Market News

Low bookings dim tourism recovery

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A guest in a buffet queue at a hotel. FILE PHOTO | NMG

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Summary

  • Bed occupancy in Nairobi stood at 17 per cent while the rest of the country stood at 30 per cent.
  • Cautious revellers and holidaymakers have kept off hotels and restaurants as well as tourism sites amid surges in coronavirus infections and deaths since October.

Persistent low bed occupancy, despite a gradual reopening of the economy, has dealt a blow to the hospitality sector, which had hoped to recoup some losses ahead of the Christmas festive season.

Central Bank of Kenya (CBK) Governor Patrick Njoroge said a survey on hotels revealed that bed occupancy in Nairobi stood at 17 per cent while the rest of the country stood at 30 per cent.

“Most hotels are now back in operations. Some hotels are not fully operational because some are renovating while others have specifically opened the restaurant section. Bed occupancy remains low but we are seeing an improvement. In Nairobi, it is around 16 to 17 per cent and the rest of the country is about 30 per cent,” he said on Friday during the regulator’s post-Monetary Policy Committee (MPC) meeting briefing.

Cautious reveller and holidaymakers have kept off hotels and restaurants as well as tourism sites amid surges in coronavirus infections and deaths since October.

According to the Kenya National Bureau of Statistics, the accommodation and food services sector contracted 83.3 per cent in the second quarter compared to an expansion of 12.1 per cent in the corresponding quarter of 2019 — hurt by the economic fallout of the Covid-19 pandemic.

The State imposed several lockdown measures to curb the spread of coronavirus, including a countrywide dusk-to-dawn curfew, restrictions on travel in and out of the capital Nairobi and the closure of learning institutions, hotels and restaurants.

The Treasury said the tourism sector has taken a S72 billion hit following the measures taken by different countries to shutdown borders 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 and 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.