Diversifying Towards Business Tourism

KENYA's Vice President William Ruto recently vacationed in Livingstone with his family, while Acting President Dr. Guy Scott spent his Christmas break in the Lower Zambezi National Park with his wife Dr. Charlotte Scott. Vice President Ruto hailed Zambia's wonderful tourism product and urged the country to maximize it for the benefit of the citizens, while Dr. Scott implored Zambians to take interest in tourism entrepreneurship and not leave the industry to foreigners.

Though tourism is touted as one of the priority sectors in the Sixth National Development Plan, Zambia has not exploited its competitive advantage. And, the economic contribution of the accommodation and food services activities industry – often used as a proxy for gauging the tourism sector – has remained stagnant, averaging a mere 0.3 percent in the period 2009-2013.

The country has continued to rely on Copper and copperrelated industries as its mainstay. With the copper prices declining, this dependence should not continue much further. Russia is a perfect example of an economy that has relied on a single commodity – oil – to finance half of its budget. This has worked to its advantage over the years until mid-2014 when a sudden mass oil production worldwide sent the unit cost of oil plummeting to way below Russia's breakeven point.

If Russia is too far-fetched as an illustration, let's look closer to home. In Nigeria their growth projections for 2015 were recently revised downwards to accommodate the slump in oil prices. Like Russia, Nigeria is equally oildependent. The possibility of Zambia entering a similar slump to that of Russia, Nigeria and other singlecommodity- dependent countries is quite real.

Why should we wait until this happens to re-strategize our revenue sources? One of the areas we could take advantage of is Tourism. The fact that the country is able to attract a leader from a well-known tourism country speaks volumes about how we can leverage on the products and services that we have to offer.

All these years Zambia has been known as the most peaceful country in Southern Africa. Vice President Ruto comes from a country where tourism has been on the decline due to insecurity concerns, among other reasons. According to the Kenya National Bureau of Statistics third quarter 2014 GDP release, Accommodation and Restaurant service activities contracted by 14.6 percent compared to a contraction of 3.9 percent in the same period of 2013. Other than insecurity concerns, the contraction is attributable to negative advisories by some key tourist source countries and the perceived health risk in Kenya due to the county's geopolitical location and connectivity with West Africa. This has continuously chipped away at Kenya's dominance as an East African tourism hub. Tourists may increasingly consider moving south – to the SADC region, our region.

Some of the highlights to attract potential tourists to Southern Africa are the pristine game reserves, nature excursions and various waterfalls. That means there is basically little product differentiation offered to tourists as each of the fifteen SADC countries has more or less similar highlights. Zambia therefore needs to focus on product differentiation.

An area that has been scarcely explored is Business Tourism. Of the 914, 576 visitors in 2013, Business/conference visitors accounted for over half (56 percent) of the arrivals, while holiday visitors for just over one-quarter. It therefore makes sense to concentrate on the segment that brings in the most visitors.

Source: Ministry of Tourism and Arts, 2013 Tourism Statistics Digest

A large proportion of visitors to Zambia come from neighboring countries for the purpose of trading goods. On a smaller scale, there are long-haul business visitors related to the copper industry and donor community. Few of these visitors engage in much leisure tourism but do spend money on accommodation and food/beverages.

With regard to conferences, the peace and stability we enjoy is enough to encourage business enthusiasts to hold large scale international gatherings, conferences and the like, here. The country hosted the Poverty Reduction and Equity Growth Network (PegNet) conference in September 2014 at Government Complex. The majority of the delegates were first-timers from Western Europe. The Zambia Development Agency in conjunction with Pangaea Securities hosted an International Investment Conference at which the main guest speaker was Sir Richard Branson, founder and Chairman of the Virgin Group of companies. The country also hosted the 4th Zambia International Mining and Energy Conference (ZIMEC) and the Commonwealth Magistrates and Judges Conference, among other conferences.


Delegates at the PEGNet Conference at Government Complex, September 2014

In 2015, about ten high profile international conferences are scheduled to be held mostly in Lusaka, Livingstone and Kitwe. These include the Agritech Expo in April, Southern African Banking and ICT Summit in April, the Mining Trade Expo in May and the 5th ZIMEC conference in June. However brilliant this may be, the lack of infrastructure to host multiple large-scale events, in addition to the unavailability of diversified accommodation, continue to hamper Zambia's chances of winning bids to be hosts.

Zambia's tourism sector, however, is dominated by small and medium sized operators that are not vertically integrated. Hence, they are largely reliant upon overseas providers for services such as representation, marketing and flights.

At the risk of sounding like a broken record, Zambia's centrality offers opportunities for stronger regional linkages. Bordered by eight other countries, Zambia is positioned at the heart of the region. In particular, the town of Livingstone – which, as well as being located next to the Victoria Falls, is close to the borders of Zimbabwe, Botswana and Namibia – offers significant potential for regional tourism circuits and joint marketing. The geographical