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The future of Tourism in Tanzania

Let’s reimagine the future of tourism in tanzania.

Tanzania’s tourism sector is seeing a rebound after the Covid-19 pandemic—and the aspirations for its continued growth are high: by 2025, the country hopes to reach $6 billion in tourism revenue, which assumes the influx of five million tourists annually. To achieve such lofty goals will require some important upgrades and improvements to tourism infrastructure and services. I outline a few of them in this article.

Before the pandemic, tourism was the largest foreign exchange earner, the second largest contributor to the gross domestic product (GDP) and the third largest contributor to employment. After taking a severe hit during Covid, tourists are starting to return to Tanzania, with 742,133 visitors between January and July 2022, a 62.7% increase over the previous year (Exhibit 1).

Exhibit 1: Tourism is returning after the Covid-19 pandemic

But whilst we are doing well, many bottlenecks persist. These include limited access to cheap financing, inadequate tourism infrastructure, a multiplicity of levies, insufficient diversity in products offerings, and lack of sufficient hotel and airport facilities.  So how can we measure how we are doing?

Well, the World Economic Forum (“WEF”) in its Travel & Tourism Development Index 2021 (published in May 2022, and themed “Rebuilding for a Sustainable and Resilient Future”) is one barometer of where we stand.  It ranks Tanzania as 5 th of the sub-Saharan African (SSA) countries (and 81 st globally out of 117 countries, up from 86 th in 2019). 1 st to 4 th places within SSA are taken by Mauritius (62 nd ), South Africa (68 th ), Botswana (76 th ) and Kenya (78 th ), with 6 th to 10 th places taken by Cape Verde (82 nd ), Namibia (88 th ), Rwanda (89 th ), Zambia (98 th ) and Ghana (101 st ).

According to the WEF report Tanzania and South Africa are very clear leaders within SSA in terms of ranking of natural resources.  One aspect to consider further as a significant opportunity is the “non-leisure resources” pillar, which measures the extent and attractiveness of factors that drive business and other non-leisure travel; although Tanzania’s ranking is broadly in line with the SSA average, it does lag Kenya and South Africa by quite a bit.  More generally, the WEF report does highlight that East Africa as a region does not rank as highly as Southern Africa in terms of price competitiveness.  

Exhibit 2: Tanzania can do more to boost its tourism competitiveness

Tourists coming to Tanzania frequently speak of seeing “the Big Five”.  Stakeholders in the tourism sector would also say that they have their “Big Five” namely the “Five A’s”:  Attractions, Access, Accommodation, Amenities, and Affordability!  From my perspective, and aligned with this, I would highlight some priority areas that need to be addressed by the government and other stakeholders in the tourism sector.

Reduce multiplicity in levies and taxes . There is a need for a fresh look at tourism taxes and levies so as to reduce multiplicity and create competitiveness across the region – indeed, this point was highlighted as an urgent priority in a report recently presented at the 13 th meeting of the Tanzania National Business Council. Currently, Tanzania is deemed an expensive destination compared to other destinations such as South Africa and Kenya. Notwithstanding the positive efforts which led to reduction of some of the levies such as the Tourism Agency License (TALA) fee, there is still scope for rationalization of fees that are charged by multiple government agencies. Further, stakeholders’ engagement prior to fee changes will smoothen the operations of the tourism firms and attract more investments in the sector.

Affordable financing .  Tourism firms across the sector, as well as those in downstream value chains, need access to affordable finance particularly in this post Covid-19 era, when the risk appetite for financial institutions in the tourism market is very low. Support from International Development Agencies (IDAs) on the tourism sector should be sought for development projects that have a direct economic impact on the sector and the country as whole.

Improved infrastructure . Tanzania ranks higher than Kenya with respect to safety and security, but lower than Kenya when it comes to tourist service infrastructure. For instance, the drive from Dar es Salaam to Selous Game Reserve, the largest game reserve in Africa is bumpy and long, taking an average of 7 to 8 hours. Flying is a better one option and the fastest way to get to Selous. However, it is the most expensive and hence suits more high-end tourists. Again, IDA support to improve tourist service infrastructure could give a welcome boost.

Upgraded hotels and airport facilities . More effort is required to attract private sector investment in hotels and ensure diversity in service offerings. The current hotel capacity in both Mainland and Zanzibar cannot cater for the expected influx of 5 million tourists by 2025. Improvement in efficiencies and flight handling capacity at the airports is another area which requires fixing. Automation of immigration procedures in Zanzibar and Kilimanjaro Airports will help fast track the process. Instead of having a paperwork checking system, barcodes should be set to scan all the documents. This will help to reduce unnecessary queues at the airports during high season.

Diversified tourism products . Other than wildlife and beaches, the Ministry for Tourism should spearhead the innovation of new tourist attractions. The recent decision to market Ngorongoro-Lengai geo park and the introduction of “Mice” (meetings, incentives, conferences, and exhibitions) are commendable efforts as these will boost tourism income, since Tanzania is an already established adventure destination.

Introduction of direct flights and collaborations with aviation industry . The signing of a memorandum of understanding between the Tanzanian Government and Dallas in April 2022 was one of the great achievements of the Royal Tour of the United States by her Excellency Samia Suluhu Hassan, as this will attract more American visitors to Tanzania's tourist destinations. More direct flights need to be added to key markets while maintaining a closer collaboration between the aviation and tourism industries for sustainable growth of the sector. This will ease flight interconnectivity to tourists who prefer to do inter-connected travels. 

Raising public awareness . More education is needed for the public and journalists to help promote the tourism sector. Although we are in the era of freedom of speech, care should be taken not to exaggerate unproven facts that are detrimental to the sector’s growth.

In conclusion, the target of $6 billion by 2025 is achievable—but it will require deliberate efforts to make it a reality. The President’s Royal Tour is expected to bring a significant boost to the numbers in 2022 and beyond. The tourism sector needs to be given the utmost priority due to its huge potential in transforming the country’s economy as the sector contributes significantly to foreign exchange and employment.

By Zainab Salome Msimbe is a Partner with PwC Tanzania

Pauline Koola

Manager, PwC Tanzania

Tel: +255 (0) 22 219 2000

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Tanzania's tourism industry bounces back with 37.2% increase in tourist arrivals

• Tanzania's tourism industry is staging a comeback, with earnings surging from $1.95 billion in July 2022 to $2.99 billion in July 2023.
• Tourist arrivals increased by 37.2%, reaching a record 1,658,043 visitors.
• Europe and the United States remain primary sources of tourists visiting Tanzania for leisure and holidays.

Tanzania's tourism industry is making a remarkable comeback nearly four years after its revenues plummeted due to the COVID-19 pandemic.

Recommended articles

The recent data from the Bank of Tanzania reveals that tourism has staged an impressive recovery, contributing $2.99 billion to foreign exchange earnings in July 2023, compared to $1.95 billion in July 2022.

According to the Bank of Tanzania, this represents a 33% surge in service receipts, reaching $5.49 billion in July 2023, up from $4.12 billion in July 2022.

The bank also noted that this resurgence in tourism and increased earnings from gold have played a pivotal role in boosting Tanzania's service earnings to over $5 billion for the first time in its history.

READ: From wildlife to wardrobes, see Tanzania’s plan to turn a profit on Maasai apparel

In 2019, Tanzania’s tourism sector generated approximately $2.52 billion, but by December 2020, its earnings had dropped significantly to just $1 billion.

Gold emerged as the country's primary foreign exchange earner during this period, generating $2.958 billion in December 2020.

The recovery in the tourism sector is highlighted by a 37.2% increase in foreign arrivals, totalling 1,658,043 visitors during the year—reaching an all-time high.

The previous record for tourism earnings in Tanzania was $2.5 billion, achieved in 2019 when the country welcomed 1,527,230 tourists.

Europe and the United States remain primary sources of tourists visiting Tanzania for leisure and holidays, according to the National Bureau of Statistics (NBS).

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Tourism in Tanzania

Development of the tourism sector in tanzania from 1995 to 2021.

Revenues from tourism

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Travel, Tourism & Hospitality

• Value added of travel and tourism to GDP in Tanzania 2019-2021

Contribution of travel and tourism to Gross Domestic Product (GDP) in Tanzania from 2019 to 2021 (in billion U.S. dollars)

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Statistics on " Travel and tourism in Tanzania "

• International tourist arrivals in Africa 2020, by country
• Monthly tourist arrivals in Tanzania 2019-2022
• Main nationalities of tourists arriving in Tanzania 2021
• Average tourist expenditure in Tanzania 2015-2020
• Contribution of travel and tourism to GDP in Tanzania 2019-2021
• Tourism receipts in Tanzania from 2020-2022
• International and domestic visitor spending in Tanzania 2019-2021
• Share of employment in travel and tourism in Tanzania 2019-2021
• Highest-rated safari parks in Africa 2021
• World Heritage Sites in Africa 2024, by country
• Most visited national parks in Tanzania 2019
• Revenue generated by visits to national parks in Tanzania 2015-2019
• Visitors at national parks in Tanzania 2020-2021, by geographical zone
• Earnings from visitors at tourist attraction sites in Tanzania 2021, by zone
• Hotel occupancy rate in Africa 2021-2023
• Bed occupancy rate of hotels in Tanzania 2019-2020
• Number of tourists staying in hotels in Tanzania 2015-2020
• Bed nights occupied in hotels of Tanzania 2019-2020
• Share of international visitors in hotels occupancy in Tanzania 2020
• Monthly international arrivals in Zanzibar 2018-2021
• Hotel beds available in Zanzibar 2020-2021
• Bed occupancy rate in Zanzibar 2020-2021
• GDP of hotels and food services in Zanzibar 2016-2020
• Share of hotels and food services in Zanzibar's GDP 2016-2020

Other statistics that may interest you Travel and tourism in Tanzania

• Premium Statistic International tourist arrivals in Africa 2020, by country
• Premium Statistic Tourist arrivals in Tanzania 2015-2022
• Premium Statistic Monthly tourist arrivals in Tanzania 2019-2022
• Basic Statistic Main nationalities of tourists arriving in Tanzania 2021
• Premium Statistic Average tourist expenditure in Tanzania 2015-2020

Economic impact

• Basic Statistic Contribution of travel and tourism to GDP in Tanzania 2019-2021
• Basic Statistic Value added of travel and tourism to GDP in Tanzania 2019-2021
• Basic Statistic Tourism receipts in Tanzania from 2020-2022
• Basic Statistic International and domestic visitor spending in Tanzania 2019-2021
• Basic Statistic Share of employment in travel and tourism in Tanzania 2019-2021

Attractions

• Premium Statistic Highest-rated safari parks in Africa 2021
• Basic Statistic Highest mountains in Africa
• Basic Statistic World Heritage Sites in Africa 2024, by country
• Premium Statistic Most visited national parks in Tanzania 2019
• Premium Statistic Revenue generated by visits to national parks in Tanzania 2015-2019
• Basic Statistic Visitors at national parks in Tanzania 2020-2021, by geographical zone
• Basic Statistic Earnings from visitors at tourist attraction sites in Tanzania 2021, by zone

Accommodation

• Premium Statistic Hotel occupancy rate in Africa 2021-2023
• Premium Statistic Bed occupancy rate of hotels in Tanzania 2019-2020
• Premium Statistic Number of tourists staying in hotels in Tanzania 2015-2020
• Premium Statistic Bed nights occupied in hotels of Tanzania 2019-2020
• Premium Statistic Share of international visitors in hotels occupancy in Tanzania 2020

Special focus: Zanzibar

• Premium Statistic International visitors in Zanzibar 2015-2021
• Premium Statistic Monthly international arrivals in Zanzibar 2018-2021
• Premium Statistic Main countries of origin of international visitors in Zanzibar 2021
• Premium Statistic Hotel beds available in Zanzibar 2020-2021
• Premium Statistic Bed occupancy rate in Zanzibar 2020-2021
• Premium Statistic GDP of hotels and food services in Zanzibar 2016-2020
• Premium Statistic Share of hotels and food services in Zanzibar's GDP 2016-2020

Further related statistics

• Basic Statistic Global travel and tourism expenditure 2019-2022, by type
• Basic Statistic Forecast: economic contribution of travel and tourism to GDP worldwide 2020-2029
• Premium Statistic Average daily expenditure of Australian residents traveling to Italy 2010-2017
• Premium Statistic Average daily expenditure of German residents traveling to Italy 2010-2017
• Premium Statistic Average daily expenditure of Russian residents traveling to Italy 2010-2017
• Premium Statistic Average daily expenditure of UK residents traveling to Italy 2010-2017
• Premium Statistic Average daily expenditure of American residents traveling to Italy 2010-2017
• Basic Statistic Average daily expenditure of Canadian residents traveling to Italy 2010-2017
• Premium Statistic Average daily expenditure of Austrian residents traveling to Italy 2010-2017
• Premium Statistic Average daily expenditure of Chinese residents traveling to Italy 2010-2017
• Premium Statistic Average daily expenditure of French residents traveling to Italy 2010-2017
• Premium Statistic Average daily expenditure of Japanese residents traveling to Italy 2010-2017
• Premium Statistic Number of goat in Kenya 2010-2020
• Premium Statistic Number of companies in Tunisia 2003-2020
• Basic Statistic Percentage of women in Angola's parliament 2004-2023

Further Content: You might find this interesting as well

• Global travel and tourism expenditure 2019-2022, by type
• Forecast: economic contribution of travel and tourism to GDP worldwide 2020-2029
• Average daily expenditure of Australian residents traveling to Italy 2010-2017
• Average daily expenditure of German residents traveling to Italy 2010-2017
• Average daily expenditure of Russian residents traveling to Italy 2010-2017
• Average daily expenditure of UK residents traveling to Italy 2010-2017
• Average daily expenditure of American residents traveling to Italy 2010-2017
• Average daily expenditure of Canadian residents traveling to Italy 2010-2017
• Average daily expenditure of Austrian residents traveling to Italy 2010-2017
• Average daily expenditure of Chinese residents traveling to Italy 2010-2017
• Average daily expenditure of French residents traveling to Italy 2010-2017
• Average daily expenditure of Japanese residents traveling to Italy 2010-2017
• Number of goat in Kenya 2010-2020
• Number of companies in Tunisia 2003-2020
• Percentage of women in Angola's parliament 2004-2023

Publication: Tanzania Economic Update, July 2021: Transforming Tourism - Toward a Sustainable, Resilient, and Inclusive Sector

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Tanzania Travel & Tourism Economic Impact Factsheet

Discover the total economic contribution that the Travel & Tourism sector brings to Tanzania and the world in this data-rich, two-page factsheet.

Discover the total economic contribution that the Travel & Tourism sector brings to the Tanzania’s economies and to the world in this data-rich, two-page factsheet.

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Over the next few weeks we will be releasing the newest Economic Impact Research factsheets for a wide range of economies and regions. If the factsheet you're interested in is not yet available,  sign up to be notified via the form on this page .

Factsheet details

This factsheet highlights the importance of Travel & Tourism to Tanzania across many metrics, and features details such as:

• Contribution of the sector to overall GDP and employment
• Comparisons between 2019 and 2023
• Forecasts for 2024 and 2034
• International and domestic visitor spending
• Proportion of leisure vs business spending
• Top 5 inbound and outbound markets

This factsheet highlights the importance of Travel & Tourism to the Tanzania across many metrics, and features details such as:

• Contribution of the sector to overall GDP and employment in the group and globally
• Contribution of the sector to overall GDP and employment in the region and globally

This factsheet highlights the importance of T&T to this city across many metrics, and features details such as:

• Contribution of the sector to overall GDP and employment in the city
• Comparisons between 2019, 2020 and 2021, plus 2022 forecast
• Proportion of the T&T at city level towards overall T&T contribution at a country level
• Top 5 inbound source markets

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Afdb’s tanzania economic outlook: gdp growth to reach 5.7% in 2024 and 6% in 2025 driven by agriculture manufacturing and tourism.

The African Development Bank (AfDB) has just released the 2024 edition of its flagship African Economic Outlook report , describing Africa’s growth potential as ‘remarkable’.

The theme of the 2024 African Economic Outlook is  Driving Africa’s Transformation: The Reform of the Global Financial Architecture.

The report is being published as African countries continue to contend with significant structural challenges and multiple severe shocks, including heightened food and energy prices driven by geopolitical tensions such as Russia’s invasion of Ukraine, climate issues affecting agriculture and energy production, and persistent political instability.

This challenging environment has led to a slowdown in Africa’s real GDP growth, which dropped to 3.1% in 2023 from 4.1% in 2022

However, in his foreword, Dr. Akinwumi Adesina, President of the AfDB Group, stressed that despite entrenched structural challenges and susceptibility to exogenous shocks, most African economies have shown remarkable resilience.

And the forecast for 2024–25 looks promising, as global economic conditions brighten, creating optimism for a rebound and sustained economic growth across Africa. Real GDP growth is projected to rise to 3.7% in 2024 and consolidate higher at 4.3% in 2025.

With these outturns, Africa will remain the second-fastest region in the world after developing Asia in 2024 and 2025, with 40 countries set to achieve higher growth rates relative to 2023 levels, and East Africa leading as the fastest-growing region (up to 3.4% points).

Growth Performance and Outlook in East Africa

According to the report, East Africa, the continent’s fastest-growing region, will see real GDP growth rising from an estimated 1.5% in 2023 to 4.9% in 2024 and 5.7% in 2025. The downward revision of 0.2% point for 2024 compared with the forecast in the January  2024 Africa’s Macroeconomic Performance and Outlook (MEO)  is due to larger-than-expected contractions in Sudan and South Sudan following the ongoing conflict in the former.

Recent Macroeconomic and Financial Developments in Tanzania

Tanzania’s real GDP grew 5.3% in 2023, up from 4.7% in 2022, driven by agriculture, construction, and manufacturing on the supply side and private investments on the demand side.

Tight monetary policy, together with moderation in food and energy prices, helped reduce inflation from 4.3% in 2022 to 3.8% in 2023. The Tanzanian shilling depreciated by 8% in 2023, reflecting shortages of foreign exchange.

The fiscal deficit declined slightly from 3.6% of GDP in 2021/22 to 3.5% in 2022/23, responding to expenditure controls, and was financed by external and domestic borrowing. Public debt increased from 43.6% of GDP in 2021/22 to 45.5% in 2022/23 due to an increase in loans. The current account deficit narrowed from 7.3% of GDP in 2022 to 3.8% in 2023, benefiting from higher tourism receipts, and was financed by external commercial debt and official flows.

Reserves declined from 4.7 months of import cover in 2022 to 4.5 months in 2023, explained by the authorities’ response to the foreign exchange shortage.

The banking sector, which accounts for 71% of financial assets, remained sound with the ratio of nonperforming loans to gross loans declining from 5.7% in 2022 to 4.3% in 2023, below the regulatory requirement of 5%.

Economic Outlook and Risks for Tanzania

The AfDB projects that Tanzania’s real GDP growth will reach 5.7% in 2024 and 6% in 2025 , driven by agriculture, manufacturing, and tourism and supported by public investments and reforms to improve the business environment.

Inflation is projected to decline to 3.3% in 2024 and 3.4% in 2025, helped by stability in food and energy prices.

The fiscal deficit, financed by domestic and external borrowing, is expected to decline to 2.5% of GDP in 2023/24 and stabilize at that level in 2024/25, supported by improvements in revenue performance. The current account deficit, financed by external borrowing, is projected at 4.0% of GDP in 2024 and 4.2% in 2025, supported by merchandise exports and tourism receipts.

The major downside risks to the outlook include spillovers from geopolitical tensions and regional conflicts, sluggish global growth, a narrow tax base, and climate shocks.

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Investing in the United Republic of Tanzania

"With an increased focus on green investments, the United Republic of Tanzania has a great potential to seize on these opportunities and formulate a value proposition based on these comparative advantages"

Zurab Pololikashvili, UN Tourism Secretary-General

Introduction

In an effort of the continuous series of Tourism Doing Business reports , the UN Tourism is proud to have coordinated efforts with the Ministry of Natural Resources and Tourism (MNRT), the Tanzania Investment Centre (TIC) and the Zanzibar Investment Promotion Authority (ZIPA) to create this tool to promote investments in the United Republic of Tanzania. This publication builds a reference for investors by providing valuable information and guidance on the United Republic of Tanzania’s current investment climate as well as emerging investment opportunities in its tourism sector.

With a population of almost 60 million inhabitants, the United Republic of Tanzania has a relatively stable political environment, sound macroeconomic policies and a clear resilience to external shocks. After experiencing a strong growth in recent years, the country’s growth rate of GDP slowed down over the past two years due to the detrimental consequences of COVID-19. Nevertheless, the United Republic of Tanzania’s GDP grew at 4.90% in 2021 whilst the global economic recovery rebooted and experts forecast that economic growth will pick up again from 2022 with an estimation of 5% of GDP growth.

The United Republic of Tanzania demonstrates a very promising investment environment with a strong growth potential of its nature-based tourism sector. Indeed, growing on average at 6.5%, per year the United Republic of Tanzania of has demonstrated an impressive growth performance and stability over the past decade. Also, between 2015 and 2021, the country experienced a marginal increase of its GDP per capita of 24.15%, growing from USD 981 million to USD 1,218 million. Consequently, the United Republic of Tanzania positioned itself as one of the most preferred destinations for foreign direct investment (FDI) in Africa and among the 10 biggest recipients of FDI on the continent. FDI inflows in the United Republic of Tanzania rose by 35 % from USD 685 million in 2020 to USD 922 million in 2021, and new greenfield project announcements tripled in value. 

On the other hand, with its abundance of natural and cultural resources, the United Republic of Tanzania has gained international recognition for its nature-based tourism in Africa and the world. The Travel and Tourism Competitiveness Index by the World Economic Forum ranked the United Republic of Tanzania 1st in Africa and 12th worldwide regarding the quality of its nature-based tourism resources as well as 32nd in Africa vis-à-vis its cultural resources. As a result, the tourism value chain defines a key component of the United Republic of Tanzania’s economy today, contributing to an estimated 17% of the country’s GDP and building the country’s third-largest source of employment by directly employing over 850,000 workers. Tourism-related services are especially crucial in Zanzibar, accounting for 55.5% of total services output, and for more than half of Zanzibar’s GDP, generating the largest share of private-sector employment. This said, tourism has been among the largest foreign-exchange earners in the United Republic of Tanzania since 2012. According to data from UN Tourism, tourism accounted for over one-quarter of the country’s foreign-exchange earnings in 2019, representing around USD 2,605 million. In addition, the latest report by fDi Intelligence from the Financial Times and UN Tourism ranked the United Republic of Tanzania, with nine projects, among the top 10 countries in Africa and the Middle East with the greatest number of greenfield investments in the tourism sector.

Conclusions

• The United Republic of Tanzania has been attracting international investments and increasing its inflows in the last decade, which positioned the country among one of the top destinations for tourism investments in the African continent. However, the country should continue implementing its efforts to improve its business enabling environment. This might involve strengthening institutions, regulations, policies, and transparency frameworks that facilitate the attraction and promotion of investment inflows towards the tourism sector and its value chain. Consequently, this will improve the country’s investment climate and encourage the development of strategic partnerships between government, and the private sector.
• The United Republic of Tanzania is known for its rich biodiversity, wildlife attractions, and cultural resources. The country is home to several nature reserves and national parks and represents a unique tourist destination for thousands of tourists each year. Henceforth with an increased focus on green investments, the United Republic of Tanzania has a great potential to seize on these opportunities and formulate a value proposition based on these comparative advantages. In addition, when considering new emerging consumer behaviors focused on sustainable and rural tourism demand the United Republic of Tanzania may create strategic investment opportunities for conservation, climate finance, and green investments to further diversify, attract and mobilize international and private investments. Likewise, improving the country’s regulatory mechanisms and incentives concerning climate change mitigation and adaptation as well as conservation efforts will help foster green investments to ensure the environmental, social, and economic development of its destination and safeguard its natural and cultural resources.
• Finally, the United Republic of Tanzania might consider developing new incentives and investment mechanisms to strengthen and expand its tourism value chain and supply of tourism services. The COVID-19 pandemic has tremendously harmed the tourism sector, most severely affecting small and medium-sized enterprises (SMEs) within the tourism value chain. According to the World Bank, the United Republic of Tanzania experienced a 72 % drop in tourism revenue between 2019 and 2020. To guarantee a more resilient, innovative, and sustainable tourism sector particularly digitalization and innovation among SMEs are critical and SMEs must apply strategies to upskill and train their employees. Moreover, the United Republic of Tanzania may also promote programs and opportunities for innovations through the incorporation of travel and tourism startups to facilitate the diffusion of new technologies and increase inflows of new capital for diversification.
• Presentation - Tourism Doing Business Investing in United of Republic of Tanzania