Overview
Tourism is a primary driver of Cabo Verde’s economy and, prior to the COVID-19 pandemic, accounted for at least 24 percent of the country’s GDP, 10 percent of formal employment, and the majority of Cabo Verde’s foreign direct investment. In 2019, Cabo Verde welcomed almost 820,000 tourists (up from 145,000 in 2000), and pre-pandemic, the government anticipated reaching one million tourists in 2021, with visitors now expected to return to pre-pandemic levels by 2023. Europe is the traditional source market, with 24 percent of total visitors coming from the United Kingdom. As the COVID-19 pandemic has demonstrated, the economy’s dependence on tourism makes it vulnerable to external shocks. Cabo Verde’s tourism market, brought to a halt by COVID-19, is characterized by dependency on international operators and concentrated on two islands (Sal and Boa Vista) offering “sun, sea, and sand.” The government is seeking to diversify the tourism sector – and attract more private sector investment – by promoting other kinds of attractions, including sea turtle nesting sites, big game fishing, water sports (including sailing, yachting, wind and kite surfing), hiking and trekking, volcanic exploration, birdwatching, canyoning, culture (music, festivals, and cultural heritage), cruise ships, and retirement options for senior citizens. Successful diversification of the tourism sector will require better packaging and promotion of these offerings, investments in high-quality medical care, and further improvements to inter-island and international transportation. Despite the pandemic crisis, it is expected that tourism will remain the largest economic sector. The government launched its tourism operational plan 2022-2026, which among other objectives has the goal of attracting 1.2 million tourists by 2026. Cabo Verde has fully vaccinated more than 85 percent of its adult population and is considered a model in its response to the COVID-19 pandemic, an important factor for the country’s tourism relaunch. Planned tourism investments suggest high investor confidence – including from U.S. investors – in Cabo Verde’s post-pandemic recovery.
Leading Sub-Sectors
Health: The COVID-19 pandemic has underscored the critical need to improve healthcare facilities to provide tourists peace of mind and keep them safe while visiting Cabo Verde. The government is already investing in health centers on the most visited islands. Additional opportunities exist in construction, health equipment, and technical assistance.
Ecotourism: Although some of the rural islands receive tourists interested in ecotourism, this sector is still underdeveloped and a viable niche market. Some of the less explored islands offer unique experiences that combine sun and sand with mountain trekking (including on an active volcano), viewing turtle nests, scuba diving, and bird watching.
Cruise Services: These include on shore activities for cruise ship passengers as well as bunkering services. Despite the sector’s pre-COVID rapid growth, small- and medium-sized businesses in Cabo Verde are not taking advantage of this market niche.
Sporting Events/Nautical Tourism: Cabo Verde is well positioned and already has good infrastructure for these types of events, such as kite surfing, wind surfing, sailing, volleyball, international beach games, and other aquatic activities. U.S. businesses operating in the area could take advantage of these opportunities.
Cultural/Heritage Tourism: Cabo Verde’s history, including its role in the slave trade, and its unique culture could attract specific groups of tourists, but this area has not been fully explored.
Agribusiness: Most of the country’s resorts and hotels (particularly the large European-owned resorts) rely on imported food, beverages, and supplies from Europe. Local Cabo Verdean producers struggle to place their agricultural and fisheries products in hotels and resorts due to transportation challenges, a lack of packaging and refrigeration, the seasonality of certain products, and difficulty obtaining required certifications. U.S. businesses with experience in these matters could tap into a growing market in Cabo Verde.
Opportunities
Cabo Verde has developed a good reputation among its European visitors. Development and diversification of the tourism sector is a high priority for the government. The country already has significant tourism infrastructure and incentives in place, including four international airports, domestic airports, ports, and tax benefits with special provisions for investment in the tourism sector. Due to the crosscutting nature of the sector and the requirements of the market, opportunities abound. Investments in health, agribusiness, specific market niches, and even renewable energy and ICT solutions would contribute to, and benefit from, Cabo Verde’s continued development as an international tourist destination.
Resources
- · Ministry of Tourism and Transport
- · Tourism Cabo Verde
- · Chamber of Tourism