Community-Based Tourism Products

Community-Based Tourism Products

Photo by UNDP Tanzania

Community-Based Tourism Products

Country
Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Services
Sub Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Hospitality and Recreation
Indicative Return
Describes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
20% - 25% (in IRR)
Investment Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Medium Term (5–10 years)
Market Size
Describes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
> USD 1 billion
Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.
> USD 10 million
Direct Impact
Describes the primary SDG(s) the IOA addresses.
Responsible Consumption and Production (SDG 12) Decent Work and Economic Growth (SDG 8) Life on Land (SDG 15)
Indirect Impact
Describes the secondary SDG(s) the IOA addresses.
No Poverty (SDG 1) Sustainable Cities and Communities (SDG 11) Climate Action (SDG 13)

Business Model Description

Develop tourism products and associated services by utilizing the rich traditional cultures and diverse natural assets of rural communities to create eco-tourism experiences, such as tours of traditional ways of life, fishing, ziplining and parachuting. Through a community-private-public partnerships, the private sector invest in tourism assets, the public sector provides the supporting infrastructure and the community provides the land, labour, local expertise and cultural experiences.

Expected Impact

Integrate inland and rural populations into the tourism industry and protect their biodiversity and wildlife.

How is this information gathered?

Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.

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Country & Regions

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Country
Region
  • Tanzania: Countrywide
  • Tanzania: Southern Zone
  • Tanzania: Northern Zone
Learn more

Sector Classification

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Sector

Services

Development need
Tourism has the greatest employment generation potential in Tanzania. However, the country has performed at a fraction of its potential. The sector is poorly managed, underinvested, under-resourced, and lacks a coordinated all-of-government approach and vision. This has reduced its competitive advantage (1, 2, 3, 4).

Policy priority
Tanzania is committed to promoting diversified tourism products in order to increase its competitive advantage. The government seeks to promote tourism since it integrates more than one service, notably transport, accommodation and food, information and communication, offering significant socio-economic development potential (4, 5).

Gender inequalities and marginalization issues
Women face challenges participating in tourism activities in Tanzania. Most women in rural communities are excluded from tourism activities and some of them are exploited without commensurate returns. Taking full charge of responsibilities in their households gives women challenges that constrain their ability to perform in businesses, including in tourism (11).

Investment opportunities introduction
Opportunities in services include a broad range of diversified tourism activities, both regarding products and infrastructure, utilising community inputs, particularly in Tanzania's Southern Circuit as a result of overcrowding and saturation in the Northern Circuit (9).

Key bottlenecks introduction
COVID-19 severely impacted Tanzania’s tourism activities due to the disruption of global travel, which resulted in a 72% drop in revenues with significant job losses and business closures. The poor performance in tourism adversely affects other sectors (8).

Sub Sector

Hospitality and Recreation

Development need
Community-based and sustainable tourism provides important opportunities to take advantage of the increasing demand for Tanzania’s eco-tourism products. It is strategically important to the national tourism industry, valued at approximately USD 725 million annually, in terms of diversifying tourism products, relieving pressure on over-crowded protected areas and offering the required infrastructure (6).

Policy priority
The government is committed empower rural communities and private land holders to manage natural resources, including wildlife, in a sustainable manner and for their own benefit. Developing co-investment and partnership arrangements to support nature-based landscape and seascape management is among the top priorities for the long-term transformation of Tanzania's tourism activities (7, 8).

Key bottlenecks introduction
Community and sustainability tourism is hindered by accessibility challenges to protected areas (particularly in the southern and western parts of the country), inadequate infrastructure and insufficient marketing and promotional campaigns (10).

Industry

Leisure Facilities

Pipeline Opportunity

Discover the investment opportunity and its corresponding business model.
Investment Opportunity Area

Community-Based Tourism Products

Business Model

Develop tourism products and associated services by utilizing the rich traditional cultures and diverse natural assets of rural communities to create eco-tourism experiences, such as tours of traditional ways of life, fishing, ziplining and parachuting. Through a community-private-public partnerships, the private sector invest in tourism assets, the public sector provides the supporting infrastructure and the community provides the land, labour, local expertise and cultural experiences.

Business Case

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Market Size and Environment

Market Size (USD)
Describes the value in USD of a potential addressable market of the IOA.

> USD 1 billion

CAGR
Describes the historical or expected annual growth of revenues in the IOA market.

> 25%

Tanzania’s tourism sector generated USD 2.6 billion in 2019 before COVID-19, and USD 1 billion in revenues in 2020 (14). Tanzania is first in Africa and 12th worldwide for the quality of its community- nature-based tourism resources, and 32nd in Africa and 112th in the world for its cultural resources (17).

Globally, nature tourism and ecotourism grew three times faster than the overall tourism industry, and investment is estimated to increase by 20% annually (29).

Significant tourism revenues accrue to Tanzania's local communities. For example, seven villages in Loliondo Division earn over USD 100,000 annually from several eco-tourism joint ventures carried out on their lands (14, 16).

Indicative Return

IRR
Describes an expected annual rate of growth of the IOA investment.

20% - 25%

Experience from the Columbian National Business Plan for Nature-Based Tourism shows that an IRR of 19-26% can be achieved by investing in these types of projects (30).

Investment Timeframe

Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.

Medium Term (5–10 years)

According to local investors in Columbia, an expected holding period for investments in ecotourism models would be 7-10 years (30).

Ticket Size

Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.

> USD 10 million

Market Risks & Scale Obstacles

Market - Volatile

Community-based tourism interventions have been faced by numerous conflicts among stakeholders over control of and access to the lands and natural resources that are used as tourism products. This may lead to an unpredictable situation for investors particularly on the legality of land ownership and implications to the envisaged partnership. Government intervention is critical (16).

Capital - CapEx Intensive

There may be communities that do not have the necessary accommodations, minimal infrastructure, and good communication to sustainably meet tourist demand. That is why capital investments are necessary to ensure an ecotourism approach (12).

Impact Case

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Sustainable Development Need

Tourism, which plays a prominent role in the Tanzanian economy, accounting for nearly 12% of GDP, has been the most severely affected sector from the COVID-19 pandemic due to travel restrictions (3, 8).

The growing tourism industry has put pressure on people and the planet. Areas and adjacent lands to the tourism activities have been subjected to a number of emerging issues and challenge, including failure of conservation to compete effectively with alternative land uses, habitat degradation and blockage of wildlife corridors, overexploitation and illegal resource extraction, wildfires, and human population growth (30).

Despite the significance of the tourism industry, poverty is prevalent around touristic sites, indicating that strong linkages with local communities have yet to be established. Most tourist establishments source their inputs from large-scale suppliers because of local communities inability to meet required quality standards (27, 28).

Gender & Marginalisation

Women make up 72% of all workers in the tourism industry, and surveys show that households with a member employed in tourism are far less likely to experience poverty than other households. Women involvement in the diversified tourism products and activities will make them pivotal players in family livelihoods and can make significant contribution to household economies (8, 9, 19).

Tourism-based activities and products have not adequately benefitted poor communities because of weak linkages to the local economy. Most communities need to be economically empowered through strategic linkages with the facilities in order to improve their livelihoods (31).

Expected Development Outcome

Community-based tourism products can accelerate the rate of economic growth through the tourism industry, which is estimated to have generated USD 2.6 billion in 2019 before COVID-19, and USD 1 billion in revenues in 2020 (14). Tanzania could use this potential to position itself in view of the competition in the region and utilize its competitive advantage of being the first in Africa and 12th worldwide for the quality of its community- nature-based tourism resources, and 32nd in Africa and 112th in the world for its cultural resources (17).

Community-based tourism products promote rural development through employment of local community in the facilities and residents selling products and services directly to tourists (31, 32). They reduce pressure on people and the planet through effective conservation measures and sustainable exploitation (30).

Gender & Marginalisation

Community-based tourism products spread touristic activities across the country, particularly the Southern Circuit, which is economically marginalized. They offer income generating opportunities for the rural communities where touristic activates are located, including women (3, 8, 10),

Primary SDGs addressed

Responsible Consumption and Production (SDG 12)
12 - Responsible Consumption and Production

12.b.1 Implementation of standard accounting tools to monitor the economic and environmental aspects of tourism sustainability

Current Value

Number of tourist arrivals estimated at 1,527,230 in 2020/21. Total employment in tourism estimated at 1,500,000 in 2020/21 (4).

Target Value

Number of tourist arrivals projected at 5,000,000 in 2025/26. Total employment in tourism projected at 11,750,000 in 2025/26 (4).

Decent Work and Economic Growth (SDG 8)
8 - Decent Work and Economic Growth

8.9.1 Tourism direct GDP as a proportion of total GDP and in growth rate

Current Value

Tourism real growth rate estimated at 1.5% in 2020/21. Tourism contribution to GDP at current prices estimated at 17.5% in 2020/21. Contribution from sustainable tourism to GDP estimated at 6% in 2020/21 (4).

Target Value

Tourism real growth rate estimated at 1.5% in 2020/21. Tourism contribution to GDP at current prices estimated at 17.5% in 2020/21. Contribution from sustainable tourism to GDP estimated at 6% in 2020/21 (4).

Life on Land (SDG 15)
15 - Life on Land

15.7.1 Proportion of traded wildlife that was poached or illicitly trafficked

15.a.1 (a) Official development assistance on conservation and sustainable use of biodiversity; and (b) revenue generated and finance mobilized from biodiversity-relevant economic instruments

Current Value

N/A

Total amount received in assistance for biodiversity increased from 29.2 million USD in 2002 to 167.1 million USD in 2018 (33).

Target Value

N/A

N/A

Secondary SDGs addressed

No Poverty (SDG 1)
1 - No Poverty
Sustainable Cities and Communities (SDG 11)
11 - Sustainable Cities and Communities
Climate Action (SDG 13)
13 - Climate Action

Directly impacted stakeholders

People

Communities with touristic products and activities, employees in the tourism industry, and local and foreign tourist benefit from diversified tourism offering.

Gender inequality and/or marginalization

Inland and rural populations benefit from the integration into the tourism industry, which brings about economic opportunities.

Planet

The environment benefits from sustainable tourism practices, biodiversity and the wildlife enjoys greater protection resultant from economic value generation.

Corporates

Tourism product and service providers enjoy greater demand, and tourism industry actors, such as hotels and tourism agencies, benefit from enhanced economic activity.

Public sector

The government enjoys economic growth, enhances environmental conservation and improves rural development through linkages promoted between tourism facilities and communities.

Indirectly impacted stakeholders

People

Rural populations benefit from increased economic activity and reduced environmental harm, supporting sustainable livelihoods.

Planet

The environment enjoys increased awareness on sustainable business practices in other industries.

Corporates

Suppliers of the tourism industry, such as agricultural businesses, benefit from new market demand.

Outcome Risks

Excessive levels of touristic interventions may cause damage to the environment and wildlife as well as disturb cultural and traditional practices of communities, if the number and activities of tourists is not well managed (8, 20).

Impact Risks

Some communities may not be experienced with the best practices for environmental management and socially responsible tourism. Without adequate assistance, these may therefore not be well implemented, risking the expected impact (8, 10, 20).

If the communities' interest and priorities are not take into account sufficiently, touristic activities may not experience a significant uptake and / or benefit the communities, which may limit the expected impact.

Impact Classification

B—Benefit Stakeholders

What

Community-based tourism products diversifies the tourism industry towards integration of inland and rural populations and sustainable practices.

Who

Inland and rural communities, local and international tourists, the tourism industry, the environment, biodiversity and wildlife benefit from community-based tourism products.

Risk

While the model of community-based tourism is proven, environmentally and socially responsible practices as well as the communities' interests and priorities require consideration.

Impact Thesis

Integrate inland and rural populations into the tourism industry and protect their biodiversity and wildlife.

Enabling Environment

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Policy Environment

Tanzania Tourism Policy, 2021: Outlines the government's commitment to promote diversified tourism products and associated services, including community and eco-tourism, historical and cultural heritage sites, conferencing and tourism supply chain (5).

Tanzania Tourism Master Plan, 2002: Emphasizes that the government is committed to promote diversified tourism sector in terms of geography, tourism products and associated services and activities. It also entails a renewed emphasis on targeting the Southern Circuit as a result of the saturation of the Northern Circuit (9).

Third National Five-Year Plan (FYDP 3), 2021: Outlines the government's plan to promote tourism as one of the sub-sectors that integrates more than one services, notably local culture and natural endowments, transport, accommodation and food, information and communication (4).

Financial Environment

Financial inceptives: The World Bank has offered a credit of USD 150 million to Tanzania to operationalize the REGROW project, which focuses on the promotion of alternative livelihoods for household around the protected areas of the Southern Circuit, including community-based tourism products. There is a special embedded package for identifying suitable joint economic opportunities between investors and communities (24).

Fiscal incentives: Tanzania offers import duty and VAT exemption on deemed capital goods, including building materials, utility vehicles and equipment. This applies to all types of tourism products, including activity-based tourism (25).

Regulatory Environment

Tourism Act, 2008: Provides the institutional framework, administration, regulation, registration and licensing of tourism facilities and activities, and for related matters (21).

Wildlife Conservation Act, 2013: Makes provisions aimed at regulating sustainable utilization and management of wildlife resources and to provide for other related matters (23).

Wildlife Conservation Act, 2013: Makes provisions aimed at regulating sustainable utilization and management of wildlife resources and to provide for other related matters (23).

Marketplace Participants

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Private Sector

Nomad Tours, Kudu safaris, Adventure Safaris, Kearsleys Travel & Tours, Takims Holidays, Widerange African Safaris, FCM Skylink Travel and Tours Ltd, Tanzania Mwangaza Tours & Safaris, Sultan Tours, Gecko Adventure Tanzania Safaris.

Government

Ministry of Tourism and Natural Resources Management (MNRT), Tanzania Wildlife Authority (TAWA), Ministry of Economy and Finance, Ministry of Industry and Trade, Tanzania Tourism Board (TTB).

Multilaterals

World Tourism Organisation, Global Tourism Council, World Bank Group (WBG), African Development Bank (AfDB), World Travel and Tourism Council (WTTC), World Tourism Forum Institute.

Non-Profit

Tanzania Wildlife Protection Fund, Wildlife Conservation Society of Tanzania, Community Wildlife Management Areas Consortium (CWMAC), Tanzania Association of Tour Operators, Hotels Association of Tanzania (HAT), Tanzania Natural Resource Forum (TNRF).

Target Locations

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country static map
rural

Tanzania: Countrywide

Tanzania has 16 national parks, one conservation area, 17 game reserves, several marine parks, a coast and lake zone and several other tourism attractions spread across the country, where community-based products can be offered (26).
rural

Tanzania: Southern Zone

Selous Game Reserve is the largest fauna reserve in the world, spanning over 55,000 km2. Mikumi National Park offers a unique wildlife experience with a large number of herbivores and a rich variety of bird species. Ruaha National Park, is the second largest park in Tanzania, with miombo woodland, acacia grasslands, and large baobab trees. Udzungwa National Park is one of few “World Biodiversity Hotspots” and one of 200 World Wildlife Federation ecoregions of global critical importance (34).
rural

Tanzania: Northern Zone

Olduvai Gorge is the birthplace of human kind. It was here, in the early twentieth century, that the famous archaeologist Dr. Louis Leakey uncovered some of the earliest remains of fossil hominids. Mount Kilimanjaro is Africa's highest mountain and one of the continent's magnificent sights. Serengeti National Park is one of the world’s most iconic wildlife conservation areas. Ngorongoro Crater is a rare protected area where people and wild animals co-exist in harmony. Ngorongoro is technically a “caldera”, the largest sunken ancient caldera in the world. Estimated three million years old, the once-volcanic Ngorongoro is now considered one of “Africa’s eighty wonders” (34).

References

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    • (1) World Bank Group, Multilateral Investment Guarantee Agency (MIGA), 2005. Tanzania's Investor Outreach Program.
    • (2) De Chazal Du M (DCDM), 2011. Tourism in Tanzania: Investment in Tourism in Tanzania.
    • (3) The World Bank, 2015. Diagnostic Trade Integration Study (DTIS) for Tanzania.
    • (4) United Republic of Tanzania, 2021. Third National Five-Year Plan (FYDP 3).
    • (5) United Republic of Tanzania, 2021. Tanzania Tourism Policy – Under Review.
    • (6) Tanzania Natural Resource Forum, 2003. Community-based Tourism in Northern Tanzania: Increasing Opportunities, Escalating Conflicts and an Uncertain Future.
    • (7) Word Bank Group, 2021. Tanzanian Economic Update, Transforming Tourisms Sector, Toward a Sustainable, Resilient, and Inclusive Sector.
    • (8) United Republic of Tanzania, 2002. Tourism Master Plan.
    • (9) Journal of Ecotourism, 2015. A review of ecotourism in Tanzania: magnitude, challenges, and prospects for sustainability.
    • (10) Operations Research Society of Eastern Africa, Journal Vol. 7 (2), 2017. Gender and Women Entrepreneurs’ Strategies in Tourism Markets: A Comparison between Tanzania and Sweden.
    • (11) International Institute for Environment and Development, 2004. The evolution and impacts of community-based ecotourism in northern Tanzania.
    • (12) TanZip Adventures, 2022. www.bomaafrica.com.
    • (13) Tanzania Invest, 2022. https://www.tanzaniainvest.com/tourism.
    • (14) Jadian Company Limited, 2021. Feasibility Study Report.
    • (15) Tanzania Natural Resources Forum, 2003. Community-based Tourism in Northern Tanzania: Increasing Opportunities, Escalating Conflicts and an Uncertain Future.
    • (16) World Economic Forum, 2019. Travel and Tourism Competitiveness Index Report.
    • (17) Development Southern Africa, 2015. Cultural community-based tourism in Tanzania: Lessons learned and way forward.
    • (18) Journal of Development Studies, 2015. Gender and Livelihood Diversification: Maasai Women’s Market Activities in Northern Tanzania.
    • (19) Research on Poverty Alleviation, 2003. The Role of Tourism in Poverty Alleviation in Tanzania.
    • (20) United Republic of Tanzania, 2008. The Tourism Act.
    • (21) United Republic of Tanzania, 2009. Wildlife Conservation Act (No. 5).
    • (22) United Republic of Tanzania, 2013.The Wildlife Conservation Act.
    • (23) The World Bank, 2017. New Opportunities for Development in Southern Tanzania Through Nature-Based Tourism.
    • (24) United Republic of Tanzania, 2022. Standard Incentives for Investors. https://investment-guide.eac.int.
    • (25) Ministry of Natural Resources and Tourism of United Republic of Tanzania, 2022. https://www.maliasili.go.tz/attractions/tanzania-tourist-attractions.
    • (26) World Travel & Tourism Council (WTTC), 2022. https://wttc.org.
    • (27) World Bank Group, 2015. Tanzania Economic Update.
    • (28) Brink, 2011. The Economics of Ecosystems and Biodiversity in National and International Policy Making.
    • (29) Inversor, 2022. https://www.inversor.org.co/en/portafolio-2/waya-guajira/.
    • (30) Happiness Kiami, 2018. Effects of Tourism Activities on The Livelihoods Of Local Communities In The Eastern Arc Mountains.
    • (31) The World Bank, 2018. Resilient Natural Resource Management for Growth (REGROW) Project.
    • (32) UNSTAT Hub, 2022. https://country-profiles.unstatshub.org/tza#goal-8.
    • (33) Adumua Safaris, 2022. https://adumusafaris.com/destinations/tanzania-southern-circuit.