Travel warnings slash Serena earnings

Tourists shop at the Central Jua Kali Stalls in Nakuru on October 2, 2014. Travel advisories issued by Kenya’s traditional tourism source markets due to insecurity saw the earnings of hotel chain TPS Serena decline by 39 per cent in 2014. FILE PHOTO | SULEIMAN MBATIAH | NATION MEDIA GROUP 

In Summary

• “From the middle of the third quarter of 2014, the Ebola epidemic originating in the West African countries negatively impacted all African tourist destinations and bookings for TPS Eastern Africa Limited,” the management said.
• Despite a strong performance by corporate business, which is mainly concentrated in Nairobi, the leisure income stream, especially at the Coast, suffered big losses due to withdrawal of foreign charter flights.

By JOSHUA MASINDE
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Travel advisories issued by Kenya’s traditional tourism source markets due to insecurity saw the earnings of hotel chain TPS Serena decline by 39 per cent in 2014.

The hotel’s profit after tax fell to Sh274 million from Sh451 million as a result of low visitor numbers.

Insecurity perpetuated by Al-Shabaab has seen the US, Britain, France and Australia warn their nationals against visiting parts of Kenya. Consequently, this has hit the tourism industry hard.

The introduction of Value Added Tax on tourism services and park fees in September 2013 has also continued to make Kenya an uncompetitive destination compared to the safari attractions in Tanzania and South Africa.

“From the middle of the third quarter of 2014, the Ebola epidemic originating in the West African countries negatively impacted all African tourist destinations and bookings for TPS Eastern Africa Limited,” the management said.

CANCELLATIONS

The hotel chain’s units in Tanzania witnessed extensive cancellations for the period between September and March 2015.

The company’s 2014 turnover stood at Sh6.3 billion, a seven per cent decline from the Sh6.8 billion reported in 2013.

Despite a strong performance by corporate business, which is mainly concentrated in Nairobi, the leisure income stream, especially at the Coast, suffered big losses due to withdrawal of foreign charter flights.

INSECURITY

“The Kenyan Coast is experiencing an unprecedented business crisis and unfortunately, most of the setbacks continue to negatively impact foreign leisure business levels in 2015,” the firm said.

Last week, the Kenya Association of Hotelkeepers and Caterers blamed insecurity and travel advisories for the closure of at least 23 hotels at the Coast.

Over 40,000 jobs are also on the line. Reports say more than 20,000 jobs in the hotel and hospitality industry have already been lost.