Sustainable Tourism Infrastructure

November 2022

Indicative Return:

20% – 25%

Investment Timeframe

Short Term (0–5 years)

Business Model Description

Provide and operate eco- and community-based tourism infrastructures, such as hotels, lodges and camp sites, that rely on the local value chain. The facilities run through community-private-public partnerships, where the private actors provide and operate the facilities, the public actor offers support infrastructure, such as roads, water and power utilities, and the communities supply products like vegetables, fruits, meat and eggs through supply contract arrangements.

Expected Impact

Support sustainable practices in tourism and strengthen local value chains serving the tourism industry.


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 (6).

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 (4).

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).

Key bottlenecks introduction: Community and sustainability tourism is hindered by accessibility challenges to protected areas (particularly in the southern and western parts of the country), inadequate infrastructure and insufficient marketing and promotional campaigns (10).

Market Size and Environment
Critical IOA Unit

28 million tourist arrivals per year (prior to COVID-19)

Tanzania’s tourism sector generated USD 2.6 billion in 2019 before COVID-19, and USD 1 billion in revenues in 2020. Revenues from tourism activities reached USD 1.25 billion in the year ending October 2021, signaling a slow recovery from the pandemic (11).

With 1.28 million tourist arrivals per year (prior to the pandemic), Tanzania is one of the most visited destinations in Sub Saharan Africa. Tourism contribution to GDP is expected to grow from 4.1% in 2017 to an annual average of 6.8% over the following 10 years – the seventh highest rate in the world (9).

Indicative Return

20% – 25%

Investment Timeframe

Short Term (0–5 years)

The Mkomazi Nature Camp within the Mkomazi National Park is expected to have a payback period of 3.9 years, which is within the loan tenure period of five years (12).

Ticket Size

USD 1 million - USD 10 million

Market Risks & Scale Obstacles
Sustainable Development Need

A growing tourism sector has the potential to generate significant backward links to the local value chain including horticulture, livestock, poultry, and fisheries. However, such linkages are yet to be established. Poor product quality and irregular supply limit the links. There are also specific SPS constraints including a lack of training on good hygiene practices, weak surveillance and monitoring system, and weak inspectorate (3,24,25).

The growing industry has put pressure on people and the planet. Areas and adjacent lands to the infrastructure facilities 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)

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. The return to pre-crisis levels is expected to take some time (3,8)

Expected Development Outcome

Development of tourism infrastructure such as hotels, lodges and campsites 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 (33).

Tourism hotels, lodges and campsites can promote rural development through employment of local community in such 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 development of tourism infrastructure 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).

Primary SDGs addressed

Secondary SDGs addressed

Directly impacted stakeholders

People: Communities living around the hotels, lodges and campsites benefit from supply of products and services neeed by the facilities and the visiting tourists

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.

Gender inequality and/or marginalization: Women, youth, people with disabilities benefit from improved working conditions.

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

Corporates: Secondary enterprises serving industries linked to the tourism sector, such as curio manufacturers and sellers.

Public sector: The Government benefits from greater international attention and enhanced foreign currency income.


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 tourism infrastructure is not well managed (3, 4, 7, 8).

Impact Risks

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

Skill gap among service providers (e.g., technicians) may limit the impact of the tourism infrastructure. The number of technicians graduating from technical institutions in the tourism sector is still very low compared to the demand. This has resulted in companies having to employ unskilled to low skilled staff and offer on-the-job training (17).

Impact Classification

B—Benefit Stakeholders


Sustainable tourism infrastructure supports sustainable practices in tourism and strengthens local value chains serving the tourism industry.


Rural communities in regions with high tourism potential benefit from income generating opportunities, and the planet experiences reduced strains through the sustainable tourism infrastructure.


While the model of sustainable tourism infrastructure is proven, communities’ interests and priorities as well as service providers’ skills require consideration.

Impact Thesis

Support sustainable practices in tourism and strengthen local value chains serving the tourism industry.

Policy Environment

Tanzania Tourism Policy, 2021: Outlines the government’s commitment to promote diversified tourism products, including infrastructure facilities (hotels, lodges, campsites etc) (5).

Tanzania Tourism Master Plan, 2002: Emphasizes that the government is committed to promote tourism products (such as hotels, lodges anf campsites) particularly targeting the Southern Circuit as a result of the saturation of the Northern Circuit (7).

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 accomodation services, food, local culture and natural endowments, transport, 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 (21).

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 infrastructure development (22).


Regulatory Environment

Tourism Act, 2008: Provides the institutional framework, administration, regulation, registration and licensing of tourism facilities and activities, and for related matters (18).

Tanzania Investment Act, No. 26 of 1997: The Government allows private entities to utilize PPP model to invest in: hotel construction, leisure parks, ground golf courses, conference tourism, air/ground transport, wildlife farming, tour operations, trophy hunting, sea and lake cruising, deep sea fishing, development of ecotourism activities, beach tourism; cultural and historical sites (28).

Mkomazi Nature Camp is a new accommodation facility established at Mkomazi National Park. Mkomazi The national Park is growing very fast due to the new Rhino project, and now it is the only National Park tourists are guaranteed to see the Rhinos very close. This gives the national park uniqueness in tourism activities. The exclusion of ​​13 square kilometers unique for rhino tourism completely changes the look of Mkomazi National Park. More people are visiting this Park for a closer look at the Rhino. The park is 200km from Arusha to the Same town and 6 km from the park gate (12).

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) ORSEA Journal Vol. 7 (2), 2017, Gender and Women Entrepreneurs’ Strategies in Tourism Markets: A Comparison between Tanzania and Sweden
7) United Republic of Tanzania, Tourism Master Plan, 2002
8) Word Bank Group, Tanzanian Economic Update, Transforming Tourisms Sector, Toward a Sustainable, Resilient, and Inclusive Sector, 2021
9) Oxford Business Group 2017,
10) HAL Open Science, Economic impacts of COVID-19 on the tourism sector in Tanzania, 2021

IOA Sources

11) Tanzania,
12) Jadian Company Limited, Feasibility Study Report, 2021
13) Word Bank Group, Tanzanian Economic Update, Transforming Tourisms Sector, Toward a Sustainable, Resilient, and Inclusive Sector, 2021
14) PricewaterhouseCoopers (PwC) – Hospitality outlook: 2019-2023
15) Aman Raphael, Career Development of Women in Hospitality Industry: Insights From Double Tree By Hilton Hotel, Tanzania, 2013
16) African Journal of Hospitality, Tourism and Leisure, Volume 7, 2018
17) Ministry of Education and Vocational Training, Human Resource Needs and Skill Gaps in the Tourism and Hospitality Sector in Tanzania, 2015
18) URT, The Tourism Act, 2008
19) URT, Wildlife Conservation Act (No. 5 of 2009)
20) URT, The Wildlife Conservation Act 2013
21)The World Bank, New Opportunities for Development in Southern Tanzania Through Nature-Based Tourism, 2017
22) EAC Investment Guide, United Republic of Tanzania Standard Incentives for Investors
23) Ministry of Natural Resources and Tourism (MNRT), Tanzania Tourist Attractions:
24) World Travel & Tourism Council (WTTC), 2020
25) World Bank Group, Tanzania Economic Update, 2015
26)ADUMU Safaris,
27) Inter-American Development Bank, “Public-Private Partnerships (PPPs) for Sustainable Tourism in Tanzania,
28) 2URT, Tourism Investment Guide, 2019
29) URT, Tanzania Investment Act, No. 26 of 1997:
30) Nature Conservation, Emerging issues and challenges in conservation of biodiversity in the rangelands of Tanzania, 2013
31) Journal of Development Studies, Gender and Livelihood Diversification: Maasai Women’s Market Activities in Northern Tanzania, 2015
32) Happiness Kiami: Effects of Tourism Activities on The Livelihoods of Local Communities In The Eastern Arc Mountains, 2018
33) World Economic Forum, Travel and Tourism Competitiveness Index Report, 2019
34) Oxford Business Group. Addressing infrastructure challenges in southern Tanzania to drive tourism growth, 2018