1. Tourism in Tanzania
Dr. Riccardo Pelizzo

2. Introduction
The purpose of the present presentation is to advance two basic claims and some practical recommendations
Our claims are:
First, that tourism can contribute to promoting development and reducing poverty,
Second, that tourism’s ability to promote pro-poor growth is conditional
Our discussion of the conditions under which tourism can promote growth, development and poverty reduction will lead to a set or practical recommendations

3. Tourism in Tanzania
The tourism industry has experienced a massive growth over the years
According to the World Bank the number of tourism arrivals has increased by more than 387 percent-- from international tourist arrivals in 1995 to international tourist arrivals in 2015

4. Tourism in Tanzania-2

5. The dividends of tourism
The growth of the tourism sector yielded two basic dividends:
1) it created employment
2) it contributed to wealth creation and to the country’s GDP

6. The dividends of tourism-2

7. The dividends of tourism-3
The second benefit associated with the growth of the tourism sector is the creation of wealth and the contribution to the country’s GDP
Tourism has consistently made a contribution to Tanzania’s GDP
Such contribution has varied from a minimum of 3.75 per cent in to a maximum of 9.5 in 1995
In recent years, it has steadily increased—see next slide

8. The dividends of tourism-4

9. The dividends of tourism-5

10. The dividends of tourism-5
But while the development of the tourism sector created employment and wealth, it did not do much to reduce poverty and income inequality
Why?
The first reason why tourism did not contribute much to poverty alleviation is the so called ‘vertical integration’
Tour operators use their charter flights, to bring tourists, with their buses/transport, to their resorts and none of this contributes much to the local economy

11. The dividends of tourism-6
The second reason is that, even in the absence of vertical integration, foreign ownership can prevent Tanzania from enjoying the dividends of tourism
More than 60 per cent of profits in SSA were repatriated according to various studies
And in some cases profits are not even made in Tanzania—tourists buy packages back home and most of the money does not even come to Tanzania

12. The dividends of tourism-7
The third reason is that tourism creates employment but people working in the tourism industry are paid less than the workers working in any other sector
This was true from 1995 to 2011 and it remained true from onward
The average salary in 2013 was lower than in 2012 and the average salary was only 215 shillings higher than what it had been two years before

13. The dividends of tourism-8
To make matter worse, there is a very high level of income inequality between men and women working in the tourism sector
The difference was about 30,000 shillings per month, which is nearly 20 per cent of the average monthly cash income for a woman working in the tourism sector
The bad salary conditions for women are a problem because most workers in the tourism sector are women

14. Conclusions Vertical integration Profit repatriation
Profits made elsewhere
Low income for tourism workers
Income inequality across gender
Are the 5 main reasons why a thriving tourism industry has thus far failed to reduce poverty and inequality

15. Some recommendations
Better salary/wages for workers in the tourism industry
The elimination of differences in income across gender: women must be paid like men if they perform the same function/task
Make sure profits are made and are kept locally
encourage local ownership,
find a way to compel foreign owners to reinvest locally part of their profits
Try to reduce/eliminate vertical integration
Promote use of locally-owned resorts, hotels and facilities
Promote use of locally-owned transport