Kenya tourism stakeholders tell government no on taxation

“As you know we still have an issue with lower arrival figures into our international airports,” stated a regular but reluctant-to-be-named source met at the just concluded Magical Kenya Travel Expo in Diani south of Mombasa.

“There has been a lot of positivity about the next year and that we as a destination will make a comeback. The hosted buyers were of high quality and their keen interest is maybe an indicator that we will finally turn the tide. I am not commenting on your tweet about the number of us Kenyan tourism stakeholders in the room for their seminar, those who were not there, however, should stop lamenting now because they had a chance to help formulate solutions.

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“The coast needs an extra dose of revival and not sharing experience and recommendations from senior people is surely not helping. Now, as an industry we are still concerned about the lack of movement by government to remove the VAT on tourism services and in particular transport. As long as we cannot offer tourists a VAT money-back facility at the airport of departure, we need to remove that VAT element at the source.

“The cost of excursions and safaris rocketed at the time because an extra 16 percent had to be paid. Now we hear that our government wants to put VAT on fuel from next year, which would again raise the cost burden and make safaris and even simple airport transfers more expensive again. This is a short-sighted move as far as tourism is concerned, because cost increases into a fragile business environment are hard to justify and digest. Our industry bodies will argue this case with government and parliament, but then we both know that the problem lies exactly there. They do not have enough money, revenue growth has been behind the exploding bill of maintaining the various layers of elected representatives, and it hurts. It hurts investments, it hurts all around.

“As a sector we will sound a strong warning that if government tries to take money away from our industry, which was promised and set aside for promotion, they will cut their own feet off. Tourism has a very big capacity to increase employment and bring new investments. Salaries are taxable, companies make profits which are taxed, but in order to get that done we first have to promote abroad. First Obama, now MKTE2015, next month the Africa Travel Association, and then the Pope visit are all positive foundations for good news stories. The WTO Ministerial Meeting in December alone will bring maybe 7,000 delegates into Kenya, and we hope many of them take pre- or post-conference tours.

“But if we as a sector do not go out and hard sell ourselves, no one will do it for us. We need to convince airlines to return or start flying to Nairobi and Mombasa. We need to persuade agents and operators to put Kenya back into their brochures and put us as a destination into their top five or top ten destinations. KTB and the private sector then need to support them and not wait till MKTE2016. We need the promised promotion money, and we need it now to hit the markets while these events are taking place. More taxes impacting on us will be counterproductive at this stage.”

There was, however, an overall feeling of hope and confidence among literally all stakeholders spoken to while at the Magical Kenya Travel Expo, with the indictor as high as it has not been for the past two years. Logistical issues apart, prior to the opening of MKTE2015, the feedback from both hosted buyers and the Kenya sellers was overwhelmingly positive when the show drew to a close. Regional tourism boards from for instance Uganda – which won the Grand Award for Best Overall Exhibition Stand – and neighbors Rwanda and Tanzania and from as far as the Seychelles and even Zimbabwe, equally reported rising interest levels compared to last year’s show.

All eyes will now no doubt be turning to the Kenya National Bureau of Statistics when they release the arrival data for September and the coming months, fingers crossed that indeed as this correspondent had suggested, that the negative arrival number trend has finally bottomed out, and arrival numbers from international markets rise again. Already up from previous years are notable arrivals from the Eastern African region and select other African markets, affirming the strategy by the Kenya Tourism Board to more aggressively market Kenya in Africa.

With Kenya Airways increasingly offering stopover packages for long-haul travelers connecting via Nairobi to their final destination, this will no doubt be an added factor in the future to tap into those markets and use their layover in Kenya to go on safari, play on championship golf courses, or laze at the beach side of one of the coast’s many fancied resorts.