The recent performance of Ghana’s tourism sector has been rated as strong with at least 85 percent of indigenous tourism firms across the country reporting a high capacity utilization of their facilities.
This is captured in a recent local business intelligence survey jointly conducted by the International Trade Centre (ITC) in collaboration with the Ghana Export Promotion Authority (GEPA) and the Association of Ghana Industries (AGI) – representing exporters and manufacturers respectively as well as the Ghana Investments Promotion Centre (GIPC).
The capacity utilization figure indicates that companies in the tourism sector have the potential to expand capacity further and just as importantly use increasing economies of scale to become more cost competitive since the average production cost tend to fall as output rises. This implies that higher utilization is capable of reducing unit costs, thus making businesses more competitive.
To withstand competition in the sector, about 70 percent of local tourism firms often improve their products or processes to attract increasing customer volumes. This measure has generated a wide spectrum of tourism investment opportunities that are in line with the evolving needs of current tourists.
According to the survey, the sectoral offering includes options for the environmentally conscious tourist and investor, notably community-based ecotourism projects that help to protect and prevent the extinction of threatened species.
The growing number of international travelers visiting Ghana confirms that the country is an attractive investment destination in the areas of tourist accommodation, transport services, travel agencies, leisure and sport.
In response to these development in the sector, more than 87 percent of indigenous firms surveyed are reporting a need for loan-based investments to expand their businesses as well as to finance key business operations.
It is estimated that the services sector account for about half of the country’s Gross Domestic Product (GDP), employing about 48 percent of workers. This reflects the efforts made by the government to encourage development in the sector.
Importantly, with regards to the 87 percent indigenous firms reporting on the need for loan-based financing, sector players are confident that with the needed push, the sector will witness extensive development.