An Exploration of Luxury Hotels in Tanzania

Diego A. Comin

NBER Working Paper No. 17902
Issued in March 2012
NBER Program(s):   CF

Tourism is a tradable service activity that could allow some African countries to generate significant growth. Tanzania, given its unique natural assets, is an ideal candidate. However, despite being so richly endowed in touristic resources, Tanzania receives very few tourists and revenues from tourism. To explore the determinants of this performance, I conduct an international survey for upscale hotel managers to measure supply-side constraints on the operation of hotels. The survey reveals that hotels in the safari area in Tanzania are more expensive than comparable hotels, and that this difference in price cannot be accounted for by differences in supply constraints. Further, using cross-country panel data, I show that upscale hotel prices account for a significant fraction of cross-country differences in tourists.

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Document Object Identifier (DOI): 10.3386/w17902

Forthcoming: An Exploration of Luxury Hotels in Tanzania, Diego Comin. in African Successes: Modernization and Development, Edwards, Johnson, and Weil. 2014

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