Tourism in Botswana_Project Report

8/7/2019 Tourism in Botswana_Project Report

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ENGAGING WITH AFRICA

Group Project Report

ENGAGEMENT STRATEGY FOR

TRAVEL & TOURISM BUSINESS IN BOTSWANA

Presented To

P ROF . HEMA SWAMINATHAN

O N

28 TH FEBRUARY , 2011

W ORD C OUNT - 4969

BY:

N ISHIT G ARG (0911259)

RANGINENI SRIKANTH (0911336)

RITURAJ SINGH RAUTELA (0911190)

SHRIKANT AVI (0911131)

VARUN SAINI (0911138)


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Engagement Strategy for Proj ect Report

Nishit Garg | Rituraj Singh Rautela | Rangineni Srikanth | Shrikant Avi | Varun Saini

TABLE OF CONTENTS

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INTRODUCTION

The tourism industry has undergone phenomenal growth over the last several decades. Increasedinformation dissemination and a rapid move towards a world without borders has opened the doors for amajority of the world population to visit the majestic sceneries throughout the world, with the southernAfrican region being no exception.

Botswana Tourism is a lucrative market in a rapidly growing industry 1. The national tourism industry isgrowing rapidly and the inflow of tourists from around the world is on a rise. The key to success lies in adedicated and experienced staff, excellent networking, and effective management and marketing.

There is a need for carefully positioned, high quality services that are comfortable, informative and tailoredto the clients needs such that they will enable individuals to have a greater appreciation of the naturalenvironment and its intricacies.

BOTSWANA THE LAND OF OPPORTUNITIES

Botswana, officially the Republic of Botswana (Tswana: Lefatshe la Botswana), is a country located inSouthern Africa. The citizens are referred to as "Batswana" (singular: Motswana). Formerly the Britishprotectorate of Bechuanaland, Botswana adopted its new name after becoming independent within theCommonwealth on 30 September 1966. It has held free and fair democratic elections since independence.

At the time of its Independence in 1966, Botswana, a small landlocked country, was one of the poorest inthe world with an annual GDP of $70 per capita 2. Botswana has transformed itself, moving into the ranks of middle-income status to become one of the fastest growing economies in the world with its average annualgrowth rate of about 9 percent with a GDP (purchasing power parity) per capita of about $14,800. 3

Botswana has had an impressive track record of good governance and economic growth supported by

prudent macroeconomic and fiscal management. 4 The government provides free and universal educationand the expenditure on education exceeds 10% of GDP; but still overall outcomes have not created theskills and workforce Botswana needs. Unemployment has been persistently high at near 20 percent,household incomes are much lower in rural than in urban areas 5and, while rural poverty rates have fallen,they remain significantly higher than in urban areas. The rate of HIV/AIDS infection has improved as aresult of the government's aggressive introduction of anti HIV/AIDS drugs which are provided free of chargeto the citizens.

1 http://www.bidpa.bw/docs/archive/Economic%20Diversification/TheTourismSector.pdf

2http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT/BOTSWANAEXTN/0,,contentMDK:20183107~pagePK:141137~piPK:141127~theSitePK:322804,00.html

3 2010 IMF Estimate

4 http://www.ngonewsafrica.org/?page_id=3593

5 HIES 2002/03


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BOTSWANA ECONOMY

The country is trying to diversify its economy, which is heavily dependent on diamonds and the beef market 6. Other minerals are soda ash, copper and nickel matte, gold, and coal.

Debswana, the largest diamond mining company operating in Botswana, is 50% owned by the government. 7 Mineral industry provides about 40% of all government revenues. In 2007, significant quantities of uraniumwere discovered, and mining is projected to begin by 2010. Several international mining corporations haveestablished regional headquarters in Botswana, and prospected for diamonds, gold, uranium, copper, andeven oil, many coming back with positive results. Government announced in early 2009, that they would tryand shift their economic dependence on diamonds, over serious concern that diamonds are predicted to dryout in Botswana over the next twenty years.

TOURISM IN BOTSWANA

Tourism is an increasingly important industry in Botswana, accounting for almost 9% of GDP. Thoughtourism growth is at its infancy, the Government of Botswana views the tourism industry as an importantengine of economic growth; this commitment is demonstrated by the recently produced Botswana TourismDevelopment Master Plan. 8

6 http://botswanatimes.com/

7 http://www.investmentsandincome.com/investments/debswana-diamonds-investment.html

8 http://www.botswanatourism.co.bw/doc/ecotourism_technical_report.pdf

Fig 1. TourismReve nue andGDP G rowth -Bot swana


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TOURISM OPPORTUNITY FOR AN INDIAN BUSINESS

In terms of biodiversity Botswana is a land of contrasts. It has world famous wetlands in the north and thearid Kalahari Desert in the centre and southwest. Both these contrasting areas have famous protectedareas; the Okavango Delta is the largest inland delta in the world and is a Ramsar site, and the ChobeNational Park, which has large numbers and varieties of game. Chobe harbors one of the largest elephantdensities in the world. To the south, Botswana has the first formally declared trans-boundary park in Africa,the Kgalagadi Trans-frontier Park. There is a transitional ecological area in between these two nationalparks, the Central Kalahari Game Reserve that is one of the largest game reserves in Africa. There is also aunique huge prehistoric lake, the now dry assemblage of saltpans called the Makgadikgadi and Nxai PansNational Park system, which harbors an important habitat for migratory birds. There is the hard veld to theeast along the Limpopo River. 9

MARKET ANALYSIS SUMMARY

We are today experiencing a rapid growth in the economy of unsurpassed nature. This has been brought

about by, amongst other things, the relaxation of foreign exchange policies and macroeconomic policiesgeared towards attracting foreign investors into the country. The fiscal and monetary policies of thegovernment geared towards maintaining growth with social justice have largely contributed towards this,evidenced by our economy averaging a growth rate of 7% since 1990 - very high by internationalstandards.

The current drive and emphasis by the government on diversification of the industrial base away from theminerals sector presents an opportunity for Tour Operators to make a valuable contribution towardsachieving this goal. Though there are mobile tour operators currently on the market, some of whom havebeen in existence for a relatively long period of time, it is believed that there is a market need for one thatspecializes on providing comfortable and enjoyable transport to tourists and visitors. This, also considering

the fact that, potentially Botswana's richest natural resource, the tourism industry is becoming anincreasingly important player in the economy and may in the long term prove even more valuable thanmineral resources in earning foreign exchange. Operating in such a market is largely dependent on goodnetworking and establishing strategic relationships with various hotels, lodges and travel agents to ensure asteady stream of clients.

Of all the uncertainty surrounding this industry, one fact is certain: tourism is here to stay. The onlyquestion is how large the industry will become and whether it can sustain, if not exceed, its current growthrate. However large the market ultimately becomes, the company strongly believes that travel will be animportant component of this market place. Tourism statistics provide a reliable guide as to the size of themarket. According to the latest tourism statistics total arrivals for 1998 amounted to 1,351,798 representingan increase of approximately 12.65% from the previous year. Of the total arrivals in 1998 205,146 (15.2%)were holiday/tourists whilst 319,440 (23,6%) were visitors, both groups of which constitute our targetmarket, totaling approximately 524,586 individuals. 10

9 http://www.unep.org/bpsp/tourism/case%20studies%20%28pdf%29/botswana%20%28tourism%29.pdf

10 Tourism Statistics 1998 - Central Statistics Office.


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DEMAND SIDE OPPORTUNITY FOR INDIAN BUSINESS

India is one of the fastest-growing outbound travel markets in the world. International tourism departuresfrom India have grown from 3.7 million in 1997 to 9.8 million in 2007 and international tourism expenditureshave increased from US$ 1.3 billion in 1997 to US$ 8.2 billion in 2008. 11 With more than 1.1 billioninhabitants and GDP increasing by more than 8% every year, the country offers enormous potential forfuture growth in outbound travel. India outbound travel market is expected to grow from 16.6 million in2011 to 31.9 million departures in 2016 (see table below)

12

The increase in size also means new category of travelers. A quote by Mr. John Koldowski, Deputy CEO & Head, Pacific Asia Tourism Association best describes the kind of growth we are expected to see in thismarket.

To co nsider I ndia a s on e l arge, homogenous m arket i s a m istake ; in rea lity t here ar e m any I ndias an dtheref ore Indian s, all developing an d matur ing at di fferi ng rat es an d with differen t hopes, drea ms an dambitions. To market effect ivel y o ne has t o kno w not only w here t hey ar e a nd how to access hem, but also

how their differi ng nee ds can be b est matche d. Mr. John Koldowski, Deputy CEO & Head, PATA

OPPORTUNITY FOR AFRICA

Currently, only three percent of total Indian outbound travelers visit Africa. But this is likely to change in thefuture due to changing categories of travelers. Broadly, Indian travelers today can be categorized into fourtypes 13:

a) Frequent travelers engaged in business travel

b) First time travelers: looking for cheap packaged tours

c) Niche Destination Travelersd) Seasoned travelers looking for new destinations

11 European Tourism Commission Research 2008

12 ETC Research 2010

13 AC Nielson 2010

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To tap into the African market, the travel companies should focus on marketing towards the latter threecategories as these three provide the maximum potential for growth.

On further analysis, if we categorize the Indian outbound travelers by purpose of the trip, only 20 percenttravel for leisure purposes (see table below). Business trips and VFR (Visiting family and friends) account forabout 60 percent of the total outbound travel by Indians. We focus on leisure trips, as this is our business

model to attract tourists to Botswana.

If we further break down the leisure visitors into various categories, we get seven distinct types of visitors.The profile of these travelers along with percentage of each type is presented in the table below:

To target visitors towards Botswana, we should focus on latter five of the categories mentioned above. The

first two categories i.e. family relaxer and independent relaxer do not have a taste or preference of travel,which Botswana provides. They prefer city breaks and holidays on mountains and beaches. They are notattracted to wild safaris and desert safaris. All the other five categories have a taste for travel opportunities,which Botswana provides as a unique destination and Africa provides, as a general destination.

It is difficult to estimate the potential size of capture for Botswana from the Indian market but we haveextrapolated the potential size for Africa in general (see figure below). For Botswana, the size is minimalnow but the current opportunities from both demand and supply side suggests that its share will increaseand it will capture a significant proportion of the potential market for Africa in general.

Trip Purpose %

Leisure 20

Business 40

Employment 13.2

Visiting friends & family 19.3

Religion 1.5

Studies 2.4

Other 3.6

Category of leisure traveler

% Preference

Family Relaxer 37

IndependentRelaxer

18

Prefers beach&mountain holidaysand city breaks

Luxury

Discoverer

13 New experiences

with high level of comfort

PackagedDiscoverer

15 New experienceswith basic comfort

Mature Explorer 9

AdventurousExplorer

7

Off the beaten track experiences

Special InterestMarket

1 Niche experiences

Tab le 1 . Break up of pu rpo se oftrav el for Ind ian ou tbound trav el

Ta ble 2 . Catego ries & pref eren cesof leisu re tr avelers


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SUPPLY SIDE OPPORTUNITY FOR INDIAN BUSINESS

The main incentives for an Indian business from the supply side are efforts by Botswana government topromote tourism and recent launch of one stop shop by Botswana Export Development & InvestmentAuthority (BEDIA) for Indian investors in Botswana esp. in tourism sector. These efforts are:

a) Creation of Botswana Tourism Board

b) Botswana Tourism Board Act 2003 for policy co-ordination & implementation

c) Relaxation of foreign exchange policies and macroeconomic policies geared towards attractingforeign investors into the country

d) Botswana Export Development & Investment Authority (BEDIA) investment conference in India:2010

! One Stop solution for Indian businessmen

! Assist in license, infrastructure, advice for investors in Botswana

Apart from effort by government, another incentivefor Travel & Tour Company to enter Botswana is highproportion of capture out of total expenditure by anaverage traveler.

The figure shows the breakdown of spending by anaverage traveler in Botswana. Here, out of total,proportions spend on accommodation and internaltransport accounts for 35 percent. This isconsiderably higher that other countries and providesa significant opportunity.

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THE BUSINESS PLAN

The plan is to launch a travel and tours company that intends to deliver leisure travel excursions to Indiancustomers. The company intends to guide customers in selecting a trip based on pre-defined vacationcriteria. A traveler will hence be able to select areas of interest based on their preferences and subsequently

identify destinations to visit. The intention is to provide customers with access to exclusive traveldestinations, service to fully appreciate destinations through information packages, not just sight-seeing,and access to special interest travel according to the group's/individual's preferences.

TARGET CUSTOMER SEGMENTS

The first task is to identify the customers and categorize them. Family relaxer and Independent Relaxersegments have not been identified as target segments. Other target Indian leisure travelers to Botswanacan be classified as below:

The primary task is to increase the awareness of tourism services in the various market segments. This isparticularly so with the organization looking at establishing a clear advantage(s) in an increasingly

competitive market. The company will be positioned as a quality commercial tour and travel operator thatprovides customer-need fulfillment, enjoyment and reliability.

PRODUCTS AND SERVICES

Services have to be customized according to different customer segments. Few examples of customizationare as follows:

a) Premium private long haul trips for luxury discoverers

b) Short haul group packages for package discoverers and explorers

c) Needs oriented customized trips for special interest segment

A traveler will hence be able to select areas of interest based on his preferences and subsequently identifydestinations to visit. The intention is to provide customers with access to exclusive travel destinations,service to fully appreciate destinations through information packages, not just sight-seeing, and access tospecial interest travel according to the group's/individual's preferences. The aim of the company is tobecome a destination management company that brings alive the magnificence of Botswana to the traveler.This will be done by co-coordinating the traveler's entire experience from hotel bookings, safaris and tours,greeting and porter services, and to tour packages and incentives.

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KEY SUCCESS DRIVERS

The key to success of this company will undoubtedly be effective market segmentation throughidentification of several niche markets and implementation strategies. Along these lines the company willneed to implement advertising, personal selling and direct marketing strategies to the target markets. Thevarious success drivers are as follows:

a) Solid and fruitful strategic alliances

b) Marketing know how

c) Responsiveness

d) Excellence in fulfilling the promise

SOLID AND FRUITFUL STRATEGIC ALLIANCES

Due to the nature of services and relative infancy of the company in the market, the firm will need to form

strategic alliances with various stakeholders, including hotels, lodges, and travel agencies. This will ensurethat there is a constant stream of customers. Moreover, alliance with these players will prevent them fromemerging as a competing entity in the market.

MARKETING KNOW-HOW

As a relatively new company on the market there will be a need to aggressively market the services so as tobe continuously at the top of prospective clients minds. This will also act as a temporary deterrent forcompanies contemplating entering the market. Advertising in tourist publications, attractive brochures, webadvertising etc shall be undertaken on a regular basis.

RESPONSIVENESS

The company cannot afford to delay delivery of services to clients for whatever reason, as this will have anegative bearing on the image and reputation, including future business. Hence the company needs to becontinually communicating with the client, including hotels and lodges so as to ensure that they areconstantly available to the client meeting their expectations.

EXCELLENCE IN FULFILLING THE PROMISE

The company needs to offer completely enjoyable, comfortable and informative travel excursions that will

ensure that travelers are thoroughly satisfied and appreciative at the end of their trip. The employees of thecompany will provide the key fulfillment and delivery. The real core value will be professional expertise,provided by a combination of expertise, experience, hard work, and education (in that order). The strategywill be to grow the business by nurturing clients, differentiating the service from competitors, particularlythrough service and staff behavior. All criteria from customer satisfaction, service provision, pricecompetitiveness to staff attitudes will be looked at thoroughly in the initial stages as areas for improvement.Training will be conducted on a regular basis to ensure that the staff is fully meeting customer expectations.


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BUSINESS FEASIBILITY

The company is being launched in a highly lucrative market in a rapidly growing economy. Therefore, anunderstanding of the internal and external factors is crucial to long-term sustainability of the venture. Beloware the summarized strengths, weaknesses, opportunities and threats.

STRENGTHS

Well-targeted client base: This will ensure better understanding of the customer and betterproduct and service offerings based on customer profile and needs.

Extensive advertising and marketing: The company will undertake extensive advertising andmarketing, promoting both its name as well as service/product awareness. Hence an aggressive andfocused marketing campaign with clear goals and strategies will be a key asset.

Opening up new exotic locations for Indian travelers: This tour and travel company willprovide Indian tourists an exclusive experience of Botswana, which is currently not being done byany service provider.

WEAKNESSES

Lack of a reputation in comparison to competitors: This is due to the fact that the companywill be a new entrant in the market. However this shall be addressed as the firm increasesawareness about its services through extensive marketing strategy.

Organizational practices and personnel development: The introduction of new organizationalpractices and integration of personnel (with diverse cultural backgrounds) who have not previouslyworked together presents a challenge to the organization.

OPPORTUNITIES

Government support: Current drive by Botswana government towards encouraging theparticipation of indigenous entrepreneurs in tourism presents an opportunity which can be utilized.

Current growth rate of tourism: This presents an opportunity, which is the prime logic behindviability of this venture. This is further supported by the current marketing campaigns by both thegovernment and regional tourism body, the Regional Tourism Organization of Southern Africa -RETOSA, aimed at promoting tourism into the region.

Moderate competition: Presently there is no reliable public transportation company to taketourists to areas of interest. Moreover, current packages bundle Botswana with South Africa, when it

comes to tourism and there is a dearth of Botswana only packages. Availability of abundant human resources: This will ensure that there is no dearth of local

guides and staff for other critical functions.

THREATS

Vertical integration by existing travel agencies, hotels and lodges: Established travelagencies, hotels and lodges may look at the development of new lines and vertically integratetransportation so as to provide additional services to clients.


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Inadequacy of international airline service: Absence of direct flights to Botswana makes thisindustry extremely dependent on South African aviation.

New Entrants: Other start-up travel companies generated by healthy nationwide economic andtourism growth.

A SAMPLE TOUR TO BOTSWANA

Though Botswana has many unique attractions, it is still rated 87 among 130 countries on Travel andTourism Global competitiveness 14. This poor rating is mainly because of problems faced by the tourists dueto lack of access to modern technologies, poor hygiene standards, and poor roads and communications. Most of the tourists who visit Botswana for leisure tourism are those interested in adventure trips. Therepetitive customers among the Indian visitors are very negligible. In order to make their visit memorable, acomprehensive package for touring the entire country is provided. The tour includes adventure drivesthrough safaris, river cruising, areal surveying etc. The staff will be adequately trained to meet the serviceexpectations and to guide the customers at different places. Informative briefings about different objectsand places will be provided so that visitors appreciate them fully. The current cost per traveler will bearound $3500 including all the expenses.

14 http://en.wikipedia.org/wiki/Tourism_in_Botswana

Tab le 3 . A sam ple B ot sw an a ad vent ur e t ou r


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INCLUSIVE AND SUSTAINABLE MODEL

Globally, nature-based tourism including ecotourism, rural and agro-tourism, adventure tourism andcultural tourism has become increasingly popular over the last two decades, both with conservation anddevelopment organizations looking for means of generating an income from protected areas, and withtourists from industrialized countries looking for new experiences. The expansion of Travel & Tourism ingeneral has been supported by the proliferation of long- and short-haul flights, resulting in a significantincrease in the number of flight frequencies and destinations served, as well as a drop in the cost of airtransport. This form of tourism is already a large and growing part of the economies in many developed anddeveloping countries, including Canada, the USA, Australia, New Zealand, Kenya, Tanzania, Costa Rica andBotswana. As an example, protected areas are the backbone of the successful ecotourism industry in CostaRica, which currently generates over US$1 billion a year in earnings or about 5% of GDP.

CONSERVATIONAL BENEFITS

A properly regulated tourism industry centered on the natural and cultural assets of a country offers a

unique opportunity to improve the conservation of the environment in general and protected areas inparticular. There is potential to set in motion a virtuous cycle, by which protecting the environment attractstourism and the development of the tourism industry, which in turn makes it possible to finance theprotection of nature and cultural heritage (directly by fees paid by visitors to protected areas and indirectlyvia general taxation), increasing the benefits of protected areas to the country. Moreover, tourism incomefrom popular protected areas can be used to help finance other areas that cannot attract so many tourists,or where large visitor numbers would be inappropriate.

In addition to making a direct contribution in terms of revenues and employment, the facilities and servicesrequired for the development of tourism can also benefit the living conditions of local residents in terms of improved communications, training, education and healthcare. It can also lead to the creation and

Fig 5. Benefits f romnat ure b ase d tourism


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modernization of legislation and regulation aimed at protecting the environment through reforestation andsoil-conservation practices, and the rehabilitation of affected natural areas and to improving communityparticipation and awareness of the importance of conservation.

EMPLOYMENT

The success of Travel & Tourism, like most service-based activities, depends heavily on its labor force. Highstandards of customer service are essential for a memorable and satisfactory visit whether for business orpleasure and the attraction for less-developed countries such as Botswana of diversifying into tourism isthat it is highly labor intensive as well as being an area of comparative advantage. Indeed, the TSA analysisreveals that, in 2007, 23,000 jobs were directly related to the Travel & Tourism industry. If jobs in allrelated sectors are included such as construction, or the retail sector total employment stemming fromall Travel & Tourism activity in the country was 59,000 jobs 10.6% of total employment.

Moreover, Botswana is facing a social problem where, old herdsmen in Kalahari desert are being asked tomoved out of certain portions to prevent desertification due to over grazing. Tourism will help in providingalternate employment means to these communities without leaving their native lands.

TOURISM FOCUSED EDUCATION

In order to maximize the employment gains for Botswana from tourism, the government and private sectorstakeholders need to invest in appropriate training for local people considering a career in tourism. Therecent launches of tourism courses at the University of Botswana, as well as the work of the BotswanaWildlife Training Institution in Maun and the Gaborone Technical College, are welcome initiatives, as are theconsiderable training efforts made by private sector establishments for their staff. However, stakeholderscontinue to highlight a lack of appropriately trained residents as a constraint on their businesses, obligingthem to employ foreign nationals, particularly in key positions. There is also a belief that graduates fail to

consider a career in tourism because of the aura of exclusivity the traditional wildlife product exudes.Because of this, the government should work with private sector firms and associations such as theHospitality and Tourism Association of Botswana (HATAB) to identify key skills shortages and develop astrategy to address them.

SHORTAGE OF PUBLIC FUNDS PRIVATE SECTOR IS THE SOLUTION

Financial contributions from the private sector are key to the future of protected areas since many of thepublic agencies in charge of their management lack appropriate funding to cater for increasing conservationdemands. The World Conservation Union (IUCN) calculated in the early 1990s that protected areas budgetsworldwide covered only 24% of the estimated resources needed to provide adequate maintenance for the

respective areas. Another response to the shortage of public funds is to develop market solutions togenerate resources to contribute to local (particularly rural) and national economic development, while atthe same time introducing incentives for the conservation of protected areas and the preservation of biodiversity by creating economic value for endemic and endangered species in natural habitats.


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RISKS

While operating in the tourism industry in Botswana we have identified 2 main areas, which could risk ouroperations in the country: High AIDS prevalence & Instability of Zimbabwe.

HIGH AIDS PREVALANCE

Botswana has one of the highest numbers of infected people in the world. Around 24-32% of its adultpopulation is infected with the disease the second highest in the world after Swaziland 15 . The spread of disease has an even deeper impact as the youth of nation is more gravely affected with every one youth outof 3 carrying the virus.

HIV and AIDS have had a devastating impact on Botswana. Life expectancy at birth fell from 65 years in1990-1995 to less than 40 years in 2000-2005, a figure about 28 years lower than it would have beenwithout AIDS 16. Such loss of population in its productive years has serious implications on the economicdevelopment of the country, due to loss of skilled work force, as well as on the social development of thecountry, due to families being pushed into poverty through the costs of the disease- medical treatment,funeral, loss of income, inability to educate children etc.

Such a situation might show very badly about the Botswana Government and its commitment towardscountrys health and hygiene, which might affect tourists decision to tour the country.

INSTABILITY OF ZIMBABWE

The proximity with a highly politico-economically unstable state like Zimbabwe could affect the tourismindustry of Botswana in 3 direct ways:

Population influx: With Botswana reporting high rates of growth coupled with deterioratingeconomic development and highly unstable political regime has led to a high number of Zimbabweans taking refuge in Botswana in the hope of better life. According to Government sourcesthere are more than 300,000 Zimbabweans in Botswana creating unrest within the country. ForeignMinister Phandu Sekelemani had announced that the influx of Zimbabweans into Botswana "is anissue to be dealt with" and he called on the international community "to help us because it is a drainon our resources".

Popular tourist sites: Sites like Victoria Falls, Chobe and Okavango attract a lot of tourists everyyear. These places however are close to the Botswana-Zimbabwe border and hence prone todisturbances owing to political unrest and also by thousands of people crossing the border.

Existing tour packages: Many of the big tourism companies like- SOTC, Thomas Cook etc do nothave exclusive packages to Botswana. Some of them who do have Botswana in their offerings- haveit as a part of a consolidated tour package covering Botswana, Zimbabwe, South Africa and Namibia.Hence any unrest in any of the countries would affect the entire package as a whole.

15 UNAIDS (2010) 'UNAIDS report on the global AIDS epidemic'

16 The Impact of AIDS, United Nations, 2004


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However, we place the risk in operating in Botswana as minimal . Despite the above-mentioned reasons,reports of the past few years show that these reasons havent affected tourism in Botswana to a greatextent. The government has been very pro-active and efficient with its programs regarding health care torub off any negative image foreigners might have against them and the country. In 2008, approximately$340 million was spent on Botswana's HIV/AIDS response 17. The Botswana national government provided66% of funding for HIV/AIDS programmes that year, a substantially greater share than other sub-SaharanAfrican countries who rely mainly on foreign donors 18.

Such positive initiatives from the government coupled with positive feedbacks from the tourists who havevisited the country on various forums has managed to cultivate an interest among tourists planning to visitAfrica to include Botswana in their plans.

EXIT STATEGY

We believe that the best exit strategy would be to sell off the company to a bigger player if we aresomehow forced to stop our operations in the country.

Many big tourism companies dont have an exclusive offering for Botswana and hence our company couldbe a potential acquisition target for such large luxury travel agencies that want to leverage their strongcustomer base by adding Botswana tourism to their offering. Hence, by developing our company as apremier brand we could sell it off to such companies if the need arises. Next 10 years Botswana travel isexpected to achieve annualized real growth of 5%, exceeding the world average at 4.3% and the Sub-Saharan Africa at 4.5% 19. With the forecasted high growth rates of the industry, it makes it reasonable toassume that the big players would be interested to enter the industry in Botswana.

17 UNAIDS (2010) 'UNAIDS report on the global AIDS epidemic

18 NACA Botswana (2010, April) 'Botswana - 2010 Country Progress Report'

19 World Travel & Tourism Council- Botswana- The impact of travel & tourism on jobs and the economy

Documents

Tourism in Botswana_Project Report