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The Ministry of Culture and Tourism (MoCT) has started applying strict requirements for renewing the licenses held by tour operators
Vehicle condition, hard currency earnings and tourist numbers have been set as mandatory criteria.
Some elements of the new system have led to disagreements between the ministry and private companies, particularly a rule insisting tour operators own at least one 4WD vehicle which is less than five years old.
The rule was set out in a letter sent from the Tourism Efficiency Accreditation Directorate of the Ministry to tour companies. It warns: “Where the company will not settle the issue within three months, the ministry will revoke the accreditation.”
Representatives from tour companies and officials from the Ethiopian Tour Operators Association (ETOA) argue that the Ministry’s rules force companies to buy new vehicles in order to get their licences renewed.
“Tour companies that use their talents can manage their business with their own vehicles or rental ones. The new scheme will harm the sector,” one said.
Another scheme introduced by the Ministry has had a far more positive response from the industry – a requirement for companies to record how many tourists they have handled in a year and declare their hard currency earnings in the same period. Companies failing to do this will also lose their licence.
There have been complaints in the past from the industry that the licensing rules are not clear and that some operators have been able to abuse their position within those rules.
“The sector needs clear professionals that undertake the tourism activities with the sector ethics, while some of the companies that have tour operation license do not undertake the service properly,” experts in the sector explained. “Some companies only use the duty free scheme that is provided for the sector actors to import four-wheel vehicles and rent them out for other purposes,” they said.
Experts at the Ethiopian Tour Operators Association (ETOA) told Capital that the association has also appreciated the measures that are undertaken by the ministry.
According to experts some of the business, for instance, in hospitality and traditional restaurant industries have also formed tour operation companies.
“Most of them have the license of tour companies because their business activity is related with the sector, but the majority are not undertaking the tour operation activity,” experts said.
According to the ministry’s data, the number of licensed tour operator companies is 310, while the ETOA members’ list indicates only 181 companies. 
According to experts Ethiopia has a huge tourism potential, but this is not being fully exploited and visitor numbers and revenue remain low compared with other African countries.
Even though the sector is growing it is still struggling with different challenges.
The government has targeted to earn about three billion dollar from the sector at the end of the five year plan in 2015 from the current about 500 million dollar per annum. To boost the sector the government is implementing several incentives including allowing duty free scheme for the import of three vehicles.
On the other hand the tour operators have also been complaining about different issues including VAT issue, where they claim they have to be exempted from VAT dues, considering that they are service exporters.