Tourism still on edge as Covid-19 remains a threat

Just when hoteliers had become hopeful of recouping some gains after more than one-and-a-half years of downturn due to the fallout of Covid-19, a fresh surge of infections is threatening to dim their hopes in the second successive main tourism season.

Hotels early bookings are weakening in the three months to October, as the economy slowly recovers.

A survey by the financial sector regulator, Central Bank of Kenya (CBK) showed the overall early bookings in July, August, September, and October were at 19.4 percent, 17.5 percent, 8.5 percent, and 6.8 percent respectively.

The bookings registered in July reversed a marked decline in May at nine percent.

The industry was largely dependent on the forward bookings from both domestic and international travellers in pre-pandemic period. CBK said hotels were taking forward bookings for three months. This in turn saw them report maximum bookings of over 90 percent in the holiday season, generating significant revenues.

Average forward booking in 2019 was 50.2 percent in November and 31.5 percent in the low season in February.

Travellers are now scared to make such bookings over heightened uncertainty around the virus.

The drop in the anticipated check-ins underpins a weaker second half of the industry even as the government ramps up vaccination exercise. The booking rates remain below 15.9 percent and 13.4 percent recorded in November and December last year respectively.

Travel levels which translate to high hotel occupancy especially by international clientele are expected to fully recover by 2023, according to the Tourism ministry and the International Air Transport Association(IATA).

“Majority of the hotels in the rest of the country reported that they largely depend on walk-in clients or bookings on short notice as clients avoid long prior bookings,” CBK stated.

IN THE BALANCE

The travel and hotel business sector remains at risk due to the Delta variant of the coronavirus now dominant in Kenya and contributing to the recent spike in infections.

The new variant is feared to spark a fourth wave against a slow vaccination. Over 1.74 million doses have been administered out of which 670.2 thousand people are fully vaccinated as of August 4.

Tourism Cabinet Secretary Najib Balala last week set out new directives for bars and hotels to curb the spread of the virus. He ordered that guests and visitors be registered and their records kept including mobile contacts and physical addresses to ease contact tracing.

Restaurants and eateries serving tourists have been directed to adhere to laid down protocols including staff vaccination, guests not being allowed to serve themselves from buffets, and the inclusion of electronic menus on sanitised tablets, fixed board, or printed single-use disposable menus.

The fears of the virus have led to a drop in the optimism of recovery among operators.

Thriteen percent of hotels have said they expect to resume normal levels of operations of pre-Covid-19 by end of 2021. This is a decline from the 18 percent recorded in May, with the businesses attributing the fall to the persistence of the pandemic.

“The level of uncertainty has increased among all hotels across the country due to discovery of new strains of the virus, rising cases of infections, effects of recent lockdowns, and slow rollout of the vaccine,” CBK added.

While Covid-19 vaccination is ongoing in Kenya, only 9 percent of hotels pre-conditioned their return to normal operations on vaccinations.

“Additionally, 42 percent of hotels were of the view that their businesses would get back to normal operations due to other reasons, particularly reduction of operating hours and imposition of curfew were cited as the main hindrance to their recovery.”

The hotels across the country said that the current 7pm closure time for bars had affected operations of the sector, while the 10pm curfew time had affected other sectors that previously operated for 24 hours, it added.

EVENTS

Despite the concerns of the pandemic, some towns are showing slow recovery helping keep the entire industry afloat.

The peak seasons and international events in the country are also expected to boost business.

Mombasa hotels reported the highest number of bookings in July, at an average of 36 percent, attributed to the start of the high tourist season and the July 2021 school holiday.

The forward bookings were also reported at 22.3 percent in August due to demand for the July-September which is usually the high season for the tourism sector in Kenya. They however drop to 11.8 percent for October.

Nairobi hotels reported high bookings for August, at 25.9 percent attributed to the upcoming World Under 20 (U20) Athletics Championships to be held in Nairobi from August 17 to 22 at the Moi International Sports Centre (MISC), Kasarani.

Seven hotels have signed a deal to host athletes and officials for the global junior competition. They include Safari Park Hotel, Ole Sereni, Eka Hotel, Utalii Hotel, Sports View Hotel, Tamarind Tree, and Sarova Panafric.

Over 3,000 athletes, officials, and journalists are expected in the country.

The events come as a saving grace, keeping bed occupancy afloat and helping businesses stay slightly vibrant.

On average, bed occupancy increased to 30 percent in June and July, from 19 percent in April.

The occupancy levels in hotels in Nairobi and Nakuru counties were for instance boosted by the World Rally Championship.

In June, the business facilities in Naivasha said they were fully booked as hundreds of guests visited the town.

Organisers said at least 10,000 people from all over the world attended, highlighting the impact of the iconic event that made a return to Kenya after 19 years of absence.

Analysts said the event injected about Sh6 billion into the economy.

In addition, the end of financial year expenditure by the national and county governments boosted hotels operations in the country in June, CBD added.

RESTAURANT AND CONFERENCING

Staring at the return of travellers to the skies, there is an ongoing recovery on restaurant and conferencing activities due to the eased Covid-19 restrictions in May.

There is an increasing uptake of conference services from the private sector, county, and national governments.

Experts have also said the increasing number of charter flights and cruise ships bringing tourists from traditional and new markets, provides fresh hope to the industry.

“Business is not good yet. Food and conferencing have started to pick up. Some charters like those to Mombasa and cruise ship early this year have helped but we still have a long way to go,” said Cathy Gachie of Barefoot Consultancy.

However, fears for 2022 elections loom in the sector.