A PLACE FOR HOTELS AND CATERING ESTABLISHMENT IN GHANA’S TOURISM INDUSTRY.

ARC-11-01-3037

ERIC KARIKARI

Abstract ……............................................................................................. 2

Introduction …………....................................................................................... 3

o background

What is Tourism? .................................................................................... 4

Tourism Infrastructure ……………………………………………………………………………….. 5

Tourism in Ghana: Facts & Figures. ........................................................................ 7

Strengths, Weaknesses, Opportunities and Threats ............................... 7 – 8

Tourism in West Africa ................................................................................... 9 – 10

Accommodation within the industry ........................................................ 11

Conclusion ................................................................................................ 12

Glossary ………….……………………………………………………………………………....... 13

Reference ................................................................................................ 14

Ghana’s rich heritage, her naturally hospitable people and her commitment to democratic governance

has made her a peaceful, secure and politically stable country. In terms of popularity, Ghana ranks third after

Nigeria and Senegal in the West African Sub Region. This notwithstanding, Ghana is not known as a tourist

destination site.

Something is not going right: Ghana has not been able to realise her full potential in tourism

development. Two obvious reasons for this are our lack of awareness of the importance of tourism sector to

Ghana and Ghanaians, and our lack of a marketing strategy.

The objectives of the report are to analyse the trends of international local tourist arrivals and receipts

into the country, the purpose of visits, tourist expenditure and all accommodation and catering

institution/organizations that make their visit a success. The purpose was to determine the number tourists’

sites and also whether Ghana Tourism Board (GTB) ensured that accommodation and catering facilities met

quality standards set in the New Harmonised Standards.

Background:

Tourism has become a global and highly competitive socio-economic and environmental activity in

both developed and developing countries. It has become the largest and fastest growing industry world-wide,

and stimulates other sectors such as agriculture, finance and manufacturing. Apart from generating foreign

exchange earnings and revenue for governments, tourism has the potential to become a powerful tool in pro-

poor development strategies. It has the ability to create jobs and wealth for local economies as well as

contribute to conserving natural resources. Ghana is fortunate to be endowed with a wide-range of cultural,

natural and historical attractions. Additionally, the strategic geographical central location of the country, the

excellent air transport access, political stability, coupled with the proverbial Ghanaian hospitality and

friendliness of Ghanaians are not just assets but have created a conducive environment for growth of the

tourism sector.

The tourism sector is an important contributor to Ghana’s economic development. In 2008, an

estimated 1.4 billion US dollars was realised from the tourism sector, making it the fourth highest foreign

exchange earner after gold, cocoa, and remittances from Ghanaians resident abroad. In the same year, 234,679

jobs were created (directed or indirectly) by the tourism sector.

When well planned, tourism can be a viable tool for environmental conservation and the preservation

of local cultures. Tourism can also induce central and local government to make necessary infrastructure

improvement in host communities.

Image showing wildlife and tourist

Ghana has a variety of natural, historical, cultural and other type (usually man-made) tourists’

attractions. Examples of these are national parks and forest reserves, forts and castles, festivals and

museums. These attractions need to be developed and managed to appeal to both local and

international tourists.

Historical background

A formal development of tourism in Ghana was an evaluation of the country's tourism

resources in 1970 which led to the formulation of a tourism development plan for 1972 -1975.

Subsequent plans have been developed including a 15-year tourism development plan which was

intended to guide tourism planning for the period 1975-1990 and the National Tourism

Development Plan formulated by the Ministry of Tourism in collaboration with the World Tourism

Organisation in 1995 to guide domestic and international tourism development from 1996-2010.

History of the Ministry of Tourism

The Ministry of Tourism was created in 1993, with the mandate to develop, promote and coordinate

all tourism activities in Ghana. In 2003, the functions of the Ministry were expanded to include the

Modernisation of the Capital City (MCC). From 2006, the Ministry was known as the Ministry of

Tourism and Diaspora Relations until it was renamed Ministry of Tourism in 2009. The Ghana

Tourism Board (GTB) is the implementing body for the development of tourism.

Statutory mandate

Ministry of Tourism

The Ministry of Tourism (MoT) was created by an executive instrument in 1993 with the

mandate to develop, promote and coordinate all tourism activities in Ghana.

Ghana Tourism Board

The Board was established by National Redemption Council Decree (NRDC 224) 1973,

amended by the SMCD 80 of 1977. It is the implementing agency of the Ministry of Tourism.

Major Activities

Ministry of Tourism

Establishes tourism development policies and planning

Coordinates with MMDAs and MDAs to develop and manage tourist sites

Identifies and develops products of public types of tourist attractions

Ghana Tourism Board

Sets standards for commercial types of tourist facilities and major infrastructure.

Monitors the activities of the private sector

Markets tourism domestically and internationally

What is tourism….?

Tourism comprises the activities of persons travelling to and staying in places outside their usual

environment, for a period of not more than one consecutive year, for leisure, business and other purposes not

related to the exercise of an activity remunerated from within the place visited.

The tourism industry can be defined as those firms, organisations and facilities that incidentally or

intentionally provide facilities and services for tourists, to cater for their needs from the time of planning for

their trip, to their return home. The tourism industry is one of the largest industries in the world, comprising

924 million international tourists in 2008, and accounting for 30% of the world’s exports of services. Global

tourism generated US$ 856 billion (€ 625 billion) in revenues, in 2007.

Global tourism is forecast to continue to grow in the long term, though at a slower pace for 2009, due to

the current global economic downturn. However, the good news is that Africa, as well as East Asia and the

Pacific, the rest of Asia, and the Middle East, will have higher growth percentages than the rest of the world.

TOURIST INFRASTRUCTURE

Tourism is a competitive industry that requires a good mix of attractions and support facilities to ensure

a sustainable tourism industry. Some of the facilities and services required to meet the needs of tourists include,

accommodation services; food and beverage services; transportation, services by travel agents, tour operators,

and tourist guides; recreation and entertainment services such as the performing arts, museums, botanical and

zoological gardens, nature reserves and wildlife preservation services; sports and recreation services such as

golf and race circuits, recreational parks and beaches, amusement park services, carnivals and casino services;

and other miscellaneous services such as banking and insurance services, rental and leasing services, trade

fairs and exhibitions, spa services, and tourist information services etc. These are discussed below.

• Accommodation

Accommodation is an essential component of tourism since it involves a stay away from home.

Accommodation services are wide-ranging and includes hotel and motel lodging services, letting services of

furnished accommodation, youth hostel services, children's training and holiday camp services, camping and

caravanning site services, sleeping car and similar services and residence of students.

As seen in Chart 13, the number of hotels, rooms and beds have increased significantly between 1991

and 2005. The number of hotels increased from 419 in 1991 to 1345 in 2005, which showed an average

annual growth of 9.7per cent.

The number of star-rated hotels also increased from 168 in 1995 to 504 in 2005 showing an average

annual growth of 11.9 per cent. The number of star-rated hotel rooms increased from 3,693 in 1995 to 8,791

in 2005, showing an average annual growth of 9.4 per cent.

Finally the number of star-rated hotel beds increased from 5,576 in 1995 to 11,469 in 2005, which

represents an average annual growth of 7.7 per cent.

• Food and Beverage

This is an essential service in the industry and includes meal serving services with full restaurant services,

meal serving services in self-service facilities and beverage serving services for consumption in the

premises.

The number of licensed restaurants by category also increased from 154 in 1996 to 372 in 2005, which

implies an average annual growth of 20.4 per cent.

• Travel Agency, Tour Operator and Tourist Guide

The above services provide the intermediation role to bring buyers and sellers together either to create

markets where they previously did not exist or to make existing markets work more efficiently and thereby

expand market size. For travel and tourism, intermediation comes about through tour operators who act as

wholesaler assembling the components of the tourist trip into a package and retailing the latter through travel

agents who deal directly with the public.

The number of licensed travel agents and tour operators increased from 72 in 1991 to 474 in 2005 which

showed an average annual growth of 18.4 per cent.

• Passenger Transport

Transportation provides the means to reach the destination and also the means of movement at the

destination.

Adequate transportation infrastructure is therefore crucial I tourism development. The passenger transport

infrastructure includes the following:

i. Air transport services

ii. Rail transport services

iii. Road transport services

iv. Water transport services

These findings suggest that the tourism industry in Ghana indeed has tremendous economic potential that

needs to be exploited. The nature of the industry is such that there are linkages across the economy, as its

tentacles spread into agriculture, industry and other service sectors like transport, storage and communication,

wholesale and retail trade, restaurants and hotels; finance and insurance, etc. Thus it has both a direct and

indirect potential impact on national output growth.

Structure of the Industry

The Ministry of Tourism (MOT) is the policymaking body for Ghana’s tourism industry, with its

implementing agency being the Ghana Tourist Board (GTB). The Ghana Tourism Federation (GHATOF) is

the umbrella association for private sector tourism organisations and their affiliates.

Tourism’s Contribution to the Ghanaian Economy

The tourism industry contributes greatly to the Ghanaian economy, through such means as corporate

tax, income tax, value added tax, National Health Insurance Levies, customs/excise duties, GTB licence fees,

property rates, property/asset fees, business registration fees, visa/work permits, airport service charges, and

so on. Between 2005 and the third quarter of 2008, the hotel sector had contributed GH¢ 647,296,664.15

directly to government revenue, and GH¢ 35,011,773.43 to nongovernmental/ quasi‐governmental agencies.

During the same period, the restaurant sector contributed GH¢ 28,129,876.26 directly to government revenue,

and GH¢1,888,216.42 to non‐governmental/quasi‐governmental agencies.

Share of the West African Tourism Market

In 2004, Ghana had its highest ever visitor arrival figures, amounting to 584,000 visitors in that year.

However, this figure must be doubled within three years, if we are to achieve our target of attracting one

million visitors to Ghana by mid‐2012.

This requires an increase of Ghana’s share of West African tourists from 12% to 20%, by mid‐2012.

By targeting visitors from the UK, Germany, USA, The Netherlands and Nigeria, and by the active

involvement of all at large, we need to increase our marketing efforts and close the widening gap between

Ghana and Senegal, so that Ghana may eventually be the top tourist destination in West Africa.

Ghana’s Strengths as a Tourism Destination:

o Authentic and unspoiled.

o Strong cultural and heritage tourism products.

o Nature and ecotourism.

o Safe and secure.

o Plenty of sunshine.

o High satisfaction rating by visitors.

o Friendly people.

o Anglophone country.

o Well‐connected flight network.

o Developing telecommunications.

o Political stability.

Ghana’s Weaknesses as a Tourism Destination:

o Lack of active promotion of Ghana as a tourist

destination.

o Lack of integrated channel strategy.

o Poor visa regime.

o Poor online strategy.

o Little tourist information.

o No international information offices (Senegal

has one in New York).

o Poor infrastructure (especially domestic and

international transportation, roads, rest

stops, and tourist information offices).

o Poor product quality and low excitement over

products and services.

o Lack of service and professional tourism

orientation.

o Inadequate accommodation facilities.

o High prices relative to quality.

Opportunities facing Ghana as a Tourism Destination:

o Worldwide trend towards special‐interest and

adventure tourism.

o Increasing interest on the part of African‐

Americans in their heritage.

o Tourist potential from West African

neighbours such as Nigeria.

o Currently a ‘best kept secret’: no established

image on the world tourism market.

o Attractive to business travellers due to

location and safety (potential conference

market).

o An estimated four million Ghanaians living

abroad.

Threats facing Ghana as a Tourism Destination:

o Increasing competition from other African

countries as emerging tourism destinations.

o High cost of travel to Ghana.

o Lack of appreciation of tourism’s importance

by government and society alike.

o Increasing worldwide security concerns about

overseas travel.

o Negative associations with qualities generally

associated with Africa (famine, disease,

poverty, instability).

o Global financial crisis.

It is expected that Africa will have an additional 27 million visitors by 2010, and 57 million visitors by

2020. We therefore have a good opportunity to grow Ghana’s share of African tourist arrivals. Currently, out

of the four sub‐regional blocs in Africa (northern, southern, eastern and western), West Africa has the smallest

share of visitors. Though West Africa seems to have lagged behind in attracting visitors compared to other

African regional blocs, this might present the countries in the West African sub‐region with an opportunity to

market themselves as virgin and unspoilt tourist destinations.

The current global financial crisis still calls for caution, since many households may cut back on travel

spending. However, in the more developed countries, holidays are considered essential. Research suggests that

the economic downturn will have less of an impact on holiday growth than on other areas of consumer

spending.

Selected Major Tourist Sites

The selected major tourist sites in the country include Aburi Botanic Gardens, Accra Zoological

Gardens, Cape Coast Castle and Elmina Castle. Others are Kumasi Zoological Gardens, Kakum National Park,

Shai Hills Resource Reserve and Mole National Park.

Aburi Botanic Gardens is located at Aburi in the Eastern Region. Accra Zoological Gardens is located

in the heart of the city of Accra, in the Greater Accra Region. Cape Coast Castle can be found in Cape Coast

in the Central Region. Elmina Castle is located in Elmina, also in the Central Region. Kumasi Zoological

Gardens is located in the center of Kumasi, in the Ashanti.

Region. Kakum National Park is located about 25 kilometers from Cape Coast in the Central Region.

Shai Hills Resource Reserve is situated at Shai, in the Greater Accra Region. It covers 52 square kilometers,

made up of five hills, and the highest is 290 metres. Mole National Parks is found in the Northern region, near

Damago. It is the Ghana’s largest national park covering more than 4,800 square kilometers of woodland

savannah with low hills and escarpments.

Selected Community-Based Eco-Tourism Sites

The selected community-based ecotourism sites are Amedzofe, Boabeng-Fiema Monkey Sanctuary,

Bobiri Forest and Buffer fly Sanctuary and Bunso. Others are Liate Wote, Nzulezu, Paga Crocodile Pond,

Sirigu Traditional Pottery, Art and Architecture and Tafi Atome Monkey Sanctuary. The rest are Tano Boase

Sacred Grove, Tongo Hills, Wechiau Hippo Sanctuary and Xavi Bird Watching and Cultural Canoe Tours.

Amedzofe is a community-based eco-tourism site in the Volta Region. Boabeng Fiema Monkey

Sanctuary is Ghana’s most famous example of traditional African conservation. It covers 4.4 square kilometer

piece of forest. It is situated between two villages, Boabeng and Fiema in the Brong Ahafo Region. Bobiri

Forest and Butterfly Sanctuary is located at Bobiri in the Ashanti Region. Bunso is in the Eastern Region.

Liate Wote Monkey Sanctuary is located in Liate Wote in the Volta Region while Nzulezu can be found in the

Western Region, 90 kilometers west of Takoradi.

Paga Crocodile Pond is located at Paga in the Upper East Region. Sirigu is known throughout Ghanaian

history for its pottery, basket weaving and unique symbolic wall decorations. It is located in Sirigu, in the

Upper East Region. Tafi Atome Monkey Sanctuary is located in the heart of the Volta Region, 43 kilometres

south of Hohoe. The Tano Boase Sacred Grove is found in the Brong Ahafo Region of Ghana. Tongo Hills

constitute a unique cultural landscape and is located in the Upper East Region. Wechiau Hippo Sanctuary, a

community protected area, is located at the extreme north-western corner of the Upper West Region of Ghana.

Xavi Birds Watching and Cultural Canoe Tours is a community-based eco-tourism project located in Akatsi

District in the Volta Region of Ghana.

Hotel, Catering & Tourism Training Institute (HOTCATT)

The Hotel, Catering & Tourism Training Institute (HOTCATT), a training wing of the Ministry

which was established for the purpose of training hospitality service providers has been restructured and

merged with GIMPA Hospitality Training Institute for effective and efficient training programmes for the

industry.

The number of hotels in Ghana increased from 1 345 (18 752 rooms) in 2005 to 1 775 (26 047 rooms)

in 2009, according to the Ghana

Tourist Board. The largest concentration is found in Accra, particularly in the 5-, 4- and 3-star

categories.

Nevertheless, according to the Oxford Business Group (2011), the 4-star and 5-star segments are still short of

an estimated 1 200 to 1 500 additional rooms – hence the high room rates. However, a few hotels have been

constructed in the past two years, largely driven by the emerging oil industry.

According to a Renaissance Capital (2011) study, Ghana’s hotels and restaurants sector expanded by

11.3% in 2010, attributable to business arrivals in Accra. Room rates in the 5-star hotel segment range from

USD 350 to USD 500, while average room rates for other star categories range from USD 50 to USD 350.

Renowned international hotel brands present in Ghana include the Holiday Inn, Novotel, Golden Tulip,

Best Western and Radisson Blue, amongst others. The Marriot and Hilton chains announced their entry into

the Ghanaian hotel industry in 2012.

Distribution of star rated hotels and hotel rooms in Ghana in 2010

The hotel occupancy rates, especially in star rated hotels, have been relatively high during the past

decade. The GTA statistics show roughly 80 per cent occupancy rates on average for 4-star rated hotels. This

was supported by the hotel representatives in Greater Accra. There is, however, a tendency that the

occupancy rates drop during the weekends and during the European holiday months (July-August and mid-

December – mid January).

Occupancy rates

Room occupancy rates in Ghana rose consistently over the period 2002 to 2007 in the 5-star segment,

with a similar trend recorded in the 4-, 3- and 2-star categories of the industry (with the exception of 2007,

when a drop was reported in the latter two categories). Occupancy rates in the 5-star segment reached 94.4%

in 2007, but declined to 74.1% in 2009 largely due to the global financial crisis. Occupancy rates in the 3-star

and 4-star hotel categories averaged 79% and 87%, respectively, in 2009. These high occupancy rates indicate

a shortage of accommodation in Ghana.

• Accra:

Establishment of upper market hotels and

accommodation; refurbishment and/or rebranding

of existing hotels, refurbishment of the existing

conference centre.

• Kumasi & Takoradi: Establishment of new hotels and other

accommodation.

Identified gaps in the hotel industry

Accra is deemed to have a sufficient overall number of hotels, although a shortage appears to be evident

at the upper end of the industry.

Outside the capital city, the business segment is driving tourism sector growth in cities such as Kumasi and

Takoradi. Allegedly, Takoradi residents are renting out their houses to corporate clients attracted to the city

by the developing oil industry.

The shortage of hotels in these cities presents opportunities for the establishment of upmarket hotels

or internationally branded, yet affordable, facilities. Ghana has the opportunity to establish itself as the

conference destination of West Africa. Demand for conferences and other business events is taking off due to

the expanding volume of business travellers to Ghana. A dedicated and large conference centre has been

operational in central Accra for a number of years, but is in need of refurbishment and possible expansion.

Furthermore, there may be a need for the establishment of hotels around the city.

The government recognises that the enhancement and promotion of tourist attractions is very important

towards the development and promotion of Ghana as a competitive and diverse tourist destination. The tourism

authorities, realising the importance of the sector to reduce poverty and boost foreign earnings, have launched

a marketing strategy aimed at making Ghana the preferred tourism destination in West Africa. If successful,

this three year strategy (2009-2012) will pull in more tourists, turning the ambitious million tourist mark into

reality. With adequate resources and focus, tourism could become the number one foreign exchange earner in

Ghana, surpassing the traditional commodity like cocoa.

The foregoing analysis has portrayed a picture of what is entailed in the tourism industry, what Ghana

currently has to offer in the industry, problems in the industry and attempts to solve the problems to make the

sector contribute significantly to the country's economic development. The analysis has shown that Ghana has

vast tourism potentials both in terms of natural features and her rich cultural heritage to make tourism a

booming sector of the country's economy.

After extensive evaluations of the tourism industry in Ghana it is recognized that the nation has a lot

of tourism potential. Yet that potential is wasted if it is not developed. Domestic tourism is established as one

of the keys to developing the tourism industry to its full potential. It is also discovered that the lack of good

maintenance culture and a false sense of time poverty contribute to the poor patronage of tourism by

Ghanaians. Hence recommendations were made to policy makers and stakeholders to help promote

maintenance culture and teach time management.

o Tourism: It is the activities of persons travelling to and staying in places outside their usual

environment for not more than one consecutive year for leisure, business and other purposes.

o Tourists’ Product: It comprises the tourist attractions and activities, accommodation and

other tourist facilities and services, and the infrastructure that serves the attractions and activities,

facilities and services.

o Historical sites: This consists of castles and forts which constitute the country’s historical

legacy. They serve as tangible history of Ghana and represent the treasure and monuments to the

memory of the early European contacts with Africans. With the designation of Ghana’s castles and

forts as World Heritage Monuments their maintenance is of paramount importance to the Nation and

other stakeholders.

o Visitor Facilities: These are facilities which provide the tourists with the reception they might

need, and give tourists the opportunity to buy souvenirs. They include reception rooms, toilets and

urinals, souvenir shops, and food joints.

o Accommodation Units: These are hotels, guest houses, lodges and home stays (individual

homes which are used to house tourists during their visit). They include rooms and beds of a housing

unit. The number of accommodation units is determined by the number of rooms and beds available

to tourists.

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