Study finds Kenya losing ground to tourism rivals

Kenya is losing billions of shillings in foregone revenue in the tourism industry, owing to a weak airline industry and insecurity.

New data from the World Economic Forum (WEF) indicates that Kenya is losing out to rivals like South Africa, Mauritius and Seychelles, even as the Government spends billions of shillings to turn around the country’s second-largest foreign exchange earner.

The study, which was conducted in partnership with the University of Nairobi’s Institute for Development Studies, looked at the openness of destination markets, ease of setting up a tourism enterprise and the nature of attractions and facilities.

While Kenya has emerged as the fifth most competitive tourism and travel market in sub-Saharan Africa, its position is shaky. In almost all parameters, it lags far behind regional leaders South Africa, Mauritius and Seychelles.

In fact, Kenya’s dominance in the East African tourism market is marginal at best, and the country stands to lose its lead to Tanzania, Rwanda and Ethiopia.

Strategic advantages

“Kenya ranks 78th in the global tourism market out of 141 countries, and fares strongly in terms of natural resources (11th globally), brand visibility online (10th globally) and leads Africa in the number of known species of mammals, birds and amphibians,” reads the report, titled The Travel and Tourism Competitiveness Report 2015.

These strategic advantages place the country ahead of its rivals in the regional market for game, beach and conference tourism.

However, these strengths are undermined by hurdles in key segments of the tourism industry, making it difficult for Kenya to make a complete turnaround from a four-year slump.

“Kenya has one of the highest costs of obtaining a building permit in Africa,” notes the report.

This means for investors looking to set up a hotel, lodge or private airstrip, they have much cheaper alternatives in countries like Tanzania, Ethiopia and Rwanda.

In addition, Kenya has the highest costs of ticket taxes and access to international air transport services for visitors, factors that greatly dampen prospective visitors’ appetites.

Kenya’s embattled carrier Kenya Airways has since slipped from the leading carrier in the continent to the third spot, and is on the brink of insolvency, having reported over Sh40 billion in losses in the last two years, prompting Government intervention.

New routes

The Government, on its part, has been accused of adopting protectionist policies towards the airline that have contributed to its current state, and in the process deterred foreign airlines from increasing traffic, and subsequently, tourists into the Kenyan market.

Last year, the Government had allowed German carrier Condor to operate additional direct flights between Kenya and Austria, only to turn around and rescind the decision, depriving the country of an estimated 15,000 tourists.

Qatar Airways has also been allegedly denied a licence to fly directly to Mombasa, with industry insiders saying such policies are intended to cushion KQ from competition, but have made ‘destination Kenya’ uncompetitive.

As a result, WEF states that Kenya is more restrictive in terms of establishing bilateral air transport agreements, ranking a poor 106, behind Tunisia, Tanzania, South Africa and even Uganda.

This essentially means it is more difficult to set up a new route between Kenya and a second party, than is the case in Uganda or even Zimbabwe.

Security, a major thorn in the sector’s flesh for a fourth year running, continues to undermine efforts to restore confidence among both repeat and new visitors.

Kenya ranks 131st globally in terms of safety and security, earning it a place in the top 10 most insecure destinations for tourists in the world, where it is ranked alongside countries like Egypt, Nigeria, Yemen and Pakistan.

As a result, tourism-related businesses in the country have cited the high cost of protecting their premises, property and clients from crime, violence and terror attacks as one of the highest impediments to investment.

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