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Kenya should up the ante on tourism

NAIROBI, Kenya, Jan 27- Kenya should revamp its infrastructure, beef up security and provide a favorable political environment to increase earnings raked from the tourism industry, says Stanbic Investment Analyst Stephen Gugu.

Mr Gugu explained on Wednesday that the advancements would help Kenya hike its tourist numbers from two million (in 2007) to three million and increase the average tourist spend from Sh40,000 to sh70,000 by the year 2012 in line with the medium-term plan for Vision 2030.

He added that the move would help Kenya succeed in boosting its tourism ratings on the global scale.

“If you look at South Africa and Egypt and then compare them to Kenya you realise we are lagging behind them. We must look at the global scale and although Kenya’s ranking has improved from position 101 to 97 out of 181, more needs to be done,” he said.

He also explained that the tourism industry currently employed about 400,000 people either directly or indirectly and that it contributed 8.8 percent of the country’s Gross Domestic Product as at 2008. He further added that the government had the ability increase the GDP contributed by the industry to 10 percent by the year 2012.

“As of 2008 the GDP from the tourism sector stood at Sh262 billion. This sector accounts for over seven percent of the total employment rate in Kenya. The arrival of three tourists creates one new job in Kenya and it is the third largest foreign exchange earner, third to tea and horticultural sectors. Tourism contributes eight percent of total exports,” he explained.

Mr Gugu added that the sector also affected other industries in the country further emphasising the need to revamp it.

“The tourism sector has multiplier effects for example on the hotel and transport industries. If it is negatively impacted, many people and industries will be affected but if the government focuses its attention on it, we might be able to triple the tourism earnings to about Sh200 billion by 2012,” he said.

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He also commended efforts made by the government thus far to improve the tourism sector saying the industry’s performance had made a slight improvement last year.

“The Kenya Tourism Board has been very active in marketing itself. We are talking about a marketing budget allocation of Sh300 million just for advertising for the year 2009 into 2010. This has really pushed things and there have been other developments like the lowering of visa fees for foreign tourists by 50 percent,” he said.

Mr Gugu however noted that a high number of tourists would not mean a subsequent increase in earnings. “We can have one million tourists who might not spend any money and it is much better if we have a smaller number of tourists who spend a lot. Numbers are important, yes, but spend is critical. Europe remains our strongest tourist hub because it has the numbers and the spending capacity.”

Stanbic Chief Investment Officer Anthony Mwithiga also called on the government to market the East African region as a single tourist destination saying it would boost tourism sectors in all the East African countries.

“When tourists visit Tanzania they most likely visit Nairobi and other East African countries. We should therefore sell the region as one tourist destination especially because of the launch of the East African Customs Union which proposes the issuance of a single tourist visa for the entire East African region to encourage tourism,” he said.

Mr Mwithiga further asked the government to focus on sports tourism and also target African countries when marketing the region. He added that the government should increase the budget allocations for the country’s tourism sector.

“We should also use rugby, athletics and the World Rally Championship periods to draw and attract more tourists. The government has so far allocated Sh490 million, Sh600 million and Sh800 million for the years 2008, 2009 and 2010 respectively which is good but it should increase this amount,” he explained.

The year 2007 remains the best year for Kenya’s tourism sector recording approximately two million visitors and earning Sh65.4 billion for the country.

Currently built on two distinct pillars safari business focused at Kenya’s 59 National parks and game reserves which attracts 40 percent of travelers and beaches business aimed at the Indian Ocean and attracting 60 percent of travelers. Holiday tourism accounts for over 70 percent of purpose of travel.

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