What you need to know:
- The coastal region has borne the brunt of the slump in the industry, with some hotels forced to close down temporarily.
- Industry players have come up with incentives to entice clients and the government has embarked on a major campaign to restore the country’s image, but it will take a while for the effects of these measures to be felt.
- The Economic Survey Report also lists the Ebola outbreak in West Africa last year as one of the factors that affected tourism.
At least 40,000 workers in the hotel and hospitality industry have lost their jobs in the past few months, and more than 40 hotels at the Coast have been closed, according to tourism industry players.
During a recent press conference, the Kenya Union of Domestic, Hotels, Educational Institutions, Hospitals and Allied Workers (Kudheiha) announced that “at least 28,000 unionisable hotel workers at the Coast have been laid off following the tourism downturn”.
And the situation is not likely to improve in the foreseeable future, if recent reports are anything to go by.
The Economic Survey Report 2015 published last week attributed the sad state of affairs to fewer international visitors, meaning income from the industry, which is one of the country’s top foreign exchange earners, has dropped significantly.
Arrivals decreased by 11.1 per cent from 1.52 million in 2013 to 1.35 million in 2014, according to the report, which also notes that “tourism earnings declined by 7.3 per cent from Sh94 billion to Sh87.1 billion over the same period”.
This is significant, given that, according to the World Travel and Tourism Council, in 2013, travel and tourism directly supported 226,500 jobs (4.1 per cent of total employment in Kenya), and the number of jobs was expected to fall by 0.4 per cent in 2014.
Most hoteliers whom DN2 spoke to predicted that the decrease is likely to be even greater this year, following cancellations of hotel bookings thanks to travel advisories and warnings by some of the country’s top tourism sources.
Ms Rosemary Mugambi, the director of sales at the Serena Hotels, said the coastal region had been the hardest hit, adding that the situation is unlikely to improve for the next one year.
She said bookings at the group’s hotel for the next high season had dropped drastically after the UK (the main source of Kenya’s European tourists), Germany, France, Italy and the US issued travel advisories, citing insecurity in the country.
Ms Mugambi explained that last month’s terrorist attack on Garissa University College made tourists who had booked for the next high season, which starts in July, cancel their bookings, although she hoped that things will improve as the government strives to improve the security situation.
“We started receiving cancellations. Many of the tourists were citing security concerns following the Garissa attack but we want to assure them that everything is being done to ensure their safety,” she said.
According to the economic survey, the number of bed-nights declined from 6.6 million in 2013 to 6.3 million in 2014, while the number of international conferences fell from 299 in 2013 to 241 in 2014, a 19 per cent decline.
Hoteliers are not expecting more bookings, given that it is already low season, so some have opted to suspend operations until the situation improves.
Industry players say that, while there have, indeed, been terrorist attacks in different locations, it is the perception that Kenya as a whole is insecure that has dealt a severe blow to tourism.
The perception and negative publicity about the country needs to be countered adequately in order to stop tourists from making uninformed decisions, said Kenya Association of Tour Operators (Kato) Chief Executive Officer, Fred Kaigua.
And it is to this end that the government has launched an advertising campaign to market the country abroad.
“As part of its global advertising, KTB will, beginning April, run an advertising campaign on Cable News Network (CNN), for a period of one year. The campaign will portray the country’s diverse tourism offering including wildlife, culture, beach and sports, among others,” the Kenya Tourism Board wrote on its website.
But the action seems somewhat belated as tourists have either left the country or cancelled their plans to visit altogether.
DN2 learnt from stakeholders that the situation has been deteriorating over the past two years, even as they moved to assure their international and local clientèle that the government is taking comprehensive measures to improve security.
“We have serious security concerns which cannot be downplayed because they have brought us problems. There are two problems here: there is the real problem and the perceived insecurity, and both have affected tourism negatively,” said Mr Kaigua.
His sentiments were echoed by Mr Mohammed Hersi, the managing director of the Heritage Group of Hotels, who said his group had been forced to close some of the Mombasa hotel’s wings.
“Only one wing is open, but we are doing all we can to attract visitors. Right now we are looking for alternative markets, we are not leaving anything to chance,” he said.
He added that there are now only six chartered flights to the coast weekly, down from 40 in 2007 before the post-election violence. The flights, which had been declining steadily, stood at 14 before the Westgate terrorist attack, but dropped sharply thereafter.
According to Mr Kaigua, the advisories are biased and inconsistent: “The non-essential travel advisories are focused on creating the impression that there is anarchy in the country, which is not the case. A travel advisory should be just that — a piece of advice and not a limitation as to where one can or cannot go.”
He said the isolated incidents of insecurity should not be used to generalise the situation in the country, adding that once an advisory is issued, it automatically invalidates travel insurance covers for tourists from the issuing countries.
“These advisories force tourists to abandon their trips or to cut short their visits. The foreign governments should also mention places that are secure. We have very many positive stories about Kenya,” he said.
“Besides, there is no relationship between what is happening in Garissa, Mandera, Westgate, Gikomba and Eastleigh and the tourism circuit. These places are miles away and I cannot understand why one would be advised against travelling to the country. Terrorism is a global issue with no boundaries.”
He said the countries concerned should just describe the situation on the ground without telling their citizens not to go to certain places, noting that the volume of tourists using Kato services had dropped by 60 per cent due to a combination of factors.
Meanwhile, Mr Robert Marini, the managing director of Ocean Beach Hotel in Malindi, said the withdrawal of insurance for tourists who want to visit Kenya was regrettable.
“What we are experiencing is pain and desperation. We are losing the international market to Zanzibar,” he said.
As a result, Ocean Beach Hotel and other hotels at the coast, as well as other tourist destinations, including national parks and game reserves, are empty or almost empty, while some have been forced to shut down.
In the past, they would operate at 40 per cent bed occupancy during the low season, but this year things are much worse.
“Business is so low. We have only 10 per cent occupancy at the moment while some of the hotels around here have closed down. The workers will be jobless until July,” said Mr Marini.
The sector entered the low season after Easter, and the security situation has only made matters worse. The players are calling on the government to work on insecurity first, even as other measures are being undertaken to salvage the industry.
“Hotels in Mombasa are almost empty, and any that has an occupancy of 20 per cent should consider itself very lucky. Some hotel operators have opted to suspend services and do renovations because there is nothing much going on at the moment,” said the Chief Executive Officer of the Kenya Association of Hotel Keepers and Caterers (KAHC), Mr Michael Macharia, of Diani Beach Resort.
Meanwhile, Mr Karim Wissanji, the Managing Director of Sopa Lodges and Elewana Group, said the situation is unprecedented:
“For the 25 years I have been in this industry, the situation has never been this bad. I do not recall a time it has ever been this low.”
The Economic Survey Report also lists the Ebola outbreak in West Africa last year as one of the factors that affected tourism.
“The Ebola outbreak in West Africa showed just how costly ignorance can be,” said Ms Mugambi, adding that the misconstrued perception of the region (Africa) made many international tourists from key source markets stay away from Kenya.
That Kenya Airways suspended flights to and from West Africa during the 2014 Ebola outbreak only aggravated the situation.
However, Ms Mugambi notes, the real decline began after the Westgate terrorist attack in September 2013, and a number of attacks thereafter adversely affected the traditional and reliable markets.
The disabling tourist environment poses a serious threat to the economy, as evidenced by the way the Kenyan shilling has been losing ground to the dollar in the past few weeks, Mr Kaigua said.
Industry players want the government to waive visa fees and reduce park and game reserve entry charges to attract international visitors who are opting to visit Tanzania and Zanzibar instead of Kenya.
And as they seek ways of remaining afloat, some have been forced to take painful measures. Nairobi-based Twiga Tours, for instance, has laid off more than 20 workers in the past four months.
The company’s CEO and Group Marketing Director, Minaz Manji, said: “We reduced their salaries at first, but we are still unable to pay the employees and keep the business going. I have retrenched 20 so far and my whole fleet of 60 vehicles is parked.”
Mr Manji added that even the Easter holiday did not improve the situation as only four of his vehicles were hired during the period. He said he was contemplating withdrawing insurance cover for some of his vehicles, which he said had become burdensome, until things improve.
“The situation has been grave for me since October last year. I was hopeful this year but my hopes were completely shattered after the Garissa University attack,” he said, and called on the government to improve roads on the tourist circuit.
Some hotel operators have also reduced their charges in order to attract more tourists as well as maintain the steady markets, said Ms Mugambi.
“Kenya has fantastic products and we need to tell consistent, positive stories about the country to the world. But we cannot do it alone as an industry and we need support from other government agencies and Kenya Airways,” she said.
Ms Mugambi added that there was a need for players to diversify and include the resident market to cushion themselves from unforeseen circumstances and called for incentives like a reduction of Value Added Tax (VAT) on tourism-related services.
Mr Hersi, for his part, called on the relevant authorities to encourage new airlines to fly to the Coast as a way of boosting tourism in the region.
Mr Michael Macharia of the Kenya Association of Hotels and Cateres said destination marketing, which involves mapping individual tourist attractions and facilities around the country could help build a positive image of the country.
With prospects of recovery so dim, it remains to be seen how far the measures taken by tourism stakeholders to woo more tourists as well as those by the government to counter negative publicity, will go.
Tourist arrivals fell from 1.52 million in 2013 to 1.35 million in 2014
Earnings from tourism dropped from Sh94 billion in 2013 to Sh87.9 billion in 2014
Tourism accounted for 4.1 per cent of all jobs in Kenya in 2013
Bed occupancy has dropped from 40 per cent to below 20 per cent for the low season