2008 worst year ever for tourism industry

By John Njiraini

The tourism industry lost Sh20 billion last year due to the effects of post-election violence.

In one of the worst performance of the industry, tourism revenue stood at Sh52.7 billion against a projected target of Sh70 billion.

The earnings, a decline of 20 per cent from Sh65.4 billion realised in 2007, puts last year as the worst year for the tourism sector.

"Last year all the gains of 2007 were revised. We lost more than Sh20 billion in revenues," said Kenya Tourists Board (KTB) Chairman Jake Grieves-Cook.

During the year, which will go down as jinxed for the sector, tourists’ arrival slumped by 50 per cent in the first quarter due to bad publicity generated by the chaos.

Though towards the end of the year stability had started being witnessed, the sector was again hit by the global financial crisis leading to a decline in arrivals from key source markets.

In the same year, KTB was caught in a corruption and mismanagement web involving former managing director Achieng’ Ong’ong’a and some board members. The industry was also hit by a significant depreciation of the shilling against major global currencies, further reducing earnings.

Tourists arrivals

According to statistics released by KTB yesterday, the consolidated tourists arrivals last year recorded a 40 per cent decline from two million in 2007 to slightly over one million. Declines were recorded in all source markets with France recording the worst slump of 60 per cent, Italy 53 per cent, Germany 41 per cent, UK 39 per cent and US 25 per cent.

While the decline from the US market would have been significant, the election of Barack Obama as president had a positive impact on the destination. "The election of Obama played a significant role in putting Kenya on the world map," said KTB acting Managing Director Maryanne Ndegwa Jordan.

Also on a decline were cross-border arrivals that reduced by 56 per cent from 955,354 in 2007 to 422,975 as well as chartered flights that dropped by 30 per cent from 1,533 in 2007 to 782 flights last year.

The hotel industry was also badly hit with an average occupancy of 55 per cent compared to 80 per cent in 2007. This resulted in massive layoffs and closures.

Though all traditional markets performed poorly, there were positive signs from emerging markets in Asia and the Far East, which recorded minimal declines, while others experienced growth.

Canada declined by 30 per cent, Australia 25 per cent, China 20 per cent and South Africa eight per cent. United Arab Emirates recorded the highest growth with 36 per cent followed by Russia and India with four and one per cent respectively.

Ndegwa said during the year KTB spent Sh1.1 billion in marketing campaigns that helped recover about 70 per cent of international arrivals by the end of the year.

"It took efforts in marketing and publicity initiatives to restore hope, regain confidence and salvage the image of the destination," she stated.

To push ahead with the recovery plan, the Government has released an extra Sh250 million for marketing.