I read this letter and had to share. Surely as a nation we can do better!!

Kenya Tourism In Dire Straits

A letter published in Travel News Kenya - April 2014

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 (International Tourism Borse) in Berlin, last 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 one to Tanzania. Now, unfortunately, for every one 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 right or wrong, 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 per person per day. That’s US$ 180.00 per room before they have even had a cup of coffee. Tanzania’s park fees are US$55. What makes us think we are so special that we can charge nearly double?
• We are not looking after our product, the dramatic increase in poaching, and the disgraceful over development in the Mara (arguably our crown jewel).
• Add to all this VAT (Value Added Tax) on tourism without any notice period, with complete disregard for existing contracts and all the investments made by our overseas partners in brochures and marketing.
• 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.

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.
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 Jomo Kenyatta International Airport 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 in Tanzania, 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 ten years to attract tourists to our land. Poachers are decimating game (both professional and subsistence) elephant and rhino are being killed right under the nose of the Kenya Wildlife Services (whose staff are suspected to be involved, but are not charged or jailed, not even sacked, just transferred to another park).

Our wilderness areas outside of the parks are constantly under pressure. We have let the local communities run riot in our sacred reserves and now, in the Mara, we have three times the number of properties than the day the moratorium was invoked, how is this possible if not for corruption?

There are streams of cattle grazing each night in the Mara, making sure the game is moving steadily across to the Serengeti to get away from it.
You cannot take a walk on our beaches without being constantly harassed by hawkers.

The main reason I voted for the new constitution was because all reserves would be returned to KWS.

So I pose the question; what will attract people to our country in 2030?

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 be met. 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.

We should have considered our partners, who sell Kenya, have printed brochures and fixed their prices and who 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$1 million. They decided it was cheaper and easier to simply not Kenya, rather than re-print and re-distribute their brochures because one single destination decided such a thing. So that’s 432-clients and US$ 1,725,000.00 that I have lost for 2014. Please believe me, I am not the only one!
What is an added problem is that it demonstrates a no care attitude towards these agents and partners. This is what we have decided, screw you, it’s not my problem.
Even today, 6-months after its 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, it 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, are now down to 11% gross profit margin, which even keeping costs to a bare minimum relates to less than 1% nett profit 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, here are 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 schemes, 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.
• We are the only country that I know of, where the tourism industry gets zero assistance or understanding from government.
Today, private sector operators are, primarily financing the Kenya Tourist Board.

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 collectively P.S.V.’s (Passenger Service Vehicle). The industry has been lobbying for five years now to get our own category (like everywhere else) of a 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, 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 this time. They cost over Kshs. 40,000/- each and are not currently available, but we have to fit them by Monday, 31st March!!!
What do I do on Tuesday, stop all my vehicles wherever they happen to be across Kenya and make my tourists walk?

You can count on one hand the fatal accidents involving tourist vehicles in the last ten years, and most of these were un-licensed operators. We did not tamper with our speed governors and we followed the law, then why are we caught up in this mess?

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. The Police doesn’t harass them, we do!!

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, however 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.
• Tourism is one of the largest employers.

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.

Richard Corcoran
Managing Director
Liberty Africa Safaris"

Your thoughts?

There was a post where I suggested that this comedic security situation fully loaded with clowns is killing the tourism industry.

Over the past 3 years, online searches for tourism in Tanzania have been steadily rising compared to tourism in Kenya. That is real data.

But of course, we are better than Tanzanians and South Africans aren't we? We do forget that the Mara is also in Tanzania.

Perhaps there's an opportunity in utilizing Pareto optimality. Our focus on international tourism is being affected by the above. Perhaps, due to the knowledge that there's an increase in middle class, we should focus more on domestic tourism.

Can we at least agree that the Kibaki govt left a huge mess ? And we rewarded the man with a KES 500m home and huge financial perks. Manzee wonders never cease in Kenya. A president spends 10 years neglecting the country and he is handsomely rewarded.

Dont count on Kandie and co to fix any of this.

When I was in high school, I recall studying Tourism (Human Geography or so it was called) as a topic and in there was a sub-topic: Tourism in Switzerland. To this day, one thing has remained in my mind: the state of their domestic tourism, which contributes numerous revenues to the exchequer, creates employment and helps cushion the industry in case of a downturn in the numbers or spending of int'l tourists. Sasa hapa kwetu twangoja nini?

A certain rich Wazuan here, makes his money from domestic tourism. He saw a gap and went for it.

I like the fact that Richard Corcoran has been able to factually articulate the case. It is not a pro/anti-establishment discussion or tourism industry seeking favours but core bread and butter issues at discussion here. Interesting angle on the data from alma too about online searches.

Dr Richard Leakey as a professional did make this sector receive a major hearing ear in President Moi's regime due to the donor funding and appease required from Kenya. Left to 'ourselves' we are cannibalizing each other. Devolution and involvement of county governments run by short term thinkers just complicated it.

At the root, poor governance (little creativity with resource mobilisation) and corruption are our undoing.

As an example, maybe any county legislation impacting local an forex gains +/-ve needs to go through review at central government for strategic review. At the end of the process, the county still keeps a portion of the income generated but core legislation remains at central government.

An Economic Crimes Bill should be enacted where in part poaching and corruption are declared economic crimes with special well staffed courts where wealth restitution is effected as well as severe punishment like death/life imprisonment.

Punitive actions when taken have a way of containing negative human behavior.

There is certainly a problem that calls for attention, but I also get a feeling that matters are being over hyped here.
Actualy my take is that the write up by Richard Corcoran has certain valid points, but also many half truths based on business interest biases

The VAT matter was poorly and hastily implemented, complicating pricing issues for businesses. If my memory serves me well, it was formally adopted in the budget estimates read out in June 2013. As required by the constitution, the proposal was floated a couple of months earlier for the public to reflect on them.

In regard to security, I agree that the government needs to do more, as the current situation is worrying.

I also do agree that Poaching can be checked much better than we are doing. To be fair though, Tanzania and other African Countries are also faced with this menace.

Businessmen will always attempt to lobby Government as they canvass for preferential treatment even in circumstances where it is not justified.

Why for example would tour vehicles expect to
have a different set of rules in relation to other PSVs!!

I have no issue with the park fees being increased to $90 as Kenya deserves to earn equitable revenue from her resources and as is usual, every passing year, prices across all sectors go up as a matter of course.

Whining about small scale operators and calling for their obliteration is to lose it completely.
For starters, you begin small before you can grow big. In any case would anybody show me a sector where the small operators don’t exist. Even media has the gutter guys eking out their living right there.

I am not persuaded that Liberty Africa Safaris Kenya is making any losses!! How!! Its just a fat lie. One that stinks.
He would have to demonstrate how that happens, otherwise I am not sold out on this.

Irony
Isnt the proliferation of lodges in our parks an indication of business fortunes!! Why would any businessman invest in a resort with no prospects for returns!

Year in year out we keep hearig how we should grow our tourist arrival numbers.
Doesnt that of necessity mean that we have to increase our bed capacity!

Finaly, just as Richard Cocoran may have voted for Uhuru, so did the Matatu guys, the brief case operators, hotel industry investors, ranch owners around the Parks etc.

From that article, the real problems I think we have are:
- Insecurity; this will definitely kill the coast circute and may be our tourism
- Poaching, if it reamins unchecked
- Overdevelopment of the Mara.

All the others are neither here nor there, the park entrance fee is fine, VAT is fine, brief case whatever are simply someone mourning about competition

B.Timer I thought I was going to see data. You are showing me a link about projections.

My friend. The data is damning. There is no way to hide from that.

The tourism industry needs a major injection of Jubilee gov't machismo.

Bring in the First Lady. Her participation in a marathon is GREAT for the country. Let her work on our PR.

Lakini trying to pretend that things are rosy is a recipe for failure.

I know that's the jubilee motto. Kusema na kutotenda. But on this one, data is not lying. You are.

I'm saying that as someone who's seeing a major decline in bookings from the industry first hand. From 50 bookings a day to 5 a day. Accross the board.

The queries you get from the bookings are simply

"how safe is Kenya in October? I'm coming with my family and want to know if I should come to Kenya or Tanzania."

The above is copy pasted.