Tourism remains at the limit as Covid-19 remains a threat
Tuesday, August 10, 2021
By ELIZABETH KIVUVA
More from this author
- Advance hotel reservations are weakening in the three months to October, as the economy slowly recovers.
- A survey by the financial sector regulator, the Central Bank of Kenya (CBK) showed that overall advance reserves in July, August, September and October were 19.4 percent, 17.5 percent, 8.5 percent. percent and 6.8 percent, respectively.
- The reserves registered in July reversed a sharp fall in May of 9 percent.
Just when hoteliers were hoping to recoup some profits after more than a year and a half of recession due to the aftermath of Covid-19, a new wave of infections threatens to dampen their hopes for the second consecutive major tourist season. .
Advance hotel reservations are weakening in the three months to October, as the economy slowly recovers.
A survey by the financial sector regulator, the Central Bank of Kenya (CBK) showed that overall advance reserves in July, August, September and October were 19.4 percent, 17.5 percent, 8.5 percent. percent and 6.8 percent, respectively.
The reserves registered in July reversed a sharp fall in May of 9 percent.
The industry relied heavily on advance reservations from domestic and international travelers in the run-up to the pandemic. CBK said the hotels were holding reservations for three months. This, in turn, saw them report peak bookings of more than 90 percent in the holiday season, generating significant revenue.
Average term bookings in 2019 were 50.2 percent in November and 31.5 percent in the low season in February.
Travelers are now afraid to make such reservations due to the increased uncertainty surrounding the virus.
The drop in advance controls underpins a weaker second half of the industry even as the government intensifies the vaccination exercise. Reservation rates remain below the 15.9 percent and 13.4 percent recorded in November and December of last year, respectively.
Travel levels that translate into high hotel occupancy, especially from international clientele, are expected to fully recover by 2023, according to the Ministry of Tourism and the International Air Transport Association (IATA).
“Most hotels in the rest of the country reported that they rely heavily on walk-ins or short-notice reservations as customers avoid long past reservations,” CBK said.
ON THE BALANCE SHEET
The travel and hotel business sector remains at risk due to the Delta variant of the coronavirus now dominating Kenya and contributing to the recent surge in infections.
The new variant is feared to trigger a fourth wave against slow vaccination. More than 1.74 million doses have been administered, of which 670.2 thousand people are fully vaccinated as of August 4.
Tourism Cabinet Secretary Najib Balala last week set new guidelines for bars and hotels to curb the spread of the virus. He directed that guests and visitors be registered and their records maintained, including mobile contacts and physical addresses to facilitate contact tracing.
Restaurants and eateries serving tourists have been ordered to adhere to established protocols including vaccinating staff, not allowing guests to serve themselves from buffets, and including electronic menus on sanitized tablets, fixed board or single-use printed disposable menus.
Fears of the virus have led to a drop in recovery optimism among traders.
Thirty percent of hotels have said they expect to resume normal pre-Covid-19 levels of operations by the end of 2021. This is a decline from the 18 percent recorded in May, and companies attribute the decline to the persistence of the pandemic. .
“The level of uncertainty has increased among all hotels in the country due to the discovery of new strains of the virus, the increase in cases of infections, the effects of recent closures and the slow launch of the vaccine,” added CBK.
While Covid-19 vaccination is ongoing in Kenya, only 9 percent of hotels pre-conditioned their return to normal operations with the vaccines.
“In addition, 42 percent of hotels believed that their businesses would return to normal operations due to other reasons, notably reduced hours of operation and the imposition of a curfew were cited as the main obstacle to their recovery.” .
Hotels across the country said the current bar closing hours at 7:00 p.m. had affected operations in the sector, while the 10 p.m. curfew had affected other sectors that previously operated 24 hours. added.
Despite concerns about the pandemic, some cities are showing a slow recovery, helping to keep the entire industry afloat.
High seasons and international events in the country are also expected to boost business.
Mombasa hotels reported the highest number of bookings in July, averaging 36 percent, attributed to the start of the high tourist season and school holidays in July 2021.
Term bookings were also recorded by 22.3 percent in August due to demand from July to September, which is usually the peak season for the tourism sector in Kenya. However, they fall to 11.8 percent in October.
Nairobi hotels posted high bookings for August, with 25.9 percent attributed to the upcoming U20 (U20) World Championship to be held in Nairobi from August 17-22 at the Moi International Sports Center (MISC), Kasarani.
Seven hotels have signed an agreement to house the athletes and officials of the world youth competition. They include Safari Park Hotel, Ole Sereni, Eka Hotel, Utalii Hotel, Sports View Hotel, Tamarind Tree, and Sarova Panafric.
More than 3,000 athletes, officials and journalists are expected in the country.
The events come as a saving grace, keeping bed occupancy afloat and helping businesses stay a bit vibrant.
On average, bed occupancy increased to 30 percent in June and July, from 19 percent in April.
Occupancy levels in hotels in Nairobi and Nakuru counties were boosted, for example, by the World Rally Championship.
In June, the commercial facilities in Naivasha said they were completely full as hundreds of guests visited the city.
Organizers said at least 10,000 people from around the world attended, highlighting the impact of the iconic event that returned to Kenya after a 19-year absence.
Analysts said that the event injected around Sh6 billion into the economy.
Additionally, fiscal year-end spending by national and county governments boosted hotel operations in the country in June, CBD added.
RESTAURANT AND CONFERENCES
Watching the return of travelers to the skies, there is an ongoing recovery in restaurant and conference activities due to the reduced Covid-19 restrictions in May.
There is a growing acceptance of conference services from the private sector, county and national governments.
Experts have also said that the growing number of charter flights and cruises bringing tourists from both traditional and new markets brings new hope to the industry.
“Business is not going well yet. The food and the lectures have started to improve. Some charter flights like Mombasa and cruises earlier this year have helped, but we still have a long way to go, “said Cathy Gachie of Barefoot Consultancy.
However, fears for the 2022 elections loom over the sector.