FE ADEDAPO writes on how the economic benefits of tourism can be exploited
The tourism and hospitality sector of the country contributes little or nothing to the Gross Domestic Product.
In 2010, the contribution of the sector to GDP was 1.4 per cent and rose slightly to 1.5 per cent in 2013, but has remained the same till date according to data from World Travel and Tourism Council.
The hotel and catering aspect of tourism has rather been reported to attract about 50 per cent of tourist expenditure in the country.
Revenues generated by the government directly or indirectly from tourism activities can be through income tax, property tax, company tax and duties on commodities and services rendered to tourists.
Recently, the Lagos State Government enacted the Hotel Occupancy and Restaurant Consumption Tax Law, which imposes a five per cent tax on goods and services consumed in hotels, event centres and restaurants within the state and the Lagos State lnland Revenue Service, was mandated to collect the payments.
Experts argue that the Federal Government has mainly promoted the development of large-scale tourism projects such as beach resorts, high-rise hotels, lodges and restaurants, coupled with other tourism centres in the country.
But according to them, most of the large tourism projects have been initiated with the assistance of foreign private and multinational capital investment which tend to hinder local participation in tourism project design, management and ownership of resources and facilities.
Evidently, this sector which has a lot to offer does not rank high among the priorities of the Federal Government as shown in the 2015 Travel and Tourism Competitiveness Report.
The World Economic Forum report states that the sector stood at 131st position in terms of government priority among its counterparts in 141 countries of the world.
Although the country’s cultural and natural resources are in the 57th position, the limited development of the tourism industry is a missed opportunity for diversifying the economy and creating employment opportunities, the report notes.
However, significant challenges constrain the potential development of the sector.
Barrier to tourism development
The report notes that Nigeria ranks the lowest (141) in terms of safety and security due to the incidence of violence and terrorism; as such it poses a major barrier to the development of this sector and remains the greatest challenge to be tackled.
It notes that infrastructure, which is inadequate, also hinders economic competitiveness beyond the tourism sector.
It adds, “Nigerian business leaders consider lack of infrastructure as the most problematic factor for doing business, and Nigeria ranks only 127th on ground transport, 111th on air transport and 114th on tourism services infrastructure.
“Improving on these aspects is complex and requires time, but would bring long-term benefits not only to travel and tourism competitiveness but also to Nigeria’s development path.”
According to the report, the travel and tourism sector globally, is growing more quickly than many other sectors, adding that transformations currently taking place can have significant implications if not addressed in an appropriate and timely manner.
It adds that the following steps can be taken to address the situation:
Improve the ease of travel by removing visa barriers
WEF notes that the huge growth potential of travel and tourism is being held back by the outdated practices of visas and border controls.
It says in other areas great emphasis is placed on the benefits of globalisation and free trade, and often the government forgets to think of tourism as an export, and overlook restrictions on the movement of travellers.
According to a United Nations World Tourism Organisation study, the proportion of global travellers having to apply for a visa declined from 77 per cent in 2008 to 62 per cent in 2014, however, much more can be done. Research estimates that removing travel visas at the bilateral level would more than triple travel flows between countries.
It notes that improving visa processes alone can generate an estimated $89bn in additional international tourism receipts and 2.6 million extra jobs in Asia-Pacific Economic Cooperation countries by 2016.
Improve security of travellers
Despite its resilience to shocks, ultimately the travel and tourism industry’s growth and survival is entirely dependent on people’s ability to have a safe travel experience.
It says that current geopolitical tensions, from the Middle East to Ukraine; the growing terrorism threat from ISIS; and the risk of pandemics, as exemplified by the Ebola outbreak can affect the development of this sector in the affected countries.
According to the report, the impact for the affected destination will be a decrease in the number of tourists and amount in revenues, which may be temporary but are nonetheless significant.
The report says, “In high-risk times, the natural instinct of nation states is to re-evaluate their borders and immigration policies. But closing down borders is not a viable solution—it will not resolve security challenges, and will lead to further significant economic losses.
“To mitigate these risks, it is critical to implement technological advances and innovative processes that can increase both the efficiency and security of travel. There is a need to consider how to implement improvements in early warning systems, risk profiling and scenario planning, visa systems, data sharing and passenger profiling at airports.”
It suggests collaboration among international institutions, government agencies and the private sector.
Groom talent and expertise in the sector
The report notes that the aviation and travel sector is already the second-largest employer in the world, with huge potential for further job creation—travel and tourism is forecast to employ 338 million people by 2023, and aviation and aerospace an additional 58 million people.
Yet the industry has difficulties in attracting top talent, both for technical and managerial positions, it says.
According to the WTTC, the total global impact of talent gaps could cost the global economy nearly 14 million jobs and $630bn GDP loss, with China, Italy, Japan, Russia and the United States suffering most.
It suggests that the public and private sector need to collaborate closely to update university and training programmes to ensure they keep up with market needs and technological advancements.
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