Tourism players warn against proposed parastatal mergers

By Kenneth Kwama

Kenya: The proposed mega-merger of parastatals in the tourism sector could negate recent gains made by the industry and throw the existing structures into disarray, an industry lobby has said.

The Kenya Association of Hotelkeepers and Caterers (KAHC) has said the suggestion by the Presidential Task Force on Parastatal Sector Reforms to merge the Kenya Tourist Board (KTB), Export Promotion Council (EPC), Brand Kenya Board and the body mandated with promoting investments in the country, Kenya Investment Authority (KenInvest), would stifle progress in the tourism industry.

The proposal to unify the four institutions and form a single entity referred to as the Kenya Investment Promotion Service (KIPS), whose duty it will be to promote and market Kenya as tourist and investment destination, is awaiting Cabinet approval.

But the Executive is likely to get an earful from tourism industry stakeholders who say that the new entity will be too amorphous to give Kenya’s tourism the kind of attention it needs to compete with global players.

“If you look at the countries that rank among the top 10 tourist destinations in the world, you’ll realise that they all have a specific entity meant to promote tourism. The functions are not combined as proposed in the Kenyan scenario,” said KAHC Chairman Mike Macharia.

Resistance

The industry lobby said KTB should remain intact, probably with the functions of Bomas of Kenya and the Kenyatta International Conference Centre (KICC) that carry out cultural and conference tourism, respectively, put within its mandate to consolidate the services.

It warned that the functions being undertaken by the KTB will look “more like mini-objectives” under the new entity if the proposed merger is completed. 

KAHC said this would negatively affect the sector, which earned the country Sh96 billion in the 2012/2013 financial year.

A look at world tourism rankings by the United Nations World Tourism Organisation (UNWTO) confirms the sentiment that the top 10 destinations have a single entity managing tourism promotion.

France Tourism Development Agency, Spanish Tourist Board and Tourism Malaysia run tourism campaigns in their respective countries. A single institution does the same in destinations that compete with Kenya like Tanzania, South Africa and Egypt.

But unlike Malaysia, which allows its tourism promotion board autonomy to conduct a number of functions beneficial to tourism promotion, the Kenya Tourism Act does not expressly mandate KTB to impose fees or carry out activities that are commercial in nature.

KTB’s strategy the past few years has been to focus on increasing holiday visits by foreigners and influencing leisure travel. This has been successful, with the share of the market made up by holidaymakers and domestic tourists growing.

KAHC said the general sentiment in the industry is that despite recent gains, the country has not yet reached its tourism potential. But the growth in confidence in the industry — helped along by improved quality as a result of major investments and development of new markets — suggests that the best is yet to come.

The association intends to impress upon the Cabinet, which is expected to review the presidential task force’s findings in a meeting this week, that the consolidation of the four entities is “not a good long-term solution” to the industry’s problems.

The proposals

Some of the task force’s other notable proposals include mandating Bomas of Kenya to preserve, maintain and promote the  diverse cultural values of various ethnic groups in Kenya under the East African, Commerce and Tourism ministry.

The team also recommends the dissolution of the Tourism Research Institute, which undertakes and co-ordinates tourism research and analysis. Research will be done by the Kenya Utalii College if Cabinet accepts the proposal.