Serena hit by slump in tourism, records profit drop
What you need to know:
The company is pegging its hopes for a better second half on the seasonal nature of tourism industry but analysts are not as optimistic.
The slump in tourist numbers visiting the country showed in the performance of Serena Hotels and Lodges, whose after-tax profit for the first six months of the year dipped 71 per cent to Sh41 million.
Terror attacks, especially in the coastal region and travel advisories by major markets such as the United States and UK have hurt tourism business in Kenya.
TPS Eastern Africa, the owners of Serena Lodges, recently said its survey showed business on the important coastal tourism circuit has fallen by between 30 and 50 per cent on last year.
“The group faced a challenging business landscape in Kenya during the first half of year 2014,” said TPS in a statement following release of its half-year results.
The tour operator disputed official figures from the Kenya Tourism Board indicating that visitor arrivals had dropped by four per cent, terming it a gross under-statement.
Its survey also showed inland trips to destinations such as to the Maasai Mara game reserve and Mount Kenya had fallen by 20 per cent.
The company’s income dropped by seven per cent to Sh2.7 billion compared to a similar period last year. TPS, which also operates in Rwanda and Mozambique, said its Tanzania and Ugandan businesses delivered good performances.
TPS Eastern Africa said the introduction of value added tax on tourism services and park fees in Kenyan had made the country uncompetitive relative to similar destinations.
The company is pegging its hopes for a better second half on the seasonal nature of tourism industry but analysts are not as optimistic.
“Going forward, in 2H14, we expect the company to continue grappling with low tourist numbers which have been a challenge across the tourism industry,” said Standard Investment Bank.
Thursday the company’s share at the Nairobi Securities Exchange lost Sh0.50 to trade at 36.75 per unit with 2,200 shares changing hands.
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Note: The results are not exact but very close to the actual.
