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Why the tourism sector will be a star in 2023

From being the worst-hit sector at the height of the pandemic, the tourism sector appears to have turned a corner to become the star in 2023, according to 2024 Economic Survey figures released by the national statistician.

The sector – which includes accommodation and food service activities – recorded a growth of 33.6 percent to a valuation of Sh527.2 billion, driven by increased footfall for both tourists and business travelers.

The sector grew by 33.3 percent last year, the fastest growth among the 21 economic sectors the national statistician tracked in calculating the country’s gross domestic product (GDP).

This growth – which for the first time exceeded pre-pandemic performance – was also a boon for the labor market in the accommodation and hotel sector, which recorded an additional 21,100 formal jobs in 2023, according to annual findings from the Kenya National Bureau of Statistics. (KNBS) shows. In 2022, the sector produced services worth Sh374.1 billion.

“Globally, there was a 34 percent increase in the number of international tourists… representing a resilient recovery from Covid-19,” KNBS said.

“In Kenya, the tourism sector recorded better performance in 2023, thanks to growth in the aviation sector and the hosting of prominent conferences in the country,” KNBS said.

The number of international arrivals grew by 35.4 percent last year to 2,086,800, surpassing 2019 figures for the first time. There was a marked increase in the number of visits to national parks, museums and historical sites, indicating the recovery of the tourism sector.

The country also witnessed accelerated visitor arrivals during the African Climate Summit held in September, along with other major conferences.

Improved performance was also reflected in increased wage employment in the sector, which grew by 27.8 percent, the highest of any sector, to 97,000. In 2022, the sector had 75,900 salaried employees or those who receive a regular wage. These were still lower than the pre-pandemic wage employment of 81,200.

The sector was one of the hardest hit by travel restrictions, which saw international travel fall to just 60,000 in January 2021, before rising to 91,000 in 2022.

Many hotels have closed and retrenched thousands of employees as the country implemented containment measures aimed at curbing the spread of Covid-19, which was first recorded in Kenya in March 2020.

Most hotels closed briefly and then reopened, but others, such as the Intercontinental Hotel and Silver Springs, closed completely.

This year, the iconic Hilton Hotel decided to close its doors completely after years of poor performance were exacerbated by the pandemic.

On Kenya’s coast, popular with tourists, several hotels have since closed forever, leaving a trail of unemployment that is only beginning to diminish as the number of tourists increases.