Hoteliers in Kilifi County have attributed poor business to implementation of the Salaries and Remunerations Commission (SRC) guidelines.
The guidelines, enacted in August 2023, limit the payment of Daily Subsistence Allowances (DSA) to distances of 50km and above, drastically affecting conference tourism—a vital revenue source for coastal hotels.
According to the Kilifi South Hotels and Restaurant Association (KISHRA) chairperson and Mtwapa Country Resort General Manager, Michael Mwiha, the hospitality sector has faced significant challenges since the new guidelines came into force.
"We have lost businesses, employment opportunities have decreased and facilities can no longer sustain themselves," Mwiha stated.
He noted that the SRC's decision has not only hurt hotels but also caused a ripple effect through the supply chain, adversely affecting suppliers and local economies.
Mwiha and other hoteliers have urged the government to review the SRC Act of 2011, to create a level play field.
"Most facilities will close down very soon if this punitive law continues to be enforced," he warned.
The hoteliers warned that the loss of revenue may lead to property being seized by auctioneers.
The Kilifi hoteliers said that conference tourism, especially from parastatals such as the Kenya Ports Authority (KPA) and Mombasa County Government is crucial for their survival.
The current guidelines have redirected much of this business to other regions, notably Naivasha, leaving Mtwapa disadvantaged.
"We appeal to the national government to prioritize tourism-dependent areas for conferences to be held here," Mwiha said.
KISHRA secretary, Yvonne Ayieko said bureaucratic challenges have compounded the issue, particularly for foreign travelers.
"We did a letter through our lawyer representing 72 establishments, but we have not received any response," she said.
Ms Ayieko called on local Members of Parliament to table this issue in Parliament to secure a fair deal for the hoteliers.
"Investors have put their dreams into these businesses to create jobs and now unfavourable government policies are sending people home," she said.
The SRC's move, intended to cut down the wage bill for government employees, has resulted in unintended consequences for the hospitality sector.
The circular from SRC chairperson Lyn Mengich, stipulates that public officers are not eligible for DSA if meetings or retreats are held within a 50 km radius of their duty stations.
Additionally, retreat, sitting allowances for institutional committees, task force allowances, and daily subsistence allowances (local and foreign travel) for public officers are no longer paid.
As the hospitality sector in Mtwapa teeters on the edge, stakeholders are appealing for government intervention.
"If this 50 km provision in the Act is not reviewed, we will see increased crime levels as more businesses shut down and jobs are lost," Ayieko warned.
The hoteliers are calling for immediate action to prevent further economic decline and ensure the survival of the industry.
