Kenyan hotelier TPS half-year profits down on security woes

TPS Eastern Africa, the owner of Serena Hotels and Lodges, reported first half of the year after-tax profit down by almost three quarters on Thursday, saying the Kenyan tourist business had been hurt by a spate of militant attacks and travel warnings by several Western nations.

The hotel chain said its net profit stood at Sh41 million in the period compared to Sh141 million a year earlier. However, it said its Tanzania and Ugandan businesses delivered good performances.

"The group faced a challenging business landscape in Kenya during the first half of year 2014," said TPS in a statement.

The business outlook for this year's peak season, running from July to October, was at "satisfactory levels", the firm said.

Kenya's tourist industry has been buffeted by security worries.

In September 2013, Somali-linked Islamist militants attacked Nairobi's Westgate mall and left at least 67 people dead. Since then, a series of attacks, many of them along the coast, have prompted several Western nations to warn their citizens against travel to some areas in Kenya.

The security worries and travel advisories have emptied many beach resorts as well as hurt bookings on Kenya's popular inland safaris, damaging an industry that is a vital source of income for the country.

When the Kenya Tourism Board said this month that arrivals in the first four months of the year were down just four per cent from a year earlier, TPS said the numbers underestimated the problems facing the industry.

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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 other similar destinations.

The firm, which also operates in Rwanda and Mozambique, said sales fell to Sh2.71 billion from Sh2.92 billion, while earnings per share plummeted to Sh0.13 from Sh0.69.