Demand for Kenya as a Tourist Destination, 1980-2013

Abstract

The National Tourism Strategy (2013-2015) of the Ministry of Tourism positions tourism industry as one of the key drivers behind Kenya’s economic development. It has a contribution of 13.7 percent of the gross domestic product (GDP) of Kenya. Fluctuations in the number of international tourists arriving in Kenya motivated this study to be conducted. The study sought to establish the determinants of international tourism arrivals in Kenya. The study specifically sought to identify the factors that affect international tourist flows in Kenya, to investigate how demand for Kenya as a tourist destination could be increased in the face of challenges such as terrorism and to provide policy recommendations to raise the demand so as to help re-energize the industry. The study adopted the inter-consumer demand theory for modeling. The study employed time series data collected for a period of 33 years (1980- 2013 ) collected from World Bank national accounts and indicators on GDP per capita for OECD countries, Central Bank of Kenya reports (on the exchange rate) and the KNBS for the period 1980-2013. An ordinary regression model was used to investigate the determinants of international tourism arrivals in Kenya. The study findings indicated that in the long run, only per capita GDP of OECD countries and insecurity dummy significantly affected the international tourist arrival in Kenya. Per capita GDP of OECD countries positively affected international tourist arrivals while insecurity negatively affected it. The findings of the study also indicated that in the short run there is a negative and significant relationship between insecurity and international tourist arrivals. Based on the conclusions, the study recommended that the Kenyan Government should put in place measures to improve the security level. This is because insecurity is seen to reduce the number of international tourists visiting Kenya and as a result that leads to a negative impact on the GDP of the Country.