Tourism set for record year as arrivals peak

The tourism sector is set for a record year as arrivals over the last five months surpass the peak levels of 2007, signalling that the industry has made a turnaround.

Data from Kenya Tourist Board (KTB) shows that arrivals in the first five months grew 20.5 per cent to 403,996, moving beyond the 2007 levels when Kenya posted its best performance with 400,362 arrivals over the same period.

In 2007, the country earned Sh63.5 billion from 1, 048, 732 tourists, but the momentum was halted by the bloody post election turmoil in January 2008 and the global recession that cut travel budgets.

In 2008, the sector earned Sh52.7 billion from 729,000 tourists before rising to Sh62.5 billion last year when arrivals rose to 952,481.

“All things being equal, this year should see a record performance and set the stage for a fresh growth trajectory similar to the period between 2003 and 2007, seeing that the arrivals have overtaken the 2007 benchmark year,” KTB chairman Jake Grieves-Cook, said.

Though the earnings estimates for the period under review are not yet available, they are expected to be high due to the Sh13.3 billion recorded in the first two months which was double the earnings of a similar period in 2009.

Analysts say that if the momentum is maintained to the end of the year, the sector could earn a total of Sh70 billion by December.

Mr Grieves-Cook attributed the growth to aggressive marketing in the main source markets of which Europe remains key, accounting for nearly half of all arrivals last year.

The healing global economy is also expanding travel budgets around the world.

The IMF projects the global economy to grow to an average of 4.5 per cent this year.

While the sector appears to be on a rally, analysts still feel that the outcome of the referendum will be a key determinant of future growth of the sector and the overall economy.

“The passage of the proposed constitution will provide the economy with an additional momentum as politics will take a back seat, allowing the economy an opportunity to be the driving agenda,” Mr Paul Mwai, CEO of African Alliance Asset managers, said in an earlier interview.

For now, activity in the sector appears to have shrugged off fears that a contested referendum next month will keep tourists away from the country in the near term.

Mr Rana Mukheri, the director of operations at Fairmont Mt Kenya Safari Club, said bookings for August are high, in line with the high season which is usually the second half of the year.
But the growth is not evenly spread, with the performance of the coast circuit slowing down.

“Tourism in Nairobi is gaining from increased activity in conference and business tourism. The coast is still slow because it depends heavily on chartered flights which have not recovered since the violence following the 2007 elections,” Grieves-Cook said.

Cruise ship tourism has been hit hard by the piracy menace off the coast of Somalia which has now spread to the regional waters.

Statistics from the Kenya Ports Authority (KPA) indicate that in the first four months, only four cruise ships carrying 1,506 passengers arrived compared to 12 vessels carrying 11,487 passengers in a similar period last year.

Tourism in the northern circuit has also been hit by the recent closure of an estimated six lodges in Samburu following flash floods that destroyed the properties.

Ms Amina Sheikh, the treasurer of Isiolo County Council that collects revenues from Buffalo Springs, Shaba, and Samburu national reserves, said monthly revenues have been down by 60 per cent.

She cited the loss of an average of Sh4 million per month from Samburu Serena alone, which is one of the highest revenue earners among the chain of lodges operating in the area.