Kenya: Hotels Teeter on Brink of Collapse as COVID-19 Bites

With zero per cent occupancy, Mr Ishpal Oberoi has to cough up Sh1.4 million every month to maintain his hotel on the shores of the Indian Ocean.

The lack of customers, a result of the closure of hotels to combat the spread of the coronavirus, is something he had never imagined.

Even when the tourism sector was at its worst due to terrorism, the investor said hoteliers managed to stay afloat through other business avenues.

But the Covid-19 pandemic has brought the industry and its subsidiaries to their knees, with almost all hotels closed, thousands of workers sacked, and either sent on leave with half pay or unpaid leave.

"This is the worst time for Kenya's tourism sector. Not even terrorism could destroy the industry, but Covid-19 has," said Mr Oberoi, Kuldip's Touring Company managing director.

It is his sole business, having inherited it from his grandfather. The 63-year-old business had over 60 tour vans and 88 drivers. Today, only three drivers remain.

"If I had somebody willing to buy this business, I would have sold it yesterday. I am tired. I have never been this tired," the distraught investor said during the interview at his Bamburi hotel, Mombasa County.

He says the company enjoyed brisk business in the 1980s, only to take a nosedive due to terrorism.


Mr Oberoi, Kenya Association of Tour Operators (Kato) Coast branch chairman, said he has exhausted his financial reserves and he is now relying on bank loans.

"How can you sustain this business with zero occupancy? Sh350,000 goes to electricity; swimming pool is another cost, the chemicals, and you have to have a minimum number of staff. If I lock this place up, I need guards. With no guests, I have a Sh1.4 million monthly bill for water, security, electricity and cleaners," he lamented. He has fewer than 30 essential staff.

Lofty Tours Director Monika Solanki said her firm is refunding clients. "These were deposits. We are trying to convince people who had already paid to postpone their visits to next year or when we can manoeuvre, but it is difficult. We have paid deposits to hotels but they are not giving us back our money, yet our clients will no longer trust us if we don't refund their cash," Ms Solanki said.

Her firm had 70 tour vehicles but only 10 are operating after she sold the rest because of declining business.

Mr Swaleh Karama, a father of seven, had this to say: "I have worked at Ketty Tours for over 20 years, but the pandemic is the worst challenge ever. We have no source of livelihood. It has killed tourism at the Coast."

Operators want Tourism Cabinet Secretary Najib Balala to agitate for reduction of water and electricity costs.

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