|
Getting your Trinity Audio player ready...
|
And he doesn’t just talk, he also puts money where his mouth is. His new Tanzanian outfit, Mwamba Lodge Tarangire Limited has gotten a 50-year lease to run the former Boundary Hill Lodge in Randilen, a community-owned and managed wildlife conservation area that offers safe space for wildlife on the edges of Tarangire National Park. The lodge is being remodelled, expanded and upgraded to a high-end lodge, due for opening this July. Great Lakes Adventures Ltd (different from the Ugandan-based Great Lakes Safaris), his travel company has also been licensed to operate in Tanzania.
CEO East Africa’s Executive Editor, Muhereza Kyamutetera, caught up with him for an interview on several industry issues, including his recent decision to spread his wings to the Tanzanian market.
You are one of the fiercest pro-Uganda supporters, taking every chance to speak about Uganda to whoever cares to listen. Won’t your decision to go into Tanzania send the wrong signals? Relatedly, from your experience, how does the Tanzanian investment environment compare to that in Uganda? How does it compare in terms of what the government puts into supporting the tourism sector and investors in general?
There are times that I feel that here in Uganda we talk too much; more than we are doing. I love Uganda so much, but the truth is that I’m in Tanzania because there is business.
First of all, I started in this business as a tour guide many years ago in the region, especially Uganda, Kenya and Tanzania, so I have always known about Tanzania’s potential. This potential has recently been reinforced with a bold vision.
Tanzania is targeting 5 million tourists by 2025 and USD5 billion in earnings. Their most recent figures show that their tourism rebounded big time, with a 24.3% increase in visitors to touch 1.8 million visitors at the end of 2023. This makes tourism the biggest forex earner⏤ a record USD3.37 billion, closely followed by gold at USD3 billion.
When you’re in Tanzania and you wake up in the morning, for example at Karatu near Arusha, you can count about 500 safari vehicles every hour in the morning alone. It is a scene to behold. In Arusha, I think, every third car is a safari car.
Where we have invested- in Tarangire, there are about 45 lodges with rooms ranging from 50- 75 -120 rooms. That is more rooms than we probably have in all our national parks in Uganda combined.
But there are also day visitors because Tarangire is just about 120 kilometres from Arusha.
The problem with our Uganda, it is like for every 5 steps we take forward, we sometimes are forced to stumble another 4 or even 5 backwards because of lack of marketing of our tourism potential, poor handling of sensitive information and a number of other issues that hurt the private sector. And we can do nothing about it as the private sector, but all the while we have to pay tax.
The idea about life is that it’s okay to tax me, but make sure that you create an enabling environment for me to thrive as well. I have just told you about the Tanzanian numbers, but here they will just say that they want 5 million tourists, but they are hardly putting in any meaningful investment in marketing. Someone thinks, they will just want to get USD5 billion in tourism revenue⏤ I have heard that now they have gone to USD20 billion as target tourism revenue. It is like there is some kind of magic, some spell that you will cast and get USD20 billion.
Of course, I keep telling my friend Odrek Rwabwogo⏤ he is a Special Adviser to President Yoweri Museveni and Chair of the Presidential Advisory Committee on Exports and Industrial Development (PACEID) ⏤ that our dream of USD6 billion in export earnings by 2028 is great, but it can only be achieved through real and sustained support by all the relevant government ministries and agencies, with the ministry of finance in the lead. There must be a consistently well-orchestrated, well-thought-out, optimally resourced and executed medium to long-term tourism agenda. He has very good ideas for marketing Uganda through targeted content creation and product development and other ideas like easing mobility through enabling flight charters, but these are just ideas if they can’t be funded, evaluated and improved.
The other reason we are going to Tanzania is that it presents vast opportunities between Uganda and Tanzania. I have for example spoken to a new airline that is coming here from Tanzania very soon. It is small, but with very new planes and a hunger to succeed. We are discussing departures, out of Tarangire National Park straight to Ugandan national parks. And we’re going to work with many Ugandan tour operators who want to cross-sell. The tour operators in Tanzania have no understanding of Uganda whatsoever. No one has gone there and tapped into them. No one. No one.
I know of a number of big tour operators in Tanzania, where just one operator is probably bigger than all the tour operators in Uganda combined- in terms of revenue, vehicles, traffic etc. So the amount of opportunities for Uganda to tap into Tanzania is massive. That’s one of the reasons why we’re going there. There is a lot of opportunity for us to cross-sell as well as increase the number of days and nights that tourists are staying in the region.
Lemme give you an example, Uganda’s biggest number of tourists comes from the UK, right? If you look at the statistics of 2022⏤ I don’t have 2023, the highest number of foreign tourists was British and that was about 13,000 and our second highest was Germany with 3,500. This is probably one month for Tanzania of Germans or even two weeks. Now the French are also picking up and the French investors have seen the opportunities and are beginning to come and invest in Tanzania.
As a tourism investor, and a businessman, what worries you? What makes you not sleep at night⏤ like before you go to sleep, what are you worried about that you will wake up and things have gone wrong?
I think for me as a businessman, if you look at the political environment, you have to worry, because, our politicians don’t seem to be prioritising the economy like they prioritise other things. You don’t seem to see anyone who wakes up and talks about Uganda in terms of business regularly. And this includes the opposition. You hardly hear anyone speak so passionately like when I come into power, this is what I will do for agriculture, tourism etc.
I only know two politicians who seem to have understood how to do this i.e. Joseph Kabuleta and Odrek Rwabwogo. They seem to have learnt how to explain the situation a bit better. For the rest, it is just about hitting each other.
The other issue is that in Uganda there doesn’t seem to be anyone who controls information, especially sensitive information. Every country has its challenges, but you don’t see people going about casually washing our dirty linen in public.
For example, you know what is happening right now around our borders with the Democratic Republic of Congo. Queen Elizabeth National Park and Kibale National Park are all under very bad negative travel advisories. The border of the DR Congo is code red. It is off-limits, then the rest are orange. Orange means that you only go there at your own risk. That nullifies travel insurance and repulses travel to the area and subsequently Uganda.
A lot of our investments are in Kibale National Park and Queen Elizabeth National Park. So I can’t sit back. I have salaries to pay. Last year my team was like Amos, we are going to support you but at least find a new destination that we can run and support from our base in Uganda, but at least let’s spread the risk. We have to balance these risks. We all don’t want to lose our jobs.
Then, next year, elections are going to start. In Uganda, we go to elections every 5 years. For the tourism industry, the year before and after elections is usually very slow. That keeps me awake.
The other issue is, why is it that Uganda is a destination for investors and not a source of investors for other destinations?
We seem to have too much love for foreign investors. I met up with the owner of Mt. Meru Hotel, in Tanzania. The gentleman is worth more than USD300 million. He told me, that whenever there is a big opportunity in the region, the government calls all the Tanzanians worth that opportunity and is like, guys here is the deal. I wonder why we aren’t doing the same here in Uganda.
What makes us a destination for investors and not a source of investors for other destinations? What’s causing this?
I think for you to go and invest elsewhere, you must first of all understand how your environment works. When you understand your environment, then you can take that experience elsewhere.
You see now I have taken my interior designer, my marketing person from the UK and some of my staff to see what we’re doing in Tanzania. They are now aware, but if I hadn’t understood that at the beginning, I would have not probably taken the risk.
The other reason is also because we’re also extremely, very risk averse as a people. We are also very risk-averse and yet, we need to see very many Ugandans going out there and doing business bringing the resources, experience and positive stories back home and keeping the hope alive.
Are we probably seeing other Ugandan companies or companies operating in Uganda spreading their eggs into the Tanzanian basket or other markets outside Uganda? From your conversations, do you see other Ugandans who are venturing out or planning to venture out?
Yes, there are some big boys like Matooke Tours who have also ventured into Tanzania. These players, just like like ourselves, Matooke and others haven’t left Uganda, but I think they are spreading their wings to Tanzania and other destinations that market themselves to increase their chances of not just survival but growth and thriving. That’s for sure. If you see how many Matooke Tours vehicles working in Tanzania; the ones you meet in the morning, they are many.
I’ve heard our president in his end-of-year speech and I think most recently in his 38TH NRM Victory Anniversary speech talk about tourism prominently. He hasn’t done this in the recent past. He mentioned the refreshed targets to grow tourism earnings from USD 1 billion to date to USD5 billion by 2028. On the ground, do you see anything visibly serious, being put to achieve that? If you met him in a closed room, what would you honestly and genuinely tell him about what the country needs to fix our tourism⏤ from the people running, to the investment that is needed, and even from mobilising the whole country? What would you tell him?
For starters, I think the president probably means well, but there’s no system around him to implement that. It’s not there. I personally believe that even if you gave the Uganda Tourism Board (UTB) USD 100 million every year, we will achieve nothing. That’s for sure. I genuinely believe so.
There is a lack of knowledge and a lack of interest in seeing the country grow. There are just so many excuses- they use excuses like procurement hurdles, but truthfully they are not exposed. This is an industry that needs exposed people. This is an international business and international businesses, need people who are exposed to international thinking, Now that is not there. Completely, not there.
So you would tell him about the need to reconstitute UTB and the entire sector management?
Yes. Maybe get a smaller team of very committed people. Let me tell you, if they gave my team USD 5-10 million, I am very sure we would orchestrate a better marketing strategy. And I am not saying that they give me the money, but I am saying we understand this game much better now, having learnt through blood and sweat.
Look at how we failed to fully utilise the marketing agencies we signed in 2016- KPRN in Germany, Kamageo in the UK and PHG in North America. Those guys did a fine job. They marketed us so well in 2016; there was great PR happening all over the world- on CNN, Sky News etc. For one year, things changed; our gorilla trekking moved from 30% to 70% in one year. But for some reason, we failed to work with them for reasons that are well-known in the industry.
For the little time, I have spent in the industry- there seems to be a lot of fighting⏤ private sector fighting amongst themselves and then against the government. You also have the government fighting amongst itself as well as fighting and or competing with the private sector. We seem to be spending very little time around a common goal and yet have all the time to spend fighting each other. How can this be solved? Where is the problem? How do we progress if we can’t unite around a common goal?
Well, you are right, but I think that can be sorted out. You see whenever there are challenges, when people face hardships, you see that being manifested outwardly and sometimes the anger gets misdirected. For example, people start thinking that maybe the reason why they are failing is because so and so is succeeding. The key thing would be ⏤it just needs a critical mass of people, focusing on the bigger picture.
For example in 2016/2017, when Kamageo did some good marketing, most of the noise in the industry cooled down because people were busy. People had opportunities. The fights even online went down. People were busy trying to do business. But because there’s no business now, people are angry with themselves. It is extremely very normal for people to disagree but those disagreements should be more about the issues and the strategy on our command destiny but as it is, that common destiny is not there. However, if we harnessed the strengths of our numbers there is a lot that we can do.
For example, I tell hotel owners, that they are some of the biggest owners and runners of the economy, but they can never get together to push a national agenda where numbers come in. A lot of them, don’t even see how they are connected to the larger tourism picture. They are only focused on driving local conferences and workshops. They don’t understand that local conferences, yes, are important, but they do not bring new money into the economy. They just help redistribute the little that is available. There are too many negotiations, and many underhand deals happening in those things. But when you bring in international conferences, there is very little room for underhand negotiations; clients pay on time and you have little or no headaches. So we need to understand the bigger picture.
The government has put across some numbers, on post-Covid-19 tourism sector recovery. From your perspective and when you’re speaking to other players in your league, is this recovery real? Relatedly, during Covid-19, we saw, domestic domestic tourism grow. Post-COVID-19, has that growth stayed or are Ugandans now back to running to Dubai and the rest of other destinations? Has that local demand been sustained?
Yes, the pandemic helped in enhancing domestic tourism travel and domestic tourism travel has several advantages. One is that it creates knowledge among the population about their home turf, but it also encourages investment as Ugandans can spot opportunities as they travel.
Domestic tourism also helps in the redistribution of wealth. When Ugandans go out of Kampala, they spend money from the Kampala economy across the country.
Surprisingly, domestic tourism also helps solve some national challenges such as defusing tribalism- which is an issue that we are struggling with as a country. When Ugandans travel around the country, they can dispel some of the biases they previously held about certain tribes. You will be shocked by the kind of biases that different tribes have about each other until they travel and experience the opposite. So domestic tourism is a tool for national cohesion.
In general, it also reduces the amount of money that could have gone elsewhere, out of the country. The same people who travel probably can go to Mombasa or other destinations, so it helps retain those resources, the foreign exchange at home.
However, the challenge for us is that our purchasing power internally is so low. Secondly, culturally we have not studied so much about our country. We studied the Rhinelands, the Canadian Prairies etc, but we hardly studied anything serious about Uganda, that makes us appreciate it more.
But now that the whole world is open, people have started going back to visiting other destinations. Very many of these destinations are aggressively marketing in Uganda. Kenya is aggressively marketing in Uganda. Ugandans are going to Zanzibar, Dubai etc. Many Ugandans are going to Zanzibar in big numbers. I’m also shocked that there are very many Ugandans in the diaspora that are going to Zanzibar. They are overflying Uganda and going to Zanzibar.
Then the other issue is that Uganda Airlines has helped increase the number of Ugandans going out, as opposed to foreigners coming into the country. The route between Entebbe-Nairobi-Mombasa has just enhanced the number of Ugandans going to Mombasa.
You were one of the key proponents and campaigners for the return of Uganda Airlines. As a key proponent or campaigner for the return of Uganda Airlines, are you happy with the job being done by Uganda Airlines in fulfilling the role it was created for? Have we seen an increased influx of arrivals?
The other day, a friend of mine working in the United Nations told me that he was among 30 Ugandans going to ‘eat’ money in Cape Town and they travelled with the Uganda Airlines’ Bombardier but returned on the Airbus which was almost empty save for their Group.
South Africans are wealthier big spenders. Why don’t we have more and more South Africans, Kenyans, Nigerians etc coming to Uganda, now that we have Uganda Airlines? Uganda Airlines made a loss of UGX265.9 billion in 2021/22 and this rose to UGX325 billion in 2022/23. That is largely because there is no marketing of the Airline. No budgets. It appears the people there think we should wait until one day when we wake up and there is so much traffic and they just break even.
My argument on the return of Uganda Airlines was that in theory, the return of Uganda Airlines was good, but the problem with us as a country, we lack end-to-end execution. We invested in aeroplanes but forgot that this is an ecosystem. People will not fly just fly to Uganda, because we have new planes. We also have to invest in demand creation and giving people to reason to travel to Uganda. We should also be investing in conferences, marketing Uganda as a destination and giving people a reason to travel here with Uganda Airlines. If I were to ask- if you met Jenniffer Banturaki, the CEO of Uganda Airlines, would you tell her that you are happy that she is doing a good job?
No, I wouldn’t because we are not doing a good job with Uganda Airlines.
I think one of the things that is key is that economic growth is based on two things i.e. product development and marketing/markets. Marketing is even more critical because if you do good marketing, it actually helps enhance the growth and opportunities of the developed products. Most people invest because of opportunities. Investments follow opportunities.
Now, there are two reasons why we should have a National Carrier. One is that it brings in or makes it easy for big spenders to come into your economy and No.2, it takes your products to the market. These are the only two things. If a national carrier doesn’t do that, that’s a waste of time. Now, the reality is that I think we have very good quality pilots, service staff, new planes, but we’re not taking advantage of that.
For example, there’s a Nigerian guy I wrote about a couple of weeks ago. He is based in America. He says he sat in our beautiful plane but was shocked that the plane was empty. He told me that immediately he started getting ideas of how to get Americans to Nigeria and then to Uganda via Uganda Airlines.
There is a a company called Wakanow- an into-Africa online travel tech company that in Nigeria alone, last year made about USD300 million – they are in Dubai, UK Nigeria. One of their executives told me that last year they did some small business with Uganda Airlines worth about USD700,000 and USD800,000 but that was for flights from Nigeria to Kenya and Rwanda and hardly to Uganda. This is because, he said, Nigerians don’t know how wonderful Uganda is.
Uganda Airlines should be working with UTB to sell Uganda in those markets where it flies. That is why it was created.
Did we probably spend most of the money on the planes and forgot to spend on the marketing?
I believe so.
But as a government, how do you spend USD400 million on the hardware and forget to spend on software? Software is the quality of human beings who can do the marketing and stuff like that. Because of the failure to spend on those vital elements, the airline is now bleeding our taxes and borrowed money. If we do not spend on marketing Uganda and giving people a good reason to travel to Uganda, that national airline is not going to be profitable ever. It will never, never, never, never, never go anywhere, unless we change some mindsets on marketing- the airline and the destination.
Maybe someone needs to go and overturn that board. I don’t know how well they understand the commercialisation of an Airline. But certainly, it was a very good idea for a national carrier. Very, very, very good idea.