Airlines review flights to Kenya as passenger numbers drop

In trying to understand how far Kenya’s tourism has sunk, one need not look any further than the visitor arrivals at the Moi International Airport in Mombasa.

International arrivals were down 60 per cent in December last year, a month that has traditionally brought the best prospects for hotels and airlines.

At only 9,600 leisure travellers that whole month — down from the already depressed 25,500 reported in December 2013 — the reality of the tourism sector’s crisis became particularly stark.

Several airlines have already reduced their flights to Kenya on account of the falling number of travellers to Nairobi and Mombasa.

One international airline has cut its weekly scheduled flights by more than half to just three, and even then, in much smaller capacity aircraft.

Only British Airways has reported a surge in passenger numbers, announcing in February that it was replacing its Boeing 777-300 aircraft operating to Nairobi with the larger 777-400, “which would translate to an additional 780 seats per week”.

First casualty

Sir Richard Branson’s airline Virgin Atlantic was the first casualty of the passenger crisis. It axed the London-Nairobi route in September 2012, citing falling passenger numbers.

That decision came after some tour operators reported that tourist numbers had dropped by more than half months after retired holidaymaker David Tebutt was killed by Al Shabaab militants and his wife, Judith, abducted for several months.

Incidentally, the place the couple was attacked in Kenya’s North Coast, which extends from Kilifi to Lamu, was and still remains the top pick for international tourists, though the number of arrivals has slumped significantly.

Fears over safety have increased since then, with the Al-Qaeda-linked militants staging deadlier attacks, including the Westgate Mall siege, and more recently, the Moi University attack in Garissa where 148 people were killed.

The world’s largest travel firm, TUI — which operates Thompson and First Choice among other tour agencies in Europe — suspended flights to Kenya in May last year for at least six months, following a travel advisory issued by the UK government.

The tourists on TUI-organised holidays in Kenya, estimated to be more than 400 at the time, had to be evacuated, cutting down their stay over heightened terror threats across the country.

It is unlikely that the travel company has returned to full operations on travel to Kenya from the two important markets of UK and Germany, which are among top source markets for the local tourism sector. The company had not responded to our enquires on this by the time of going to press.

Dimming prospects

But official data on international travel into Kenya contained in the 2015 Economic Survey paints the grim picture of dimming prospects for a sector very important to the economy as regards job creation in the hospitality and travel sectors, as well as foreign currency earnings.

Only 861,000 international visitors came through the two main airports in Nairobi and Mombasa last year, down from almost 1.3 million in 2011, a drop largely attributed to increasing terror activity. Tourists are now opting for countries in the region perceived to be more secure, such as Tanzania.

This near 500,000-travellers-a-year gap between 2011 and 2014 has had serious implications for airlines that operate routes to Kenya.

This shortfall comes on the heels of huge investment in the construction of a new terminal at the Jomo Kenyatta International Airport (JKIA) expected to double the capacity of arrivals it can hold.

In the short term, the consolation for the expanded capacity is the growing number of Kenyans who would rather fly between major towns than take a bus.

Locals have become a crucial marketing target for the tourism sector, with the Government offering various incentives to encourage more Kenyans to holiday within the country.

But still, sector earnings dipped to Sh87 billion last year, elongating the downward spiral seen over the last five years. Kenya earned Sh98 billion in 2011.

In an attempt to reverse this trend, the Government has proposed spending Sh6 billion on tourism recovery and another Sh3 billion for industrial development, according to the 2015-16 Budget estimates released last week.

Should these efforts work, it would come as welcome news for industry workers. A lobby for tourism players reports that 21,000 hotel workers lost their jobs in 2014, following capacity cut-backs at various hotels.

Travel advisories issued by the European Union, US and Australia against Kenya have dented sector projections, and the real slump is much worse after adjusting earnings for inflation. In just two years — 2013 and 2014 — average consumer prices rose 5.7 per cent and 6.9 per cent, respectively.

Earnings from tourism have traditionally been a key stream of foreign exchange reserves, a shortage of which means imported products cost more shillings to purchase, even without a change in pricing.

Import expenses

Kenya’s biggest import expense is petroleum products, which cost Sh330 billion last year and are paid for in US dollars. Motor vehicles, machinery and pharmaceutical purchases are also paid for in dollars — which means that a weaker foreign currency base exposes all households to a higher cost of living.

The Government has yet to say if the serious fluctuations in the local currency in recent months could be linked to falling prospects in the tourism sector, which has meant a shortage of foreign exchange inflows. The shilling closed last week at Sh94.60/70, lows last seen three years ago.