Economy

Covid-19 costs tourism sector Sh72bn

tourists

Tourists look at a lion at the Nairobi park. Tourism has taken the biggest hit following the closure of borders in an attempt to contain the spread of the virus. FILE PHOTO | NMG

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Summary

  • Treasury says tourism sector has taken the biggest hit following the closure of borders by different countries in an attempt to contain the spread of the virus.
  • Hotels alone will lose Sh56 billion on low occupancy and cancellation of reservations while catering and other associated services like entertainment, tours and travel, park as well as game drives will lose about Sh16.2 billion.

Tourist lodges, hotels and associated catering will lose Sh72.2 billion this year on the effect of coronavirus disruptions on foreign travel and local restrictions on movement.

The Treasury said in a November Paper titled ‘Post Covid-19 Economic Recovery Strategy 2020-2022’ that the sector had taken the biggest hit following the closure of borders by different countries in an attempt to contain the spread of the virus.

Hotels alone will lose Sh56 billion on low occupancy and cancellation of reservations while catering and other associated services like entertainment, tours and travel, park as well as game drives will lose about Sh16.2 billion.

“Research commissioned by the Ministry of Tourism and Wildlife on the impact of Covid-19 on tourism, estimates that the pandemic is likely to cost the industry loss of $511 million (Sh56 billion) in hotel revenue, $125 million (Sh13.7 billion) in associated revenue and Sh2.5 billion for catering levy,” said the Treasury.

This has led to the fear of job losses in the sector that accounts for about 10 per cent of the GDP and nine per cent of the total employment.

The decline in revenues saw hotels cease operations, axe casual workers and send other staff on unpaid leave while those retained got pay cuts.