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Tourism earnings expected to
drop by 60%, says KTB
Written by Wangui Maina
February 7, 2008: Tourism earnings are expected to drop by 60 per
cent in the first quarter of the year reflecting massive
cancellation of bookings that followed last month’s outbreak of
post-election violence.
A statement released by Kenya Tourist Board - the agency that is
charged with marketing the country as a tourist destination -
lowered its first quarter earnings expectation from Sh21 billion
to Sh8.4 billion.
The revised figure would only be realised with a speedy resolution
of the political impasse, said Dr Ong’ong’a Achieng’, the managing
director at KTB.
Tourism earnings stood at Sh17.5 in the first quarter of 2007.
KTB data shows that tourist arrivals are expected to drop by 57.3
per cent to 134,450 in the first quarter compared to an earlier
projection of 314,995.
Dr Achieng’ said the higher expectations were based on last year’s
heavy investments that were expected to increase earnings by a
monthly average of 15 per cent.
“We will need Sh1.5 billion if the sector is to recover by October
2008,” he said.
KTB said that if the political impasse is solved within the first
quarter of the year and the government maintains the current level
of spending on marketing the country as a tourist destination full
recovery is possible in 2009.
Dr Ong’onga said the tourism industry needed the Sh1.5 billion to
carry out the Herculean task of rebuilding the country’s image
through targeted public relations campaigns, advertising and
familiarisation trips.
More than 20,000 people have lost jobs in the tourism sector since
Kenya was thrown into political turmoil on December 30, 2007.
Hotels, especially at the coast, have shut down as charter planes
withdrew from the destination. Seat capacity on charter planes has
declined from 31,320 in January 2007 to 1,918 this month.
The drop in tourism earnings is expected to have a major impact on
overall economic performance given the sector’s key role as a
driver of growth in the past four years. Tourism contributes more
than 10 per cent to Kenya’s gross domestic product.
Tourism sector’s outlook came as the Central Bank of Kenya
acknowledged for the first time that an earlier projection of
eight per cent growth for 2008 may not realised due to poor
performance of key sectors of the economy.
Last year, tourism sector performance improved significantly
surpassing both the projected arrival and earning figures.
Arrivals hit the targeted one million mark compared to the 954,335
in 2006. This translated into a 15.4 per cent earnings growth to
Sh65.4 billion, compared to Sh56.2 billion in 2006.
The domestic market accounted for 26.9 per cent of the total
earnings of 2007 while international tourists contributed the rest.
The UK continued to be Kenya’s main source market with the number
of arrivals having risen by 19 per cent to 202,924 arrivals while
the US was second with 101,846 arrivals.
Growth of the UK market is mainly attributed to increased air
capacity following last year’s entry of Virgin Atlantic and
charter services in the Nairobi-London route. Italy emerged as the
third source market for Kenya a position that has been held by
Germany for years.
The increase in Italian tourists was mainly boosted by the
introduction of direct charter flights to the coastal city of
Mombasa. The number of Chinese tourists visiting Kenya grew by 27
per cent as was the case for India, France and Canada.
Dr Achieng’ however warned that the gains of 2007 may be lost to
regional competitors such as Zanzibar, South Africa, Mauritius and
Seychelles.
However, KTB still remains optimistic that the destination will be
able to recover.
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