The eurozone crisis, high inflation in East Africa and travel advisories by western governments have reduced TPS Eastern Africa profits by Sh65 million.
TPS Eastern Africa, whose flagship brand is the Serena Group of hotels, posted a 35 per cent drop in profits after tax for the second quarter to Sh120 million, down from Sh185 million realised over a similar period last year.
The company points to reduced tourism revenue from traditional markets — Europe and the US — which were affected by travel advisories.
“The business was supported by local tourists, those from Eastern Africa and other non-traditional markets, say, China, Scandinavia and Thailand,” TPS said in a statement on Thursday.
Early this year, tour operators African Safari Club and Long Couriers, and the Xl Airways, operated by XL Leisure Group, which sells holiday packages, closed down citing low tourist numbers.
A quarterly report by the Kenya Tourist Board shows holiday arrivals at the Moi International Airport, Mombasa, fell by 22 per cent in the first quarter.
Visitors from France and Italy, key sources of beach tourists, fell by 75.7 per cent and 14.3 per cent respectively.
TPS also cites a volatile economy in the EA marked by high energy and interest charges as factors in poor performance.