Five ways coronavirus might affect the hotel industry in Kenya
By Charles Bazenga
| March 16th 2020
The whole world is grappling with
a pandemic that is spreading like bush fire- the novel Corona Virus also
referred to as Covid-19. Its cure hasn't been invented. Hitherto, there have
been more than 160,000 cases of infections, more than 6,000 deaths, and more
than 75,000 recoveries across the globe.
All seven continents have been
affected with Africa and Kenya, in particular, being in the list of the most
recently hit areas. The suspected cases in Kenya have been put under
quarantine. The Government, through the Ministry of Health, is doing the best
to sensitize Kenyans and to inform them about emerging/suspected cases.
Tourism in Kenya, particularly the
hotel industry, has been hit the most owing to lockdowns and travel advisories
in nearly all parts of the world that have led to cancellations of
bookings/reservations. This has sent stakeholders back to the drawing board to
come up with strategies to deal with the deadly. Below is how the hotel industry
in Kenya has been affected;
1. Low Business Volume
Owing to booking cancellations,
Hotels will suffer low occupancy resulting in dismal accommodation revenue. Due
to the virus scare, the majority of Kenyans have shied away from eating out,
drinking out, and attending conferences. These are key revenue centres in a
hotel setup; their lack of utilisation will lead to little or no revenue. Many
hotels, restaurants, pubs, cafes, meeting centres have been deserted.
2. Downsizing- loss of jobs
As a result of low occupancies,
one of the obvious decisions by management of hotels will be to lay off casual
workers and to suspend the renewal of contracts expiring during this period.
Loss of jobs will affect families directly as the breadwinners are sent
3. Financial losses
Fixed costs, e.g., rent,
electricity, insurance, internet, marketing/advertising costs, will majorly
affect hotels' bottom line negatively. The below-average revenues of many
hotels will be exceeded by the expenditure.
4. Unpaid creditors
With insufficient cashflow, hotels
will not be able to meet their financial obligations, especially creditors,
among other things. This will directly have a negative impact on the creditors'
businesses and an indirect impact on other parties, depending on the creditors.
In as much as Kenya was alert and
ready to employ recommended global measures of dealing with the pandemic in the
eventuality it hits her, nobody expected the virus to catch up with us this
soon. Procurement of edibles, perishables, among other delicate foodstuffs, had
taken place with the hope of selling them to a projected number of customers.
The low business volumes will lead to spoilage of perishables and other food
items that cannot be preserved.
In conclusion, businesses have
been hit hard. This will have a major impact on the economy. Hotels must train
their staff on the virus- how it spreads and how spreading can be curbed. The
use of disinfectants during cleaning is of the essence. Provision of enough clean
water, soap and sanitizer for staff and guests is paramount to fighting the
pandemic. If the Covid-19 pandemic is not urgently resolved, there will be more
loss of lives, businesses, and jobs. Hopefully, the pandemic will be resolved
Covid 19 Time Series
What could happen if the Premier League is nullified?How Arsenal could end up qualifying for the Champions League
Why Kenyan boxers are winning medals once againThe BFK led by President Anthony ‘Jamal’ Ombok was elected into the office in 2019 and has since...
Missing Ugandan woman found in septic tank
By Too Jared
- Wanjigi: Send home all MPs over rising fuel, food prices
- Why fuel lands in Kenya at Sh60 but is being sold at over Sh130
- 'A' plain student risks missing out on Egerton University dream course
- Contractor to refund Judiciary Sh3.2 million for using their water
- Farmers set up Sh450m maize milling plant to ward off cartels