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Kenya Bids to Revive Tourism as al-Shabaab Vows Broader War

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Westgate Mall
In September, an attack on Nairobi's Westgate mall killed at least 67 people. Photographer: Carl De Souza/AFP/Getty Images

May 23 (Bloomberg) -- Kenya scrambled to revive its tourist industry after a spate of bombings scared off visitors, as the al-Shabaab militant group vowed to broaden its war in Somalia to the neighboring East African nation.

The government will spend 200 million shillings ($2.3 million) on a campaign to include online marketing and global roadshows advertising the country, Kenya Tourism Board Managing Director Muriithi Ndegwa told reporters yesterday in the capital, Nairobi. President Uhuru Kenyatta today announced further temporary measures including the reduction of national wildlife park fees and tax exemptions for air travel.

“Kenya’s brand equity, as a destination, is at stake and is quite eroded due to these incidents,” Ndegwa said. “We are here to say Kenya is open for business despite the ongoing challenges.”

Tourism is Kenya’s second-biggest source of foreign currency after tea, generating $1.1 billion last year. Arrivals fell by almost a fifth to 1.4 million last year as the country was hit by a series of bombings, including an assault by al-Shabaab on the Westgate Mall in Nairobi that killed at least 67 people. The al-Qaeda-linked group said the attack was in retaliation for the deployment of Kenyan troops in Somalia.

Since the Westgate raid, the currency has declined 0.8 percent against the dollar to 88 by 1:43 p.m. in Nairobi today, heading for an almost 2 1/2 year low.

Nairobi has been hit by two attacks this month -- twin explosions in the Gikomba open-air market on the outskirts of the city center on May 16 that killed at least 12 people, the week after two bus bombings on a highway leading out of the city left at least three people dead.

Multiple Attacks

Yesterday, a police officer and civilian were injured in the port city of Mombasa after a grenade explosion, the local County Commissioner Nelson Marwa said

Last week, TUI AG, the owner of Europe’s largest tour operator, repatriated about 400 customers from the Kenyan coast to the U.K. and canceled all flights to Mombasa until Oct. 31. The evacuations came after the U.K.’s Foreign Office on May 14 advised against travel to Mombasa and surrounding areas because of threats to security. Other countries including the U.S. and Australia have issued similar advisories.

“We are liaising with foreign offices to lift travel advisories,” Ndegwa said. “There is engagement with the private sector and of course the government fully supports us.”

Tourism Measures

The government, which is targeting to raise annual tourist arrivals to 10 million in a decade, will reduce national park fees for non-residents to $80 from $90 and lower landing charges at Mombasa’s airport by 40 percent and coastal Malinda by 10 percent, Kenyatta said in a statement. Other temporary measures include exempting air ticketing services provided by travel agents from value-added tax and allowing companies to pay for their workers’ vacation as a tax-deductible expense.

Sheikh Fuad Mohamed Khalaf, a leader of al-Shabaab, said in remarks broadcast yesterday that the group is committed to “shifting the war” in Somalia to Kenya and Uganda because both countries have soldiers fighting in Somalia.

Kenya deployed troops in Somalia in October 2011 after accusing al-Shabaab of killing and abducting tourists and aid workers. Uganda has the biggest contingent of forces in the 22,126-strong African Union peacekeeping mission that is battling the insurgents, who are trying to topple the Somali government and create a state ruled by Shariah, or Islamic law.

Closing Shop

The spate of attacks in Kenya has reduced occupancies at companies including Hemingways Holdings, which has spent $25 million building hotels in Nairobi, at the coast and in the Masaai Mara region famed for its safaris, according to Chief Executive Officer Alastair Addison. From this month, Hemingways shut down its coastal hotel for six weeks and put staff on leave because of poor bookings, he said in a May 19 interview.

The attacks come ahead of the Kenya’s high season for tourists -- the end of June, July and August accounts for almost 80 percent of the industry’s annual revenue, Addison said.

“If we lose that a lot of companies will not be able to continue,” he said. “Frankly they will just shut up shop.”

To contact the reporter on this story: Ilya Gridneff in Nairobi at igridneff@bloomberg.net

To contact the editors responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net Paul Richardson, Karl Maier, Sarah McGregor

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