COMEBACK

Kenya's tourism sector losses Sh81bn in wake of Covid-19

CS calls for attractive domestic products

In Summary

•Tourism CS Najib Balala says the recovery will be supported by attractive packages for domestic tourists, product innovation, digitization of the sector and marketing campaigns.

•Government to give tax relieves, incentives and funding to industry players and encourage both the international and local tourists to travel.

Domestic tourists from Nairobi during vacation at Jacaranda beach resort in Watamu./FILE
Domestic tourists from Nairobi during vacation at Jacaranda beach resort in Watamu./FILE

Kenya has lost 50 per cent of total annual tourism earnings due to the coronavirus pandemic, Cabinet Secretary Najib Balala has said. 

This translates to Sh81.8 billion based on last last year's revenues where the sector generated Sh163.6 billion.

Balala yesterday said Covid-19 , which was declared a global pandemic in March, has hit the sector as international travel and tourism came to a halt.

 

"We begun the first and second quarters of financial year 2019/20 with tremendous tourism growth. However, the performance was curtailed by the coronavirus," Balala said in Nairobi.

Government data in collaboration with the Kenya Private Sector Alliance indicates travel and tourism is the most hit with 3.1 million jobs affected.

iThis includes hotel employees, pubs and restaurants, tour operators, airlines, travel agents and their related suppliers and support services.

About 2.3 million employees are at home on unpaid leave with most hotel employees on 50 per cent pay as most businesses consider redundancies from June on wards.

The government is staring at at a loss of up to Sh2.5 billion in catering levy alone.

Balala spoke in Nairobi when he received the National Tourism Crisis Steering Committee Report on the 'impact of Covid-19 on tourism industry in Kenya', that will guide the recovery of tourism industry.

He gazetted the committee in March to come up with a recovery strategy for the industry, as government eyes re-opening the economy next month.

The committee yesterday reported that the  country has the potential to net 860,000 international visitors in the medium-term if the economy opens up in July.

 

The sector can potentially attract 615,000 tourists within six months if domestic, regional and global travel opens up in September, and 450,000 if normalcy resumes in December.

The committee, chaired by Tourism and Wildlife Chief Administrative Secretary Joesph Boinnet, has recommended raft of measures to help the sector recover, with Balala affirming government support. 

They include a one week-long nationwide holiday to coincide with school holidays.

Other measures include tax reliefs and incentives, Tourism fund to provide SME’s with the requisite funding to enable the businesses operate again and provision of favorable tax policies that will encourage both the international and local tourists to travel.

"We must look at how we do business in a much smarter way," Boinnet said.

CS Balala has since called for product innovation, good pricing for the domestic market products, digitization of the sector and gaining the trust of travelers through prioritizing their health and campaigns to re-assure the world that Kenya is safe.

“There will be a new norm. We need to diversify. Tourism is no longer about wildlife and beach,” CS Balala said.

The state has so far has provided Sh500 million for marketing.

An additional Sh4 billion will go towards conservancy , support hotels refurbishment and marketing campaigns.

Yesterday, Balala called on local industry players to develop products that will attract domestic tourists, the first target to help the industry recover.

“Domestic tourists are sensitive to pricing. A Kenyan will not pay 300 dollars to go to Maasai Mara when he or she can pay the same to Dubai. You cannot charge a room Sh15,000 per night for domestic tourists, we must re-think on product pricing,” he said.

He is hoping the economy will start re-opening this coming month (July), mainly with domestic travel.

His ministry is eyeing the domestic market with a target on the 1.02 million middle class people to jump-start the sector , before going into regional and international markets.

International travel is expected to pick in 2021, according to the CS, who has insisted on high health standards by hotels to be extended to both locals and international visitors.

On Wednesday, CS Balala is expected to launch 'health protocols' by the World Travel and Tourism Council (WTTC), which will set global standards for the industry.

“We now have the safe travel stamp. What we are worried is if the protocols are gong to be rigid , they will constrain travel,” he noted.

International tourists coming to Kenya will be required to have a WHO clean bill of health(certificate) on Covid-19.

International arrivals totaled 2,048,833 in 2019 where US was the top market source for Kenya, with arrivals at 245,437.