Kenya is one of the leading tourism hotspots in East Africa. The country offers a broad range of tourist attractions such as sandy beaches, safari tours, and national parks. However, political instability, security problems particularly?in the coastal region, and the outbreak of Ebola in West Africa in 2014 caused a sharp decline in international visitor arrivals to Kenya in recent years. Thus, the country's tourism earnings have decreased gradually by around 2% annually from 2011 to 2015. However, increased security boosted the tourism earning in 2016 after five years of steady decline.

Tourists visiting Kenya

Source: Kenya National Bureau of Statistics

Kenya has emerged as a major conference tourism destination in East Africa in recent years. Conference tourism accounted for 27.5% of the total tourism revenues in 2015 according to the Kenya Meetings Industry Report 2016.

Kenya - Tourism earnings

Source: Kenya National Bureau of Statistics

Tourism industry is a major source of foreign exchange and employment for East African countries. Kenya faces a growing competition from its neighbors as a tourist destination of choice in the region.

East Africa’s top tourist destinations (2015)

Source: World Bank

The Kenyan government has allocated a total of KES2.7 billion for the tourism sector in the upcoming financial year starting July 1, 2017, a reduction from KES4.5 billion in 2016/17 financial year.

Kenya - Tourism Budget

Source: Kenya National Bureau of Statistics

According to the World Travel and Tourism Council (WTTC), the tourism industry’s total contribution to GDP has reached KES588.6 billion ($5.9 billion) in Kenya in 2015. The sector’s share of GDP has fallen from 10.5% to 9.9% in 2015. WTTC forecasts that the total contribution of tourism to GDP to rise by 5.1% per annum to KES964.2 billion (10.3% of GDP) by 2025.

Kenya Tourism - Total Contribution to GDP

Source: World Travel & Tourism Council

Tourism sector’s total contribution to employment stood at 9.3% of total employment in Kenya in 2015. This is expected to rise by 2.9% annually to 2.1 million jobs in 2026 (9.5% of total employment), according to the WTTC.

Kenya Tourism — Total Contribution to Employment

Source: World Travel & Tourism Council

Rising incomes and emerging middle class created a strong domestic tourism sector in Kenya. According to the WTTC, domestic travel spending generated 59% of direct travel and tourism GDP in 2015. This figure is expected to increase at an average annual rate of 5.4%, reaching $4.2 billion in 2026.

Kenya - Domestic Travel Spending

Source: World Travel & Tourism Council

Kenya’s upscale hotel industry has been growing. Investment in new hotels especially in Nairobi and Mombasa is under way. Global hotel brands such as Marriott, Ramada, Sheraton, Mövenpick, and Hilton are planning to provide extra capacity in the next five years.

According to the PWC’s Hotel Outlook 2016-2020 survey, sixteen hotels are expected to be built in Kenya, adding 2,900 rooms and expanding hotel capacity by 14% with a 2.7% compound annual increase in available rooms over the next five years. PWC forecasts that the number of available rooms to increase from 18,100 in 2015 to ?20,700 in 2020.

Kenya - Hotel Occupancy Rate

Source: PWC Hotel Outlook 2016-2020

Total room revenue in Kenya’s hospitality industry has been in decline since 2012. PWC forecasts that total room revenue? will expand by 6.1% compounded annually, rising to $677 million in 2020 from $504 million in 2015.

Kenya Hospitality - Total Room Revenue

Source: PWC Hotel Outlook 2016-2020

Kenya ranked 80th in the ranking of the WEF’s Global Competitiveness Index in Tourism 2017 report among 136 countries, by achieving an overall competitiveness score of 3.6 on the scale from 1 to 7.

Kenya Travel & Tourism Competitiveness

Source: WEF Travel & Tourism Competitiveness Index 2017

The Outlook

Safety concerns and insufficient infrastructure will remain the primary issues impacting the short-term growth of Kenya’s tourism industry. Kenya has a huge potential to become one of the leading tourism destinations of choice in Africa in the long term if the government overcomes these key challenges.