Tourism Trade With Africa Benefits Few African Countries

LAST year, to much fanfare, 26 African nations signed off on a free-trade ‘super bloc’ that seeks to improve the absurdly low levels of intra-regional trade on the continent, at the Egyptian seaside resort of Sharm el-Sheikh.

In the same city at the Africa 2016 Forum last weekend, African Development Bank (AfDB) president Akinwumi Adesina painted a picture of just how insufficient trade with other African countries is.

African trade represents just 2% of the global total, and intra-African trade makes up 12% of the continent’s activity, compared to 60% in Europe and 35% in Asia.
“This is not acceptable,” Adesina said.

He added that AfDB will continue to invest heavily in regional infrastructure, especially rail, transnational highways, power interconnections, ICT, air and maritime transport, reducing the bottlenecks that cost the region billions in inefficiencies and lost opportunities.

While tariffs on the continent are high—according to the United Nations Conference on Trade and Development (UNCTAD) an African company making sales on the continent would pay more than three times the 2.5% average tariff rate elsewhere – non-tariff barriers tend to wreak more damage than levies.

Despite an abundance of trade blocs on the continent—17 at the moment—their poor internal workings has led potential benefits such as comparative advantage trading to be erased by red-tape heavy protectionist approaches.

African countries have also kept the same export-geared infrastructure, leaving the continent vulnerable to global market shifts.

One promising way of solving this is seen as ramping up regional trade in services—a model that has contributed to the booming growth in many Asian countries.

It may be already happening and could herald exciting possibilities.

The number of tourists visiting Kenya from neighbouring countries has increased over the past few months as the East African nation set off on promotions around the region to make up for dwindling numbers from its traditional source markets in Europe.

While tourists arriving at the nation’s two main airports dropped by 13% to 748,771 last year, the decline was less steep than the previous year’s reduction of 28%, according to the country’s statistics agency. Visitors have shied away from going on world-renowned safaris in the country or lounging on its white sandy beaches after a series of deadly attacks by al-Shabaab Islamists in the past few years.
The government targets annual tourist arrivals of 10 million in about a decade’s time. Visitor numbers are expected to rise now that France, the US and Britain have lifted travel bans to the country, which will allow tour operators to market the destination once again.

East African holidaymakers staying at Amani Tiwi Beach Resort on the Indian Ocean Coast more than doubled in the past three months, General Manager Aditya Mata said in Kwale County, at the Kenyan coast. “Forty five to 50% of our visitors have been from Kenya and the rest of the East African countries,” he said.

Bed occupancy improved to 85%, compared with 50% a year earlier, he said.

Diani Reef Beach Hotel in the same county received vacationers from Rwanda, Burundi, Democratic Republic of Congo and Ethiopia in the past six months, according to Chief Executive Officer Titus Kangangi. “Even Nigeria, which is a first for me,” he said. “I would put the number of regional visitors at around 10-15%, excluding Kenyans. It’s very good, it’s looking up.”

Carriers such as Ethiopian Airlines and RwandAir now have flights to the coastal resort city of Mombasa.
While cash remittances and agricultural exports have relegated tourism to third place in the hierarchy of leading foreign exchange sources, the industry is still key for the economy. As many as one million Kenyans depend on it for their livelihoods at the coast.

Regional visitors account for a third of arrivals with Uganda the second highest source market after South Africa, acting Kenya Tourism Board Chief Executive Jacinta Nzioka Mbithi said by e-mail.
It is perhaps no surprise that the East African Community bloc is seen as the regional grouping that has made the most trade gains on the continent.

If such chains continue to grow, concerns about external market performance could soon be a flash in the pan as the continent’s future growth is powered from within.

IRAN: Visa Access Eased Except For US And UK

Iran is to issue visas for all foreign nationals upon their arrival at Iranian airports, except for those from Britain, the US and seven other countries. Visas in those cases must still be applied for in their home countries.

The move is aimed at promoting tourism with the numbers of foreign visiters having recently increased by over 12 percent .

The boost in tourists appears to have been triggered by the signing of a nuclear deal between Tehran and the Group 5+ (Russia, China, the US, Britain, France and Germany) which came into force in January.

The seven other countries are thought to include Pakistan Canada Somalia Bangladesh Iraq Jordon Afghanistan but the list is yet to be confirmed.

UNITED KINGDOM: British Airways To Fly Direct From London To Iran

British Airways is resuming direct flights to the Iranian capital Tehran, Willie Walsh, the chief executive of the airline said, following the lifting of western economic sanctions against the country.

British Airways will operate a six-times weekly service during the summer before moving to daily flights towards the end of the year, beginning July 14.

British Airways’ Tehran flights will be operated by a four-class Boeing 777 aircraft and depart from Heathrow Airport Terminal 5.

British Airways CEO Willie Walsh has previously hinted at a recent conference in Dublin that the London-Tehran route would return:

“We are very interested in flying to Tehran and we are hopeful that it will form part of BA’s network in the very near future. We are actively looking at it as a destination.”

The move came a few weeks after the Joint Comprehensive Plan of Action (JCPOA), a lasting nuclear deal between Iran and the Group 5+1 (Russia, China, the US, Britain, France and Germany), came into force.

Based on the nuclear deal, reached in July 2015, all nuclear-related anti-Iran sanctions have been removed.

A British Airways spokeswoman said the company’s route network was regularly reviewed “to ensure that we operate to destinations with a strong demand from our customers”.

If the flights are introduced, it is thought that other Heathrow slots will be dropped to make way for the service, which was stopped in 2012.

British Airways head of network planning Neil Cottrell, said:

“Iran is a large and growing economy and Tehran is a brilliant business city so we are incredibly excited to be adding another gateway to the Middle East for our customers.

According to a British Airways spokesperson, the airline suspended flights in October 2012 when British Midland International (BMI) became part of British Airways and the route was “no longer commercially viable”.

British Airways has a long history of flying to the city and offered the first scheduled flights between London and Tehran in 1946.

Tehran is one of 14 new routes British Airways will be launching this year, which include San Jose, Costa Rica, San Jose, California and Lima in Peru.

FRANCE: Paris Christmas Bookings Low After Attacks

Demand for Christmas trips to Paris has slumped following last month's attacks in the French capital, according to data from travel information firm ForwardKeys.

Overall, net bookings recovered in the week starting November 23, compared to the week immediately following the attacks, due to fewer cancellations.

New bookings, however, remain around 25 percent lower compared to last year, and Christmas demand has stagnated at pre-attack levels. There is a lack of new bookings from all major source countries, including Britain, Germany, Italy, Spain and the United States, Forward Keys said.

"Put another way, in a normal year bookings for Christmas would be accumulating well now but following the attacks, enthusiasm has been dented," chief executive Olivier Jager said.

Travel companies are feeling the impact, with several airlines saying the numbers of people heading to France are down, although many expect the effect will be short-lived.

Didier Le Calvez, who is managing director of luxury hotel Le Bristol and heads the luxury section at hotel association UMIH, said earlier this week that high-end Paris hotels had only sold 40-50 percent of their rooms for the end-of-year festive period, whereas normally they would be 80-90 percent booked.

The chief executive of AccorHotels has said the French hotel group is seeing fewer last-minute bookings for the second half of December compared with a year ago and that the impact will probably last three or four months.

The ForwardKeys database contains reservations handled by more than 200,000 online and offline travel agencies worldwide.

USA:Airbus Seeks Sale Of Services Unit Vector

Airbus Group SE is exploring a sale of Vector Aerospace Corp, a unit that services and maintains aircraft, in a deal that could be valued at more than $800 million, people familiar with the matter say.

Airbus, Europe’s largest aerospace group, is currently selling several businesses to focus its defense division on warplanes, missiles, launchers and satellites.

Airbus has hired investment bankers to run an auction for Vector, which has annual earnings before interest, taxes, depreciation and amortization of around $80 million, the people said.

The sources asked not to be identified because the sale process is confidential. Vector and Airbus declined to comment.

Toronto-based Vector Aerospace was purchased in 2011 for about $640 million by European aerospace giant EADS, which was renamed Airbus in 2014.

Vector provides maintenance services to military, commercial and private helicopters and airplanes. It has 2,300 employees and facilities in the United States, Canada, Britain, France, Australia, South Africa, Kenya and Singapore.

Other aircraft services companies have recently been sold for hefty prices. BBA Aviation Plc agreed to buy Landmark Aviation from Carlyle Group LP for $2.1 in September.

Airbus also aims to pick a buyer for its defense electronics unit by the end of 2015 as part of its plan to dispose of assets with combined revenues of around 2 billion euros ($2.13 billion), Chief Executive Tom Enders told a German newspaper last month.

Based on its asset sale program, Airbus’ board has authorized a 1 billion euro share buyback, to be completed by the end of June 2016.