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Tanzania: US hedge fund company to finance Serengeti airport

Posted by on 13 August 2012

Tourism, tourism, tourism. The largest industry in the world. The largest peaceful temporary migratory process. With people flocking in famous, luxurious palaces to take a glimpse at how the the emperors of the old age used to live. Or, alternatively, with tourists invading the most reclusive guesthouses in the African bush in order to “reconnect” with the nature. Folks in search of authenticity, a gateway, a distraction, an adventure. But no matter where the tourists go, by in large, they are in need of at least a couple of things: a way to get there and a way to get around.


Tanzania, one of Africa’s poorest countries, has some of the greatest natural wonders in the world. Mount Killimanjaro is guarding the country’s northern frontier, located not too far from its “pal” across the border, namely Mount Kenya. And then, there’s the Serengeti – the famous national park spanning over the territory of two countries, home of the largest terrestrial migration in the world. South of this natural treasure, there’s the famous Zanzibar island, with its enchanting Stone Town, the imposing tortoises on the Prison Island and the gorgeous beaches  on the Indian Ocean. And if you didn’t have enough excitement after this, you can always go south to Selous National Park – only the largest faunal reserve in the world where there’s almost impossible to miss the Big Five.

 

With all these attractions to show for, how is it that Tanzania only receives a minuscule share of the world tourism arrivals of about one  million people  out of the staggering one billion people expected to travel in 2012? Well, there are explanations that include factors such as infrastructure, flight costs, well-equipped hotels, local tourist industry, reasonable prices for the attractions offered on site.

Each of these factors has somehow taken its toll on Tanzania at one point or another.

Yet needless to say, the Tanzania that I visited for the first time in 2007 (and almost every year since then) is not the same as the Tanzania of 2012. First, whereas back in the day the drive from Dar es Salaam to Arusha (the stopover for the Serengeti Park) used to be a constant struggle to avoid crater-like potholes, today drivers are mesmerized by the smooth, top of the class, Chinese-built highway.

Again, only 5 years ago the number of affordable, Western-inspired lodges in the country was very small and a tourist on a budget who still desired a modicum of quality would have had to look long and hard for the right place at the right cost.

Today, the tourism industry in the country is changing, and, for once, for the better. Adding to this momentum is the recent exciting news that the US-based Tudor Investment Corporation (TIC), one of the largest hedge fund management companies in the world, has agreed to build an airport in the immediate vicinity of the Serengeti National Park. The TIC’s announcement follows its preexisting investments in the country as the company already owns a number of luxury lodges in the area.

Now it is well-known that tourism development produces value of sorts. What is less clear is where and how this value is distributed. In the current scenario, for example, the development of the airport will bring in a new influx of tourists, who will spend quite a lot of money on their trip with some, less impressive funds being directed toward the purchasing of souvenirs and other services rendered by locals (performance shows, village visits, home-stays, etc).

However, with respect to the new airport some questions remain:

1. There’s already one airport in the region – Kilimanjaro National Airport ( only 80 miles or so away from Serengeti). How will that airport be affected if the new airport is built? Since that airport was designed to serve the Arusha region, what would happen to the people working there, the management and the assets of the parent company?

2. With the Tudor Investment Company owning both the airport and the lodges in the area, one can rightfully speak of tourism vertical integration – that is, foreign companies charging tourists for most services from airfares to accommodation with very little money ever reaching Tanzania. The effects of such a vertical integration have yet to be studied.

 

I will, however, close on an optimistic note. Tourism development has clear potential to improve the livelihood of the people where such development occurs. For all its criticisms, when a tourist site springs up, it requires a solid infrastructure, a wide-variety of services being rendered and a certain number of experiences made available to tourists. Inadvertently,  local jobs are created, new opportunities for both and formal and informal labor engagements promoted. The development of the Arusha region, and the Serengeti National Park in particular has been rising exponentially, though at a lower rate than the tourist market demands. The recently announced investment made by the Tudor Investment Corporation in building a new airport has the potential to bring revenue, business and development to a region that is in dire need of it. Should the Tanzanian government take a direct interest in mediating local demands/resources with the desires and business goals of the investor, then this endevor might finally be the financial and social catalyst required for northern Tanzania to develop.

 

PS: I’m still waiting for the ridiculous Tanzanian government national park fees that are the highest on the entire freaking continent to drop down:

 

Ngorongoro (Serengeti):
Fee for 24 hours – $50 per person
Crater fee – $200 per vehicle
Camping – $30 per person in the park
Guide fee: $20 per day

 

In contrast, South Africa’s renowned Kruger National Park charges a flat fee of approximately 23 US dollars (192 rand) per day per visitor. No other fees imposed as of August of 2012.

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1 Comments For This Post

  1. Amos says:

    the difference is South Africa is a much richer nation than Tanzania and so doesn’t rely on the tourism sector as much as Tanzania, hence perhaps the lower park fees.

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