Concerns about Ebola, terrorism and xenophobic attacks are stalling a growing driver of economic growth on the continent

JOHANNESBURG—Ebola, terrorist attacks and violence against foreigners are striking a heavy blow against Africa’s increasingly critical tourism industry.

Safari companies, coastal resorts and city hotels are reporting precipitous declines in business as spooked tourists cancel bookings—or don’t make them at all. The losses are being propelled by months of persistently bad news from pockets of the continent that are pushing some businesses to the brink of collapse.

Tourism fueled 11% of Kenya’s gross domestic product and more than 9% of South Africa’s last year, according to the World Travel and Tourism Council.

As falling oil and mineral prices drag down the outlook for the continent’s main export engine, the decline in tourism threatens to deal another blow to growth this year.

Key drivers of the declines are the fears of Ebola and terrorism, which have prompted tourists to cancel holidays in African countries not directly affected by either. Tour operators and lodge managers say fear of Ebola, although confined to a pocket of West Africa, has had a bigger impact on bookings than 9/11 or the financial crisis.

“A few countries outside the epicenter [of the Ebola epidemic] have experienced considerable economic spillovers, mainly in terms of the inflows of tourists and business travel, in some cases delaying investment,” the International Monetary Fund said in its April outlook on sub-Saharan Africa.

The IMF forecasts regional growth of 4.5% this year, down from 5% last year.

Many tourists book weekslong, often once-in-a-lifetime African safaris a year in advance. That means that even as the Ebola epidemic has largely abated, bookings haven’t picked up.

Source: http://www.wsj.com/articles/foreign-fears-take-toll-on-african-tourism-1432247925