Rwanda: How tourism is getting back on track

By Maher Hajbi
Posted on Tuesday, 26 July 2022 18:55

The Kigali Convention Centre, a conference centre, next to the Radisson Blu hotel, in March 2019. © Vincent FOURNIER/JA

"This year is the year". Having successfully rebounded, the Rwandan government is showing off its ambitions in tourism: new air routes, prestigious hotel brands in the pipeline and a goal of "generating $342m in tourism revenue by 2022", says Zephanie Niyonkuru, deputy director-general of the Rwanda Development Board (RDB).

Launched in 2009 to accelerate national economic development, this agency – the Rwandan government’s Swiss Army knife for attracting foreign investors and tourists from the four corners of the globe – hopes to make Kigali not only a real economic hub but also a multi-activity tourism hub on the continent.

Although critics describe President Paul Kagame’s regime as authoritarian, others point out that his liberal policies and reforms are modernising the country and creating a business climate conducive to competitiveness. The World Bank’s latest Doing Business report (2020) – which was discontinued in September 2021 – ranks Rwanda second among African countries in terms of ease of doing business, and 38th out of 190 economies worldwide.

In 2021, the Land of a Thousand Hills recorded a record $3.7bn in investments. Despite the unpredictable global context, Rwanda seems to be recovering from a complicated 2020 in terms of tourism-related investments and revenue due to the global health crisis. According to RDB figures, revenue from the tourism sector also jumped last year, by about 25%, from $131m to $164m between 2020 and 2021.

Building confidence

To make Rwanda “the place to be” in Africa, “the recipe is simple,” says Niyonkuru: “The country is green, clean and safe. It is open to entrepreneurs and tourists, to whom we roll out the red carpet and for whom access to entry visas has been simplified.”

In an effort to get the tourism industry moving again, the Rwandan authorities have set up a $100m economic stimulus fund (later increased to $250m), 50% of which has been allocated to hoteliers to restructure their bank loans. “After a long period of stagnation that made tourism one of the sectors most affected by the pandemic, our strategy was to help the industry recover financially with tax relief measures for investors,” says the RDB’s deputy CEO, who predicts that by 2022 revenue will be at 80% of pre-pandemic levels, which averaged $480m.

Once the financial balance had been largely stabilised, the authorities then decided to prioritise the mass vaccination of the sector’s professionals: from airport staff to hotel and restaurant staff, and even national park agents. The aim? To establish a climate of confidence and health security so that the machine could be restarted as well as attract tourists and investors to Rwanda.

The government suspended several hotels and restaurants in Kigali for one to three months for not respecting the sanitary guidelines in place. It imposed “symbolic” fines of 150,000 to 300,000 Rwandan francs (from $145 to $290) on the managers of these establishments.

Meanwhile, last June, the country set up Africa’s first messenger RNA vaccine factory so that Covid-19 treatments can be developed by 2024.

Ahead of the Commonwealth Heads of Government Meeting (CHOGM), which took place at the end of June in Kigali, Rwanda deployed considerable resources to ensure that the 4,000 delegates from the 56 member states of the English-speaking club headed by Prince Charles would have a pleasant stay.

Champion of conference tourism

On the continent, holding conferences has become a Rwandan trademark. The World Economic Forum and the African Union summit have been among the major events hosted by Kigali in recent years.

In 2021, the seminars, incentives, conferences and exhibitions sector, known by professionals by its acronym MICE, generated $12.5m, more than double the revenue recorded in 2020 ($5.4m). “The tourism industry is showing signs of recovery. We hope to return to the pre-pandemic momentum soon and see the sector contribute even more significantly to the country’s GDP,” adds the RDB’s deputy CEO.

The champion of conference tourism, who is determined to make this activity an engine of economic growth, is working hard to diversify its services. In addition to political and financial summits, Rwanda is very interested in major sporting events. After organising the Africa Basketball League final at the Kigali Arena last May, the country will host the 73rd FIFA congress on 16 March 2023, during which elections for the new head of the world football’s governing body will be held.

Rwanda, which has invested heavily in sports infrastructure such as the Kigali Arena, a cricket stadium and a golf course, has made no secret of its desire to host major international tournaments and become the preferred destination for foreign football clubs for their pre-season training.

Ultra-luxury

Beyond MICE, Rwanda is also counting on ultra-luxury tourism as a key diversification area, targeting tourists who want to immerse themselves in the mountain gorillas, Volcanoes National Park and the forest. Despite the pandemic, the high-end segment continued to attract investors, like with projects on the shores of Lake Kivu, thanks to tax incentives from the Rwandan government, which also revised its services to local populations in order to maintain a minimum income level.

Although the pandemic slowed it down, the Rwandan tourism machine has continued to run. Committed to supporting the tourism sector’s growth, the government has been active in stimulating private investment and contributing to hotel infrastructure development. “Today, five-star hotels are established in Kigali and even outside the capital. The hotel park has 15,000 rooms […] Lodges and the biggest hotel brands such as Radisson Blu, Serena, Marriott, Sheraton and One&Only are present, while other prestigious brands are planning to set up there,” says Niyonkuru.

Qatari connections

One of the most important transactions, Kasada Capital’s purchase of the Umubano Hotel in Kigali, was launched with the support of the Qatar sovereign wealth fund and AccorHotels, which are committed to renovating the establishment so that it can open in 2025 under the Mövenpick brand.

From the Umubano Hotel to the new Bugesera international airport, Rwanda is relying on its strong connections with Qatar. The gas emirate is financing 60% of the new airport hub, with an estimated cost of $1.3bn. Located about 40km from Kigali, the airport, which will be able to accommodate up to 8 million travellers per year, is part of Kigali’s vision to make the country “a logistics hub in Africa”. Pending the airport’s launch scheduled for late 2024 or early 2025, the first phase of work is more than 50% complete. “It will increase the number of annual flights and by extension the number of tourists to Rwanda. It will be a major boost for our economy,” concludes Niyonkuru.

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