GROWTH

Tourism sector resilient, needs more investments – Balala

Total international arrivals in 2019 hit a new high of 2.04 million arrivals compared to 2.02 million in 2018.

In Summary

•CS Najib Balala has called for investments in a new airport and modern convention centre if destination Kenya is to remain competitive.

•Acting Treasury CS Ukur Yattani has hinted the sector could get a higher budget owing to its returns to the exchequer as earnings for 2019 grew to Sh163.6 billion compared to Sh157.4 billion  in 2018.

Tourists along Mombasa beach
Tourists along Mombasa beach

The tourism sector defied 2019 hiccups to record a new high of 2.04 million international arrivals, helped by growth in the aviation industry, political stability and aggressive marketing campaigns.

These, coupled with the country’s ease of doing business and improved security, helped the sector navigate through effects of global economic down-times, US-China trade wars and effects of Brexit, Tourism Cabinet Secretary Najib Balala has noted.

This comes even as the ministry calls for investments in a new airport and a state-of-the art convention centre, and increased budgetary allocation to help market the country for further growth.

Total arrivals for the year closed at 2,048,843, a 1.2 per cent growth compared to the 2,025,206 recorded in 2018.

This is the highest ever number of arrivals, an indicator the country is on course to beat the 2.5 million government medium-term plan target, which also seeks to increase earnings to Sh175 billion and 6.5 million bed nights for domestic tourists.

Last year, earnings from the sector grew 3.9 per cent to a high of Sh163.6 billion compared to Sh157.4 billion the previous year.

“Tourism has been growing. We are strong we are solid and we are moving forward despite challenges that we have,” Balala said in Nairobi on Friday during the release of the results.

“2019 growth was marginal, we started the year with the Dusit attack.We are however now stable,” he added.

 

TOP MARKETS

The US remains Kenya’s top market source having grown nine per cent last year to close at 245,437 arrivals, up from 225,157 in the previous year.

Uganda comes in second after closing the year at 223,010 up from 212,216 visitors a year earlier.

Tanzania, though dropped by five per cent, was the third top source after recording 193,740 arrivals compared to 204,082 thousands.

Other key sources are the UK, India, China, Germany, France, Italy and South Africa which closes the top ten list, data by the Tourism Reserch Institute (TRI) shows.

63.2 per cent of international tourists who visited the country last year were here for holiday. Business tourists accounted for 13.5 per cent, those visiting family and friend( 10.6 per cent) while other purposes, including medical , shopping and education accounted for 12.75 per cent.

“The American market has grown despite the distance. This has been helped by Kenya Airways direct flights between Nairobi andNew York,” Balala noted.

 

AVIATION AS A DRIVER

Positive developments in the aviation industry played a critical role in the growth of the sector last year.

After resuming flights between Paris and Nairobi in 2018, Air France in March 2019 increased its flights frequency from three to five weekly, which helped growth of the French market as arrivals rose to 54,979 up from 48,189 the previous year.

Qatar Airways started direct flights from Doha to Mombasa in December 2018 serving various markets. The effects were felt in 2019 as Doha remains a major connection hub.

Ethiopian Airlines increased flights frequency to Mombasa from one to two daily in the year.

TUI and Neos increased their charter flights to Moi International Airport (Mombasa)further boosting arrivals.

Balala has called for the formation of a state department for aviation to support growth of the sector.

“Tourism and aviation must be connected, that is why I propose the government to establish a state department of aviation, where we can focus and increase investments in the aviation sector,” the CS said.

 

NEW HOTELS

The country has continued to attract global hotel brands which are seeking to set up facilities, mainly in the capital Nairobi.

According to the ministry, at least five major brands are set to open between this month and the next two years.

They include Radisson Blu-Arboretum which is bringing on board about 130 rooms, JW Marriott ( 336 rooms) , Pullman Hotel ( 334 rooms) and Gallery Hotels which is setting up a facility at Gigiri.

The new developments come even as Balala refuted claims that a number of hotels are closing.

Southern Sun Mayfair Hotel in Nairobi is closing its operations in Kenya which Balala has described as a re-modelling of business. South African hospitality group Tsogo Sun has opted not to renew its lease.

On Friday, Balala hinted that the owners of the property, who also own EKA Hotel along Mombasa Road are putting in place a new modern hotel facility on the site.

“That is change of ownership that is taking place. The owners want to build a new hotel,” Balala said.

Boma Nairobi on the other hand is facing financial woes which the CS has described as “self administrative”, and has nothing to do with the industry.

“They have taken loans which have stressed with repayment and they are restructuring themselves to be able to pay better,” Balala said.

 

INFRASTRUCTURE

Meanwhile, the CS has called for investments in a new airport and modern convention centre if destination Kenya is to remain competitive.

“Without a proper airport in the country, without a proper convention center, it will be difficult for us to grow,” he said.

Though the Jomo Kenyatta International Airport (JKIA) remains a major installation in the continent’s aviation industry, it lags behind other facilities in the continent on modernity and capacity.

The creation of a state-of-the-art convention centre is also expected to put Kenya on the global map and cement its position as a Meetings, incentives, conferences and exhibitions (MICE) destination.

This will go hand in hand with the Kenya National Convention Bureau (KNCB) created last year.

“The bureau is going to be dynamic in the coming couple of years bringing more conferences into the country. Without these conferences, these hotels will remain empty,” Balala alluded.

National Treasury acting CS Ukur Yattani has hinted tourism could get a higher budget, owing to its returns to the exchequer.

“Tourism is a leading foreign exchange earner contributing about 10 per cent to the GDP. We want to look at how we can facilitate this sector, which is among the least funded, but has the potential to contribute to the revenue is enormous,” Yattani said.