Kenya: Kenya Tourism Profile

Kenya turns to other regions as terrorism-induced travel advisories deter tourists from the West

Kenya’s tourism industry was heavily affected by the ever present threat of terrorism throughout 2013. The number of traditional tourists from the West dwindled following repeated travel advisories against visiting the Kenyan coast, a popular destination for inbound tourists. New tourist source markets include Asian nations such as India and China. Kenya has as well opened new commercial airline routes to some of these nations and eased visa requirements for their citizens. Additionally, domestic tourism as well tried to fill the void left by Western tourists but the relatively slow economy led to a fairly poor performance from the category.

Taxation slows industry growth

Kenya’s taxation regime had an adverse result on the increase of tourism. Heavy taxation meant that domestic tourists could not spend as heavily as their sorely missed incoming counterparts. Strict transportation measures introduced due to terrorism meant that equipment upgrades led to higher prices at all levels in the industry, further dampening the enthusiasm of domestic tourists. Trade associations and local politicians failed in their attempts to force the government to reduce taxation levels so as to incentivise spending on the part of both consumers and suppliers. It is no secret that Tanzanian park fees are half those charged in Kenya. Other factors affecting tourism in 2013 included the high cost of electricity, the internet, fuel and insurance, whose rates are either the highest or part the highest on all continent.

Industry players resort to informal mergers and agreements

Tourism players, having been affected by both terrorism and heavy taxation, were forced to enter into informal mergers and agreements. The traditional leaders in the industry could not operate on their own as travel was heavily affected, leading to below-average bookings. This led to a lot of players joining forces with regard to transporting and accommodating tourists. As a lot of hotels on the coast failed to fasten bookings, staffing levels were drastically reduced, leaving players the only option of teaming up temporarily to use the same facilities. It was thus impossible to achieve a equitable increase rate in any category.

Local entities go digital in an effort to boost sales

Improving internet connectivity and reliability continued to encourage players in the industry to offer online platforms. Additionally, leading internet providers are increasingly offering faster processing speeds to boost internet penetration. In particular, the middle class in Kenya, with their smartphones, have led the way in online transactions. The Kenyan government’s strategic focus on improving data and communication technology as well continued to contribute to the increasing reliability and usability of online services in the country. Massive campaigns were launched by tourism players such as airlines, hotels and travel agencies. These player have as well turned to social media sites such as Facebook and Twitter inclunding popular radio stations to promote their services.

Investors continue to be optimistic about Kenya’s tourism industry despite challenging environment

Despite the threat of terrorism and increasing government taxes, investors continue to be optimistic about the Kenya’s tourism industry. This is evident from the continuing investment and entry of international brands such as Radison Blu and Lonrho Hotels that are seeking to tap into the growing conference and business tourism category in Kenya. Additionally, the newly established county governments in collaboration with the national tourism board and industry players are expected to implement initiatives that will boost both domestic and inbound tourism during the estimate period.

SWOT

• Kenya has been a leading destination for tourists from both the East and West, leading to the development of a lot of facilities. The country’s relative political and economic stability over the years have as well made it a favourite of the majority of incoming tourists to Africa. The major weakness of Kenyan tourism is that it is heavily reliant on tourists from the West.

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• Kenya faces a stiff challenge from other African nations, particularly South Africa, Tanzania, Ethiopia and the island nations of Mauritius and the Seychelles. However, the various government bodies dealing with tourism have embarked on marketing the country as a destination for tourists from across Europe, the Americas and emerging Asian markets. Kenya Airways has countered Ethiopia’s purchase of Dreamliner aircraft with a purchase of its own aircraft. The government has entered into trade agreements with East African neighbours with regard to a joint tourist visa in an effort to try and reduce tourists’ expenses. Kenya has as well entered into code sharing agreements with South Africa, which will increase its range of airline destinations and hence improve its chances of attracting visitors from South Africa.