Coronavirus Brings Kenya’s Hospitality Industry to its Knees

Kenya’s tourism and hospitality industry have been affected by the coronavirus outbreak, including hotels and airlines. Several hotels have temporarily closed because of a huge dip in occupancy rates.

“The tourism sector which contributed approximately 1.3% to Kenya’s GDP in Q3’2019, is facing hard times due to lockdowns in major economies where tourists originate from such as Italy,” Cytonn Investments in Impact of Coronavirus to the Kenyan Economy.

“The lockdowns have seen a reduction in revenues to the aviation industry which also greatly contributes to the tourism sector.”

At the beginning of the year, the hospitality sector was projected to increase with the number of international arrivals growing by an annual appreciation of 6.7% to approximately 2.3 mn in 2020, resulting in a greater demand for hospitality services

The sector was also witnessing a rise in Meetings, Incentives, Conferences, and Exhibitions (MICE) as an alternative to leisure travel.

It is estimated that the MICE industry contributes KSh24.6 billion annually and employs 24,000 people.  Globally, it is worth over $30 billion (KSh3 trillion), with an estimated 50 million Mice travellers annually. 

This growth has been attributed to political stability, global marketing campaigns and notable growth in the aviation sector.

The Kenya National Bureau of Statistics Economic (KNBS)  Survey 2019 says local conferences grew by 7.9 percent in 2018 to 4,147, from 3,844 in 2017, signaling a growth in the MICE tourism sector. Stakeholders say this growth accelerated in 2019.

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• Kenya Earns Ksh163.56 billion from Tourism in 2019

However, with the Corona Virus pandemic, the sector faces a bleak future.

Kenya Tourism Federation (KTF) says 98 percent of international tourists have left the country and it will have an extremely ripple effect on the entire chain-food supplies to hotels; tour operators and public transport; entertainment sector, support services among others, with a massive loss.

“Never in the 40-year history of Serena Hotels has any event of this breadth and scale impacted the global hospitality industry than COVID-19.  We have been following the COVID-19 situation very closely and its emerging impact on our business model and portfolio in Africa. It is indeed impossible today to calculate the human and financial impact that COVID-19 will have on the global hospitality industry,” said Serena Hotels after it announced the closure of its 10 lodges and camps in Kenya and Tanzania until June 15, 2020.

The hotels closed include, Amboseli Serena Safari Lodge, Kilaguni Serena Safari Lodge, Mara Serena Safari Lodge, Serena Mountain Lodge and Lake Elementatita Serena Camp in Kenya.

In Tanzania, Lake Manyara Serena Saari Lodge, Ngorongoro Serena Safari Lodge, Serengeti Serena Safari Lodge, Kirawira Serena Camp and Mbuzi Mawe Serena Camp have been closed.

Other Kenyan hotels closed include Weston Hotel, Enashipai Resort and Spa, DusitD2 Nairobi, Sopa Lodges -Amboseli Sopa Lodge and Lake Nakuru Sopa Lodge,  Masai Mara Sopa Lodge and Lake Naivashsa Sopa Resort.

White Rhino Hotel in Nyeri, and Maiyan, in Nanyuki.

Currently, KSh500 million has been set aside to cushion the industry against the effects of coronavirus. 

The Ministry of Tourism part of the money will be used to restore destination confidence to ensure that Kenya remains as a preferred travel destination globally while the rest will be used for the post coronavirus recovery strategy in all our key source market.

National Tourism Crisis Steering Committee

The Ministry through a Gazette Notice has set up a National Tourism Crisis Steering Committee to come up with mitigation measures for any emergencies that will help mitigate the impact.

The twenty-member Committee will be chaired by Tourism Chief Administrative Secretary Joseph Boinnet will also include Inspector General Police Hillary Mutyambai, Attorney General Paul Kariuki and Kenya Tourism Board Chief Executive Officer Betty Radier.

The team to spearhead crisis mitigation in the tourism sector for a three-year renewable term will further be expected to oversee operations of the National Tourism Crisis Operational Centre set up at the Kenyatta University Nairobi.