At least 40 per cent of businesses in the hospitality sector in Meru County are operating without licences, denying the government revenue, the Tourism Regulatory Authority (TRA) has said.
TRA Mount Kenya regional chief officer Kenneth Moturi said that of over 200 establishments in Meru County alone, more than 80 were operating illegally.
Restaurants pay Sh8,500, guest houses Sh11,000 while homestays are charged Sh3,000 per year. Hotels pay between Sh6,000 and Sh31,000 depending on size and services they offer. The officer said TRA had launched a crackdown targeting unlicensed operators who had refused to pay rates despite constant reminders.
“We know they have taken advantage of our low capacity to enforce in the past but right now we have enough personnel to monitor their operations and they should be warned that we will get them,” he said in a telephone interview.
For instance, only three homes have been registered for homestay in the entire county, yet several are in operation, he said. The revelation comes after stakeholders in the sector raised concern over thee proliferation of unlicensed guest houses and homestays, saying the establishments were posing unfair competition.
Upper Eastern Tourism Circuit Association (UETCA) vice-chairman James Kithinji said the operators were hosting visitors and offering outside catering services against the law.
“These undocumented service providers are not only robbing the government of revenue but they are also affecting our businesses. When there are big functions in Meru they jostle for contracts with us and since their costs are low they undercut others.
“We are not against their businesses but they should be licensed and comply with other regulations so that there is fair play,” he said.
Mr Kithinji, who is also the general manager of Three Steers Hotel, warned that their operations also pose health risks to their clients.