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Nkutu: Uganda’s Tourism Potential is Sky High – and Airline Industry is Key

Nkutu addressing the inaugural 'The Uganda We Want' conference at Silver Springs Hotel in Bugolobi on June 23
Conrad Nkutu addressing 'The Uganda We Want' Conference at Silver Springs Hotel in Kampala on June 23

Ugandan intellectuals have called for an ambitious strategy to catapult the country’s tourism to greater heights, suggesting massive financial investment in the budding sector.

Former Head of Corporate Affairs at Tullow Oil, Conrad Nkutu says government needs to set an ambitious medium-term growth target up from 1.4 million to 4 million arrivals in three years to 10 million arrivals in six years.

He further advised government to aim for 2 million jobs to be created in 10 years, up from 247,000.

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World Tourism Organisation statistics indicate that approximately every four tourists create one job.

Speaking at the ‘Uganda We Want’ conference this past Friday at Silver Springs Hotel in Kampala, Nkutu first listed some of the reasons holding back the tourism sector.

These included dependence on government support which he said was “woefully inadequate”; very low spend on tourism promotion ($2m vs $25-78m spent by rivals); and key consumer markets which don’t know what Uganda has to offer.

“We haven’t driven demand,” said Nkutu, arguing the Uganda Tourism Board budget which only accounts for 11 percent of sector budget of Ministry of Tourism remained so low.

He also cited the low international media and public relations engagement with only two global PR firms marketing Uganda compared to 18 for Kenya.

He also pointed out the negligible digital and social media awareness and incentives footprint.

Nkutu wondered why the big three wholesale international tourism package agencies – German firms Tui, Meier and Thomas Cook do not market Uganda.

But Deputy UTB boss John Ssempebwa said arrangements were underway to ensure Thomas Cook sells the Uganda brand in high-end markets.

He further said Uganda has four international PR firms to market Uganda abroad and that UTB was doing everything in its means to realise 4 million tourists per year by 2020.

Uganda is among the top tourism destinations in the world, accounting for 54 percent of world primates. Over 1,300 chimps live in Kibaale alone.

Lions, elephants, rhinos and buffaloes can all be found in three main game parks in Uganda not to mention scenic lakes such as Victoria, Albert, Bunyonyi, Edward and George – plus the source of River Nile.

Throughout the year, Uganda has river rafting and bungee jumping opportunities on the River Nile and ziplining in Mabira Forest.

Interestingly, United States earns about Shs 100bn from viewing of its 930 Bird species yet Uganda which boasts of 1,036 bird species earns not even 10 percent of America’s.

Uganda's market share compared to he rest of the world

Uganda’s market share compared to he rest of the world

Value Chain

Nkutu revealed the entire value chain was very weak and that Uganda lacked strategies for “conference tourism, history-cultural sites, museums, non-nature/ safari adventure and domestic tourism.”

In regard to inland transport, Nkutu submitted that tourists do not like destinations with connecting flights or connection waiting time exceeding three hours.

“They want direct flights. Uganda has no national airline. There is low supply of other critical hardware: hotel beds, vehicles e.t.c. which means we cannot position Uganda for low-value-high-volume markets like China and India. Our hotels are not world-graded,” he added.

However, Ssempebwa argued that UTB recently embarked on a process of classifying and grading accommodation facilities at a free cost.

The present grading covers the physical and intangible service expected from an accommodation facility in a specified category and level of classification.

The East African Criteria rating system is denoted by stars where one star denotes the lowest and five star the highest grade.

With exception of motels and restaurants whose star rating range from 1 to 3 and 3 to 5 respectively, all the other categories are graded from one to five stars.

Nkutu addressing the inaugural 'The Uganda We Want' conference at Silver Springs Hotel in Bugolobi on June 23

Nkutu addressing the inaugural ‘The Uganda We Want’ conference at Silver Springs Hotel in Bugolobi on June 23

Ugandan intellectuals pose for a group photo at 'The Uganda We Want' conference

Ugandan intellectuals pose for a group photo at ‘The Uganda We Want’ conference

Meanwhile, Nkutu said Uganda lacks the capacity to train the estimated 3,000 core senior, middle and junior personnel required for even a short term leap from 1.4m to 4m arrivals and that 18 percent VAT on local hotels and tour operators makes them less price competitive.

“Our inland flights are very expensive. Air Kenya (Aerolink) is charging $480 for a flight to Kihiihi to see the gorillas. We are not packaging destinations in single package value chains,” he observed.

Way forward?

Nkutu suggested that Uganda aims for the middle to high end of the market – the $1,000-a-day tourist, mainly from Europe, North America, Australia, South East Asia, and Middle East.

He also called for a high-value-not-maximum-volume strategy to tap into regional and continental markets in Africa.

Nkutu, who also served as Monitor Publications Limited Managing Director, said government must drive this growth.

“Invest $500m over 10 years in order to start earning $10 bn a year. This is over six times the projected oil revenue, for which cost recovery will be $12 bn for upstream and pipeline alone,” said Nkutu.

He said in a timeframe of ten to 20 years, Uganda could earn $100 bn.

Gilbert Mugasha alias Jomo attending the function

Gilbert Mugasha alias Jomo attending the function

“Tourism is a low-spend, high-yield, infinite-return investment for Uganda yet oil is a finite resource,” said Nkutu as majority of intellectuals in the conference room listened attentively.

Nkutu belongs to The Uganda We Want, a group of Uganda intellectuals from all walks of life.

They are inspired by the desire to mobilize the entire citizenry to participate in shaping the Uganda they want.

They last week initiated The Uganda We Want Summits- an engagement and feedback platform for the citizenry and their leaders to build a shared understanding and working towards a Uganda that works for all.

In his conclusive remarks, Nkutu urged government to invest more than $50m a year in international PR and marketing; increase number of global PR firms from 2 to 25 and create scenic, multi-destination package products with world class promotional materials.

Nkutu said UTB should engage the top 3-5 international package holiday deal wholesalers and tap into the international tourism upstream value chain.

This, he said, requires proof of a strong global consumer marketing and PR footprint and a presidential pitch, supported by top notch promotional material and a strong global digital and social media footprint.

Nkutu further said Uganda needs cheap, easy online visa application/ pay and cheap landing fees for charter flights.

“Government must invest proactively in domestic tourism marketing and local zoos, museums, cultural and historical sites. This strategy must support lower prices for nationals, plus non-nature/ non-safari adventure experiences, especially for children and nationals,” he noted.

He further suggested that Uganda Hotels and Tourism Institute (UHTTI) returns to the Ministry of Tourism and that government invests in and attracts world class trainers to reestablish Ugandan standards and build a sufficient manpower skills base to manage a steep growth in the number of arrivals.

He also wants a waiver of VAT on hotels and tour operators for at least 10 years to build price competitiveness and industry profitability.

UTB's Ssempebwa said the country's tourism sector is destined for greatness

UTB’s Ssempebwa said the country’s tourism sector is destined for greatness

Nkutu further urged UTB to invest in promoting Uganda to international Speakers Bureaus and conference and events hosts and organisers as a destination venue for conference tourism.

He wants government to build a Lake Victoria ring-road and pitch for large scale Chinese, Indian and European investors to develop the full beach hotel capacity of the lake.

Nkutu also rooted for an investment of $500 million in a low-cost, direct flights national airline that is designed principally to offer direct flights to tourists from selected mid-to-high end country markets; and turn Uganda into a regional hub for high-value cargo.

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