Tourists arrive at the Malindi airport in Kilifi County on August 16, 2014. PHOTO | FILE |
NATION
Lately, rumours have been circulating in
Nairobi that President Kenyatta was about to create a completely new
ministry dedicated to tourism.
Had this happened it
would have sent a powerful message to the industry that the
administration was beginning to face up to the causes and depth of the
crisis.
Indeed, the tourism industry is currently in a
stupor. Methinks that we are at a point where President Kenyatta should
convene one of those famous State House press conferences he usually
calls when we have a national crisis, to announce what he has decided to
do to save the industry.
Whenever the conferences are
held, you know that the government is admitting it has a crisis in its
hands. They have a way of powerfully communicating declaration of
commitment to resolve the crisis at hand.
And,
I am in no way insinuating that the government is not aware of the
gravity of the crisis. Several interventions have been effected. A
tourism recovery task force has been in place for months.
Last
year, the President even announced new tax measures to support domestic
tourism. VAT on air tickets was waived in May last year. Company paid
holidays for employees were made tax deductible.
In
June last year, the Kenya Wildlife Service reduced park conservation
fees. The Kenya Airports Authority also reduced landing fees in Malindi
and Mombasa Airports.
Yet if you look closely at the
depth of the crisis, these measures amount to mere gestures. Why do I
say so? By the last count, 20 hotels had closed shop. More than 21,000
citizens had been rendered jobless.
Hotels on the
Coast were at an average of 25 per cent in terms of bed occupancy. As
things stand, it should not take long before we start seeing a wave of
foreclosures sweeping across the industry.
I don’t want
to preach and to belabour the critical role tourism plays in our
economy. Tourism is a powerful vehicle for growth in this economy. When
we receive large numbers of tourists, the money they spend here plays a
catalytic impact across the economy.
Tourism energises
this economy. When you are building new hotels and other tourist
facilities, you create demand for furnishings and furniture.
The
buoyancy of tourism in this economy has also been linked with growth in
demand for telecommunications and financial services. A protracted
depression in the sector is something this economy can ill afford.
Tourism has over the years evolved into a complex sector with tentacles into many other sectors.
When
it is at a low point, the ramifications are felt in many sectors,
including agriculture, fishing, food processing and in the manufacturing
of garments and handicraft.
WIDENING CURRENT ACCOUNT DEFICIT
Tourism
is critically important to the macro stability of this economy. It has
always been one of the major foreign exchange earners.
Lest
we forget, the exporting sector has been gradually weakening. The signs
are in a current account deficit that is permanently weakening.
Or a balance of payments surplus which we achieve from surpluses on the financial account supported by hot money flows.
When
you have an economy like ours that has a widening current account
deficit, and where the traditional exports — tea, coffee and
horticulture — are not bringing in as much foreign exchange as they used
to, a depressed tourism sector exposes your currency to permanent
speculative pressures.
What must be done to stimulate recovery in the tourism sector?
What must be done to stimulate recovery in the tourism sector?
I can’t claim to have all the answers. But there are several issues around air transport that have to be tackled.
Is
it not time we considered liberalising the air transport sector? How
many of the world’s scheduled air service seats serve Kenya?
What can be done to bring the cost of air fare and charter tours into Kenya closer to comparable destinations elsewhere?
What can be done to bring the cost of air fare and charter tours into Kenya closer to comparable destinations elsewhere?
How
do we address the issue of non-availability of intra-regional air
connections and constraints that make it impossible for tour operators
to sell multi-county tour packages?
I also think that Kenya Airways, our national airline, must be made to play a bigger role in supporting the recovery of tourism.
We can’t allow this critical sector to keep bumping along in the doldrums.
jkisero@ke.nationmedia.com
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