Kenya Tourism Update: Beyond Recovery, a Reorientation?

Wednesday, 03 February 2010

An aggressive marketing campaign has helped the Kenyan tourism industry’s recovery from the post-election violence and the global financial crisis. But Stanbic Investment Management Services (SIMS) think that Kenya should take some inspiration from Tanzania and focus on quality over quantity. By Rachel Keeler. Two years from the post-election violence and still struggling under the weight of global crisis fallout, Kenya’s tourism industry is not on track to meet the goals set by Vision 2030 of three million visitors, and a 10% contribution to GDP by 2012. However, an aggressive marketing campaign that won Najib Balala the Tourism Minister of the Year 2009 award, backed by more public spending, has begun to turn the sector around. Data released recently by Stanbic researchers in Nairobi shows a 42% increase in performance from 2008 for the first three quarters of 2009. Bookings were strong over the December holiday and the general doom and gloom mood hanging over the country’s beaches and savannahs is lifting. Stanbic’s conclusions: so far, so good. But looking beyond recovery toward the growth envisioned before all the crises came crashing down will require a shift in focus from quantity to quality. “As much as the arrival numbers are important, the spend-per-trip is paramount,” says Anthony Mwithiga, chief investment officer for Stanbic Investments Management Services (SIMS), who conducted the research. Tanzania has been working on an environmentally friendly high-value, low-volume strategy for a few years, to great effect. Even as the country faces declining arrival numbers for foreign visitors (10% down in the first 10 months of 2009), the amount each tourist spends in Tanzania far and away outpaces Kenya and even Egypt and South Africa.  How did they do it? Part of this comes naturally – Tanzania ranks more attractively than both Egypt and Kenya on natural resources, with Mount Kilimanjaro, Ngorongoro Crater and Zanzibar collectively beating out the pyramids. But the government has also enforced strict regulations to keep hotel standards high. Zanzibar’s coastline is dotted with much nicer resorts and fewer low-end beach shacks than Mombasa’s. Exclusive hotels have overtaken the dusty streets of Arusha in the last few years. And the Tanzanian government, notably President Jakaya Kikwete himself, has been vigorously courting Americans with money to spend. Unlike most African destinations, Tanzania gets more tourists from the US than the UK. Qatar Airways started a direct flight from Houston to Dar es Salaam last year. Kenya is still hurting from Delta’s postponement of its planned Atlanta to Nairobi direct flight because of security concerns. Limited travel warnings due to terrorism and violent crime that persist from the US and the UK also keep more high-end travelers from coming to Kenya. These warnings will not abate anytime soon, and are likely to increase as the potentially violent 2012 election season nears. But Mwithiga says, “there’s still a strong opportunity for investment at the high end of the market” in Kenya. Top-end hotels and resorts are back at maximum occupancy for the country’s high season. And the sector has a lot of room to grow from business traffic that only accounted for 10% of revenues in 2008. With or without terrorists, Nairobi remains a conference hub in need of more modern hotels and better conference facilities. The sleek Tribe hotel that opened recently near UN headquarters in Gigiri has been rewarded by consistently strong bookings. How to attract more investors? Those interested in building hotels already get tax breaks. Balala now wants to give them free land. That could offset other deterrents like poor infrastructure and insecurity that the government will not be able to fix in the near term, but also unfortunately poses the potential for inefficient patronage and land conflicts as has been the case in Uganda. Balala is also keen to partner with Tanzania in marketing East Africa as a single destination. Tanzania says it supports the idea, but seems markedly less excited about it (understandably enough, as Tanzania knows it will suffer from any further political turmoil in Kenya). Kenya’s low spending tourists currently create one job for every three arrivals. If the country can manage to attract more high-end visitors, that could come up to one job from every two arrivals. Much of this employment creation would filter down into the wider service economy, which in this post-crisis climate could sure use the help.  Share this article with others: Comments (0) Subscribe to this comment's feed Write comment Show/Hide comment form Name Email Title Comment smaller | bigger Subscribe via email (Registered users only) I have read and agree to the Terms of Usage. Add Comment