KATA in crisis meetings as State ignores their woes budget
Players in Kenya’s travel sector are not sure how they will benefit from the Sh5 billion stimulus package that will be used to rebound the travel and hospitality industry from the negative impact of Covid-19 pandemic.
In May, President Uhuru Kenyatta announced a Sh2 billion stimulus package to support the renovation of facilities and restructuring of business operations.
This was in additional funding to support operations of Utalii College, engage 5,500 community scouts under Kenya Wildlife Service at a cost of Sh1 billion and another Sh1 billion to support 160 community conservancies.
And in his budget statement last Thursday, National Treasury Cabinet Secretary Ukur Yatani allocated the sector an additional Sh3 billion, bringing the total amount to Sh5 billion.
Kenya Association of Travel Agents (Kata) board of directors Treasurer Joseph Kithitu says the stimulus rationalisation package was silent on the travel sub-sector.
“The regulations that guide the administration (of the money) is not clear on who gets what and how much. Some of the conditions are also pegged on facility renovations,” he said.
The Kata board was due to meet this week to deliberate on the issue, in addition to coming up with an industry position on the financial year 2020/2021 National Budget.
Concerns are that the minimum tax of one per cent on gross turnover —even for loss making firms — announced by Yatani will hurt the sector, which is operating with no cash flow as a result of Covid-19.
In the four months to June since the government instituted a lockdown that has restricted local and international travel as a way of mitigating the spread of the virus, travel agents have undergone a traumatic period with many businesses closing down and laying off staff.
“Whereas we were projecting a 31 per cent revenue growth by June this year, the sector has lost 70 per cent revenue, estimated at about Sh2 billion— far below last year’s year-on-year figure of Sh5.5 billion,” Kithitu said, finance director at Express Travel Group.
Meanwhile, the travel agents have resolved to stop issuance of credit facilities for travel to their clients to sustain their businesses as the Covid-19 crisis bites.
The radical decision, arrived at by KATA has been informed by the looses incurred as a result of the pandemic.