Kenya's Government May Offer Incentives, Land for Investors in New Hotels

Kenya’s government is considering offering tax incentives and making more land available to investors to build three- to five-star hotels, Tourism Minister Najib Balala said.

The minister has proposed the idea to the Ministry of Finance and discussions are ongoing, Balala said in an interview today in Kenya’s capital, Nairobi.

Hotels are full during the high tourist seasons, with the country on target to meet its goal of attracting 1.2 million visitors this year, Balala said. Tourism accounts for 11 percent of gross domestic product in Kenya, making it the second-biggest foreign exchange earner after horticulture in East Africa’s biggest economy.

The country, home to Indian Ocean beaches and some of Africa’s most famous safari parks, is aiming to attract 2 million visitors in 2012 and 3 million in 2015.

In the eight months to August, tourist numbers rose to 701,691 from 611,674 in the year-earlier period, while in the six months through June earnings jumped 85 percent to 48.5 billion shillings ($603 million), Balala said in October.

Construction in the port city of Mombasa and the surrounding coastal area popular with holidaymakers has not kept pace with the business hub of Nairobi, he said.

“During the peak season our hotels are filled over 100 percent,” Balala said. “We are looking for investors to build quality beds, especially on the coast.”

To contact the reporter on this story: Sarah McGregor in Nairobi at Smcgregor5@bloomberg.net.

To contact the editor responsible for this story: Paul Richardson at pmrichardson@bloomberg.net.

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