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Kenya set to lose Sh40 billion as tourists shun troubled Coast

By Jackson Okoth | August 24th 2014
 A waiter at the Voi Wildlife Lodge within Tsavo East walk in an empty lounge due to the low tourist season [Photo: Gideon Maundu\Standard]

Kenya: Low occupancy at coastal resorts and hotels could see Kenya’s lucrative tourism sector lose over Sh40 billion in net revenue this year.

The slump has seen stakeholders lobby to have travel advisories lifted, security restored especially in the coastal regions and more funding given to market tourism in overseas markets. The move is aimed at reversing the trend, especially at the troubled Coast.

“We are already witnessing a worrying trend where bed occupancy in the South Coast area is between 25-40 per cent during this peak season when the range should be between 70-80 per cent,” Kenya Association of Hotel keepers and Caterers(KAHC) Chief Executive Mike Macharia told Weekend Business.

Macharia warns that if normalcy is not restored and quick measures taken, the earliest the tourism industry could experience full recovery is November next year.

Source markets

While the US and Britain have been partners with Kenya in the fight against terrorism, the diplomatic fallout and the ensuring travel advisories from these key source markets, have succeed in pulling Kenya’s tourism business to its knees.

“We have seen Western diplomats issuing statements in public and government officials responding in kind. This points out to a breakdown in communication and lack of a channel that could assure visitors that insecurity is being dealt with,” said Macharia.

Following cancellation of chartered flights to Kenya, local tourism stakeholders want the Government to extend the reduction in landing fees for another year. There is also a proposal to have an open air policy, to encourage more flights into this destination.

“Things are not okay in the industry and pressure from the union has made matters even worse,” said one hotel owner at the South Coast, who refused to be identified for fear of negative publicity.

Most of the operators are staring at low occupancy levels as fears rise that things could worsen before they get better.

It is estimated that more than 20 hotels and holiday resorts in the coastal region have shut down their operations since April this year, to minimise on their losses.

“I now have bed occupancy of 20 per cent, which could fall to four per cent in December if things do not improve,” said one hotel owner. As the tourism industry suffers from drop in visitor numbers, several hotels have reduced staff and scaled down their operations - which has seen unions and hotel owners clash.

A letter in our possession, addressed to the resident manager of Leopard Beach Hotel and Spa, dated August 9, 2014, by Kenya Union of Domestic, Hotel, Educational Institutions,Hospitals, and Allied Workers (Kudheiha) says the hotel has negated on an earlier agreement on unpaid leave.

Now, the union wants all permanent staff on compulsory leave recalled. Kudheiha accuses Leopard Beach Management of failing to implement an agreement reached earlier concerning leave days, house allowances, service charge, casual workers and travelling allowances for those reporting from leave.

This letter had been copied to management of Leopard, who denied having it in their possession. “We had a deal with the Union only for them to bring up new demands one and a half months later,” said a senior official at the hotel.

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