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Kenya Wildlife Service delays investment

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Wolfgang H. Thome  Jan 28, 2008

(eTN) - Confirmation has been received from a Kenya Wildlife Service (KWS) source that the delivery of ordered capital goods, in this case over 100 new vehicles, has been delayed “until further notice” due to the present downturn in tourism across Kenya, which has also severely impacted on the numbers of visitors to the national parks. With gate receipts dropping by as much as two thirds, compared to pre-election levels, the organization is acting swiftly to tighten its belt and delaying deliveries of vehicles and other expensive goods may only be a start to get KWS ready to face the lean months ahead.

Other investors in the tourism sector, too, are faced with the hard choices whether to go ahead with renovations, modernization and upgrading presently underway or planned for their properties. The same applies to scheduled fleet expansion and overhauls for the safari companies, where order cancellations have already started hitting the key vehicle suppliers.

In all likelihood, most of those investments are being delayed now until a full recovery in the tourism sector is visibly underway, which, however, will also allow other destinations to pull ahead of Kenya in terms of maintaining quality, innovation and product diversification.

Even domestic airlines operating charters for tourists are mulling over whether or not to take delivery of newly ordered additional aircraft, as the immediate prospects are not exactly encouraging for them with a high cost base and income sharply reduced. Domestic scheduled flights from Nairobi’s Wilson Airport to the national parks and some coastal destinations are also facing severe cut backs due to lack of passengers and private airlines flying domestic and regional flights are said to be suffering a reverse of their fortunes they enjoyed up to the end of December last year.

Some of the hotel and lodge operators are reportedly already using up their cash reserves and wider spread lay offs are now expected within weeks, should the trend not massively reverse. This applies in particular to local and regional hotel operators without the fallback on other markets doing well, to support their Kenyan and East African operations, as long as the decline here lasts. In fact, most recent reports speak of a dozen resorts in Malindi already having closed altogether, laying off some 5,000 directly and indirectly employed staff, with a ripple effect right across the rest of this coastal town’s economy. Bed occupancy in Malindi has reportedly fallen to below 10 percent, threatening to wipe out the entire tourism sector. The Italian consul in Malindi decried the decision of holiday companies in Italy to halt flights to the Kenya coast, which he himself declared “safe to visit,” but to no avail.

The hard lessons learned from the 1982, 1997 and 2003 situations may come in handy for the tourism industry to ensure its long term survival, which means cutting cost to the very bone, delaying new investments and keeping only essential staff while waiting out the cash draught and hoping to scrape through this toughest test yet for Kenya’s tourism sector. In the meantime tourism leaders in Kenya called for a waiver of the visa fee of US$50 per person and concessions on airline landing and parking fees in order to create incentives for tour operators to begin returning passengers to Kenya, who are now being booked to other destinations.

Kenya Wildlife Service delays investment
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