Govt must review priorities in tourism sector


The target to double the level of tourism in the country to 3 million tourists to 2017 is likely not to be achieved with a possibility of numbers dropping because of new government initiatives that make it hard to sell the country.

Investment in the sector has reduced with the recent budget cuts due to the government’s high expenditure, the VAT Bill that has seen the cost of business go up and tourism products that were previously exempt affected.

The lumping of Kenya Tourism Board with the Export Promotion Council (EPC), Kenya Investment Authority (KenInvest) and Brand Kenya Board to form the Kenya Investment Corporation (KIC) by the Presidential Taskforce on Parastatal Reforms is expected to have far reaching effects in the marketing of Kenya’s tourism.

The taskforce, which presented the report to the President in November, says the role of the new body would be to promote and market Kenya as a tourist and investment destination. Already tourism was downgraded in this government to a department.

This is modelled after Rwanda Development Board. A one stop shop for investors interested in Rwanda to get all the information they need, providing , all necessary licenses and permits thus reducing the endless delays and hurdles before invests start business.

The report fails to take cognisance that how you sell Kenya to a tourist is different from an investor. Growth in the sector has happened due to focus, being able to sell to source markets and open new ones.

For a destination that has ambitious plans to become a top ten long-haul tourist destination, Kenya must benchmark with the very best. All leading tourist destinations have an organisation to drive the undivided focus on tourism marketing both domestically and internationally. This is not combined with marketing of the country’s investment or exports. This undivided focus is what puts countries like France, Spain, South Africa and Morocco on the global tourism map.

If leading tourist destinations, including France which attracts the highest number of visitors at 83 million, have organisations why does Kenya want to reinvent the wheel?

The report argues that all these government agencies are charged with the “responsibility of investment promotion and facilitation” thus should all be put together.

Rwanda is only starting to develop its tourism product, mainly concentrating on the mountain gorillas. This cannot compare to all the different products and experiences Kenya has to offer.

KTB was established in 1997 by President Moi’s government in recognition of increased competition in the market. Kenya was no longer the only country offering a safari product southern Africa was opening up. The automatic tourists the country had enjoyed in the earlier years were now visiting new destinations. The establishment of a body purely dedicated to market the country saw the tourist numbers and earnings dramatically increase. In the past 10 years Kenya has grown from 1 million tourists, bringing in Sh17.8 billion to 1.78 million in 2012 with earnings of Sh96 billion.

The report proposes the functions of the Tourism Research Institute, which was created by the Tourism Bill (2011) be transferred to Kenya Utalii College, the sectors training institution. TRI is meant to handle research and monitoring activities in the sector in order to able policy direction which is removed from core role of the college to train talent for the sector.

Also expected to hurt the tourism sector in 2014 is the VAT Bill (2013). The bill revoked the VAT exemption on tourism services including transport, commission earned by tour and travel agents, park and conservation fees and other services provided by hotels. New park fees were introduced this month a move that will impact business than even the recent terrorist threats and attacks.

Our packages will have to increase to meet the cost because of the tax element which could have an impact on forward bookings. The recent increase in park fees come after commitments for the whole of 2014 have already been made. Players cannot go back to clients or agents with a price increase to reflect the new cost because signed agreements are subject to Consumer Protection Laws in the EU and other markets and a price change – post sale – is not an option. Players will have to absorb the additional cost, impacting investors.

If the government is serious about its targets of the policies affecting the sector has to be looked at.
It is time the government invests in the goose that lays the egg and the tourism sector in Kenya has the potential, it only needs the right environment, support from the government.

(Macharia is the Chief Executive Officer – Kenya Association of Hotelkeepers and Caterers)

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