FILE wrY R ESTRI C TED

AF58 Report No. AF-58a

Volume 21

1 1This report was prepared for use within the Bank and its affiliated organizations.They do not accept responsibility for its accuracy or completeness. The report may a

not be published nor may it be quoted as representing their views.

TNTPRNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

INTERNATIONAL DEVELOPMENT ASSOCIATION

rvi,n 1TI'rQm T-rNTr T1'f'%T~Tr%1. ZTI~ r,Thr,'Tr T r%'-Ihk ArWT'T' ThT t' A 0"IT A T.'I T) f A

(in four volume s)

VOLUME TV - UGANDA

(in seven parts)

PART FOUR: ANNEX C - TOURISM

August 31, 1967

Africa Department

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

EQUIVALENTS

Currency

1 Uganda Shillina U.-S. $0. 14U.S. $1 = U. Sh 7. 14T 1 TTC dW) QA

L 1 = U. Sh 20. 00

Weight

Throughout-this report, unless otherwise stated,tons refers to long tons of 2240 lbs.

COMPOSITION OF THE MISSION

This rponrt is based on the findings nf a Mission to Fast, AfricGawhich did its field work in October, November and December 1966 and consistedof the. fnlln ,TAing:-

John Cn de IWilder Chief of Mission (TRPD))

Colin M. F. Bruce, Deputy Chief of Missionand Chief Economist - Kenya (TIRD)

Kudlapur G. V. Krishna, Economist - Kenya (IBRD)r r. AlAmywio,+ A crv'i rn1l +,,v,.e1 ArAT-; c!v. _ VKvvwr,z ( VA r1

Maurice Fenn, Agricultural Economist - Kenya (FAO)

TPer Tveit`Ue, T"eputy -he r of- - M.issior---

and Chief Economist - Tanzania (Consultant)DJrUilU Th. U[IleL bellici, Th0UIUIILL - [d1idd - lDFID)

Archie Forbes, Agricultural Adviser - Tanzania (FAO)Jacques Kahane, Agricultural Economist - Tanzania (IBRD)

Otto Maiss, Deputy Chief of Missionand[u Urhiei i Economuist - Uganua (IBRD)

Nicholas Carter, Elconomist - Uganda (IBRD)David lJ. M. Haynes, Agricultural Adviser - Uganda (IBRD)Montague 'Yudelman, Agricultural Economist - Uganda (Consultant)

H. David Davis, Aciviser on Tourism (IBRD)Bernard H. Decaux, Adviser on Industry (Consultant)Jack Derrick, Adviser on Industry (Consuitant)Edward V. K. Jaycox, Adviser on Transport (IBRD)Aristides J. Macris, Adviser on Agricultural Training

and Education (IERD)David McLellan, Adviser on General Education (Consultant)Lyell H. Ritchie, Adviser on Industrial Finance (IFC)Gavin Wyatt, Adviser on Power (IBRD)

The Mission's findings relate for the most part to the situation asof the end of 1966, although in some respects note has been taken of developmentsup to the middle of 1967.

TABLE OF CONTENTS

Page No.

Summary and Conclusions

Trends 1

Touristic Features 1

Targets 2

Development Strategy 4

Lodge and Hotel Accommodation 5

Wildlife Resources 9

Total Investment and Receipts 11

Organization 12

TOURISM IN UGANDA

SUMImARY AiD CONCLUSIONS

1. Ugandats international tourist trade, which was growing at an annualaverage of just under 20 percent in the early 1960's, was set back in 1965and 1966 by disturbed political conditions. Indications of some recovery emergedlate in 1966.

2. Tha Mission expects the growth rate to nick unD raduallv during theremainder of the 1960's so that the number of visitors will nearly doublebet.wean 1966 and 1970 from over 10.000 to iiist undesr 20000. Because av'erageexpenditures per visitor are likely to rise, gross foreign exchange receiptsshrni1d mnre thAn rm nihl e from iiit-. oupr 'E miTnllion in 1966 to nearly t2. tmillion in 1970.

3. Uganda's major tourist assets consist of its two major wildlifeSo r-+iin;aPiz n+_ TMiu"rhicornn Pnllct Ma\T+Jnn_n1 P-ny-I fin;i Qmmann PFl;naih,+.) T\TntJnnsn1 PsirkL

n . _ vie -,s a . ----- -- --~ '~~''~~~'~~~r~~~---which together with the country's entry point at Kampala/Entebbe form thetria 1

ngulp, anr cnire, , l + .. h moin - st +t-i- st fonl I ow. Th-e M o nn nAdrvn+c o cornm.cn-

trating investment in thi.s. triangle in order to increase its capacity and. toer,courage anextension of t-he average len-+I of stay.

4.. A.~ .LIU.'~J Tak-ing i,-4to. account lnvest ent al-.e- ady A u -- y +- theissio

suggests an investment program in hotels and lodges amounting to r2.5 millionrn theIZ fiLve YW;AJ.-sy 1966,/-1x7 - .L70 (-L. Of± Utis UVUotal, abu U '. 1lin iJ.C

required to complete the new E3 million hotel at Kampala.. Since, after :i.tscor,pletion, L ere,is .lke.Ly tAo bJe consiLdeUr-able UoVeJr-c IapacijtydLG lUf'or

some years,, no additional hotels there.will be.required during the periocd.EctentiOnUs- and reno-vations along the triang-ular circuit are needed and twro newwildlife lodges will probably be justified late in the decade.

5. Both because of the heavy cost of the new hotel at Kampala whicih isa state enterprise and of the predominance of national park iodges in. theremainder of the hotel irvestment program, the role: of public-sector finamnceis very large.. uf L2.5L million of nvestmetrl expenditures in hotels and lodges,.some E1..8 million would.be by the public sector.

6.. Development of the country's wildlife resources should also beconcentrated along the triangular circuit, with projects elsewhere being phasedfor subsequent development.

7. Total investment expenditures through 1970/71 would amount to nearlyE3.2 million of which 54 percent would be in foreign exchange..

8. There is poor coordination of tne various public sector agenciesconcerned with tourism.. The Mission endorses the.suggestion that a newcoordinating body be established.

9. Investment in tne tourist sector might well merit financlal supportfrom abread, but only after a comprehensive development program for the sectorhas been dra-w-n up anrd the n1ecessary organization for its effective implementationhas been established.

TOURISM IN UGANDA

Trends

L. Foreign exchange receipts from visitors! personal expenditures inUganda, after doubling from E649,o00 to E1,295,000 between 1961 and 1964,declined in 1965 to about El million. This was primarily due to the disturbedpolitical situation in the latter year which undoubtedly discouraged visitors;furthermore, the western provinces were closed to visitors during the firsthalf of the year. Political disturbances reached their climax in the firSthalf of 1966, after which there may have been some upturn in the tourist trade.However, it is unlikely that foreign exchange receipts from tourism in 1966 weremore than 5-10 percent above the unusually unfavorable previous year, as comparedwith an average annual increase of just over 20 percent between 1961 and L964.

2. The estimated number of visitors rose from about 8,300 in 1961 toroughly 13,400 in 1964 - or by an annual average of 18 percent - before droppingback to about 9,900 in 1965. In 1966, there was a recovery to about 11,0:0, anincrease of approximately 11 percent.- This record confirms experience elsewiherethat there is a lag in the recovery of tourism from the adverse effects of politicaland social instability.

3. These disappointing results of the last two years are against thebackground of a continued expansion of the international tourist trade to theEast Africa region as a whole. This gives hope that, with appropriate effort,Uganda can increase its own tourist trade fairly rapidly and return to itsprevious share in a growing market.

Touristic Features

4. Uganda has a number of assets important for the development of itstourism. Its airnort at Entebbe is the international air entry into theEast Africa region from the north, the direction from which most visitors arrive.As a result; and unlike Tanzania- the great maioritv of visitors to Tganridarrive directly from outside the region.l/ However, most visitors to Ugandago On to visit nther tourist attractions tl sewherp in East Africa, and evenbeyond. Also, with the recent growth of local touring by small aircraft, aninereasing number of tourists can be exneeted to arrive in Uganda from herneighbors, thus including Uganda's wildlife sanctuaries in a circuit for thewhole reglon.2/

5andAnI ma;nn +tist1i Q+. atti'Qr actlon i +its wri I fl i arercevs, , rint

setting of traditional African life, and to be seen in the comfort of an

1/ For example, in 1963 and 1964, there were totalsof 13,254 and 13,449riitr to U 5 a,a .*ith 12,248 ar.dJ4 I 0 1268 bein fis arrivls.

2/1Road distar.ces 4T--; Nair a, .pal- -407 5L..i., I j d.-L- M-,hso Lla

further 190 miles or Kampala-Queen Elizabeth Park a further 290 miles - has.Li1ibLV.LUeU LLLJ.robi-base¶d safaris iLnJ, Ut,gariu. O.JIn Ul4e oJV Lder IIdIIU, lVoal

air travel puts Uganda's tourist attractions within a couple of hours ofNairobi and at a cost per passenger-mile onuy fraciVonally above that ofthe mini-bus, the means of transporting tourists by road.

- 2-

excellent climate. Uganda possesses two outstanding wildlife sanctuaries inthe Murchison Falls and Queen Elizabeth National Parks whose special featureis the possibility of traveling the waterways by launch, thus being able toobserve the game at unusually close quarters, drinking at the edge. In addition,the Murchison Falls itself is one of the great spectacles of the world. Smallwonder then that more than 80 percent of all visitors to Uganda spend at leastpart of their time in one or both of the parks. In fact, it would be noexaageration to state that virtually all visitors to Uganda on holiday havethese two parks as their primary objective. The Kampala/Entebbe area for themis the point of entry and exit to the country and thus a transfer point tothe parks.

6. There are of course many other potential tourist attractions, particularlyin the Semiliki Vallyv. the Ruwenzori Moiint,i-ns and the lakes and mTho1ntnin5s ofKigezi, but these are as yet somewhat off the beaten track and tourist trafficto them is only a very s.mall prornnti on f' +.th to+.al. The snme is true of theKidepo Valley lNational Park, which is in the remote northeastern part of thecountry, and veryr difficult to renacih byr a ndr. Ma n+ o-- thr +pa nrt +fhe re+s nof

a> J ; ^ -- s *- *, ^---t -- v- f- p f -_ ethe country are very interesting - and Uganda Hotels Ltd. has good hotelsdotted around the country at less than a day! s drive apart - but very few holiday-makers (as distinct from those on business) visit them.

7. The major disadvantage of Uganda from a tourist point of view is-Uhat it h.,as no coastline and that the value of TLake Victoria as- -- tourist assetis limited by the presence of bilharzia. This factor probably precludes thelarge-scale development in- T Ugnd of the 4less-expensive - -nlsv tour whic,4

-~ d.~ .~ ~ p.I aulIli 1 LL11 U C%11iUZ VJ.L ULIIIU LI . JI~J J.IIL .LUIOJ~VV~U Uvl- Wv"IIJA.,II

as we have shown, are based on air charters and a stay, usually of two weeks,atl' a resort . -± center iCrom whichI ex.cuL LrsLiJons are 4-ken. -Thi A wou -.,-y that4

Uganda's opportunity to increase the average length of stay is somewhat limitedali l iIII U IIi L U UlIIUJ. iI4LL c riI.LL~ LLUIIt UII dti± -LiI e'Ctot J±il i4UIluI.. U± UUL± U~an' that the country rllus prr.riycutInaIicesUi OUeso tuit

(and also, marginally, on a growth in average daily expenditures) to boosttotuabL receipts from -visitors! expenAditurs uIs * ±/

Targe s

U. .The 9yuu6-1(1. rPlan udes i10 inulude a specific prograiri of uourisL±

development, since the Government had engaged a firm of consultants to draftrecommendations for such a program. The report oI tne consultants was madeavailable to the Government in the latter half of 1966 and the Government wasplanning to publish its own tourist development program, in tne lignt of tnereport, early in 1967.

9. While the Mission recognizes the difficulty of making projectionsconcerning visitor arrivals and expenditures, particularly from a series whichafter rising for a few years then declined, we find the consultants' reportoverambitious in its demand forecasts. The consultants choose to projectinto the future the rate of growth between 1960 and 1964 (unusually high

1/ From 1961 to 1964 average expenditures per visitor rose from E78 to;97 (see Table 1). In 1962, the average was 1100, but this was anexceptional year because of independence celebrations.

Table 1: UGANDA: NUMBERS OF VISITORS AND GROSS FOREIGNnVfnTT A'Tn Ti LI A' TM)TT'r\Tt¶ C' Ti-rn11iT mnTtThfr -1r -~1 -7r

Gross ForeignGross Foreign Exchange

Number of Exchange EarningsVisitors a/ Earnings b/ Per Visitor c/

Year (in thousanas) (in X thousand) (X)

Actual

1961 8.3 649 781962 9.7 977 1001963 13.3 1,225 901964 13.4 1,295 971965 9.9 1,039 105

Mission's Projections

1966 10.4 1,092 1051967 11.4 1,254 1101968 13.1 1,506 1151969 15.7 1,884 1201970 19.6 2,449 125

a/ Including estimated arrivals of nonresidents of East Africa from otherEast African countries. For 1966, Mission's estimate based primarily oncomparative hotel occupancy figures.

b/ For 1961-64, East Africa Tourist Travel Association data. For 1965-70,derived from assumed or projected per capita gross foreign exchangeexpenditures shown in third column.

c/ For 1961-64, the result of dividing first column into second. For1965-70, see note b.

because it started from a low base) and ignore the subsequence decline.l/ Itseems more reasonable to us to assume that demand will take a few years toregain momentum. Accordingly, we assume an average growth rate for Uganda'stourist trade during the coming five years of 17.5 percent rising from 10percent in the first year of the period to 25 percent in the last year. Onthis basis, the number of visitors to Uganda in 1970 would be about 19,600(see Table 1). This differs greatly from the consultants' projection of t48,351visitors in the same year.

1/ One result of this is that the report (written in the first half of1966) shows 19,805 visitors in 1966, about double the actual number.

I .4

10. An inevitable consequence of this wide divergence is that there is aconsiderable difference in the priorities, scope and phasing of the touristdevelopment program we outline below and that of the consultants. Naturally,in the event demand were to grow more rapidly than is here projected, and ifadditional capital works could be expeditiously implemented, necessary adjustmentsin the program could be made in two or three years.

11. We expect gross expenditures per visitor to rise gradually as thecombined result of a small increase in the average length of stay and somegrowth in average daily expenditures. Accordingly, gross foreign exchangereceipts from visitors to Uganda could be of the order of E2.4 million in 1970(see Table 1). This is considerably below the E4,569,173 projected by theconsultants.l/ Nevertheless, the Mission does project gross foreign exchangereceipts more than doubling during the five-year period under review.

Development Strategy

12. We have already noted that the overwhelming majority of foreignholiday-makers in Uganda spend their time there in the "triangle" bounded byKampala/Entebbe, the Murchison Falls Nqational Park and the Queen ElizabethPark. Since this circuit is the only touristic complex already in a sufficientlyadvanced stage of development to receive international visitors in any quantityat all and since it is the only one with which the international tourist tradeinterests are already familiar and are therefore making promotional efforts toexploit, we advocate concentrating developmental efforts on it for the next fewyears. This policy would not preclude earmarking other areas for subsequentdevelopment once the "triangle" is clearly approaching saturation point andmaking certain minor improvements in these other areas forthwith.

13. This strategy of concentration has the advantage of ensuring arelatively quick and high return on incremental investment in the existingcomplex, rather than dispersing scarce capital funds over a number of projectsas yet unproved and, in any event, only likely to show an adequate return overa relatively protracted period.

14. In investing in the "triangle," not only should the capacity atexisting locations be augmented in the face of rising demand but efforts shouldalso be made to prolong the stay along the circuit. This could best beachieved by inrreasina ths number of stons offered. That is why we advocatethe early development of the Semiliki Valley, including the designation of partof the Toro Tame RPeserve as a natlonal park and inrressing the size of thepresent lodge. Fort Portal could also be developed as a stopover. Finally,facilities for visiting h, The1rwTn.zi Mountains could be developed. All threelocations are on the line between Queen Elizabeth and NIurchison Falls NationalParks and thus within the circuit. Such a developmnent would be particularlyattractive to the client since the length of the tour could be increased withonly relat ir; I 7r I i ++- r f Ai +i n +r, +hic +n+.n I ',nnrl mni 1 nng +biiq y- sriie-' -nr

average costs and time between points of interest.

1/ Although proportionately the divergence is less than for numbers of visitors,since the consultants do not assume any change in per capita expenditures.

15. Visitors could also be induced to stay longer on the circuit ifarditinna1 amenities were provided. such as swimming pools at the park lodges,augmented fishing facilities either in the parks or en route and various formsof PntertalninTnPnt at. the oes1

T.nraa nnA Wn+l.P1 m.modtiO

16. Sirnce the majority of risitors pass through Murchison Falls and.Queen Elizabeth National Parks, accommodation in and near them is crucial tothe development of Ugandann tourism. There are at p three lodges in theparks: Paraa and Chobe in iMurchison Falls Park and Miweya at Queen ElizabethP ar. P--ar aa T and- SI a have beer. *n ex-stene o a nur.belf -eMTs but are

being expanded and undergoing substantial improvements. When work is completed4n thue fi rst half- of I 96') Paraa will bave 100 beds -ar, ,weya OA hbel~L u U1 4 .L.L U ±Ld...L± VJ.L J.TJf SACLId. WJJ.uo V'1 .LWW WIJTAQ O.SST. -SVVWLY. /./~ -S~"

new lodge, opened in late 1965, and has 70 beds. Thus, total capacity in existingpal 1-de -Wl 11o-A _-E- e 57ttLr

1 7. Ther are plar. to -4 isal adIoa lodge4- caac -y -u 4-se are.L I I 1' *ii v CL. a±z U'aj .Jc Ju11o U, _L.L d.UAU.L U.LVJ±LdLJ. _L Ur %C.FCJL%;J.. UJ UU - UUA~.VQ ULU

not definitive as to specific siting, design or phasing. In accordance withLt1h ,1sL.0n.t s owUin de-11Ud fLorecULtU, we c.aLLcUU 'a liU t JhLatre1en oge 1japci.j.uY

will be sufficient to accommodate visitors prior to 1970, but additionalcapacity Vil±± ue requirdu ULdt:ei uutl:.sI TL._UU; t;VU0bVUI.LV11 d4lLU UqUJiI1LWut1 VJ.L

a lodge takes about 18 months, actual investment would have to be made in 1968/69ard~~~~~~~ ,h -is hal of 19970, thsmasdelliepans shol be1_ A agreed

during 1967/68.

18. At the Murchison Falls National Park, the Government has been

l/ At present the average length of stay at any one lodge is about 1.3 days,since the great majority of visitors simply stay one night viewing gainein the vicinity of the lodge, usually in the late afternoon and againin the early morning, and then depart for the next stop which is of:tena full day's drive away.

2/ Assuming that 75 percent of all visitors to Uganda visit the parks, therewould be 13,950 nonresidents of East Africa visiting the parks in1970. About 12 percent of annual arrivals visit the country during apeak month of the year so that about 1,750 tourists would have to behandled at such a time. The present lodge capacity provides for 7,380bed-nights a month (266 times 30). Experience shows that, even at thepeak, monthly occupancy rates can rarely be pushed above 90 percent (inthe 45 months between January 1963 and September 1966, the monthly occupancyrate at Paraa only rose above 90 percent for 3 months); this is due tolast-minute cancellations, inevitable organizational deficiencies,scheduling difficulties with respect to a series of one or two-night stays,and single occupancty of double-bedded rooms. Thus the "practical" capacityis 7,092 bed-nights. Assuming each of the peak month's 1,750 visitors stayin the lodges' beds for 4 nights, a total of 7,000 bed-nights would berequired. This would leave only 92 bed-nights in all three lodges through-out a peak month to accoznmodate Uganda residents and experience shows thiswould be grossly insufficient.

- 6 -

considering siting a new lodge on the other side of the River Nile, and nottoo distantn frorm the eyisting Para2 Lsdge. Sinnc the mTaior attraction here isthe river launch trip, this is a reasonable concent.l/ At Queen ElizabethPark, there is already a small privately-owned hotel at Kichwamb2 which isjust outside the park boundaries on a magnificent site on the escarpment.Tentative rebuilding plans have been under discussion h but m.uh depennds onsolving a water-supply problem.

19. Plans for these two lodges could be expedited so that each will havean installed bed-capacity of 100 in operation by 1970. With a practicalmonthly additional capacity of about 5,400 bed-nights, the accommodationssituation+- with, respect t_o th +vsne parks wVould bhe satis-factory for several yrs-

into the 1970's. In addition, there are a few small hotels some miles from theparks - ( Ce.rg. at KaU Wie -te Fort. POrtJIal, .L,aSindiJ an.d G'Jul.uJ) wVhilJchL-JJ can serve as

bases for excursions into the parks.

20. We urge that new lodges be built to comfortable, but not luxurious,standards. * ince a park lodge is primr,arily a night stop for tourists who havebeen on the move all day (and likely to go to bed early in order to rise earlythe following day), they requiLe- private toilet facilities wlth hot -water,comfortable beds, good meals and the opportunity for drinks, but not the full

47 ~~~~~~~~~~A A -Z_ __ _ _44 -_ ;t _ _ _4 T-- .- ? T,_ P4 - X 1--4 r ll--I- range V1 Ste-LrV±Ue -r0VriUUU iLi IdJUI R UJJ VI l .LUI D 11U UWt * D. 1'U .L..LIIU W.a.tt WUU

Lodge and the new facilities at Paraa and NMweya are built to too expensive astandard. As a result, Chobe cost more than . ,0uu a bed, wil±e une cosuj at

Paraa and Mweya (including those of the new public rooms and general services)come to considerably more per added bed.

21.- I'T e bteli 4eve that the new lodges cudbe bullt1 to the - appropriate -- -4 4C-L . L LI U t.LLtV UidA. Uilt; ilutV _LVuUot LUULL-u Ut- UU-LLI4 UU U1t: dJpi.JiUJ Labt:

standard for about E2,000 a bed and, accordingly, suggest an allocation of400,000 f.J'..AJor eachti would bie sufficient± (see Tau.Le C) I lie new IParaa 'U UUI loUge,being in a national park, would presumably be built by National Park Lodges(Uganda) Ltd. (a subsdiLar-y of Uganda nuuels LtUd. iuse±L. a uubsidiary of theUganda Development Corporation) which owns and operates the other lodges in thenational parks. The present owneris of the aichwamba hotel are already consideringan expansion program.

22. We have already alluded to the development of the Semiliki Valley.There is a small establishment already there consisting of 32 beds of which 26are in tents. There is a reasonable road from Fort Portal and an adjacentairstrip. Uganda Wildlife Development Ltd. (also a subsidiary of UDC) has anexpansion plan which would bring bed capacity to 80 at an estimated cost of1120,000. An early decision on the project by the Government and the UDC isbeing sought.

23. Fort Portal is a pleasant town which is not only on the main roadbetween the two parks, but also forms an excellent base from which to visit theRuwenzori Mountains and the Semiliki Valley. The Nountains of the Noon Hotel

1/ In fact, a problem at Chobe is that most visitors wish to make the rivertrip and must now take a circuitous road journey 72 miles each way toreach the embarkation point.

-7-

at Fort Portal has been recently renovated and has a 47-bed capacity. The NewP.uiwenzori Hotel, seven miles out of the town, ren.ir-s renovato-n and expansin.If its capacity were doubled from its present 24 beds, it could be a more viableenterprise. Fort Portal would then have er iy 100 1beds -An could co+-tutean important stopping place for tourists. Consultants have estimated the

~Jd.J~~~.Ji i.AJ U .U UII IIVUV 1UVNVLL11.J±.._L Ii')U .L.= C U AW.LA~, JUU. .tL L _ J.4.vO - - -i.~ 4 -~.*~~expansion costu atU the' New P.uwen20ri; Hotel Zat nnn00 MIe -riat -rn.othe hotel would probably find it difficult to attract the necessary capital unlessiLveuos were cor,vinced ta aUL1LELU UUUcoheren1 tJuplaI, VhLcIL in .cluded a rolle for

Fort Portal, was being vigorously implemented by the Government.

24. The remaining point along the triangular circuit to be considered- ~cL LV n, Li- - - rt±..L - nf 21-- V____t.... 1 L_ is Kamppala/EnLtLeb e. Iv'itxi Une airport aU Z11LeuLe, 21 miie frUm KaJ[aLa, the

capital and main city, the area may be regarded, as stated, as serving togetheras the entry and exit poi'nt for visitors to Uganda. At the outset of 1967,there were about 510 beds available in the area suitable for accommodatingvisitors from abroad.!/ The Grand Hotel, Kampala, had an ongoing program ofrenovation and modernization, due for completion during 1967, which would notadd to that hotelis bed capacity.

25. The major hlote"l inve sumult acLUUiviDY n1 1the areva -ls ithecnsrcto

of the new Apolo Hotel at Kampala. This has 600 beds and is costing about L3million, o1 Which about IiJC million hlad bDeeni spent prior to y966/67*. The lotel

is due to start operations late in 1967. Thus, at that time there will 'oe 1,110beds in the Karrmpala/Entebbe area of which 5 percent will be inl the newhotel.The investment has been made directly by the Government, but the UDC has beencharged with the responsibility of operating it. For this purpose, UDC has estab-lished a new subsidiary, State Hotels Ltd. The latter has engaged a manager forthe hotel. However, by early 1967 no provision had been made for the internationalsales and promotion necessary to sell the 219,000 bed-nights which will beavailable in the hotel each year.

26. By any assumption, there has been a considerable overinvestment inhotel space at Kampala. As illustration, if all 19,600 visitors to Ugandaprojected for 1970 stayed an average of 4 days each in the Kampala/Entebbearea, the resulting bed-nights of 78,400 would represent only 19 percent of theW5,150 total bed-nights available in all 1,110 beds in the area. Even allowingfor stays by Uganda residents (limited by the level of charges), the annualoccupancy rate three years after the completion of the project would be scarcelyabove 20 percent, obviously inadequate to provide a return on the investment.

27. Since construction of the Apolo Hotel is so advanced, it clearlywill be completed. But thought could be given to an alternative use forpart of its space. In any event, no further investment in additional hotelspace in this area will 'be required for a number of years to come. Further-more, attention will have to be paid to the structure of charges made by thevarious hotels in the area to ensure that all levels of the traffic are accom-modated.

1/ There were 190 beds at the Lake Victoria Hotel, Entebbe, together with some320 beds at 4 hotels in Kampala and at a few suitable guest-houses.

- 8 -

28. While no further hotel space is needed, a renovation and modernizationof the Lake Victoria H-otel at Entebbe woulld be 'hp l.i f'ied. Al+.tih h ervi rithe discussed area as a whole, the Lake Victoria Hotel also functions both asthe transit stop for the airport and as the accommodation for visitors to themany government offices in Entebbe. At E250 for each of its 190 beds, plusr.early P.9r(f fnor- -P +c lts - Q public Q ad-.e-.rinQ ad,, *'r7Er nnn T7rNtoAuld

be required (see Table 2).

Table 2: UGANDA: SUGGESTED INVESTMENT IN HOTELS AND LOLGES-- v,J/6 U I- L970I-/71 .

(in E thousand)

-I966Z/6 7 -I96z7/68 1968z /69 I 16/-70 In2 17/'71 rnotal±Lyuf/ U ±YU(/L)UU ±Lyuu/ Uy ±YU 71 f 1J (yLi/ I i v1 JI.VI

ZXeI16L:11 | s: iU

Renovations

Paraa 150 150 a/iweya 150 1 5 b/Semiliki 60 60 120Nvew Ruwenzori oUGrand 150 150Lake Victoria 75 75

New

Paraa South 100 100 200Kichwamba 100 100 200Apolo 800 200 1,000 c/

Other and Contingency d/ 50 5o 100 200 4001,250 g17 310 300 200 2,505

Of which:Public e/ 1,100 335 160 150 100 1,845Private 150 110 150 150 100 660

a/ About E80,000 spent prior to 1966/67.

b/ About E60,000 spent prior to 1966/67.

c/ About L2,000,000 spent prior to 1966/67.

d/ Includes modernization and extensions at other hotels and possible startson new hotels in 1969/70 - 1970/71.

e/ Central government and subsidiaries of UDC (Uganda Hotels Ltd., NationalPark Lodges (Uganda) Ltd. and Uganda Wildlife Development Ltd.)

- 9 -

29. In all, the Mission suggests investment in hotels and lodges totalingaboutLiLL I--I or, ilo 4ing tI-h fiv e-year period, 1966 - 170 /7 (see - ld.le 2).

Of this amount, 11.4 million, representing the cost of completing ongoing work,is relativelyI firm; the remainder reflects the priorit-y selections of' the14ission from a number of projects already under discussion in Uganda.

30. Even if the E1 million remaining to complete the Apolo Hotel isexcluded, it will be noted that public investment will be greater than private(see Table 2). This reflects the preponderant role in the public sector alreadyhas in the Ugandan hotel industry. Private interest in the industry nas beenrelatively limited in the past and is only likely to grow in the future undera positive government program for its stimulation.

Wvildlife Resources

31. Apart from their scientific importance and their impact on theinterests of the entire population, Uganda's wildlife resources constitutethe country's major tourist attraction. In fact, l-ecause of the lack ofa sea coast, Uganda tourism is perhaps more heavily dependent on wildlife thanthe other two East African countries. It is therefore distressing that nodevelopment funds have been allocated in 1966/67 to either the Wational Parksor the Game Department, the two agencies responsible for the country's wi:Ldliferesources.

32. Both agencies are revenue earning: the National Parks from entrancefees, road transport hire and river launch fares; the Game Department frormhunting licenses; and both from the sale of meat, ivory and skins resultingfrom animal population control operations.

33. In 1965/66 the National Parks' revenues amounted to f83,498, wh:Llerecurrent expenditures were fl74,698, the shortfall being provided by anallocation from central government funds. The revenues quoted are of couwsedirect receipts by the National Parks and do not take into account the ea^ningsof the lodges nor indeed the total value of the tourist trade in Uganda (bothdirectly and through the multiplier effect) which must be largely attributableto the existence of the National Parks.

34. The National Parks have produced a five-year program of capitalexpenditures which the Government should consider without delay so thatimplementation could start in 1967/68. More than 60 percent of all expenditureswould be devoted to constructing roads. tracks and airstrips and in acquiringriver launches and vehicles; the remainder is for various buildings for offices,staff housing and guide services and informational activities.

35. We believe that the programs outlined have high nriority with respectto the Murchison Falls and Queen Elizabeth parks (totaling 1173,000 and1169.000 resnectivelv for the five-year period) and should he imnplemented,c inthe proposed phasing of 40, 20, 20, 10 and 10 percent of total expenditures inearsh of five siiccedina years (see Tahle 3)V1/ T-onwtever_ because ofn the Missionns

1/ The National Parks propose this phasing primarily in order to make goodearlier lags in development as rapidly as possible. Since many expendituresin the early cart of the period would be for the acquisition of machinery,equipment and vehicles, the Mission feels that such a phasing could in factbe achieved.

- 10 -

suggested strategy of concentrating on the triangular circuit in the yearsirm,mediately ahIead, vwe suggest that- 4the pro 4a 4at -the _ KidpoValeNtina

-~~-~--'~ '-~--~-J ~'-~-~ 11U uLc u UL; p jLL J. dIIJ L U UIl~ I -UV}.J( VC d.LWt;.y lCL'J.LL/l.J

Park be spread over ten years subject to the proviso that in the first yearan additional f3 , 000 be allocated (see Table 3) to build an airstrip at Apokain order to afford better access forthwith. The lNission also recommends that the

4- _ _ m l. flflf 2.. 2 2 2..I -.- -T 2 --t -expenditu e of 24,000 included in Lhe Nationa Parks prograll for headquarters

offices and informational services be carried out in the second and third years(see TLabUle 3).

m. 1 - - T-fl A 7/TtA - ll rrm n -t-T7i~,lrT rn -IT IT,-rT fllable 3:I UGNL PRAJEtDD k in LDIAZAIt IN WI.LDL-IFE, RLSOURCESl

1967/68 - 1970/71 a/

1967/ 1968/ 1969/ 1970/1968 1969 1970 1971 Total

National ParksMurchison Falls 69 35 35 17 156 d/Queen Elizabeth 68 34 34 16 152 d/liidepo Valley 13 10 10 10 43 e/Semiliki Valley b/ 52 26 26 13 117Headquarters - 12 12 - 24

202 117 117 56 492

Game Department c/ 25 35 45 55 160

TOTAL 227 152 162 111 652

a/ There was no allocation of developing funds for this purpose in 1966/67.

b/ To be newly established wvhile retaining part of the Toro Oiame Reserve forhunting safaris.

c/ For illustrative purposes, pro memoria.

d/ f17,000 to be spent after 1970/71.

e/ f59,000 to be spent after 1970/71.

36. The National Parks are in accord with the recommendation to establishanother national park in the Semiliki VaTlley Th.eyr lanvT )not h r*coste a

program of capital works. There is already an airstrip, but a road and trackprogramV To'ld have to be i-ni+tine w.,4 +thout delay. ThkirAdcl-a mr 1 / rnoAd

can be built for about f4CO a mile. Assuming the need to build 150 miles duringa five-year periodo, the ttal cost wouId be 000. ITel,-;V cles and other equl

ment might amount to f20,000. Control points and entrance gates would have to beestab.U±L-liseu andul of± fices and stafLf . Pi prouv u dli .Ldl.L 1/1;± Pi VV.s.iLUl of

L50,000 should be sufficient for these purposes. Total capital expenditures on

1/ A local gravel used for road-surfacing.

- 11 -

establishing the Semiliki Valley National Park could thus amount to f130,000 overfive years and should be phased in proportions similar to those for the otherpriority parks (see Table 3).

37. The Game Department is responsible for close control over 14 reservesand general supervision of wildlife matters throughout the country. In i965/66the Department's recurrent expenditures were E82.9 thousand, while its revenueswere f115.3 thousand (of which L97.8 thousand were remitted to the central Govern-ment and E17.5 thousand to various local authorities). There was thus a directsurplus on the Department's recurrent account of E32.4 thousand.

38. Since t+hev-e have been very few development activities in the last few yearsa backlog of projects is now accumulating. There is a need for additional roads andtracks in the reserves, for more protective works and firebreaks and for vehiclesand equipment. The lMission urges that a detailed development program for the GameDepartment be elaborated. In the meantime, pro memoria, we have assumed that fundsmade available for this purpose will rise from E25,000 in 1967/68 to S55,,000 in1970/71 (see Table 3).

Total Investment and Receipts

39. The investment expenditures we have projected through 1970/71 t;otal nearlyf3.2 million (see Table 1h). The two outstanding features of these projections arethe heavy preponderance of public expenditures and the high proportion of allexpenditures in the early part of the five-year period. Both these features canbe largely explained by the necessity to complete the heavy investment in the ApoloHotel at Kampala and by t;he previous lag in capital expenditures on wildlife.

Table 4: UGANDA: PROJECTED INVESTMENT EXPENDITURES ON TOURISM ANDFOREIGN EXCHANGE COMPONENT, 1966/67 - 1970/71

(in E thousand)

1966/ 1967/ 1968/ 1969/ 1970/1967 1968 1969 1970 1971 Total

PublicHotels and Lodges 1,100 335 160 150 loo 1.8h5Wildlife - 227 152 162 111 652

TflOo 562 312 312 211 21 97150 110 150 150 100 660

Private a!

Total TnvestTmennt 1,250 672 1462 J62 311 31_57Of which:

Construction 695 248 301 242 178 1,664Enuipment 525 3214 141 180 133 1 303Working Capital b/ 30 100 20 40 - 190Also, of -.Th iJch Foreign Exchange Costs 698 358 233 241 178 1,708

a/ In hotels and lodges.

b/ For starting-up operations of hotels and lodges.

h0. Equipment is an unusually heavy item_- E1.3 million or about 41 percent ofall exrpenditures_mil becausse --ch ofr the- hote-l qlmetiacurddithe completion period of a new hotel and also such equipment figures prominently

in renoV pg. LXJiIi a nd beaus ri;,ver launches d veh ices Jsan integral part of development in wildlife sanctuaries.

41. Both because most of the sizeable equipment needs can only be met by importsand the imLport requirem--nents for the constructio n industry- ar l also considerable, wecalculate the foreign costs of projected investments over the five-year period at1l.7 million (see Table 4) or 54 percent of all expenditures.

42. 'Wve believe these investments are necessary if the targets for total arrivalsof visitors and foreign exchange receipts (see Table 1) are to be achieved. Grossdirect expenditures on tourism (excluding the multiplier effect) by both visitors andresidents would rise to about 12.9 million in 1970/71 (see Table 5). Because ofthe estimated costs of imports consumed by tourists (perhaps 25 percent of allreceipts in Uganda) net foreign exchange receipts on current account would amountto L1.7 million in 1970/71, or more than double those at the outset of the five-year period.

Table 5: UGANDA: PROJECTED EXPEINDITURES BY FOREIGN ANDRESIDENT TO-URISTS, 1966-1970

(in 1 million)

Net Foreign Ex-Gross Expenditures change Receipts on

Total By Foreigners a/ By Residents Total Current Account b/

1966 1.2 1.1 0.2 1.3 0.71967 1.5 1.3 0.3 1.6 0.91968 1.7 1.5 0.3 1.8 1.11969 2.2 1.9 o.4 2.3 1.31970 2.7 2.4 0.5 2.9 1.7

a/ See Table 1.

b/ i.e. gross expenditures by foreign visitors minus the foreign exchangecosts of imports included in all grc>ss penditures,

Organization

43. The effective implementation of a tourism program will require closecoordination of a number of organizations. both in the public and private sectors.At the governmental level, the Ministry of Information, Broadcasting and Tourismhas general resnonsibilitvy HoTVwver. the Game Depnartment is under the sunprvisionof the hvinistry of Animal Industry, Game and Fisheries, even though the NationalParks, which carryv oiit. similar functions in certain deisisgnated ars is responsi-ble to the Vlinistry of Information, Broadcasting and Tourism. Naturally, some ofthe activities of other ministries have an impact on the tourist trade.

44. At the parastatal level, several subsidiaries of the UDC are concernedwith aspects of tourism. Uganda Hotels Ltd. owns and operates the major hotelchain in the country, while its subsidiary, National Park Lodges (Uganda) Ltd.owns and operates the lodges. State Hotels Ltd. will operate the new ApoloHotel.l/ Another subsidiary, Uganda Wildlife Development Ltd., original:Lyestablished to outfit and conduct hunting safaris, increasingly acts as a gene-ral tour operator (and not only within Uganda). The Company also owns andoperates the lodge in the Semiliki Valley.

45. In the private sector, there are a number of hotel businesses, most ofthem quite small, although one is part of a chain which owns three hotels in Ugandaand others elsewhere in East Africa. There are a few travel agencies and touroperators some of which are subsidiaries of companies outside Uganda. There arealso a few road transport companies and one air-charter firm.

h6. The Uganda Tourist Association operates an information office i-nKampala and is a cooperative organization with members from both the pub-Lic andprivate sectors.

47. The consultants' report, to which we referred earlier in this section,advocates the establishment of a coordinating body which it calls the '"UgandaTourist Board." The Mission agrees that such a body should be established. Itsprimary function would be to ensure that the tourism program is implemented andthat all public agencies carry out their assigned roles. It i-uld U]lso collectinformlation and data necessary for periodic adjustments in that program. Thebody would be responsible for all promotional and publicity campaigns at home andabroad.

48. The Board would be headed by a chief executive of professional competence,supported by a suitable staff. Many of the latter could be recruited from theDepartment of Tourism of the Ministry of Information, Broadcasting and Tourism. TheMinister should probably be chairman of the Board, the other members being represent-atives of the various public and private agencies mentioned above. In this wayv theviews of these interests would be brought to bear on the decisions of the Boardwhile the Board would have an effective channel to disseminate those decisions backto those most concerned. The Minister would remain the "voice" of tourism in theCabinet thus ensuring dedication to tourism develonment at the highest levels.

49. Such development can make an important contribution to the generaleconomic growth of the country, both by increasing foreign exchange earnings andgenerating employment and incomes, and should therefore be accorded high priority.The lMission believes that investments in the tourist sector might well merit finan-cial support from abroad as soon as a comprehensive development pregr-am along thelines we have indicated has been drawn up and approved and the necessary organiza-tion for its effective imrplementation established.

1/ It is rot clear to the Mission who will own the hotel. Funds for itsconstruction have been carried on the vote of the Ministry of EconomicDevelopment and Planning.