Kenya stares at Sh40b loss as tourism dips

The Kenyan economy stands to lose up to sh40 billion from falling tourism figures that have been attributed to revised travel advisories, negative publicity and insecurity in the Coast region.

According to reports from industry insiders, travel advisories in key markets coupled with security threats in parts of Coast Province have led to cancellation of thousands of bookings, leading to closure of dozens of hotels in the region.

"The advisories continue to bite and as recently as last week we had two charter companies that bring in up to 600 visitors each week cancel their flights," stated Mike Macharia, CEO of Kenya Association of Hotel Keepers and Caterers, (KAHC).

"The Government's approach to the travel advisories and insecurity situation is not easing the pressures on the industry and we estimate that the current effects might persist until November 2015 at the cost of Sh30 to 40 billion to the economy."

This presents the greatest fall in the country's greatest foreign exchange earner since 2007/2008 post-election violence where annual earnings dipped by 54 per cent.

In addition to the advisories, the recent Ebola outbreak in parts of West Africa has seen Kenya labelled as high risk, owing to its position as a travel hub in Africa.

"The foreign press in Europe, particularly the BBC and CNN are fanning speculation through alarmist reporting on the Ebola outbreak and security situation in Mombasa and these media reports are doing worse than the travel advisories," explained Mr Macharia.

President Uhuru had two months ago announced a raft of policies to prop the ailing industry after governments in key markets of US, UK, France and Austria placed travel advisories warning their citizens from visiting Kenya.

These included tax incentives for companies in the private sector to promote domestic tourism and a Value Added Tax (VAT) waiver on all air-ticketing services by travel agents in order to ease travelling costs.

However, industry players are stating that these measures have yielded no fruits and that other similar policies meant to revive the industry are failing and raising questions about the government's commitment to the industry.

"We have not seen any uptake of the free holidays and the response to the travel advisories from the government's side shows little engagement with the foreign players," states Mr Macharia.

The pattern for domestic tourists for example is that people like to travel with their families and they can only do this in April, August and December when schools are closed so we have a very short time to work with," he explained.

At the same time, telling employers to give paid holidays to their employees and have them claim this money from the Kenya Revenue Authority (KRA) is not a process that employers are keen on following."

Mr Macharia further states that Sh200 million that had been promised to help the Kenya Tourist Board to market the country in the wake of the advisories in May is yet to be released four months down the line.

According to Harald Kampa, KAHC's chairman in charge of the Coast region, the travel advisories are also being enforced by other markets and Kenya is losing out to other competitive destinations.

"The advisory by the UK, for example, is not only affecting arrivals from the UK but is also being picked up by would-be tourists in Switzerland and that is how it is spreading to other countries whose governments have not put out official advisories," explained Mr Kampa."Kenya is losing its Safari business to Serengetti in Tanzania and chartered flights are now being routed to Zanzibar."

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