Hotels at Kenya’s Coast have registered low tourism numbers after several attacks in the country saw countries like the UK and US issue travel advisories. Photo/FILE
What you need to know:
Shares of TPS Serena and Kenya Airways, both heavily linked to tourism prospects, have lost ground since January.
TPS Serena, which runs several hotels around the country, has shed 19 per cent since January while KQ has lost 22 per cent.
Last year, tourist arrivals in Kenya fell 15.8 per cent to 1.49 million as security worries kept visitors away.
If there were any doubts about the impact of the recent spate of insecurity in Kenya on the economy, the Nairobi bourse offers the best illustration.
Shares of TPS Serena and Kenya Airways, both heavily linked to tourism prospects, have lost ground since January. TPS Serena, which runs several hotels around the country, has shed 19 per cent since January while KQ has lost 22 per cent.
Though the majority of the country remains safe, the insecurity at the Coast has seen major tourist source markets such as the UK and the US issue travel advisories that have affected tourism numbers. The UK is the country’s biggest source of visitors.
Though the poor performance of the KQ counter could also be attributed to its loss-making streak, the company has also taken a beating from the advisories.
KQ’s CEO Titus Naikuni told an investor briefing last month that the insecurity had brought down passenger numbers on some European routes by as much as 20 per cent.
But TPS Serena is largely paying for a sin that it has no direct control over. The company fundamentals remain strong. It has renovated its hotels to improve on the customer experience.
Last year, tourist arrivals in Kenya fell 15.8 per cent to 1.49 million as security worries kept visitors away.
The insecurity has also seen conference organisers cancel and relocate some events to neighbouring countries. The US government is also cutting back on its regional conferences and trainings in Nairobi.
The insecurity has also affected jobs. The Kenya Association of Hotelkeepers and Caterers (KAHC) estimates that occupancy levels at the Coast have dropped by between 10 and 20 per cent and that at least 20 hotels associated with the organisation have closed shop due to inadequate guest numbers. Indirectly, KAHC says, the insecurity has contributed to the loss of 7,500 jobs.
But things are expected to look up for the two counters. For one, the government has lowered the landing fees at the Malindi and Mombasa airport. It has also exempted VAT for air ticketing and lowered national park fees.
With KQ now finally having started to receive the B777 and the B787 planes, the airline is expected to start flying into new destinations particularly in the Middle East and Asia, among the fastest growing markets for Kenyan tourism.
Also, the country has backtracked on a decision that had banned government agencies from holding retreats, trainings or conferences in private hotels. This should offer reprieve for the country’s hospitality industry.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
