Why economy of region takes a beating when tourism suffers

Kenya: Tourism is so important to coastal communities that when it slumps, the region’s economy grows cold. Earnings from tourism often trickle down to the pockets of most residents, and it is this spiral effect that brings misery when visitors’ numbers drop.

Tourism is one of Kenya’s leading economic pillars and provides jobs to more than 100,000 people countrywide besides being a major foreign exchange earner. At the Coast, the industry employs about 20,000 people directly during high season.

However, casual workers and those who benefit indirectly such as farmers, fishermen, tour firms, taxi operators, beach boys and curio dealers make up thousands more.

Suppliers, airlines, markets, entertainment spots and landlords also benefit when the industry is vibrant.

With Sh96 billion earned by the government from tourism last year, local communities are worried about anticipated losses following recent adverse travel advisories. It is anticipated that government will lose up to 40 per cent of its revenues from tourism. Another 2,000 jobs are lost.

“Tourism is a major pillar of income for communities and the government; it is also a major source of foreign exchange,” says Kenya Coast Tourist Association (KCTA) executive officer Millicent Odhiambo.

Mombasa County has been charging Sh180 per tourist hotel bed per night, raising millions of shillings in revenue.

Already, Kwale County has estimated in its budget that it will raise Sh100 million from this form of tax that is accrued from the Sh50 bed levy that it slapped on hotels since last month. The levy is payable per individual person per night.

Other coastal counties that earn millions of shillings from tourism are Kilifi, Lamu and Taita Taveta.

In Kwale County alone, more than 31,500 people who depend on tourism are likely to suffer as the industry encounters a slump. Of this, 1,500 are employed directly while the livelihood of another 30,000 depends on tourism.

“Forty per cent of the Sh96 billion that the national government earns from tourism will be lost following the travel advisories,” says Kwale County executive member for Tourism Adam Sheikh.

Already hotels are operating at about 30 per cent bed capacity instead of 50 to 60 per cent usually experienced during low tourist seasons.

The Kwale County Assembly Public Accounts and Investment Committee vice chairman Omar Boga says it would be difficult for the county government to raise sufficient funds to meets its budgetary requirements following the drop in tourist numbers.

“Apart from the bed levy there are land rates that amount to Sh50 million annually, and with many hotels facing closure, it will be really hard for them to pay up,” says Boga.

Leisure Lodge Resort and Golf Club, for example, sponsors a modern school – Leisure Rondwe Jalaram Girls High School. The best performing girls from poor backgrounds in this school are sponsored by the hotel through a kitty contributed by the tourists.

“If things do not change, the school, which was established three years ago, may not survive,” says Boga.