Community-Based Tourism Products

November 2022

Indicative Return:

20% – 25%

Investment Timeframe

Medium Term (5–10 years)

Business Model Description

Develop tourism products and associated services by utilizing the rich traditional cultures and diverse natural assets of rural communities to create eco-tourism experiences, such as tours of traditional ways of life, fishing, ziplining and parachuting. Through a community, public, private partnerships, the private sector invest in tourism assets, the public sector provides the supporting infrastructure and the community provides the land, labour, local expertise and cultural experiences.

Expected Impact

Integrate inland and rural populations into the tourism industry and protect their biodiversity and wildlife.


Northern, Southern

Services > Hospitality and Recreation

Direct Impact SDGs:

Indirect Impact SDGs:


Development need: Tourism has the greatest employment generation potential in Tanzania. However, the country has performed at a fraction of its potential. The sector is poorly managed, underinvested, under-resourced, and lacks a coordinated all-of-government approach and vision. This has reduced its competitive advantage (1, 2, 3, 4).

Policy priority: Tanzania is committed to promoting diversified tourism products in order to increase its competitive advantage. The government seeks to promote tourism since it integrates more than one service, notably transport, accommodation and food, information and communication, offering significant socio-economic development potential (4, 5).

Gender inequalities and marginalization issues:Women face challenges participating in tourism activities in Tanzania. Most women in rural communities are excluded from tourism activities and some of them are exploited without commensurate returns. Taking full charge of responsibilities in their households gives women challenges that constrain their ability to perform in businesses, including in tourism (11).

Investment opportunities introduction: Opportunities in services include a broad range of diversified tourism activities, both regarding products and infrastructure, utilising community inputs, particularly in Tanzania’s Southern Circuit as a result of overcrowding and saturation in the Northern Circuit (9).

Key bottlenecks introduction: COVID-19 severely impacted Tanzania’s tourism activities due to the disruption of global travel, which resulted in a 72% drop in revenues with significant job losses and business closures. The poor performance in tourism adversely affects other sectors (8).

Hospitality and Recreation

Development need: Community-based and sustainable tourism provides important opportunities to take advantage of the increasing demand for Tanzania’s eco-tourism products. It is strategically important to the national tourism industry, valued at approximately USD 725 million annually, in terms of diversifying tourism products, relieving pressure on over-crowded protected areas and offering the required infrastructure (6).

Policy priority: The government is committed empower rural communities and private land holders to manage natural resources, including wildlife, in a sustainable manner and for their own benefit. Developing co-investment and partnership arrangements to support nature-based landscape and seascape management is among the top priorities for the long-term transformation of Tanzania’s tourism activities (7, 8).


Market Size and Environment
Critical IOA Unit



Tanzania’s tourism sector generated USD 2.6 billion in 2019 before COVID-19, and USD 1 billion in revenues in 2020 (14). Tanzania is first in Africa and 12th worldwide for the quality of its community- nature-based tourism resources, and 32nd in Africa and 112th in the world for its cultural resources (17).

Globally, nature tourism and ecotourism grew three times faster than the overall tourism industry, and investment is estimated to increase by 20% annually (29)

Significant tourism revenues accrue to local communities. For example, seven villages in Loliondo Division earn over USD 100,000 annually from several eco-tourism joint ventures carried out on their lands (14, 16).


Indicative Return

20% – 25%

Investment Timeframe

Medium Term (5–10 years)

According to local investors in Columbia, an expected holding period for investments in ecotourism models would be between 7 and 10 years (30)

Ticket Size

More than USD 10 million

Market Risks & Scale Obstacles

Market – Volatile

Capital – CapEx Intensive

Sustainable Development Need

Tourism, which plays a prominent role in the Tanzanian economy, accounting for nearly 12% of GDP, has been the most severely affected sector from the COVID-19 pandemic due to travel restrictions (3, 8).

Despite the significance of the tourism sector, poverty is prevalent around touristic sites, indicating that strong linkages with local communities have yet to be established. Most tourist establishments source their supplies (e.g., vegetables) from large scale suppliers because of local communities inability to meet required quality standards (27, 28).

The growing industry has put pressure on people and the planet. Areas and adjacent lands to the ecotourism activities have been subjected to a number of emerging issues and challenge including failure of conservation (as a form of land use) to compete effectively with alternative land uses, habitat degradation and blockage of wildlife corridors, overexploitation and illegal resource extraction, wildfires, human population growth (30)

Expected Development Outcome

Community based tourism can accelerate rate of economic growth through the tourism sector which is estimated to have generated USD 2.6 billion in 2019 before COVID-19, and USD 1 billion in revenues in 2020 (14). Tanzania could utilize this potential to position itself in view of the competition in the region and utilize its competitive advantage of being the first in Africa and 12th worldwide for the quality of its community- nature-based tourism resources, and 32nd in Africa and 112th in the world for its cultural resources (17).

Community based tourism can promote rural development through employment of local community in the facilities, poor residents selling products and services directly to tourists, e.g., making and selling handicrafts, supplying various food products to the tourists’ facilities or provide guiding services or (31,32)

Sustainable community-based tourism can reduce pressure on people and the planet through effective conservation measures and sustainable exploitation. Total biodiversity can be conserved and supported by the added income generated by ecotourism (30).

Tourism can be an especially important vehicle for poverty reduction in rural areas, where the poverty rate among households with a member employed in the tourism sector (16 percent) is about half the overall poverty rate (31 percent). Households with a member employed in tourism are also more resilient to income shocks (8).

Primary SDGs addressed

Secondary SDGs addressed

Directly impacted stakeholders

People: Communities with touristic products and activities, employees in the tourism industry, and local and foreign tourist benefit from diversified tourism offering.

Gender inequality and/or marginalization: Inland and rural populations benefit from the integration into the tourism industry, which brings about economic opportunities.

Planet: The environment benefits from sustainable tourism practices, biodiversity and the wildlife enjoys greater protection resultant from economic value generation.

Corporates: Tourism product and service providers enjoy greater demand, and tourism industry actors, such as hotels and tourism agencies, benefit from enhanced economic activity.

Public sector: Government enjoys economic growth, enhance environmental conservation and improve rural development through linkages promoted between tourism facilities and local communities

Indirectly impacted stakeholders

People: Rural populations benefit from increased economic activity and reduced environmental harm, supporting sustainable livelihoods.

Planet: The environment enjoys increased awareness on sustainable business practices in other industries.

Corporates: Suppliers of the tourism industry, such as agricultural businesses, benefit from new market demand.

Outcome Risks

Excessive levels of touristic interventions may cause damage to the environment and wildlife as well as disturb cultural and traditional practices of communities, if the number and activities of tourists is not well managed (8, 20).

Impact Risks

Most local communities do not quite understand the best practices for environmental management and socially responsible tourism. These may therefore not be well implemented, risking the expected impact ((8, 10, 20).

If the communities’ interest and priorities are not take into account sufficiently, touristic activities may not experience a significant uptake and / or benefit the communities, which may limit the expected impact.

Impact Classification

B—Benefit Stakeholders


Community-based tourism products diversifies the tourism industry towards integration of inland and rural populations and sustainable practices.


Inland and rural communities, local and international tourists, the tourism industry, the environment, biodiversity and wildlife benefit from community-based tourism products.


While the model of community-based tourism is proven, environmentally and socially responsible practices as well as the communities’ interests and priorities require consideration.

Impact Thesis

Integrate inland and rural populations into the tourism industry and protect their biodiversity and wildlife.

Policy Environment

Tanzania Tourism Policy, 2021: Outlines the government’s commitment to promote diversified tourism products and associated services including community and eco-tourism, historical and cultural heritage sites, conferencing and tourism supply chain (5).

Tanzania Tourism Master Plan, 2002: Emphasizes that the government is committed to promote diversified tourism sector in terms of geography (location), tourism products and associated services and activities. A renewed emphasis on targeting the Southern Circuit as a result of the saturation of the Northern Circuit (9).

Third National Five-Year Plan (FYDP 3), 2021: Outlines the government’s plan to promote tourism as one of the sub-sectors that integrates more than one services, notably local culture and natural endowments, transport, accommodation and food, information and communication (4).

Financial Environment

The World Bank has offered a credit of USD 150 million to Tanzania to operationalize the REGROW project, which focuses on the promotion of alternative livelihoods for household around the protected areas of the Southern Circuit, including community-based tourism products. There is a special embedded package for identifying suitable joint economic opportunities between investors and communities (24).

Fiscal incentives: Tanzania offers import duty and VAT exemption on deemed capital goods, including building materials, utility vehicles and equipment. This applies to all types of tourism products including activity based tourism (25).

Regulatory Environment

Tourism Act, 2008: Provides the institutional framework, administration, regulation, registration and licensing of tourism facilities and activities, and for related matters (21).

Wildlife Conservation Act, 2013: Makes provisions aimed at regulating sustainable utilization and management of wildlife resources and to provide for other related matters (23).

Wildlife Conservation Act, 2013: Makes provisions aimed at regulating sustainable utilization and management of wildlife resources and to provide for other related matters (23).

Ololosokwan village In Loliondo District entered into an arrangement with a South African eco-tourism company to jointly operate a large commercial eco-tourism development project. Through the joint venture, the villages’ annual income increased from USD 25,000 in 1999 to USD 37,640 in 2003. It now constitutes more than 30% of the council’s income (12).

The Tanzip Zipline Adventure Park is located just outside of Mto wa Mbu village in Arusha. It is nestled at the base of the Great Rift Valley wall, offering stunning views of surrounding lakes, wetlands, maasai steppe, and the valley. The facility is run jointly with the village and provides a variety of tourism activities (13).

Private sector

Nomad Tours, Kudu safaris, Adventure Safaris, Kearsleys Travel & Tours, Takims Holidays, Widerange African Safaris, FCM Skylink Travel and Tours Ltd, Tanzania Mwangaza Tours & Safaris, The Sultan Tours, Gecko Adventure Tanzania Safaris etc


Ministry of Tourism and Natural Resources Management (MNRT), Tanzania Wildlife Authority(TAWA), Ministry of Economy and Finance, Ministry of Industry and Trade, Tanzania Tourism Board (TTB).


World Tourism Organisation, Global Tourism Council, World Bank Group (WBG), African Development Bank (AfDB), World Travel and Tourism Council (WTTC). World Tourism Forum Institute


Tanzania Wildlife Protection Fund, Wildlife Conservation Society of Tanzania, Community Wildlife Management Areas Consortium (CWMAC),Tanzania Association of Tour Operators, Hotels Association of Tanzania (HAT), Tanzania Natural Resource Forum (TNRF).

Public-Private Partnership

Chumbe Island Ecotourism A PPP between the government and a special purpose company, Chumbe Island Coral Park Ltd. (CICP) to restore the coral reef which was endangered by overfishing and unsustainable fishing practices, such as dynamiting the reef

Sector & Subsector Sources

1) World Bank Group- Multilateral Investment Guarantee Agency (MIGA): Tanzania’s Investor Outreach Program 2005
2) De Chazal Du M(DCDM), Tourism in Tanzania : Investment in Tourism in Tanzania, 2011
3) Diagnostic Trade Integration Study (DTIS) for Tanzania, 2015
4) United Republic of Tanzania, Third National Five-Year Plan (FYDP 3), 2021
5) Tanzania Tourism Policy 2021 – Under review
6) Tanzania Natural Resource Forum (TNRF), Community-based Tourism in Northern Tanzania: Increasing Opportunities, Escalating Conflicts and an Uncertain Future, 2003
7) Resource Forum, Community-based Tourism in Northern Tanzania: Increasing Opportunities, Escalating Conflicts and an Uncertain Future, 2003
8) Word Bank Group, Tanzanian Economic |Update, Transforming Tourisms Sector, Toward a Sustainable, Resilient, and Inclusive Sector, 2021
9) United Republic of Tanzania, Tourism Master Plan, 2002
10) Journal of Ecotourism, A review of ecotourism in Tanzania: magnitude, challenges, and prospects for sustainability, 2015
11) ORSEA Journal Vol. 7 (2), 2017, Gender and Women Entrepreneurs’ Strategies in Tourism Markets: A Comparison between Tanzania and Sweden

IOA Sources

12) International Institute for Environment and Development, The evolution and impacts of community-based ecotourism in northern Tanzania, 2004
13) TanZip Adventures,
14) Tanzania,
15) Jadian Company Limited, Feasibility Study Report, 2021
16) Tanzania Natural Resources Forum, Community-based Tourism in Northern Tanzania: Increasing Opportunities, Escalating Conflicts and an Uncertain Future, 2003

17) World Economic Forum, Travel and Tourism Competitiveness Index Report, 2019
18) Development Southern Africa, Cultural community-based tourism in Tanzania: Lessons learned and way forward, 2015
19) Journal of Development Studies, Gender and Livelihood Diversification: Maasai Women’s Market Activities in Northern Tanzania, 2015
20) Research on Poverty Alleviation (REPOA), The Role of Tourism in Poverty Alleviation in Tanzania, 2003
21) URT, The Tourism Act, 2008
22) URT, Wildlife Conservation Act (No. 5 of 2009)
23) URT, The Wildlife Conservation Act 2013
24) The World Bank, New Opportunities for Development in Southern Tanzania Through Nature-Based Tourism, 2017
25) EAC Investment Guide, United Republic of Tanzania Standard Incentives for Investors
26) Ministry of Natural Resources and Tourism (MNRT), Tanzania Tourist Attractions:
27) World Travel & Tourism Council (WTTC), 2020
28) World Bank Group, Tanzania Economic Update, 2015
29) Brink (2011) – The Economics of Ecosystems and Biodiversity in National and International Policy Making. Accessed July 2nd 2020
30) Inversor Portafolio: Waya

31) Happiness Kiami: Effects of Tourism Activities on The Livelihoods Of Local Communities In The Eastern Arc Mountains, 2018
32) The World Bank, Resilient Natural Resource Management for Growth (REGROW) Project, 2018
34) ADUMU Safaris,