Tourism Fund blames pandemic for Sh1.6bn fall in earnings

Tourists at a hotel in Diani. FILE PHOTO | NMG

By EDWIN MUTAI
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Summary

• The Tourism Fund (TF) says its earnings from levies imposed on the hospitality industry slumped by Sh1.6 billion due to economic fallout from Covid-19 pandemic.
• The TF told the National Assembly’s Public Investments Committee (PIC) that its earnings from the two percent levy on accommodation, food and drinks dropped from a high of Sh2.7 billion to Sh1.1 billion.

The Tourism Fund (TF) says its earnings from levies imposed on the hospitality industry slumped by Sh1.6 billion due to economic fallout from Covid-19 pandemic.

The TF told the National Assembly’s Public Investments Committee (PIC) that its earnings from the two percent levy on accommodation, food and drinks dropped from a high of Sh2.7 billion to Sh1.1 billion, a 40.7 percent drop.

“Before Covid-19 struck, we were making between Sh2.5 billion to Sh2.7 billion but it went down to Sh1.1 billion currently,” David Mwangi, the acting chief executive officer, said.

Mr Mwangi made the disclosure following a question by PIC chairman Abdulswamad Nassir who wanted to know the current Tourism Fund annual turnover.

“We rely on the 2 percent levy on hotel accommodation, food and drinks in the hospitality industry. But Covid-19 hit us hard although we can still find something for our recurrent expenditure,” Mr Mwangi

Mr Nassir raised the question after the committee gave Mr Mwangi more time to respond to audit queries.

Mr Mwangi, who took office as acting CEO eight months ago, sought more time to prepare responses to issues raised by Auditor-General for Tourism Fund’s financial year 2011 to 2018.

He said the Covid-19 has had negative impact on the tourism industry but is slowly recovering from effects of travel restrictions and lockdowns.

The pandemic has since last year devastated businesses and livelihoods with tourism and hospitality industry being the hardest hit.

The Treasury has allocated Sh26.6 billion for post Covid-19 recovery with the lions share directed at businesses in the current budget.

Nearly all tourism businesses have reported a drastic reduction of earnings solely blamed on Covid-19 pandemic that saw airports closed and facilities shut down to stem new Covid-19 infections.