• 90 per cent pay cuts for CEO’s as the travel industry witnesses a shutdown in the wake of the coronavirus.
•All industry employees are also expected to go on unpaid leave for two months from April 2020 to safeguard their health.
The Kenya Association of Travel Agents (KATA) has announced 90 per cent pay cuts for CEO’s as the travel industry witnesses a shutdown in the wake of the coronavirus.
All industry employees are also expected to go on unpaid leave for two months from April 2020 to safeguard their health.
“The economic effects are getting worse by the day, the industry is currently witnessing a grounding due to suspension of international flights to Kenya effective midnight on March 25,” said KATA Chairman, Mohammed Wanyoike.
Travel agents' business is aligned to airlines, and hence in the absence of operating airlines, their businesses are vulnerable.
The travel sector has continued to witness a drastic decrease in travel owing to the travel restrictions put in place by the Governments of Kenya, USA, UK, and European Governments, Middle East and Asia including India.
By mid of March, Air India, Etihad Airways, South African Airways, and RwandAir had canceled their flight to Kenya
National carrier Kenya Airways has also suspended flights to and from key business and tourist destinations within their network.
KATA is calling upon the government to help to shield the travel industry from the economic effects by addressing the operating expenses of travel agents brought on by the COVID19 pandemic.
“The industry lost 85 per cent of revenue in February due to a decline in passenger bookings by 50 per cent, followed by a drastic cancellation of flight bookings, conferences, and events,” said Wanyoike.
He added that they had recorded zero bookings this week and the forecast for April to June 2020 was the same.
Over 95 per cent of forward bookings for the month of April 2020 has also been canceled since Europe, America and the Middle East issued lockdown notices for noncitizens.
“This is an unprecedented occurrence, and travel agents have no cashflows to support their employees in the coming months should the government fail to intervene,” said Wanyoike.
According to KATA, the estimated losses by the travel industry alone are severe enough to create job losses across the sectors.
The full impact of the crisis is expected to last at least three quarters, with Q2 2020 being the low point.
The travel industry has over one thousand travel agencies, and it is projected that a majority of the travel agents are facing an imminent risk of collapse.
The government pledged to release Sh500 million to rebuild the tourism industry after the coronavirus pandemic ends.