Kenya’s tourism industry braces for more misery after Al-Shabaab attack…

Hoteliers from Kenya’s Indian Ocean coast region and sprawling game park reserves have said tourists have started cancelling trips to the East African nation after gunmen last week killed 148 people at a university campus.  

A vital part of East Africa’s biggest economy, Kenya’s tourism industry has been in decline since 2013 when al-Shabaab stormed an upscale shopping mall in the capital Nairobi, killing 67 people during a bloody four-day siege. Since then, repeat al-Shabaab attacks and travel warnings issued by the likes of Britain, US and Australia have emptied Kenya’s palm-fringed beaches and forced hotels to lay off staff. 

Hoteliers say the pre-dawn attack on a campus in Garissa, a remote town 200km from the Somalia border, far off the tourist trail, is likely to spark another wave of redundancies in the hospitality sector. “We were expecting tourists from UK, Germany, France, Australia and Asia continent but they cancelled their bookings when they learnt of the terror attack,” said Peter Kipeno, the owner of a luxury tented camp in Kenya’s Maasai Mara game park, nearly 600km from Garissa. 

Kipeno, whose camp has a 25 bed capacity, said 19 visitors cancelled their bookings on 3 April when it became clear the raid was the deadliest attack on Kenyan soil since 1998, when al Qaeda bombed the US embassy, killing more than 200 people. “The Garissa attack simply sealed our fate,” Mohammed Hersi, a veteran Kenyan hotelier and chair of the Kenya Coast Tourism Association, told

Reuters in Mombasa. Mr. Hersi said some of the management and staff at his luxury Heritage Group hotel chain had recently taken pay cuts of between 20 to 30%, hoping to avoid lay-offs during one of the worst periods for Kenya’s tourism sector in recent memory. “It seems we might have to go further and lay off staff, because we may not sustain even this reduced wage bill.” 

Steve Keriga, assistant manager of Mara Sarova Game Camps, said the impact would be felt from this week and is worried about the outlook for the busiest part of the year. “The attack might affect the July-October peak season,” he said, a reference to the annual wildebeest migration between Tanzania and Kenya in the Maasai Mara reserve. 

The attack has piled pressure on Kenyatta, who on taking office in April 2013 vowed to triple tourist numbers to 5-million annually within five years, and get economic growth into double figures to lift millions out of poverty. Kenya recently also set up a special tourism “task force” to devise a plan to lure tourists back to the east African nation. 

The impact on tourism will be severe with ripple effects to the wider economy expected. We believe the impact in the short to medium term will depend on the veracity of the government’s reaction. An effective offensive against the terrorist organisation will reinforce confidence in the government whilst a protracted and slow reaction will lead to under investment which will affect employment and the economy’s broader consumption patterns.

Source: Imara Securities Equity Research