Industry Overview
Senegal is a West African country located along the Atlantic Ocean coastline. Its neighboring countries include Mauritania, Guinea-Bissau, Mali, guinea, and Gambia. The terrain of Senegal is generally low and flat, with rolling plains that rise to the foothills located in the southeast. Senegal covers an area of about 196,722 square kilometers, with a coastline stretching to about 531 km (Global Edge, 2015). By 2014, the population of the country stood at 14.7 million, with an annual growth rate of 3.126% (Global Edge, 2015). About 43% of this population stays in the urban centers. Senegal is one of the emerging developing countries in the global tourism market. The travel and tourism sector made a direct contribution of XOF396.0 billion to the GDP in 2014 (World Travel & Tourism Council [WTTC], 2015). The bulk of this revenue resulted from the operations of hotels, restaurants, leisure industries, airlines, travel agents, and other passenger transportation services. The number of jobs created directly by the industry in 2014 totaled 132,500 (WTTC, 2015). The principal tourist region in the country is the Petite Cote, a vital resort area with big game fishing activity and excellent beaches (Crompton & Christie, 2003). The country has superb cultural and natural assets that compete favorably in the global market. The resort assets are the main attraction as millions of tourists escape the winter season in Europe to bask in the warm climate in the country’s beaches. Other attractions in Senegal include scenic areas, birds, wildlife, a rich traditional culture, scuba diving potential, vibrant arts scene, and attractive handicrafts, which provide it with latent diversification and expansion capabilities (Crompton & Christie, 2003). Overall, the strengths of the tourism industry include its proximity to Europe, warm climate, diverse scenery, flora, and fauna, a friendly population, and language compatibility with French nationals. Its weaknesses include poverty, the scarcity, and high cost of air transport, and inadequate infrastructure.
Competitor analysis
International players in the travel and resort/beach segments mainly serve the tourism sector in the country. These include travel agencies such as the African Connection Tours, The Senegal Experience, Intrepid, Africa Tour Operators, Continent Tours, and West African Tours among others. These multinational companies employ both locals and expatriates from their home countries. Expatriates, especially those from the U.S. have high failure rates because of poor pre-departure training that they receive (Peng, 2014, p. 201). Thus, travel agencies play a key role in connecting expats and tourists to the appropriate accommodation facilities that fit their needs. The primary business of these agencies is to organize tours to meet diverse tourism needs such as ecotourism, business, leisure, and groups ranging from individual to large groups. The tours also cater to special events such as weddings. They identify popular tourist destinations in the country and connect customers with accommodation facilities in these areas that match their price preferences. Overall, the typical products sold by these agencies include excursions, conferences, special interest, ecotourism (e.g. bird watching, and nature groups), cruises, corporate travel, government travel, and leisure among others. The homogeneity of the products makes competition very stiff in the domestic market as each company tries to dominate the market and increase its market share. The companies compete on prices through offers and comprehensive package deals. Those entities that can achieve the best fit between their package deals and consumer tastes and preferences thrive in the industry.
An in-depth analysis of a few competitors in the sector highlights the dominance of international players in the industry. These include Africa Connection Tours (ACT), The Senegal Experience, and Continent Tours. ACT is one of the top competitors in the tourism industry. It is an international tour operator that focuses on the West African market. Although its headquarters is in Dakar, Senegal, it also operates offices in neighboring African countries such as Ghana, Mali, Mauritania, Gambia, and Cote d’Ivoire (Africa Connection Tours [ACT], 2016). It products include individual, small, medium, and large group travels, leisure, ecotourism, and business travels. It also arranges special events such as conferences and weddings. ACT connects its customers with resort hotels throughout West Africa it offers a variety of packages that range from half-day tours to 8-day tours. In Senegal, the tourist destinations served by ACT include Pink Lake, village feast, Saloum Islands, Dakar and Goree, Touba, cruises, and Djolof region.
The competitive strength of this entity arises from its skilled staff, Africa values, language compatibility, customized tours, and wider reach. The company recruits its staff from different backgrounds, which enables it to appeal to the diverse tourist population. The employees receive their training in the United States and Europe, contributing to first-class customer service and experience (ACT, 2016). Besides, they are conversant with several languages including French, German, English, Spanish, and Japanese (ACT, 2016). Being an international company, ACT has a wider customer base in the global market than domestic competitors. Lastly, the company offers affordable, quality, and enriching tour packages that guarantee a cultural discovery for the customers. For instance, the full-day tours include lunch, relieving tourists of the hassle involved in searching for good eating joints and restaurants.
The Senegal Experience is another independent tour operator in the country. It specializes in displaying hotel listings within the La Somone, Saly, and Sine Saloum Delta regions (Condé Nast Traveller, 2011). Its touring itineraries include three- or seven-night tours in East Senegal and north of Dakar. It also offers a ‘Rivers of West Africa’ cruise (Condé Nast Traveller, 2011). The seven-night trips cost about £979 for each individual in regular hotels and a minimum of £1,175 in luxury hotels (Condé Nast Traveller, 2011). These prices include return flights and transfers. Other trips such as the Lompoul Desert, the Pink Lake, and Kayar, and the Grand Coast Adventure tour cost a minimum of £1,219 each for three nights (Condé Nast Traveller, 2011). These prices are inclusive of flights, transfers, and full-board accommodation. The types of trips offered by the company include competitions, art and culture, spa guide, hotels, style and fashions, beaches, and city breaks. Thus, its competitive advantage mainly stems from the superior tour package deals and travel convenience that it offers to its customers.
Continent Tours is an independent tour operator that with a presence in more than thirty African countries such as Senegal, Mauritania, Burkina Faso, Mali, Ghana and Angola among others (Continent Tours, 2016). Its services include tours, hotel accommodations, government travel, corporate travel, group travel, airfare, and meetings and destination services management. The tour packages include listed meals, experienced tour guides, hotel accommodations in selected properties, admission to all listed sites, hotel transfers, assistance on arrival and departure, and private vehicle transportation (Continent Tours, 2016). These auxiliary services create convenience for customers since they eliminate the hurdles involved with searching for appropriate and secure accommodation facilities in a foreign country. The places explored in Senegal include Goree Island, the city of Dakar, museums, and St. Louis for the jazz festival. The strengths of the company include it strategic presence in West Africa, in-depth experience of its staff, personalized service, and substantial cost and time savings to the customers.
Demand and supply factors and trends
The growth of demand for tourism products in Senegal stems primarily from the French market. French nationals make up 50% of all tourists visiting the country mainly because of the colonial ties between the two nations (Crompton & Christie, 2003). African tourists comprise 25% while the rest constitutes visitors from other parts of the world. The African tourists mainly visit the country for business purposes since they congregate in Dakar, book mostly convention facilities, and stay for short periods. Generally, the tourism demand of Senegal is weak as indicated by the short stays and small repeat tourism rates. The average length of stay by tourists in Senegal is 3.4 nights while the repeat tourism rate is only 5% (Crompton & Christie, 2003). The short stays imply that people only stay in resorts or hotels during special events in the cities such as carnivals or special occasions such as weddings and anniversaries, or business meetings. There are no incentives to induce longer stays. The country also depends only on one source market – France – which limits its market share in the global market and exposes it to a high country risk associated with adverse economic changes in France. Moreover, the tourism industry depends primarily on the peak season in January and February for its large revenue streams. During these peak periods, the hotels and restaurants sell more than 23% of bed nights (Crompton & Christie, 2003). However, the low seasons, characterized by a small stream of visitors, generates small income volumes. Since the country is an emerging participant in the international tourism industry, it depends highly on international tour operators to coordinate tourism activities within the country and facilitate the travel and bookings by foreign visitors. These industry players can depress prices in the domestic market to attract more customers, to the detriment of local tourism companies (Crompton & Christie, 2003). Hence, the low occupancy rates and depressed prices contribute to the marginal profitability of Senegalese hotels. The small profit margins cause deterioration in the quality of tourism assets offered by hotels and resorts, leading to deficiency of competitiveness. Other factors affecting tourism demand include the frequency and cost of air access. The unpredictable termination of airline operations or the issuance of travel advisories creates erratic demand patterns that hinder forecasting initiatives. For instance, the termination of operations by three major airlines – Sabena, Swissair, and Air Afrique – in 2001 crippled flight schedules of tourists, thereby pushing up flight charges and lowering demand for tourism products in Senegal (Crompton & Christie, 2003). Lastly, the “green” tourism trend among European tourists threatens the sustainability of the industry because of little awareness among industry players in Senegal. While no hotel in Senegal has an international certification for sustainable environmental management, several resort destinations in the world enjoy the revenue benefits accruing from such certification.
The two largest business segments in the Senegalese tourism industry are business travel and resort/beach. The industry supports more than 9000 hotel rooms and receives about 390,000 tourists each year (Crompton & Christie, 2003). The highest occupancy rates and longest average length of stay are in Ziguinchor and Thies (Crompton & Christie, 2003). The hotels in the country range from 4-star luxury hotels to 2-star accommodation facilities. Currently, the country is increasing the capacity of these facilities, especially 4-star hotels, to attract more business tourists. The supply of tourism products in the country has been rising, albeit, slowly, over the years. This growth stems from better financing to certain attractions in the country. For instance, St. Louis and Ile de Goree cultural areas received a significant financial boost from the government to attract tourists and protect their assets (Crompton & Christie, 2003). The government is also exploring legislative protections for royalties and copyrights for the renowned local artists and musicians given that their work is famous in France (Crompton & Christie, 2003). These initiatives aim at enhancing the image of the country as a tourism destination and an international art scene. Despite these changes, factors such as poor infrastructure in certain areas, increase in value added tax, stringent lending terms by financial institutions to the sector and sub-optimal land management threatens the survival and profitability of the tourism industry in the country (Crompton & Christie, 2003).
Several international trends are likely to affect the tourism industry. First, the continued strength of the Chinese tour companies threatens the viability of international travel companies operating in African countries such as Senegal (Fuggle, 2015). These companies only connect their citizens with tourist destinations with big brand names and prestige, an attribute lacking in most Senegalese tourism products. Thus, the country stands to lose on potential revenue from Chinese tourists if it does not enhance its products and marketing activities. Second, tourists continuously look for untouched and unique places to explore (Fuggle, 2015. This trend presents an opportunity for Senegal to market its lesser-known products in the global market to attract tourists from other parts of the world rather than Europe alone. Third, young people are increasingly taking up traveling to look for adventure. Currently, this segment constitutes 20% of tourists in the world and is expected to rise to 47% by 2020 (Fuggle, 2015. Senegal can customize its tourism products to fit the traveling needs of young people by enhancing its cultural assets such as jazz music and carnivals.
Conclusion
The tourism industry in Senegal is one of the major contributors to the GDP of the country in the form of revenues and job creation. The country has a diverse range of tourism attractions that appeal to the needs of both domestic and foreign tourists. Since the industry is still at its growth stage, most of the participants are international entities. The competition in the industry revolves around price and quality since the companies offer almost homogeneous products. Despite the steady growth in the sector over the years, challenges such as poor infrastructure and inadequate financing threaten its viability.
References
Africa Connection Tours (ACT). (2016). Africa Connection Tours - Dakar Senegal. Retrieved April 9, 2016, from http://www.actours-senegal.com/anglais/
Condé Nast Traveller. (2011, October). Tour of Senegal, West Africa - Travel Information (Condé Nast Traveller). Retrieved April 9, 2016, from http://www.cntraveller.com/recommended/amazing-journeys/senegal/page/senegal-travel-information
Continent Tours. (2016). Ghana Tours, West Africa Tours, Meeting Planners. Retrieved April 9, 2016, from http://www.continenttours.com/
Crompton, D. E., & Christie, I. T. (2003). Senegal Tourism Sector Study. Africa Region Working Paper Series No. 46, 1-70. Retrieved from http://www.worldbank.org/afr/wps/wp46.pdf
Fuggle, L. (2015, December 11). 6 travel trends for 2016 that will drive the global tourism industry. Retrieved April 9, 2016, from https://www.trekksoft.com/en/blog/travel-industry-trends-2016
Global Edge. (2015). Senegal: Introduction >> globalEDGE: Your source for Global Business Knowledge. Retrieved April 9, 2016, from http://globaledge.msu.edu/countries/senegal
Peng, M. W. (2014). Global business. Mason, OH: Cengage Learning/South Western.
World Travel & Tourism Council (WTTC). (2015). Travel & Tourism: Economic Impact 2015 Senegal. Retrieved from https://www.wttc.org/-/media/files/reports/economic%20impact%20research/countries%202015/senegal2015.pdf
