The Tourism Confederation of Tanzania (TCT) is calling for acceptance of US dollar pricing across the tourism sector, warning that Tanzania risks falling behind regional competitors if it pursues a shilling-only policy for transactions.
This follows news that the country will ban the use of foreign currency for domestic transactions.
In a meeting between the TCT and the Bank of Tanzania in Dodoma, the bank clarified that tourism operators may invoice foreign clients and agents in US dollars –but only for services rendered outside Tanzania. All transactions for services delivered within the country must be conducted in Tanzanian shillings (TZS).
The TCT acknowledged the partial concession as a step forward but argued that the global tourism industry is predominantly dollar-based with most international bookings, contracts and distribution systems operating in US dollars. This includes platforms such as global distribution systems, online travel agencies and payment processors.
“Forcing local conversions to TZS introduces avoidable friction, banking fees and currency risks into an otherwise standardised global system,” said Tim Henshall, Head of Tourism Marketing for Tanzania in the UK, in a TCT statement.
Tourism businesses typically receive payments in US dollars 12 to 18 months before services are delivered. If forced to convert these payments to TZS immediately, businesses bear the cost of exchange rate volatility – posing pricing risks and undermining long-term financial planning.
Regional and operational disadvantages
The TCT highlighted that regional competitors, including Kenya, Rwanda, South Africa and Egypt, all allow dual-currency use in their tourism sectors. Maintaining a TZS-only domestic payment policy could reduce Tanzania’s attractiveness to foreign buyers and travel agents – many of whom prefer to work in US dollars.
Additionally, domestic tourism suppliers – such as hotels, safari operators and airlines – often pay costs in US dollars, including park fees, imported equipment, international staffing, fuel, aircraft leasing and loan repayments. A mismatch between revenue in TZS and costs in US dollars further destabilises local operations.
Small operators disproportionately affected
The TCT notes that multinational tourism groups are often able to mitigate currency challenges through offshore accounts and hedging tools. Local small and medium enterprises, however, face a heavier burden due to higher banking fees, conversion losses and reduced access to financial instruments.
“Without dual-currency flexibility, local operators are less competitive than their regional peers,” the TCT statement warned.
The TCT continues to advocate for broader US dollar acceptance for tourism-related transactions in line with export sector norms and to preserve the viability of Tanzania’s tourism businesses within a highly competitive global industry.
