EAC partner states record Ksh.517B loss in tourism, hospitality industry
East Africa Community (EAC) partner states are estimated to have lost international tourism receipts to the tune of $4.8billion (Ksh. 517.6billion) last year, following the Covid-19 pandemic.
This follows a study by the East African Business Council (EABC) with the support of the African Economic Research Consortium (AERC) and Bill and Melinda Gates Foundation.
The study was aimed at assessing the impact of COVID-19 on the tourism and hospitality industry and policy options to protect sector players from COVID-19 disruptions and future pandemics.
The study reveals that tourism which contributed an average of 9.5% in GDP in 2019 and an average of 17.2% to EAC total exports, was one of the most affected areas in the region. This was reflected in massive reductions in international tourist arrivals, receipts, jobs, visitors to parks and hotel occupancy rates.
From March 2020 when the first cases of Covid-19 were reported in the region, the report reveals that 4.2 Million foreign tourists were unable to travel to their preferred destinations in the bloc.
This saw a dip of about 2 million jobs, from the about 4.1 million jobs recorded in 2019 to 2.2 million jobs by the end of the year.
The study also revealed that visitors to national parks declined significantly by about 65%, impacting negatively wildlife conservation efforts in the region.
The study also shows that hotels in the region registered average occupancy rates of below 30% thus affecting their operations significantly including maintaining staff.
An online survey conducted as part of the study indicated that 26.5% of the businesses lost their entire projected revenues during the pandemic period, 44% lost 75% of their projected revenue and 17.6% lost 50% of their projected revenues.
The respondents indicated that 35% reduced staff by more than 50%, 20% reduced staff by below and up to 50%, 32% maintained staff at partial pay and only 8% maintained all staff at full pay.
The report indicates that businesses turned to borrowing to fund their running expenditures such as rent and utilities due to reduced operational capital while the loss of jobs saw a decline in household incomes,
Speaking during a webinar validating the studies, Mr. Dennis Karera, EABC Vice Chairman noted that the study will contribute to developing macro-economic policy options for consideration and adoption by EAC Partner States.
“ Adopting an EAC coordinated approach in reviving the tourism sector by marketing the region as a single tourist destination, opening EAC skies, rolling out national-wide vaccination drives and mutual recognition of COVID-19 test certificates in the region is certainly critical,” he said.
The Study recommended for tourism destinations to have pandemic preparedness and risk management plans to minimize such instances in the future.
The report also revealed that the tourism stakeholders are calling for the sustaining of stimulus packages provided by EAC Governments to re-engineer and re-define the tourism products by also leveraging digital technologies in tourism marketing and promotion.