Focus: Tourism

Pearl of the Ocean

Pearl of the Ocean

May. 9, 2013

Mozambique's hidden treasures appeal to a wide range of visitors and harbor a wealth of opportunity for investment.

According to the World Travel and Tourism Council (WTTC), Mozambique's tourism sector is expected to grow 6% annually over the next decade. Currently, the largest group of visitors arrives from South Africa, with 51% of recorded tourists coming from the neighboring country in 2010. Other key markets include Malawi, Zimbabwe, Swaziland, Portugal, Germany, and the US.

Arrivals to the southern African country recently increased by 18%, up from 1.8 million in 2010 to around 2.2 million in 2011. The number of tourist arrivals increased by an additional 11% to reach 2.4 million in 2012. Meanwhile, tourist spending rose from $197 million in 2010 to $231 million in 2011. Currently, the sector provides 42,000 jobs, up from the approximately 32,000 recorded in 2005, and represents 2% of GDP. The number of hotel rooms in the country rose from 15,740 in 2006 to 38,460 in 2011. The increasing volume of the sector continues as Mozambique strives to promote its image abroad, two decades after a 16-year civil conflict was resolved. By 2020, the Mozambican authorities expect 4 million tourists to visit the country on an annual basis.

Leading state entities such as the Ministry of Tourism and the Instituto Nacional do Turismo (INATUR) have worked to promote tourism development and designate areas that have the potential for further investment. According to the Strategic Plan for the Development of Tourism in Mozambique from 2004-2013, the niche markets that the country aims to focus on include deep-sea fishing and diving, ecotourism, cruise ships, luxury tourism, and culture.

The size of the country also contributes to its wide tourism appeal, as “you can be by the sea and then see wild animals as nature intended them to be in a park next door," Fernando Sumbana, the former Minister of Tourism, explained to TBY. “All of this is combined with the hospitality of the Mozambican people. We like visitors, and that's what attracts many people."

ATTRACTING INVESTMENT

Investors in Mozambique's tourism sector have long been interested in increasing the amount of accommodation available and improving the telecommunications and infrastructure needed for guests. In July 2011, the government embarked on a program to identify four Tourism Interest Zones in Cabo Delgado Province, Niassa Province, Nampula Province, and Inhambane Province. These are areas that are considered culturally and economically predisposed to make the best use of FDI.

The government has also spearheaded a number of programs to develop and flesh out the hospitality sector of the country. One such program being carried out by the government is a hospitality training initiative, which required an investment of about $225,000. During the campaign, Mozambicans were exposed to a variety of hospitality training sessions and marketing techniques. Since taking offices, President Guebuza's administration has been encouraging tourism through the establishment and renovation of hotels and incentives for private business, some of which are tax breaks for companies investing in tourism. In late 2012, President Guebuza inaugurated the Tete Park Inn Hotel, a 117-room facility built through an investment from Belgium's CR Holdings with a price tag of $25 million. The majority of the hotel's 90 workers will be sourced locally.

With the main goal of promoting development and classifying the existing tourism establishments in the country, Inatur carries out a variety of studies and implements programs to increase tourism activities. One such project consists of the phased construction of medium- and high-standard hotels, at a reasonable cost, to be managed by the local business community. “The tourism industry was historically run by the Portuguese and South Africans, but we are encouraging Mozambicans to take a role in the sector," Hermenegildo Neves, Director General of Inatur, told TBY. “We have been trying our best to make tourism an important industry for the economy." The company's hotels will be located in at least 56 districts in Mozambique, in accordance with regional distribution criteria and funding available to the institution.

However, Mozambique has also piqued the interest of organizations such as USAID, which is currently engaged in a project called Arco-Norte, a $5.5 million initiative to provide technical assistance to tourism companies operating in the northern provinces of the country. These companies are involved in the design and construction of three projects in the coming three-year period. The first is a Tourist Resort Municipality in Pemba covering an area of 200 hectares and featuring space for 14 hotels or apartment buildings. A second project is the establishment of a 700-hectare tourism zone in Mecufi, which will include a golf course, 500 villas, 150 urban residences, and 1,500 apartments overlooking the sea. The third project is a service center designed to provide amenities, facilities, and utilities to tourism resorts, based in downtown Rio Macherewa. There will also be a shopping center and sports complex on site.

Another major foreign investor is China, which has committed to invest $13 billion in several projects in Mozambique up until the end of 2015. Furthermore, the Chinese government has declared Mozambique as an official tourist destination for its citizens. The country features on a list of more than 30 countries that are considered suitable destinations for Chinese tourists. However, work will be needed to provide the services and attractions to encourage Chinese guests to make the journey.

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