After a pandemic-induced slump, Ethiopia’s tourism industry showed signs of rebound last fiscal year. But behind the headlines, a different story is unfolding in restive regions heavily reliant on tourism.
According to reports from Ethiopia’s Ministry of Tourism and the World Travel and Tourism Council, Ethiopia’s tourism and hospitality sector saw promising growth in the 2022/2023 fiscal year, suggesting a full recovery from the downturn caused by the COVID-19 pandemic. The Ministry reported that the country welcomed 969,061 foreign tourists over the last fiscal year, generating USD 3.63 billion in revenue—significant increases from 2020/2021, when 518,000 tourists visited and generated USD 2.6 billion.
However, those working in the industry in regions like Amhara and Oromia paint a starkly different picture on the ground. Despite overcoming the pandemic’s initial impact, ongoing conflict and instability have severely damaged tourism in these areas. Destinations that once drew visitors, such as Aksum, Lalibela, Gheralta, Batu, Jimma, and Gondar, have become battleground.
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Lalibela, home to 13 renowned rock-hewn churches, has been especially hard hit.
Previously, it welcomed a diverse international tourist population. Tourism accounts for 70-80 percent of Lalibela’s economy.
“With limited resources and no major transport links, the town relies heavily on tourism as its primary source of income and livelihood,” notes Mesay Mekonnen, president of the Lalibela Hotels Association. Traditionally, its peak season runs from October to February, bringing a notable influx.
However, despite its dependence on tourism, Lalibela now struggles to attract even a fraction of its former visitor numbers. The past four years have delivered one blow after another to the tourism and hospitality industry through unrelenting conflict and instability, with many regional destinations fighting for survival.
Sora Lodge, situated in Lalibela and long a stalwart of the region’s tourism industry, finds itself in a fight for its very existence amid escalating challenges. Where the property and its 56 employees weathered the initial impacts of the COVID-19 pandemic with the aid of a two million birr loan at five percent interest from the government, what has followed has plunged the lodge into an even more precarious position.
But two years later, as hopes remained for a swift recovery once the pandemic subsided and repayments loomed, violence instead erupted – dashing recovery hopes.
When the Tigray People’s Liberation Front seized Lalibela from August to December 2021, tourism ground to a halt.
Just as a fragile peace was restored, fighting flared again in Amhara in 2023, dashing dreams of a rebound.
Now unable to repay its pandemic loan on time due to the persisting turmoil, Sora Lodge received a five year extension at the steep price of higher interest – from five to 15 percent. Mass layoffs reduced staff levels by over half as bookings plunged. Where February once saw 30 rooms fully-booked, most weekend nights now see only 2-3 occupied rooms, if lucky, according to owner Habtie Melese.
Even operating at a monthly loss of 200,000 birr feels an insurmountable challenge as expenses continue. Habtie says that “once closed, it’s hard to restart in this industry.” So, he keeps the lodge open through personal sacrifice, selling possessions, clinging to hope that stability may one day return and revive an industry so central to the region’s economy and livelihoods.
Sora Lodge’s struggle is compounded by Lalibela’s isolation. Without major cities or government events nearby, it relies heavily on dedicated religious tourists—a clientele now scarce due to instability. Local tourism is nonexistent, leaving Sora with virtually no patrons.
Adding to the woes, the government demands unpaid taxes from prior years, according to Habite. He says, “We have never encountered such a distressing situation in the 10-years of running Sora.” Hotel owners like Habtie are appealing for tax relief and extended debt timelines to survive.
Once a hub welcoming 50-100 foreign visitors daily—who comprised 90 percent of its former clientele, according to Lalibela Hotels Association president Mesay Mekonnen—the town now sees just 5-10 foreigners on average.
Where 5,000-7,000 locals found stable work in Lalibela’s 50 hotels before the pandemic, employment has fallen by 2,000 jobs.
Expatriates, the primary weekend leisure visitors, also hesitate to make the trip due to doubled church entry fees, which saw hikes from USD 50 to USD 100, Mesay says.
With no major industries to fall back on, Lalibela’s singular reliance on tourism makes government support critical, argues Mesay.
Addis Ababa’s hotel scene brings mixed signals, with closures like the Ambassador and Mosaic offset by arrivals like Best Western Premier, Haile Grand Hotel, and Skylight Hotel. Shitaye Hotel will soon join the scene.
In Addis Ababa, where over 20,000 people rely on the hotel sector, signs of rebound exist according to Ephrata Abate executive assistant of the city’s Hotel Owners Association. Despite headwinds, she notes instability remains a concern, even though new destinations promoted by authorities have improved occupancy rates, she says.
Ephrata expressed concern about the impact of fluctuating interest rates on pandemic loan repayment plans. After reprieve, higher rates have investors anxious.
Statistics show tourism earnings and arrivals surging nationwide in 2023’s first seven months over pre-pandemic levels. UN World Tourism Organization report found Ethiopia’s tourism earnings increased 28 percent from January-July 2023, surpassing pre-pandemic levels. This growth exceeded the 49 percent increase recorded in 2022 compared to before Covid-19, demonstrating strong sector rebound. The number of international tourist visiting also rose by 28 percent.
Yet the road ahead remains rocky for some regions. Regional states have seen varying recovery. The security issues in Oromia region stall attempts to attract tourists.
Bale Mountain Lodge in the breathtaking Bale Mountains National Park offers one example. Owner/Manager Yvonne Levene recounts a string of setbacks for the lodge, which opened in 2012 but was devastated by the pandemic along with security issues.
Levene explains that the closure of international borders and travel advisories issued by European and UK governments during the pandemic had a severe impact on tourism.
The outbreak of the Tigray war in November 2020 further exacerbated the situation and reports of Al-Shabaab presence in the Bale Mountains in 2022 became a cause for fresh concern, leading embassies to issue “do not travel” advisories. Despite the gradual easing of travel restrictions and the end of the Tigray war, these advisories not only discouraged potential visitors but also rendered travel insurance policies invalid, effectively closing off a critical avenue for prospective tourists.
Levene expressed hope for a rebound in September 2023. However, the challenges of insecurity and ongoing travel advisories loomed large, deterring tourists from exploring beyond Addis Ababa and resulting in low visitor numbers.
Recent but unrealized threats of strikes in Oromia further exacerbated the climate of uncertainty. Levene recounted a recent experience: “We had guests arriving from Kenya, but there were murmurs of a strike in Oromia. Advising them on whether to proceed was a truly difficult task. Ultimately, they came, and fortunately, the strike never materialized. However, had it occurred, our guests could have found themselves stranded in Addis Ababa.”
The unstable security situation significantly hampered the lodge’s promotional efforts, as Levene explained plans were afoot for a major tourism promotion for September and October of last year.
“We even organized a promotional webinar expecting a large audience of tour operators and tourists. Unfortunately, due to the unpredictable security issues, we were forced to postpone it. Promoting in such an environment is extremely challenging.”
The lodge experienced full occupancy between 2016 and 2019, particularly during the peak seasons of October and November, as well as January and February, Levene says. Unfortunately, since the COVID-19 pandemic, occupancy rates have plummeted.
Bale Mountain Lodge, renowned for attracting high-end tourists and contributing to conservation efforts, played a crucial role in securing UNESCO World Heritage status for Bale Mountains National Park in September 2023. Leven proudly stated, “We hosted science researchers at our own expense, and their discoveries of numerous new species in the Bale Mountains significantly contributed to the park’s UNESCO World Heritage Site designation.”
The ongoing instability stemming from the armed conflict between the government and the Oromo Liberation Army is also another issue severely affecting the tourism industry.
Batu, a serene town in the Oromia region, is home to the tranquil Sabana Beach Resort along Langano Lake. Once a bustling destination for both domestic and international tourists, the resort now grapples with dwindling visitor numbers. The owner of the Resort lamented the significant decline in tourist activity.
He explained, “Our business has been severely impacted. Tourist numbers in Batu have dwindled, with very few visitors from abroad and only a handful of domestic tourists coming to Sabana Beach Resort.”
The resort’s tourist inflow has plummeted to less than half. Despite witnessing some post-pandemic recovery, ongoing insecurity has hindered its recovery aspects, resulting in minimal customer traffic on weekdays and only modest activity on weekends. Consequently, the resort’s occupancy rate has dropped to a mere 20 percent, despite having 30 available rooms.
Meanwhile, in the historic town of Lalibela, the iconic Harbe Hotel faces its own set of trials.
Tourist numbers plummeted, leading to the hotel being forced to lay off over 50 percent of its employees. The hotel’s occupancy rate has drastically declined, going from an average of renting 10 rooms daily to now only leasing one room per month, despite having 16 rooms available.
Compounding these issues, Harbe Hotel acquired a loan during the pandemic, with a repayment deadline set for July 2023. However, due to the persisting challenges and the escalating conflict in the region, the hotel was unable to meet this deadline.
Habte Yitbarek, the owner of Harbe Hotel, had initially set a target to settle his debt by October 2023. However, as the situation worsened and a state of emergency was declared, his plans were disrupted. This setback dealt a severe blow to hotel owners alike who had hoped for improvements. Habte was compelled to apply for a six-month extension to repay his debt, highlighting the challenges faced by businesses in the region.
Bishoftu, known for its seven beautiful lakes and its proximity to Addis Ababa and Adama, offers a calm and secure environment compared to other parts of the Oromia regional state. The presence of the Ethiopian Air Force base adds to its security, attracting visitors seeking a peaceful retreat.
In the past, Bishoftu thrived as a popular destination for leisure and business activities. Its peaceful setting made it a preferred choice for weekend getaways and corporate gatherings, drawing guests primarily from Addis Ababa. However, the recent wave of instability and insecurity gripping the country and the Oromia region has taken its toll on Bishoftu’s hospitality and tourism industry.
Asham Africa Hotel and Resort, a prominent establishment in Bishoftu, has experienced a significant decline in visitor numbers.
The ripple effects of instability from other parts of the country have hampered business activities, resulting in a notable drop in occupancy rates. Despite recovering from the challenges posed by the COVID-19 pandemic, the hotel currently operates at only 30 to 40 percent occupancy, a stark contrast to its previous robust rates of 70 to 80 percent.
David Desta, a senior associate at JLL Hotels & Hospitality, a consultancy firm specializing in the hotel and real-estate sector, emphasizes the critical roadblock of instability that hinders Ethiopia’s potential as a regional tourism powerhouse.
He highlights the need for a conducive investment environment and improved security to stimulate growth in the sector. David points out that inadequate hotel infrastructure outside of Addis Ababa and ongoing security concerns pose obstacles to the country’s tourism growth.
While the government launched initiatives to construct high-end resorts in various parts of the country targeting luxury travelers, affordability and inclusivity remain important considerations, according to David. He suggests that domestic investors fill this gap by offering more diverse and affordable accommodation options to attract a wider range of visitors.
One common sentiment echoed by all hotel owners and managers is the need for political stability. As Ethiopia sets its sights on a brighter future, characterized by a thriving tourism industry, stakeholders are acutely aware of the obstacles that must be overcome. A concerted effort to address security concerns, improve infrastructure, and foster a conducive investment environment will pave the way for Ethiopia’s ascent as a premier global destination.
