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High prices take the shine off tourism as Kenya slips in ranking

Kenya slipped two spots to 82nd position compared to the previous year, according to a Tourism Travel Competitiveness survey by the World Economic Forum (WEF).
Kenya slipped two spots to 82nd position compared to the previous year, according to a Tourism Travel Competitiveness survey by the World Economic Forum (WEF). 

Concerns about high pricing and bad environmental practices have hit Kenya’s tourism competitiveness ranking for 2019, a new report shows.

Kenya slipped two spots to 82nd position compared to the previous year, according to a Tourism Travel Competitiveness survey by the World Economic Forum (WEF).

The country was early this year on the spotlight after recurrent outbreak of cholera killed six people, none of them tourists — prompting the government to raise an alert in five counties — Narok, Kajiado, Nairobi, Garissa and Machakos — besides slapping a ban on roadside eateries.

Several restaurants including, outdoor catering service firms and a hospital were affected by the disease, which is spread by ingesting contaminated food, causing acute complications that can kill within hours if not treated.

Nairobi also reported an outbreak of cholera in 2017 with at least four people killed and dozens more treated, causing authorities to shut down some restaurants.

Apart from concerns about hygiene, Nairobi has been steadily climbing as one of the most expensive destinations in the world over the years.

The exchange rate of the Kenyan shilling, which has generally held stable against the US dollar, has also played a significant part in the ranking that sets Nairobi apart as the costliest in East Africa and 14th in Africa.

The WEF Tourism Competitiveness survey, which covered 140 countries, shows Kenya also lags in tourist service infrastructure and ICT readiness, resulting in its decline in the overall enabling environment ranking.

Despite being dubbed a “Silicon Savannah”, Kenya ranked 106 globally in ICT preparedness, which measures not only the existence of modern hard infrastructure (i.e. mobile network coverage and quality of electricity supply), but also the capacity of businesses and individuals to use and provide online services.

Kenya gained ground in the safety and security segment by 10 points — showing improvement in costliness of common crime and violence as well as terrorism, and the extent to which police services can be relied upon to provide protection from crime. However, tourism numbers saw a decline during the first half of 2019.

Terror attack

Latest tourism data shows that visitors fell from 927,797 to 921,090 for the first half of the year.

This may be attributed to the terror attack that happened at Riverside14, a mixed-use development in Nairobi in January.

PwC Hotels Outlook: 2019—2023: South Africa — Nigeria -Mauritius — Kenya — Tanzania, had predicted a short-term dampening on demand to travel to Kenya, projecting a 13.6 percent decline in 2019.

“In Kenya, the period of peace and security was interrupted in early 2019 by a terrorist attack that may lead to a drop in tourism and guest nights.

Thereafter, assuming confidence in overall security is not impacted, Kenya’s appeal as an adventure destination, with more flights, and new hotels will continue to grow,” reads the PWC report.

“Thereafter, we project a pickup in tourist arrivals beginning in 2020. For the forecast period as a whole, we project arrivals to increase at a 1.3 percent compound annual rate to 2.16 million in 2023 from 2.025 million in 2018,” forecasts the report.

Prioritisation of tourism and travel remains a strong point for Kenya where it ranked 21st globally.

“By making clear that the sector is of primary concern, the government can channel funds to essential development projects and coordinate the actors and resources necessary to develop the sector.

Signalling the stability of government policy can affect the sector’s ability to attract further private investment,” reads the report.

Increased investment

There has been increased investment in the segment especially by international chains signing up for new properties in a race for the business tourism segment.

Nineteen hotels are expected to come to Kenya shortly, with a total of 3,453 new rooms in the pipeline, according to a report by Lagos-based consultancy W-Hospitality Group.

This coupled with natural resources, which include UNESCO natural World Heritage sites, a measure of the quality of the natural environment which proxies the beauty of its landscape, the richness of the fauna in the country as measured by the total known species of animals, and the percentage of nationally protected areas, which proxies the extent of national parks and nature reserves. Kenya ranked 18 in the category.

Despite Kenya’s decline in overall ranking in the WEF report, the hotel market in Kenya benefited from an increasing number of foreign tourists as travel advisories were lifted and the country enjoyed a period of peace and security.

Improved drinking water

“Access to improved drinking water and sanitation is important for the comfort and health of travellers. In the event that tourists do become ill, the country’s health sector must be able to ensure they are properly cared for, as measured by the availability of physicians and hospital beds,” explains the report.

“In addition, high prevalence of HIV and malaria can have an impact on the productivity of the tourism and travel labour force and play a role in discouraging tourists from visiting a country.”

Environmental sustainability continues to be a major challenge for the country, which has been struggling with rampant deforestation and increased pollution of its water bodies.

According to the World Bank data, in 2015 Kenya’s forest area was 44,130 km2 or 4,413,000 hectares.

The country is losing 50,000 hectares of forest each year through deforestation.