Kenya Tourism Report Q2 2012
Business Monitor International, March 2012, Pages: 45
Tourist Arrivals Grow Strongly In 2011
The swift action by Kenyan military forces in cracking down on al-Shabaab terrorist activity in southwestern Somalia during recent months should hopefully mean any impact on tourism from the September and October 2011 kidnappings and murders of foreign citizens is relatively short. However, the risk remains that a prolonged period of fighting with al-Shabaab forces in Somalia could lead to an increase in suicide bomb attacks or other terrorist activity in Kenya over the longer term.
Tourist arrivals for 2011 did not fall off as drastically as BMI had feared when compiling the previous quarterly report. According to figures released by the Ministry of Tourism in February 2012, tourist arrivals by air and sea grew by 15% over the full year to 1,265,136, up from the 1,095,842 arrivals in 2010. Minister of Tourism Najib Balala has said Kenya will continue to market itself to new and emerging markets in 2012 as it seeks to diversify its source tourism markets.
The strong tourist arrivals performance in 2011 was a slight surprise given that many Western governments had issued travel advisories for Kenya. In January 2012, the UK’s Foreign and Commonwealth Office was still advising against ‘all but essential travel to within 60km of the Somali border and to coastal areas within 150km of the Kenya-Somalia border’, including the Lamu area. However, demand from new markets such as China and India more than made up for any drop in demand from traditional European source markets in Q411. This was also reflected in 2011 tourist revenue figures, which rose by 32% year-on-year (y-o-y) to KES98bn, mainly on the back of higher spending from Chinese, Indian and Emirati tourists.
Looking forward, much will depend on how the security situation develops over the coming months. Although the Ministry of Tourism released a statement in October 2011 that said Kenya is not at war with Somalia and that the military response on al-Shabaab will not affect tourism activities in the country, it is likely that Western tourists in particular will stay away from Kenya in the short term given the many travel advisories warning against travel to the country.
The effect of escalating military action will have differing effects on different aspects of Kenyan tourism. Given its location, we expect inbound tourism to Lamu to be hit particularly hard. On the other hand, safari holidays – which take place much further inside Kenya – should be relatively unaffected. That said, perception is everything when it comes to tourism demand and further deterioration in the security situation – such as a grenade attack in Nairobi similar to the twin attacks in October 2011, which killed one person and injured more than 20 – would likely put further downward pressure on arrivals and revenue numbers over the medium term.
We have taken a cautious stance and forecast 4.7% growth in tourist arrivals in 2012 and a 5.3% increase in tourist revenue to US$1.16bn. Beyond this point, our core forecasts are for steady growth in tourist arrival and revenue. However, this remains predicated on a stable political situation on the ground. Aside from the risk posed by renewed al-Shabaab activity, a downside risk to our forecasts includes the fact that domestic political tension will likely rise over 2012 ahead of the parliamentary election scheduled for March 2013 (which may take place sooner if the coalition government collapses).
UK Still Largest Source Market For Tourism
In 2011, the UK remained the leading source market for Kenyan tourism, with 203,290 tourists arriving, according to figures from the Ministry of Tourism. Second was the US with 119,615 arrivals, followed by Italy (96,360), Germany (68,737) and India (58,986). India’s high placing is indicative of the changing face of inbound tourism to Kenya. Over 2011, traditional markets saw falls in visitor numbers to Kenya, such as France (down by 3.6%), The Netherlands (-9.8%) and Austria (-10.5%).
However, emerging markets such as China (37,432 arrivals, up by 31.4%), India (+24%) and the UAE (+42%) provided strong increases in visitor numbers. This is a trend BMI expects to continue over the forecast period. Within Africa, Uganda was the largest source market (42,674 arrivals), followed by South Africa (38,354).
Airline Industry Expanding
In recent years, there has been a steady increase in the number of visitors travelling to Kenya by air, withpassenger numbers (arrivals, departures and transit) passing through Jomo Kenyatta International Airport (JKIA) in Nairobi rising by 8% y-o-y in 2010, to reach 5.49mn. Passengers passing through Moi International Airport (MIA) in Mombasa also rose, by 14.1% y-o-y to reach 1.27mn. The other seven airports operated by the Kenya Airport Authority (KAA) reported abput 760,000 passengers, making for total passengers handled by KAA of 7.52mn in 2010.
In terms of arrivals alone, a total of 1.23mn travellers arrived in Kenya over 2010, making up over half of all visitor arrivals. Rising visitor numbers have led to KAA seeking funding to carry out the modernisation of JKIA, which is ongoing. The leading domestic airline is Kenya Airways, which operates a fleet of 34 aircraft to 56 domestic and international destinations, as of February 2012. More information on Kenya Airways can be found in the Company Profiles section of this report.
Business Monitor International's Kenya Tourism Report provides industry professionals and strategists, corporate analysts, tourism associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Kenya's tourism industry.
Executive Summary
SWOT Analysis
Kenya Tourism SWOT
Kenya Political SWOT
Kenya Economic SWOT
Kenya Business Environment SWOT
Industry Forecast Scenario
Arrivals
Table: Arrivals, 2008-2015
Accommodation
Table: Hotels Data, 2008-2015 (‘000, unless stated)
Expenditure
Table: Tourist Expenditure And Economic Impact, 2008-2015
Inbound Tourism
Table: Inbound Tourism By Region, 2008-2015 (‘000, unless stated)
Outbound Tourism
Table: Outbound Tourism, 2008-2015
Market Overview – Travel
Commercial Airlines
Road Transport
Global Oil Products Price Outlook
Market Overview – Hospitality
Accommodation
Accommodation Developments
Tourism Regions In Kenya
Tourism Infrastructure
Land
Tourism Bank
Industry Associations
Business Environment Outlook
Table: Middle East And Africa Tourism Business Environment Ratings
Global Assumptions
Table: Global Assumptions, 2010-2016
Table: Global And Regional Real GDP Growth, 2010-2013 (% change y-o-y)
Table: Developed Market Exchange Rates, 2011-2013
Table: Emerging Market Exchange Rates, 2010-2013
Developed States
Table: Developed States Real GDP Growth, 2010-2013
Emerging Markets
Table: Emerging Markets Real GDP Growth 2010-2013
Consensus
Table: BMI And Bloomberg Consensus Real GDP Growth Forecasts, 2011 And 2012 (%)
Company Profiles
Heritage Management
Kenya Airways
TPS East Africa
BMI Methodology
How We Generate Our Industry Forecasts
Tourism Industry
Tourism Ratings – Methodology
Table: Tourism Business Environment Indicators
Table: Weighting of Components
Sources
- Heritage Management
- Kenya Airways
- TPS East Africa
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