Economic Recession, Competition hits Kenya's Tourism

By Trek East Africa Safaris Correspondent

NAIROBI, KENYA

Fluctuating fuel prices coupled with post election chaos and competition affected Kenya's rankings in 2008.

The Managing Director Kenya Wildlife Service (KWS) Mr. Julius Kipngetich warned last Tuesday that the country’s key source markets were under severe attack from key competitors. He said that there was need for the government to defend Kenya's existing markets at this particular time of the global recession.

Kipngetich further said that, “Kenya's forays into China and other countries should hold because these markets are also under serious attack by several competitors, especially Tanzania.

Details of Kenya’s performance at the just concluded ITB exhibition held in Berlin, Germany remained scanty; Kipngetich said he would brief the media in the coming days.

Najib Balala, the Tourism minister who led the ITB delegation said most prospective tourists were still skeptical of the country’s security given the negative media reports in light of the return of the ‘Mungiki Sect’ ritual killings.

However, the Chairperson of the Kenya Tourism Federation Ms. Lucy Karume, revealed that Kenya’s four biggest markets USA, UK, Italy and Germany accounted for 38% of the revenue earned from Tourism, which equaled to all the other 23 destinations. This she said, "shows why Kenya's source markets cannot be replaced by numbers from the emerging markets”.

Different tourism players in Kenya have proposed that government comes up with a stimulus package for the airline industry and also improve on the product pricing.

Kipngetich also noted the need for the re-capitalization of the Kenya Tourism Development Corporation (KTDC) that could be used to finance the construction of new lodges in the country since according to him banks do not lend money to tourism investments that usually have long term pay back periods.

More Tourists in 2008, though a decline is evident in 2009

By Baluku Geoffrey,

Kampala, Uganda

A total of 844,000 foreigners visited Uganda in 2008, representing a 32% increase over 2007. As a key contributor to Uganda’s GDP tourism accounted for 3.7% of the total. Despite this increase, it is clear that Uganda’s tourism industry is now facing difficult times as a result of the financial melt down.

The tourism industry is especially vulnerable to financial slow downs with consumers spending less on travel products and experiences in the short and medium terms. Expenditure on accommodation and Gorilla Permits, Uganda’s trump card has decreased drastically as visitors choose more affordable safari options.

There was growing optimism that Uganda would soon achieve the 1 million foreign visitor mark by 2012. However, with the current economic melt down experienced globally and domestically, the effect on Uganda’s tourism industry is likely to be worse.

The unstable fuel costs and fluctuating dollar rate means that long-haul tourism is on the decline, particularly for middle income tourists. This has already had an effect on Uganda’s tourism industry.

As long haul travel becomes increasingly unaffordable, the integration of the East African region is now paramount for the region to achieve its tourism targets. However, reasonable controls such as some degree of protection for the Ugandan tour operators should be taken into consideration as we go into the final stages of the East African re integration.

The drop in visitors from all major source markets including UK and USA is now evident. According to research firm Trip Advisor, 58% of UK consumers are likely to or have already been influenced by the economic down town when it comes to choosing a holiday this year.

Tour operators in Uganda must now guard, at all costs, against pricing itself out of the global market as this destination now competes, on affordability levels, with Kenya, Tanzania and Rwanda.

With the deepening of the global financial crisis and economic slowdown, there is a rise of new challenges ranging from safari cancellations to souring inflation rates now believed to have settled at 14.8%.

These challenges thus call for a cash injection so as to help in facilitating tourism research, marketing and work force issues for the better of Uganda’s Tourism industry.