1991 that is only 8,000 more than the 1973 record. This flow increased steadily to 139, 000
in 1997 mainly due to the political stability and the market liberalization that attracted a large
number of business, conference and vacation tourists.
Unfortunately, the country had
another war: this time with Eritrea. This war led to a fall in the number of tourists by 27, 000
into 112,000 and 115,000 in 1998 and 1999 respectively. From 2000 onwards the county is
witnessing a massive inflow of tourists that doubled in six years time (2000 to 2005).
To decompose the relative increase and decrease in different types of tourism motives,
figure 2.2 is very helpful. Unfortunately, this data is available only since 1991; the coming of
the EPRDF regime, and our discussion would be restricted to that. In the first seven years of
this period, business was the leading motive to visit Ethiopia. Yet, in 1998, during the EthioEritrean war, business travelers to Ethiopia considerably decreased in number and their
place was taken over by vacation tourists, whose steady increase was only temporarily
halted during the war and showed magnificent increase after the war that led to a total
threefold increase in the period under consideration.. In general, business tourism increased
slowly to double in 2005 the number it had in 1991. Conference tourism has been the least
contributor to tourism with sluggish growth and falling share from the total tourist arrivals.
The number of transit visitors in Ethiopia is directly related to airport efficiency, strong
security and growth of the Ethiopian Air Lines. And except during the Ethio- Eritrean war and
its aftermath (1998-2001), this number has grown steadily to register a five-fold increase in
2005 from the 1991 record. The recent growth is mainly explained by the growth of the
Ethiopian Air Lines as one of the best airlines in Africa (World Bank, 2006). Almost every
year, the number of visitors whose purpose was to visit relatives showed a continuous but
slower increase in the period under study. Still more than 10% of the tourists’ purpose of
visiting Ethiopia is not known.
The data on tourism receipts is available only from 1971 onwards. Again the receipts show a
stagnant and sometimes a falling trend throughout the Derg period (see Appendix 1). From
12,224,000 USD in 1973 it went down to 1,609,000 USD in 1978 and the maximum annual
revenue generated from tourism throughout that period was in 1990 (20, 583,464 USD).
Due to the increase in the number of tourists, the tourism revenue has increased significantly
after 1991 reaching a maximum of 134, 500, 000 USD in 2005.
Another important factor to see the performance and the significance of the sector is to
assess how much an average tourist expended in the country. This depends on a number of
factors: purpose of visit, average days spent in the country, prices in the country, the
competitiveness in the sector, and variety of tourist supplies that motivate them to expend
more. The average expenditure by a tourist in Ethiopia has been oscillating between USD
100 and USD 200 for quite longer time between 1973 and 1988. From 1988 on, that number
has never been below USD 200 and it has fluctuated between USD 200 and USD 300 in the
period 1988-1999. This increment can reasonably be explained in the general increase in
world prices and increase in the number of vacation tourists who stay pretty long in the
country. However, a more than 100% growth of this expenditure per tourist from USD 276 in
1999 to USD 517 in 2000 and a more than USD 500 receipt since then is difficult to explain.
Though unspecified, the ministry may have changed its measure of tourist receipts. In fact
this is still much lower than the World Bank (2006) estimate on tourist expenditures in
Ethiopia indicating a good deal of underestimation of tourism receipts in the pre -1999
period.
The World Bank (2006) diagnostic study of the tourism sector shows that in 2005-6—
excluding foreign exchange earnings from Ethiopian Airlines—tourism generated
approximately USD 132 million in direct in-country expenditure on accommodation, inland
transport, food and drink, visitor fees and arts and crafts purchases (making it the third
highest foreign exchange earner behind coffee at USD 185million and oil seeds at USD
168million). This was collected from about 150,000 foreign visitors who came to Ethiopia for
various purposes such as leisure (63,000), business and conferences (62,000) and to visit
friends and relatives (25,000). The average length of stay, according to the study, was 7-8
days and the per capita expenditure averaged USD 850. The length of stay is below the
regional averages (Kenya 12.8 days, Tanzania 14.1 days, Uganda 9.7 days) while the per
capita/per day expenditure is above average (Kenya USD 62, Tanzania, USD 104, Uganda
USD 71, South Africa USD 47, and Ethiopia USD 109). The study considers this as evidence
that Ethiopia is at an early stage of development as characterized by relatively short and
expensive stays due to poor tourism infrastructure and a weaker supply side (ibid).
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