Government owned hotel group under spotlight over mounting losses

KENYA SAFARI LODGES & HOTELS CITED BY AUDITOR GENERAL

(Posted 10th October 2017)

The mixed fortunes of recent years for tourism along the Kenya coast have not spared government owned properties either as a just released report by Kenya’s Auditor General reveals.
Kenya’s tourism downturn, now thankfully bottomed out with arrival figures progressively rising again, had pushed many beach resorts along the Kenya coast financially to the wall. Struggling to pay bills and having to make hard choices if to settle taxes, utilities, wages or suppliers bills first have many of them been juggling too many obligations, some deciding to close down while others hang in there in anticipation of better days and significantly higher visitor numbers.
Kenya Safari Lodges, comprising of Voi and Ngulia Safari Lodges in Tsavo East and Tsavo West and the Mombasa Beach Hotel were not spared of the trend. The auditors report for the financial year ended in June 2016, damning as it might seen when taken out of context, however fails to take into account the general state of the tourism industry between July 2015 and June 2016 which until then was still steeply downhill before the trend turned in the last quarter of 2016.
Industry sources in fact dismissed a statement in the report that ‘management had not provided a satisfactory explanation why revenue targets were missed‘, one in fact commenting on overnight media reports: ‘While I understand the position of government auditors I am also sure they have either no clue what has been happening in our industry until last year or otherwise ignored these glaring facts. Auditors have a certain mandate but their capacity to see the bigger picture is often lacking. When business picks up and we are all hoping for this after the high interest levels seen at Magical Kenya Travel Expo, things will look better again. At KSLH, like all other places, the shareholders have to reinvest in upgrading the product and give management some working capital to see them through this patch‘.
Kenya Safari Lodges and Hotels, a parastatal, is owned by the Kenyan government after previously being part of the now defunct African Tours and Hotels and later the Kenya Tourism Development Corporation.

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