Minister, National Bank of Ethiopia Note: other eatry ports are Dire Dawa, Galafi, Moyale, Dewale, Metema, Togo, Chale, Dolo, Omate, Terferibir, Gonder, BahirDar, Mekele etc Year Bole Other ports Total

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Table 4.7 shows that there is an increasing trend of both tourist arrival and receipts generated form tourists to the country. From the data, one can figure out a slow but a steady increase in the number of tourist inflow as well as receipts since 1997. Arrivals took a sever knock in 1998/99 for the duration of the war with Eritrean. Taking the arrivals by air as the only indicative of the trend over the past decade arrivals grew by 3.6% only. But this figure masks the much higher annual growth rate of 5.8% up until the war began and a high 9.2% growth form 2000 to 2001. The war caused a 20.8% drop in total arrivals but there was a rapid recovery as total arrivals almost reached their prewar level in 2000. Taking in to consideration the amount of receipts generated by the industry to the country, there is an increasing trend but with a decreasing rate over the past decade, even negative rate is recorded during Ethio-Eritrean war i.e. -24% decline in tourist receipts in 1998 from the previous. In 2001, total receipts was $642mln up from $577.8mln the year before by 8.5%, and in 2002 it grew to $676.1mln by 4.5%. However, the sector registered a very remarkable change in the years 2003, 2004 and 2005 where it grows to $778mln (16.6%),991.2mln (27%) and 1,177.8mln (17.7%).

4.8 Attitudes and Habits


Another major non-economic determinant is that of psychological values both of suppliers and consuming tourists. Firstly, the attitudes of a host population towards tourists, and in particular those of workers with in the tourism sector have all important effect on the tourism product, and their influence is similar in nature to that of social and political stability.

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Secondly, on the demand side, tourism consuming habits are important. Two persons with similar level of income may, all things being equal, have deferent propensities to travel. This may be a function of cultural surroundings at home, age and gender. This propensity to travel will influence domestic tourism and the development of the sector in any destination closely linked to those generating areas.

Table 4.8 Arrivals by Age and Gender Group for 2003, 2004 and 2005
Year Sex <15 b/n 15 &24 2003 Male Female Note stated Total 2004 Male Female Note stated Total 2005 Male Female Note stated
Total

B/n 25&44 60832 27399 1119 89350 60899 26918 1807 89624 75495 33320 2243
111058

B/n 45&59 36960 11425 552 48937 36491 11033 1014 48538 45201 13604 1259
60064

>60

Not stated

Total

5593 3759 165 9517 5506 3790 325 9621 6744 4615 403
11762

8299 5552 191 14042 8188 6159 305 14652 10073 7555 379
18007

10593 3900 150 14643 10112 3687 325 14124 12462 4487 403
17352

2719 638 64 3421 4889 1968 662 7519 5979 2353 823
9155

124996 52673 2241 179910 126085 53555 4438 184078 155954 65934 5510
227398

Source: Ministry of Culture and Tourism From the table 4.8, in these three yeas adults i.e. age between 25 and 59 are higher in number than that of young and old aged group to visit Ethiopia that is 138287 in 2003 from the total of arrivals of 179910, and 138162 in 2004 from the total arrivals of 184078. It also 171,122 visitors from the total arrivals of 227,398 to the country which contributes 76%, 75% and 75.3% of the arrivals in 2003, 2004 and 2005 respectively. Regarding the gender group, male visitors are significant in number than those of females, that is form the total of 179,910 arrivals to Ethiopia in 50

2003, males account 124,996 (69.4%) of the arrivals, and from the total of 184078 arrivals to Ethiopia in 2004, males account 126085 (68.5%) of the arrivals. And also in 2005, from the total of 227398 males account 155954 (68.6%) of the arrivals to Ethiopia. This shows a bias that mostly those persons who are adults and that of males had a chance to visit Ethiopia in the previous years since more than 68% of the arrivals are males and more than 75% of the arrivals are adults. This is due to reasons and problems with in the country and the consuming tourist like image of the country as poor and highly affected by famine and by thinking not suitable for females and childrens in tourists mind, fear of disease due to children have no resistant ability to disease, low level of promotion and advertisement etc

4.9 The State of Technical Knowledge


Many less developed countries have regarded tourism as an easy industry to develop, because it demands relatively low technology compared with many other industries, and skills which can be easily mastered. Unfortunately, as tourism world wide has grown and become more sophisticated, high value contributions to GDP by tourism have tended to become associated with higher technologies. Examples range from the ability to operate fleets of large cost efficient aircraft with the associated technology in reservations and passenger handling, through technical innovation in providing more interesting, all season attractions. When technical advances are applied to existing inputs of other resources, they enhance the productivity of the industry concerned and hence its contribution to GDP.

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Certainly there will always be a place for low technology tourism; particularly while there are market segments which deliberately seek out the simple or natural life (current fashions i.e. ecotourism) but dominate cultural tourism generating areas will ensure that returns within tourism sectors will continue to be high where supported by good technical knowledge application. But our country has low level of technical knowledge which affects the productivity of the sector as well as the tourism contribution to the GDP.

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CHAPTER FIVE 5. CONCLUSION AND RECOMMENDATION 5.1 Conclusions


Tourism deals with movement of people a way from their normal residence for holidays, recreation and leisure activities, business meeting, visiting relatives and other purposes. International touristm, involves persons traveling to different countries while domestic tourism is part of peoples movement with in their won country. Tourism has significant economic and social benefits which includes, among other things, foreign exchange earning, creation of employment, generation of revenue for the government, integration of national cultures and societies, and the like. These days, the tourism sector is one of the major economic sectors in the world and is expanding at a steady state in the world. Ethiopia is endowed with exotic natural and man made historical attractions, which could be the basis for growing tourism industry, if complemented with standardized supporting services like accommodation, transportation and tour operation, visa and exit prices, telecom, promotion and advertisement etc with in the value chain of tourism industry. Ethiopia stands among the countries of the globe which possesses great and unique tourist attraction resources. However, the proper utilization and administration of these resources have been poor, in the past as well as in the present day of Ethiopia. This is due to lack of integrated tourism policy, like budget allocation problem and visa and exist payment problems inadequate training institutes in tourism, lack of trained man power, lack and low quality of tourist accommodation facilities and infrastructure at/to tourist attraction sites like inadequate transportation i.e. low quality roads, lack of air port to

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much of natural and cultural tourist attraction sites; hotels and restaurants are at low quality level and unevenly distributed; inadequate promotion and advertisement, low quality and even untrained tour operations and guides, low level of technical knowledge, and other inadequate financial and material support that are vital to the development of the sector and sectors with in the value chain of tourism. Moreover lack of peace and stability and periodic drought and famine have changed the image of the country from tourist attracting to tourist frustrating. With the value chain of tourism of Ethiopia government is the lead firm since it owns on average 31.5% hotels, most of conference facilities, controls visa and exit procedures, ownership and construction of roads (as public good), monopoly ownership of airline, training institutes like CTTI are owned by the government; national parks, game reservers, sanctuaries, other cultural and natural tourist attraction sites financed, protected and controlled by the government, monopoly of telecommunication, control of media monopolistically etc The dominancy of the government in tourism sector is not good for tourism development. But it is common in other most Less Developed Countries (LDCs) like Ethiopia and African countries which hinder the fast growth of tourism industry.

5.2 Recommendations
In order to facilitate the rapid development of tourism in Ethiopia both the government and the private sector or in general the society must participate in improving, protecting and advertising tourist attraction

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sites and, supply good quality facilities or services for the tourists in Ethiopia. The government must have designed strategies like: study, protect and develop the countrys tourist attraction sites, and give attention for those which are not known; encourage the private sector to: improve, develop and expand tourism facilitates that is facilities like high quality hotels and restaurants as well as conference facilities and others; Improve and expend tourism infrastructure that is develop the quality and the quantity of transportation sector like road, air, rail and water are important to the sector with the support of private sector; Promote the countrys tourism resources that is by promotion and advertisement in international media like DSTV, Show Time, G-TV, ETV and other medias; Awareness creation to the society about tourism industry; Create suitable conditions for tourists by avoiding war with neighboring countries and create internal stability in order to prevent from any fear of visiting the country. Provide high quality hotels and restaurants and other facilities which includes all gender and age groups; Improve the level of technical knowledge by giving high attention to the sector; Control illegal tour operators which have no license to secure tourists form danger; The government should allow the private sectors to participate/invest in the sectors with in the value chain of tourism like airline, telecom, hotels, road constriction, national parks,

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game reserves, sanctuaries and other cultural and natural attraction sites etc On the other hand, the private sector must invest, its resources in activities that are important for the development of tourism industry of Ethiopia. i.e: participate in protection and development of the countys tourist attraction sites; participate in improvement, expansion and development of tourism facilities like hotels and restaurants, conference facilities, transportation, tour operation and other and as well as control illegal tour operators which have no license etc

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