Tourism on its knees as thousands of jobs lost

By Winsley Masese

Kenya: Rising insecurity in Kenya following several al-Shabaab linked attacks has begun to damage the tourism sector, a key foreign exchange earner.

Hotel bookings are said to be at below 15 per cent in the Coast region, which is the worst hit.

More than 20 hotels across the country have closed shop as tourist numbers dropped sharply. The closure and scaling down of operations by many hotels has seen more than 3,000 employees sent home. Hoteliers hope the closure of hotels and slowing down of operations is temporally. Hotel lobby the Kenya Association of Hotelkeepers and Caterers (KAHC) says more than a dozen of top-end hotels operating in Malindi and Watamu have closed shop during the low season. Also, at least six hotels in Kwale and some in Lamu have sent workers on leave till the end of the low season at the end of July.

Kenya Tourism Federation Chief Executive Agatha Juma admits that the insecurity situation has led to a decline in hotel bookings and the tourist arrivals.

“The current state is not conducive for the tourism industry to thrive as some hotels in the coastal region closed early due a decline in tourist arrivals,” she said. Ms Juma said as a consequence, the Government is losing tax revenue and is expected to experience a huge deficit from the tourism sector.

This, she said, will have a bearing on the 2014/2015 fiscal year, which is likely to be most affected. “The government is losing tax revenue from this slump and the sector’s contribution to the budget will diminish,” she observed.

Kenya Association of Hotels and Caterers Chief Executive Mike Macharia said the slump in hotel bookings is a combination of other factors.

“Besides security, the Value Added Tax Act 2013 contributed to the rise in the cost of living. This made the Kenya’s tourist destinations more expensive compared to other destinations such as Tanzania,” he said. Ms Juma said the industry players are instituting short-term measures towards a recovery process and reverse the downward trend.

“We need about Sh1 billion to undertake fully the recovery of the sector and have already made recommendations on what to be done during the 2014/2015 financial year,” she said.

“Reasons that make tourists come to Kenya as the most beautiful place on earth have not changed and we need to do marketing for a full recovery.” Juma regrets that though the security has been beefed up in major attraction sites, terrorists are now targeting ordinary Kenyans. “We want to assure our prospective tourists that we are on high alert and will be safe during their visit,” she appealed.

This, she argued, has to be achieved through the cooperation between the private sector and the government in taming insecurity situation in the country.  Most hotels at the Coast have since then witnessed reduced patronage, with numbers reduced by more than 60 per cent. To break even, hotels need 60 to 70 percent of their beds to be occupied.

Kilifi County, which heavily relies on Italian tourists, has been hard hit with thousands of jobs lost, and auxiliary sectors like handicraft makers, taxi drivers, fishermen and farmers are too feeling the effect. The low season normally starts in May to July, but the hoteliers say it started early this year and they are uncertain when the high season will kick in.  The chartered airlines withdrew flights due to low passenger numbers.