Mood of Kenya tourism turns frosty while tempers run hot

A letter written to the publisher of an East Africa e-magazine has gone viral literally overnight, describing the woes of an industry – quite similar in fact to many previous articles posted here – which feels it is left alone in the proverbial “dire straits,” is being bombarded with “sunshine speeches” by an increasingly unpopular Cabinet Secretary and shortchanged on election promises made by a presidential team which the moment they were in office loaded the sector with additional taxes, fees and charges. This clearly aggravated existing problems and accelerated a downturn of a market already gone soft over post-election violence fears a year ago, which ultimately were proven wrong as peace prevailed in spite of a highly contentious outcome of the presidential election. Combined with Western anti-travel advisories, which were in place already and “oomphed” up after the Westgate attack and a series of other incidents in which grenades were thrown in Eastleigh / Nairobi, coast locations and more recently a church service in Likoni/Mombasa which ended abruptly in a hail of gunfire.

Read for yourself what Richard Corcoran, Managing Director of Liberty Africa Safaris, says in his letter to “Travel News” and then visit https://www.facebook.com/pages/Travel-News-Kenya-Ltd/142953972400844 to view the range of comments already posted, apart from a flood of comments sent by readers of this publication through emails and social media messages:

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Nairobi, 27 March 2014
Tony Clegg-Butt
CEO and Publisher
Travel News Kenya
Nairobi
Kenya

Dear Tony,

RE: SORRY STATE OF TOURISM IN KENYA

I write this letter to you, as a patriotic and very concerned Kenyan. It is prompted by a numbers of meetings I had at the recently concluded ITB in Berlin, earlier this month.

All the meetings I had were with “Africa Specialists” (who produce most of the worthwhile business to Kenya). All the meetings were very negative, depressing and difficult to argue. One particular agent used to have 7 bookings to Kenya for every 1 to Tanzania. Now, unfortunately, for every 1 booking he gets for Kenya he has 5 to Tanzania and 20 to South Africa. It was a similar story with all of them.

One agent actually asked me to give him one good reason why he should even try to sell Kenya, when his opinion, for wrong or right, was that there is just too much against us (and this is an agent who loves Kenya). The points raised were as follows:

We have major security problems and risks which are not being addressed, ranging from Acts of Terrorism to violent robbery.
Our Park Fees are now US$ 90.00 per person per day. That’s US$ 180.00 per room before they have even had a cup of coffee, transport, accommodation or anything else. Tanzania Park Fees are still US$ 55.00. What makes us think we are so special that we can charge nearly double?
We are not looking after our product, the dramatic increased poaching, and the disgraceful over development in the Mara (arguably our crown jewel).
Add to all this the VAT on tourism without any notice period, with complete disregard, no, care about existing contracts and all the investments made by our overseas partners in promotions and brochures.
The complete lack of control of “brief case operators” who not only unfairly compete with proper, licensed and tax-paying companies like ours, but also with our agents. The end client can by-pass us all and offer rates that do not even allow them to pay park fees, leave alone anything else.

It proved very difficult to persuade them that Kenya is still a good partner, destination and option for their clients, no matter how hard we tried.

For Kenyans only…. Let me try to expand, my point of view, on each of the points raised:

SECURITY.
As Kenyans, we appreciate that it was left to us to solve the world’s problem in Somalia, and the rest of the world should be more appreciative of this. However, our Government does not help themselves, we are all still waiting for answers on Westgate, the so called “light bulb” at JKIA and a list of others. Apart from this, our neighbours are considered much safer, despite the fact that they have had incidences in Zanzibar and some very violent raids on tourist camps, they seem to be able to keep it out of the news.

PARK FEES.
It is very difficult to explain that we have increased Park Fees to US$90, not because of the fight against poaching, or increased patrols or new equipment needed to protect our wildlife, but simply because “Conservation Fees” now attract VAT. We must be the only country in the world to have VAT on a fee to protect our own product and heritage.

PRODUCT.
We all have to sit and think about what we will have left in 10 years to attract tourists to our land. Game is being decimated by poachers, (both professional and subsistence) elephant and Rhino being killed right under the nose of KWS (whose staff that were suspected to be involved are not charged and jailed, not even sacked, just transferred to another park).
Our wilderness areas outside of the parks are constantly under pressure and land tussles. The Lands office is a joke.
We have let the local communities run riot in our sacred reserves and now, in the Mara, we have 3 times the number of properties than the day the moratorium was made, how is this possible if not corruption?
There are streams of cattle grazing each night in the Mara, making sure the game is moving steadily across to Serengeti to get away from it.
The main reason I voted for the new constitution was because all “reserves” would be returned to KWS??
You cannot take a walk on our beaches without being constantly harassed by hawkers. Therefore, most tourists don’t venture on to the beach.

So I pose the question; what will attract people to our country in 2030? Unless our government takes this seriously and takes action.

VAT
We all have understanding and compassion for the fact that our current government took over the country in a sorry state, and that there are bills to pay and budgets to meet. In general, I am not opposed to VAT on tourism, but it should have been implemented in a professional way, not like some Banana Republic.

Firstly, we should have considered our partners, who sell Kenya, have printed brochures / pricing and have existing bookings on their charts. We cannot wake up one morning and say there is VAT starting today.

I have one particular agent that sells packages all over the world, has a 168 page brochure and distribution costs of US$ 1 million. For them they decided it cheaper and easier to simply not sell any Kenya business, rather than re-print and re-distribute their brochures because 1 single destination decided such a thing. So that’s 432 clients and US$ 1,725,000.00 that I have lost for 2014. Please believe, I am not the only one!

What is an added problem is that it demonstrates the “no care” attitude towards these agents and partners. This is what we have decided, screw you, not my problem. This affects negatively their decision whether they come back in 2015 and beyond, especially when you add the other problems.

Secondly, even today 6 months after forced implementation, the method of charging VAT is still not clear. In a normal world, there would have been 6 months of consultation, then a year’s notice and numerous training seminars provided across the country to teach correct procedures and methods.

OTHER PROBLEMS.
“Brief Case” or “fly-by-night” operators are able to compete unfairly with us and our agents, with a simple website, good pricing and nothing really behind it. They can be cheaper, no office, no taxes, no staff costs and everything below the radar. Anywhere else in the world, governments protect their good, honest, tax-paying companies from this.
This is what our agent’s complain about but, to be honest, is the least of our problems.

Our main problems lie with the government’s false impression that we are the best, everybody needs us, everybody wants to come here, and we have no competition.
They also falsely believe that tourism is a rich industry that is just evading tax.

How wrong they are!!

We, as an industry, DMC’s are now down to 11% Gross Profit Margin, which, even keeping costs to bare minimum relates to less than 1% Nett profits in really good times and huge losses in the bad times. This comes from the extremely high costs and stress of doing business in Kenya.

As Liberty International operates in 55 countries in the world we can openly compare figures, a few interesting ones;
We have the highest electricity costs of any office, but we still need a generator due to 2 or 3 day power cuts.
We have the second highest costs of internet, after Cuba.
We have the highest security costs of any office (alarms and guards), as the government cannot protect us.
We have the third highest telecommunications costs.
We have the second highest staff insurance costs, as NHIF does not function.
We are one of the only offices that are forced to have private pension scheme as NSSF does not function properly. Even that induces a cost of RBA to control it.
We are the only office that pays rates and services, but still has to hire a “private” garbage disposal company.
Interest rates are crippling, in an industry that has high and low seasons.

We are the only country that I know of, where the tourism industry gets zero assistance or understanding from government.

Today, even KTB, is being primarily financed by private sector operators now.

In Tanzania, just as an ad-hoc example, all tourism vehicles are duty free. A minibus now costs us +/- Kshs. 3 million and a Land Cruiser +/- Kshs. 5.5 million. Client’s demand quality vehicles in Kenya like anywhere else in the world, and thus we have to renew the fleet in stages every 3-4 years. Please tell me how one can make money on this?

Tourism vehicles are put into the same category as buses and matatus, called P.S.V. (Passenger Service Vehicle) We have been lobbying for five years now to get our own category (like everywhere else) T.S.V. (Tourism Service Vehicle). This, however, has fallen on deaf ears, as usual, government is not interested in tourism.
A few years ago, we were all told to fit speed governors, which we duly complied, at vast expense to ourselves, not just to fit but also to maintain. Now, due to the matatus and buses, tampering with their speed governors, we have to buy a whole new set of these, but digital. They cost over 40,000/- each and are not currently available, but we have to fit them by Monday!!!
Firstly, you can count on 1 hand the fatal accidents involving tourist vehicles in the last 10 years, and most of these were un-licensed operators. We did not tamper our speed governors and follow the law, then why are we caught up in this mess?
Secondly, Where do I find Kshs. 1,600,000/- in this current business climate, because someone, somewhere suddenly decided we all have to fit digital governors.
As they are not available, what do I do on Tuesday? Stop all my vehicles wherever they happen to be across Kenya and make my tourists walk??
All this nonsense is because the Police cannot do their job. They have failed to enforce speed limits, now they have failed to enforce the current speed governors.

I just get so upset when I see un-roadworthy matatus falling apart at the seams, bellowing black smoke and breaking every law in the book, but who gets harassed by Police, tourism vehicles!!

In conclusion;

As a patriotic Kenyan, I appeal to the Kenyan Government to wake up and realise they are killing the tourism industry slowly but surely.

We are uncompetitive in the market.
We are ruining our product and image.
It is getting more and more difficult to do business here.
It is getting more and more expensive to do business here.
The security situation needs to be dealt with, albeit difficult.
Tourism needs some assistance, incentive and respect from government.
Tourism has such a huge impact on the economy of our country.
Tourism is one our largest earners of foreign exchange.
Killing tourism will, sooner or later kill the Kenyan economy.

I went out and queued for hours to proudly vote for Uhuru, thinking he understood tourism. Maybe I was wrong. All he has done since coming to office, is increase taxes, reduce services and put huge hurdles for tourism to try and conquer.

Yours sincerely.

Richard Corcoran
Managing Director
Liberty Africa Safaris Ltd.

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In closing I should like to add that past article here have drawn overwhelming support from readers in Kenya, and those who know Kenya, though a few vitriolic retorts were received too from what can only be assumed to by sycophants of the powers that be, with one claiming that ‘… you muzungu have no idea what is really happening in Kenya because you do not even live here. How dare you to talk down our minister and our government policy’. That of course tends to overlook the fact that I did live in Kenya for 17 years, regularly visit and live in another East African Community member state, Uganda, where we get all the going ons from across the lake close up and often very personal.
There is the saying to ‘never lose hope’ but in this particular case the Kenyan government would have to pull out all the stops to actually make this saying come true. I commiserate my Kenyan colleagues in the tourism industry, who are now suffering from a downturn in fortunes entirely not of their own doing. And if it is of any consolation, I will continue to come and visit and highlight and help showcase Kenya’s many attractions, which are worth visiting, the safari parks, game reserves as are the coastal resorts, some of which can hold their own against the best in the world.

Meanwhile has the Kenya Tourism Board, following the announcement by Cabinet Secretary Kandie that the focus of tourism promotion will now shift to the domestic market, launched an appeal to the industry:

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Dear Industry Partners,

Greetings from the Kenya Tourism Board.

The Domestic Tourism Unit at KTB has numerous plans and campaigns that are aimed at increasing tourism revenues and bed nights from the domestic segment throughout the year.

Please see below highlight of the upcoming integrated Print & online campaign;

Campaign Background

The Kenya Tourist Board will be launching a media offensive in April 2014 in the domestic market in order to establish Kenya as a positive brand in the consumer conscious with the fundamental aim of driving sales to Kenya from the Residents.

The objective of the media offensive is to tap into the AB segment of the market who frequently take their holidays outside the country and make them aware of the various luxury/ high end products offering in the destination

The campaign will have both print and online components but be more heavily weighted towards online

The focus of the campaign will be to promote luxury Kenya and the coast

At least four media houses will be invited to submit proposals to execute this campaign

We would like to encourage members of your association who specialize in Luxury & the coast to take advantage of these opportunities to promote their facilities and services and the respective local destinations.

We appreciate your continued support in our destination marketing efforts and we trust that you will find this campaign beneficial in our efforts to grow sales from the domestic market.

Kindly do share the invitation with your appropriate membership who can extend offers for the Luxury and coast products

Regards

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