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The tourism sector is on the verge of losing revenues amounting to more than Sh100 billion this financial year following the impact of the Covid-19 pandemic.

Data from the Kenya National Bureau of Statistics (KNBS) show that tourism earnings rose to Sh163 billion last year up 3.9 per cent from Sh157.4 billion in 2018.

But as a result of the pandemic, current Ministry of Tourism figures show these earnings could drop by at least 95 per cent.

The ministry also projects that more than 100,000 Kenyans working in restaurants, hotels, lodges, travel agencies and airline companies risk losing their livelihoods.

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One of the big firms in the tourism industry hit hard by the pandemic is Hemingways Collection, which has hotels in Nairobi, Watamu and Maasai Mara.

Ross Evans, the company's operations director said in an interview last week that the spread of the coronavirus has seen the firm's revenues fall by up to 90 per cent.

“We have seen a 90-100 per cent drop in revenues across our business due to the travel restrictions put in place globally,” he explained.

“We are hopeful that these restrictions will be loosened over the coming weeks to allow some domestic travel in Kenya,” he said.

Experts say the sector is unlikely to record significant overseas business for the remainder of this year, wiping out billions of shillings in projected revenue for both the July to December season, when tourist numbers usually are at their highest.

SEE ALSO: Officials explore home-based care for Covid-19 patients in Mombasa

According to Treasury documents, Sh2.5 billion has been allocated to the Tourism Promotion Fund and another Sh3.8 billion to the Tourism Fund.

The financial boost is expected to facilitate marketing and promotion efforts to aid the sector's recovery.

Tourism Principal Secretary Safina Tsungu on Thursday last week said the government is ready to support the sector in recovery efforts.

“Our new normal is here and as an industry we must quickly embrace it to ensure the best solutions for the challenges that may lay ahead,” she said. “We are for example rooting for a tax deferment so that entrepreneurs can inject this money into their business.”

Ms Tsungu said the government is also developing a tourism recovery credit scheme that will cushion industry players from revenue losses and help them remain afloat.

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However, during the webinar that brought together hundreds of industry players from across the continent, sector leaders said Covid-19 is forcing tourism funds to adapt and develop new value propositions to remain in business.

“We must not look at the rear-view mirror. We must look ahead at the segments and sub-segments of the new traveller. Our products and offerings must now address the needs of our clients,” said Kenya Tourism Board (KTB) Chief Executive Officer Betty Radier.

Commenting on growth patterns in the sector, KNBS said: “The number of international visitors arrivals increased by 0.4 per cent to 2 million in 2019, which was a slower growth compared to a 14 per cent rise in 2018.”

Kenya also recorded 4,743 local and 218 international business conferences last year that brought together 768,875 delegates across the numerous hotels and lodges.

Physical distancing measures recommended by health experts to stop the spread of coronavirus have seen meetings and gatherings move online.

This has dealt a blow to hundreds of businesses that depend on the trade directly and indirectly.

Mr Evans said Hemingways' has retained all 500 permanent and contract staff, even as the company is forced to prudently manage its cashflow and review supplier contracts. 

“Our primary focus has been the security and well-being of our staff across our entire group,” he said.

“Many of our corporate clients and trade partners and suppliers have been supportive and I think the industry is really coming together to overcome this crisis together.”

In the 2020-21 financial year, the tourism sector has been one of the few sectors spared drastic budgetary cuts in the wake of a widening budget deficit.

Ms Radier said the sector must be braced for significant changes in the post-coronavirus era. 

“Going forward, expectations will be different which means we must start getting ready for them,” she said.

“The domestic market offers a new prospect now, but even so, we must be ready to offer diverse quality offerings to suit our client’s expectations.”

Evans said the government should be working to strengthen health protocols at the country’s points of entry to be compliant with global standards once international travel resumes.

“We are concerned that international airlines may not re-instate flights back to Kenya once restrictions are lifted due to capacity reductions and cost management that they are all undertaking currently,” said Evans.

“We believe a key investment must be to offer them incentives to these airlines so that they can return to Kenya as soon as possible."

Tourism sector KNBS Covid-19
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