Last week Rwanda was in the news with their breakthrough
shirtsleeve sponsorship of English Premier League’s Arsenal Football Club.
The “Visit Rwanda” logo on the left sleeves of Arsenal
players will be viewed by more than 30 million people on match days.
Clearly this deal is to supplement Rwanda’s efforts to
promote itself as a top tourist destination. Other components of this strategy
are Rwanda’s improving hospitality and conferencing infrastructure, its
cleverly packaged tours and events and its airline. More about the airline
later.
About twenty years ago a UNDP sponsored consultant, I forgot
his name, did a study on where Uganda can maximise its potential in order to
make a great leap forward in its development.
"He highlighted eight areas – agro-processing, health, education and financial services, tourism, ICT, mining and electricity generation. While he got paid, he might weep when presented with the little progress we have made on all this fronts...
But seeing how Rwanda is progressing on the tourism, health
and ICT fronts, I sometimes wonder whether they are not using that same
presentation for their own purposes.
The way they have focused on tourism is probably their
highest visibility effort. They have zeroed in on making Rwanda not only a
leisure tour destination but are also focussed on MICE (Meetings, Incentives,
Conferences and Exhibitions).
In recent months with the completion of the Kigali Convention
Center in 2016 – a five star hotel, conference hall and information technology
park, they have hosted several high profile conferences. The Gorilla Naming
ceremony, an annual event gaining in popularity also keeps the visitors coming
as do their hiking trails.
And they have developed this systematically, over the last
two decades to the point that the small east African country has seen their
visitor numbers almost reach two million from zero.
Which brings us nicely around to their national airline. In order
to boost their tourism they needed a regular transport in and out of the
country, seeing as for a long time the only airline servicing them was Sabena Airlines, which became SN Brussels.
So in 2002 – coincidentally barely five years since the UNDP
consultant was in Kampala, they launched Rwanda Express, which became RwandAir
in 2009.
According to recent reports the airline is yet to make a
profit and were it not for government support would have gone bankrupt by now.
One may argue about how long the government can continue to support the
airline, which has swallowed more than $150m in government handouts in the
three years to 2016 and whose losses have eaten into the airlines capital to
the point that its technically insolvent.
"But I think it stands to reason that without RwandAir their MICE strategy would have no legs.
Clearly they have a long term strategy. And for them clearly, a long term strategy is longer than the near 20 years of the airlines existence...
But they also recognise that people do not come to your
country just because you have an airline. Think about it, you haven’t been to
Moroto or Arua or even Garuga, just outside Kampala, because there is a road
that leads to it.
You travel for a reason, because there is something to do or
see where you are going. Hence their deliberate effort to package their natural
endowments and create new reasons to fly to Rwanda.
The business plan for the revival of Uganda Airlines is
being held close to the works’ ministry’s chest. For good reason. They don’t
want people poking holes through their plan before government has released a
cent.
But the outer outlines of the plan are in the public domain. The justification for the airline can be distilled down to these three points that, visitors by air to Uganda have increased fivefold since the collapse of the old airline – 1.5 million from about 300,000 in 2000, so a national airline is now viable; more visitors will come to Uganda once you have an airline and the clincher, that it need not be profitable because it is like a road, whose benefits are the spinoffs in increased tourism and exports, I saw a figure like an economic return of 30 percent being hazarded by the promoters...
With that last one, they hope with one stroke, to silence
all the naysayers and remove the necessity of a business case for the airline.
What that means is that the managers will be under no
pressure to make the airline self-sustaining, like Ethiopian Airlines for
example. In fact Ethiopian Airlines is the spoiler, as all other airlines on
the continent are loss makers our national carrier promoters can point to in
justifying the revival of our own.
The promoters are putting out some low ball figures -- $400m
(sh1.5trillion) to get it up and running, and once government commits the first
few millions of dollars, they will have to continue to shell out the hundreds
of millions of dollars more over the next few decades to keep it afloat.
It reminds me of the builder many years ago who gave us a
low quote for building the foundation of our home. The figure grew day by day,
by the time I worked out what was happening it was too late and we just had to
bite the bullet and go all the way.
It’s doubtful if we knew the full extent of the financial
commitment we would have started building then.
So while we look to RwandAir’s “success” at driving numbers
to its shores, we need to deconstruct the underlying strategy.
Years ago we reportedly paid a million dollars to get some
mentions on CNN, whose impact on the news network’s viewers was questionable,
Rwanda is reported to have shelled out about $40m on the Arsenal sponsorship
over three years.
It may not see tourists bashing down the door to enter Rwanda
but you can bet the awareness of a country called Rwanda will rise
significantly in the next three years.
