Sweeping Price Cuts Target Tourist Growth
The cost of domestic flights, tour companies and hotels are all being targeted in an attempt to attract tourists.
By Mikias MerhatsidkÂ
Addis Ababa, Ethiopia -Â Ethiopian Airlines has slashed 40pc off domestic flight ticket prices, effective from May 1, 2014. Tour operators are also following suit, with a 20pc decrease in what is said to be an effort to support the tourism industry.
On October 2013 Ethiopian introduced a three to seven percent rate increase on domestic flights. The latest reduction mostly benefits foreign tourists, as residents had always benefitted from a discounted rate, says Busera Awel, Chief Commercial Officer at the airline. The new discount for domestic travelers amounts to four to six percent, with a one-way flight to Axum, for example, going down from 62 dollars to 58. Tourists, on the other hand, will now pay 70 dollars, down from 118 dollars.
The price reductions were part of an effort by the Ethiopian Tourism Organisation (ETO) to reduce the cost of tourism in Ethiopia across the board. The ETO is a governmental body that is working on developing tourist sites and marketing them and the country. Its effort includes all tourism stakeholders in the public and private sectors.
This was disclosed during a press conference organised by the ETO at the Hilton Hotel on May 8, 2014, to announce the rate changes.
The ETO is also in talks with the hotel industry to cut their prices by 30pc-40pc, according to Fitsum Gezahegn, president of the Tour Operators Association and a board member of the ETO.
“This move will help us to work all year round, rather than the four or five months that we have currently,†Fitsum said.
Representative of the Addis Abeba Hotels Association, which is represented on the board of directors of the ETO, were not present at the announcement.
Ethiopian spends around 10 million dollars to promote itself and the country, according to Busera. The airline boasts the youngest fleet on the continent, with 63 aircraft and the airbus A-350 to come after two years. It flies to 17 domestic and 80 international destinations.
The airline, which reported a 2.8 billion Br profit in 2013, says that it subsidises its domestic service with the profit from international flights.
The country has limited but growing tourist facilities and, in order to utilise this growing facility, prices must be balanced with the services that are provided, Fitsum said.
The tourist sector needs to accomplish two things, said Tewolde Gebremariam, CEO of Ethiopian and Board Chairperson of the ETO – product development and marketing. So, the country should work to create a competitive market with a better value chain, according to the CEO, and, as a national carrier, Ethiopian has an obligation to promote the sector in the country.
“We should also look in to new tourist sources, like China, Japan and other Asian countries,†Tewolde added.
The government gives Visas on arrival for tourists from 30 countries and this number could increase soon to encourage the sector, according to board members of the ETO. Representatives of the Ethiopian Airports Enterprise, Ethiopian Roads Authority and National Bank of Ethiopia are also members of the board of the ETO.
But, while trying to decrease prices in the value chain, Ethiopia is not working to become a cheap destination, Solomon Tadesse, CEO of the ETO, explained the stance of his Organisation.
The sector is still facing different problems, including – negative image of the country, limited infrastructure, inadequate trained manpower and a lack of coordination among stakeholders. According to tourism experts, the number of tourists flowing into the country is still lingering at around 600,000. This number is insignificant when compared to the approximately nine million people that flock to South Africa annually or the 1.8 million visitors to Kenya every year, according to the World Bank.
Source: Addis Fortune
