Runaway insecurity hits tourism hard

A tourist takes photographs during an afternoon game drive at the Masai Mara game reserve. Without a doubt, 2014 will go down in history as one of the worst years for tourism. PHOTO/FILE

What you need to know:

  • Travel warnings from traditional source markets — UK, Germany, Italy and France — have dealt the once vibrant industry a body blow

Without a doubt, 2014 will go down in history as one of the worst years for tourism.

After a peaceful general election in 2013, industry investors expressed hope that the sector would recover in 2014.

However, a wave of attacks in April and May rocked Nairobi and Mombasa leading to loss of lives and huge losses for businesses.

As terror took its toll in Nairobi and Mombasa, a coastal tourism hub, in May the UK, the US, France and Australia — Kenya’s traditional tourist source markets — issued travel advisories.

The Western countries warned their citizens against visiting parts of Nairobi, Coast and Northern Kenya due to threat of terror attacks by Somali-based Al-Shabaab.

The impact of the travel warnings would be felt when UK tour companies evacuated hundreds of British tourists who were on holiday at the Coast.

And before the country could come to terms with the travel advisories, all chartered airlines from the UK pulled out of the Mombasa route over insecurity.

The travel advisories hit the industry hard since the UK has for years been Kenya’s leading tourist market.

When the traditional peak season for tourist began in mid-July, international travellers from primary source markets — UK, Germany, Italy and France — were hard to come by. This sent shock waves across the industry.

Consequently, some hotels had to make painful decisions. For instance, some hotels in Malindi and Watamu, in Kilifi County, which had closed down during the low tourist season — April to June — failed to re-open in July because of the lack of international guests.

Soon after the Western countries issued the travel advisories, charter flights from Europe to Mombasa plummeted to between four and six per week compared to over 20 weekly in a similar season in 2013.

Between July and November, hotel occupancy in Mombasa was averaging 35 per cent. At Malindi and Watamu towns, the occupancy was at 20 per cent while Diani in Kwale County recorded an all-time low of 18 per cent.

More than 20 hotels in total were shut down in Malindi, Watamu and Diani, with more than 5,000 workers being laid off. Tour firms were not spared either. They were forced to send home hundreds of workers.

Could have been worse

The situation could have been worse were it not for Turkish Airlines and Ethiopian Airlines, which maintained direct flights from Istanbul and Addis Ababa to Mombasa.

The two airlines also helped connect international tourists visiting the region with other destinations around the world.

Latest Economic Report indicates that in the year to July 2014, the number of international tourists to Kenya declined by 14.9 per cent to 998,069 down from 1.173 million recorded in a similar period in 2013.

As a result of the huge decline in tourism numbers, President Uhuru Kenyatta announced measures aimed at reviving the ailing sector.

Among the plans were that the government, with effect from June 12, 2014, would allow companies to pay their staff expenses for vacation during their annual leave and deduct the expenditures in their taxes.

To shore up the declining tourism arrivals, Tourism Cabinet secretary Phyllis Kandie said the country was on a mission to woo a million Chinese tourists every year.

Ms Kandie signed a memorandum of understanding on tourism between Kenya and China which sought to increase the number of Chinese visitors.

Failure by the Treasury

But the Kenya Association of Hotelkeepers and Caterers (KAHC) Coast branch executive officer Sam Ikwaye said the government’s attempt to rescue the industry through tax-deductible employee holiday is yet to have any significant impact.

He attributed this to failure by the Treasury to come up with a legal framework to regulate how the holiday packages would be issued.

“Since the government announced the tax-deductible employee holiday, it is yet to take effect as the Treasury has delayed the process,” Mr Ikwaye said.

On the country’s move to look East, Mr Ikwaye said the campaign has not yielded much since Chinese tourists are mainly interested in safaris.

He said it was a miscalculation by the Ministry of Tourism to rush to woo Chinese without first finding out what kind of products the Asian market was interested in.

“The traditional source market is key for the Kenyan tourism sector since European tourists come here for both beach holiday and safari,” Mr Ikwaye said.

“In Asia, there are lots of beautiful beaches, so we should not expect the Chinese to come in droves for beach holiday. Their major attraction is the wildlife.”

He said the marketing campaigns by the Ministry of Tourism and Kenya Tourism Board in traditional markets have not achieved much due to travel advisories.

Unless the travel advisories are lifted, he said it would be difficult for the industry to recover.

Sharp drop

To boost occupancy during the festive season, however, hotels at the Coast in November partnered with local airlines, Kenya Airways, Fly540, Air Kenya and Safarilink.

KQ marketing director Chris Diaz, said the deal was aimed at reviving the sector since the region had been hit hard by a sharp drop in international guests.

“KQ fully supports the tourism sector through offering competitive flights to tourists on safari or beach holidays,” Mr Ikwaye said.

Kenya Coast Tourist Association chairman Mohamed Hersi said some hotels in the region resorted to partnering with local airlines to improve occupancy.

For instance, Mr Hersi said hotels started offering special holiday rates to locals to encourage Kenyans from Nairobi and upcountry to travel to the Coast for holiday.

The move, he added, has paid off as the hotels are now fully booked for Christmas and New Year festivities with over 80 per cent of the bookings being domestic and the rest from other East African countries and Europe.

However, he said, after the festive season, occupancy is likely to drop to between 10 and 30 per cent.

Pollman’s Tours and Safaris managing director Khalid Shapi told Smart Company that tourism firms have lost huge business for 2015 as a result of insecurity in the country.

Mr Shapi said that leading tour companies and travel agents in Europe have already indicated that they will not market Kenya until November or December 2016, due to runaway insecurity.

“The major challenge which has crippled the tourism sector is insecurity at the Coast and other parts of the country,” Mr Shapi said.

“The sector has already lost 2015 and 2016 due to insecurity while 2017 might also not be a good year for the sector since it’s a general election year,” Mr Shapi added.

Investors have challenged the government to address terrorism and violent crime at the Coast and other parts of the country for the industry to recover.

Lift advisories

They said that when the Coast is secure, the UK, the US, France and Australia will lift the travel advisories against Mombasa and help revive the sector that is a key foreign exchange earner for the country.

The government, the investors added, should improve infrastructure by rehabilitating poor roads in all resort towns and tourist areas.

Further, the firms said the government should withdraw Value Added Tax on tourism and cut national park fees to woo more wildlife enthusiasts.

International chartered airlines which have been supporting the industry should also be given incentives to bring more tourists to the Coast.

The players have also urged the government to implement the classification of hotels, lodges, camps and other facilities to improve accommodation and services for tourists.