Budget cuts for tourism a real and present danger to the sector

COAST HOTELIERS RAISE RED FLAG OVER PROPOSED BUDGET CUTS

(Posted 24th June 2013)

Senior hoteliers along the Kenya coast have raised the red flag over proposed budget cuts for the country’s tourism sector, warning of dire consequences should the planned recovery marketing missions not unfold and take root as a result of lack of funds. A knee jerk reaction by members of the parliamentary budget and appropriations committee left the tourism sector reeling, as the hapless MP’s cut two billion Kenya Shillings from the tourism funding, to redirect to other sectors attempting to avert strikes, but at what ultimate cost.

Information at hand indicates that along one of Kenya’s best beaches, Diani Beach, some 11 out of 21 resorts are presently closed, ostensibly for ‘renovations’ but in reality, only a few of those actually have carried out extensive maintenance and refurbishment work while most others are closed for a simple fact, lack of business.

When KTB asked for an added recovery marketing budget of 500 million Kenya Shillings it was not a farfetched request. It was based on the needs of the sector, based on assessing reality on the ground and put forward after careful consideration. The start of the year was very slow and sluggish. The impact of travel advisories was real this time. Our competitors for beach vacations did not sleep and exploited the situation. We have to recover that traffic but to accomplish that we need KTB to get the funding to go out and promote. Some politicians seem to be mistaken in their belief that this will pay for the private sector to go out and promote. This is absolutely not the case. We in the private sector pay for our own trip expenses. What KTB does is generic marketing of Kenya, offering the private sector space on stands they put up at the main tourism trade shows or the sales missions they stage abroad. These funds are for advertising and PR missions to bring travel journalists to Kenya and have them write about the destination. These funds were also meant to bring travel agents to Kenya and showcase our destination to them to create goodwill and business opportunities. We were shell shocked when the news about raiding our sectoral budget broke. Here at the South Coast half of our resorts are closed right now and even then, our average occupancy among those open is less than 30 percent. Some are doing better, true, but others are just struggling to even make the cash to pay for electricity and water and staff salaries right now. KAHC [the Kenya Association of
Hotel Keepers and Caterers, the country’s primary hotel association] has already laid out what impact on our sector the budget cut will have. We are looking at major job losses and investors in the sector will be wary to commit millions of dollars for new projects, when the existing hotels struggle to make ends meet. At the South Coast only the Swahili Beach opened over the past few years but we still have a net loss of beds. That is because other resorts closed down. If this message will not get across to government, and to parliament, they would condemn the sector to years of downsizing. Kenyatta and Ruto [Kenya’s
President and Deputy President] have singled out tourism as a growth sector and a cornerstone in their plans to generate double digit economic growth. Tourism is a sector which can, given the right circumstances, generate jobs faster than any other sector, can attract FDI and earn the country hard currency by selling our sun, sea and sand, resources we have in plenty. We will be seeking urgent audience with government to discuss our situation. Kenyatta was chairman of KTB so he will remember what it takes to turn Kenya into a success story, because he himself back then struggled to get the funding they needed. Not all hope is lost but for now, these are the facts’ salvoed a regular contributor from the Kenya coast when asked to comment on the latest statistical revelations.

The MCTA Chairman, re-elected unopposed two weeks ago, Mohammed Hersi, who is also the Regional Manager Coast for Sarova Hotels and who oversees the North Coast’s largest, and arguably most successful resort complex, the Whitesands Resort and Spa, together with the two lodges Taita Hills and Salt Lick, already let fly on Twitter when the news over the intended budget cuts became public, and it is expected that MCTA, together with the KAHC and other key tourism representative bodies like KATO and KTF will meet with their Cabinet Secretary soon to try and save the day. Clearly, not all is lost just yet but certainly there are rising clouds of doom on the horizon which need chasing away, and that can only be accomplished when KTB, and the tourism industry at large, are getting the facilitation they need to carry out their mandate successfully. Watch this space.

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