Impact Assessment of COVID-19 Pandemic on the Tourism and Hospitality Industry in the EAC and Post Recovery Strategy for the Sector - Working Paper

Tourism is one of the largest foreign exchange earners and fastest-growing sectors in the East African Community (EAC). According to the EAC Secretariat, tourist arrivals in the EAC region increased from 3.5 million persons in 2006 to about 7 million in 2019. Tourism contributed to the Gross Domestic Product (GDP) of the EAC Partner States by an average of 9.5% in 2019. It contributed an average of 17.2% to EAC total exports and 7.1% to employment. However, the upward trajectory in tourism in the region, with its positive impact on the economy, was devastatingly affected by the onset of COVID-19 pandemic in March 2020. The study aimed at assessing the impact of COVID-19 on the tourism and hospitality industry, and to generate policy options that the EAC Partner States should adopt to protect sector players from COVID-19 disruptions and future pandemics. The main activities of the study included: assessment of the impact of COVID-19 pandemic on the tourism and hospitality industry in the EAC; analysis of the current fiscal incentives for the sector; assessment of the non-tariff barriers that the sector has faced during this period of the pandemic; and propose recommendations for the tourism sector in EAC arising from the assessment. This study establishes that EAC Partner States may have lost international tourism receipts to the tune of US$4.8 billion in the year 2020. About 4.2 million foreign tourists were not able to travel to their preferred EAC destinations. The trickle-down effects have been felt across affiliated industries and the rest of the economy. In terms of impact on employment, it is estimated that tourism jobs in the region dropped from about 4.1 million jobs to 2.2 million jobs, that is, about two million jobs in the tourism sector were lost. There was a significant decline of about 65% of visitors to national parks and therefore impacting negatively on wildlife conservation efforts in the region. The Study also shows that hotels in the region registered average occupancy rates of below 30%, thus affecting their operations significantly including maintaining staff.