Ethiopia: Hotel and Hospitality Sector in Ethiopia

Ethiopia: Hotel and Hospitality Sector in Ethiopia
Photo: Addis Fortune

Genet Guest house, having 10 rooms, located at yeka district.

Hotel and tourism are inseparable sectors. To boast of a developed tourism and hospitality sector, a country needs to own modern hotels, lodges and other recreational centres. When we trace back to the history of hospitality sector in Ethiopia, we get Itegue Taitu Hotel, built in the early 1900s, believed to be the first modern hotel in Ethiopia. It was named after its founder Empress Taitu Betul, the wife of Emperor Menelik II. It was built mainly for the purpose of providing service to foreigners as a cozy place to rest and dine. Taitu Hotel is found in the middle of Addis Ababa commonly known as Piazza. The ancient hotel has 264 historic bedrooms, equipped with various important facilities. It is famous in the West as the setting for Evelyn Waugh’s 1938 satirical novel Scoop is based on it.

In recent years the hotel’s Jazzamba Lounge gained an international reputation as part of the revival of the 1960s and early 1970s Ethiopian jazz scene. The founder of Ethiopian Jazzmender, Mulatu Astatke and his colleagues have been performing in front of many jazz lovers.

Serving local and foreign dignitaries for more than a century, the hotel encountered a fierce blaze in 2015, which resulted in tremendous damages on its historic architecture and antiquities.

Flipping back, currently, the hotel industry in Ethiopia is developing in an incredible pace. Many star hotels have been built in the capital Addis Ababa and state cities. The third diplomatic city following to Brussels and Washington, Addis has 12 internationally branded hotels. The hotels are contributing a lot for tourists to stay in the capital in a happy and relaxed mood.

According to the Ethiopian Tourism Organization (ETO), the Ethiopian tourism sector has shown tremendous success over the last few years. The direct contribution of tourism and hospitality service to GDP was 51.3 billion birr (USD 2.26 billion) which is 4.1 per cent of the total GDP in 2015. In the same year, the sector had contributed 8.4 per cent of the total employment by creating 2,326,500 jobs. The hotels, restaurants, leisure industries, travel agents and airlines have enhanced the sector significantly. The Ministry of Culture and Tourism recently revealed that the political unrest that broke out seven months ago had slightly affected the tourism and hospitality service. However, after the declaration of the state of emergency, the dust has settled. Tourists from different corners of the world are coming in droves to Ethiopia without any security concerns.

After the Sheraton Addis Ababa was opened in February 1998, it paved a way for the proliferation of other star hotels in the capital and in the whole country as well. Age wise, the only global brand to precede Sheraton is the Hilton Addis Ababa which was opened in the 1969. Besides, many star hotels were built especially after the new Ethiopian millennium. As Ethiopia is the seat of the African Union (AU) and other international organizations, standardized hotels were much-needed. The issue of relocating the OAU later AU was raised by some African leaders due to lack of star hotels here to accommodate African and international guests and dignitaries. Having noticed the limitations of the sector, government and private developers have been constructing globally branded hotels in collaboration with international star groups.

According to Ebisa Gobena and Andualem Gudeta of Awash International Bank, who undertook research on “Hotel Sectors Investment in Ethiopia” in 2013, the Ethiopian hotel industry has been experiencing substantial gap in demand and supply. The research finding revealed that the demand and supply imbalance has created huge business opportunity for those planning to enter into the sector.

“The total number of international tourists arriving in Ethiopia is steadily increasing. As a gateway to all international inbound, outbound and transit tourist passengers. Addis Ababa has been taking the lion’s share in the country’s tourist arrivals hosting an estimated 95-99 per cent of the total international tourist arrivals,” they said.

While launching the new Ethiopian tourism brand, ‘Ethiopia the Land of Origins’ in 2016 Solomon Tadesse, Chief Executive Officer (CEO) of the Ethiopian Tourism Organization said, the Ethiopian government has been allocating significant capital to transform the hotel and hospitality sector. It has been undertaking many infrastructural endeavours like hotels. This move will help the nation to utilize its untapped tourism potential.

According to him, there is a strong collaboration among the government, private sector and other stakeholders to enhance the tourism and hospitality sector. He further elaborated that there is business- to-business partnership launched through embassy consulates and events to create awareness on popular destinations and on ways of attracting foreign investors.

In the coming years, the country is working to open over 58,000 hotel rooms. Currently 12 international chain hotels are in the pipeline with a total of 2,460 rooms capacity.

As to the Ministry of Culture and Tourism, the private sector has been striving to enhance the hospitality sector to higher level. Coordinator of Tourism Services Accreditation Directorate Director Tewodros Derbew told The Ethiopian Herald that the grading system of hotels in Ethiopia has improved the facilities and service provisions.

Tewodros stated that the hotel grading process has been implemented based on international standards and requirements aiming to improve the quality of hotels and the hospitality service.

“We need to develop the accommodation so as to enhance the hospitality sector. Without the development of the accommodation sector we cannot think of tourism and hospitality development. Tourism industry is showing an impressive progress over the last couple of years. And the hotel industry has paramount contribution,” he said.

In 2016, the Ministry of Culture and Tourism has given license to developers who want to build hospitality facilities including AU Grand Hotel. Upon completion, the hotels with star accolades would further improve the sector. The government has been working to build the capacity of the working force which is being deployed in the sector. Approached for his take on the matter, Lion Ethiopia Tourism and Hotel College Dean Zerihun Mokenen said tourism and hospitality training institutions have big responsibility in producing modern and skilled human power.

“There are some challenges that could derail the fastest growing hotel industry like lack of sufficient and competent professionals, lack of vibrant researches and continuous and professional support which could help to provide essential input for modernizing the sector,” he added.

Ethiopia is home to more than 80 nations, nationalities and peoples. However; their history, culture and ways of life have not been well exploited for promoting the smokeless industry. Realizing the untapped tourism resource of the nation, the Ethiopian government has expressed its commitment to bolster it by opening hotel and hospitality service facilities. It has given the area due attention in the Growth and Transformation Plan (GTP), five year plan designed to improve and transform the nation’s economy. When hotels under construction sees the day’s light, the nation will be a preferable tourist destination in Africa.