Travel restrictions hurting tourism sector-report
Travel restrictions to Kenya as announced by more foreign countries will drastically hurt the hospitality sector that by the end of last year lost over Sh110 billion of direct international revenue due to the Covid-19 pandemic.
According to the International Tourism Performance report for January to October 2020, the number of international visitors through all points of entry dropped from a high of 1,718,971 in 2019 to 470, 971 in 2020.
The report by Tourism Research Institute and Magical Kenya for the period said the sector only realised Sh37 billion in direct international tourists’ receipts.
“The holiday travel numbers declined. Only essential travel is happening. This is an indication the sector will take a long time to recover,” says the report.
Latest data from the Tourism Research Institute indicates that USA and UK were ranked second and fourth highest source markets for tourists in Kenya, respectively from January to October 2020 with 53,444 tourists from USA and 42,341 tourists from UK.
The expected declines in the tourism arrivals coupled with the current travel restrictions within the country is likely to affect the performance of serviced apartments.
Such apartments have witnessed subdued performance since the onset of the Covid-19 pandemic in Kenya, and this is expected to take a toll on occupancy rates as most tourists and expatriates will opt to stay in their countries.
USA announced that it has retained highest travel advisory after the Centres for Disease Control (CDC) issued a Level Four Travel Health Advisory to American nationals due to the steep rise in Covid-19 cases in the country.
Additionally, the Kenyan government and the United Kingdom (UK) announced plans to form a joint committee to review the travel restrictions that triggered a tit-for-tat travel blockade between UK and Kenya over rising Covid-19 risk levels.
Kenya Airways announced plans to suspend all flights to the UK effective April 9, 2021 until further notice, after Kenya was added to the UK’s red list amid concerns of new Covid-19 variants.
The move by both UK and USA is expected to result in a decline in the number of tourist arrivals, them being one of the key tourist markets for Kenya, says Cytonn CEO, Edwin Dande in a review of the report.
“This will result in a negative impact on the hospitality sector, which relies heavily on tourism,” he said.
The serviced apartments in 2020 softened with the occupancy rates declining by 31.3 per cent points to 48 per cent from 79.4 per cent.
The monthly charges per square metre also declined by 14.9 per cent from Sh2, 806 to Sh2,448 while the average rental yield declined by 3.6 per cent points to 4.0 per cent in 2020 from 7.6 per cent in 2019.
The performance is expected to decline even further in the short-term if no immediate interventions are taken to address the expected declines in the tourist arrivals, says Dande.
Lockdown restrictions is expected to affect accommodation and food services, and reduced budgetary allocation to the Ministry of Tourism, which will hamper tourism recovery efforts.
