SERENA’S PROFITS SHARPLY DOWN ON THE BACK OF KENYA’S POOR TOURISM RESULTS
(Posted 01st August 2014)
TPS East Africa, the publicly quoted holding company for Serena Hotels, has yesterday announced a sharp downturn in half year profits from some 141 million Kenya Shillings a year ago to only 41 million Kenya Shillings during the same period this year. The downturn in Kenya was at least in part buffered by a better financial performance in the company’s operations in Uganda, Rwanda and Tanzania, but with Serena’s most properties located in Kenya it was almost inevitable that the financial results would take a beating. Share earnings reportedly fell from 0.69 Kenya Shillings per share to only 0.13 Kenya Shillings per share from last year to this year.
Issues over security concerns in Kenya were made worse through taxation measures, under which tourism services are now subject to an 16 percent VAT, as are incidentally new aircraft and aircraft spares, moves which were broadly condemned by leading stakeholders but meeting with complete indifference by a government which is clearly no longer living in the same Kenya as the tourism and aviation industry does.
While Serena is the only publicly quoted hospitality company in Eastern Africa have other privately owned hotel, resort and lodge operators also signaled a significant downturn in sales revenues and profits with coastal resorts the leading loss makers.
Only recently did Serena’s Director of Marketing very publicly disagree with figures on tourism arrivals given by government in a move which saw wide support from other industry stakeholders and caused consternation in government circles over the unusually public and candid manner of the dissenting statement.
