The Chairperson of the Kenya Travel Agents Association (KATA) on Tuesday announced that Chief executive officers of various travel agencies would take a 90 per cent pay cut from March and all industry employees to take unpaid leave for two months from April.
He said the move is to safeguard the health of the travel agents’ industry.
The move is consequent to the absence of most airlines not being operational due to the Coronavirus pandemic and its effects on the global economy.
“We are witnessing the shutdown of the travel industry. The economic effects are getting worse by the day and could become more permanent if the government does not act now,” Wanyoike said.
“Travel Agents business is aligned onto Airlines, and hence in the absence of operating Airlines the Travel Agents businesses are 100 per cent vulnerable”
Mohammed further said, “During the month of February 2020 the Travel Industry in Kenya recorded a decline in passenger number bookings of 50 per cent, followed by a drastic cancellation of flight bookings, conferences, and events resulting in a revenue loss to the sector of 85 per cent.
Over 95 per cent of forward bookings for April have also been canceled since Europe, America and the Middle East issued lockdown notices for non-citizens.
The Travel industry has recorded Zero bookings this week and the forecast for April to June is the same. This is an unprecedented occurrence, and travel agents have no cash flows to support their employees in the coming months should the government fail to intervene”
The travel sector has continued to witness a drastic decrease in travel owing to the travel restrictions put in place by the Governments of Kenya, USA, UK, and European Governments, the Middle East and Asia including India.
As such, mid of March, some airlines cancelled their scheduled operations into Kenya. These airlines include Air India, Etihad Airways, South African Airways, and RwandAir. Kenya Airways has suspended flights to and from key business and tourist destinations within their network.
Other notable findings in the travel impact analysis include total spending on travel in Kenya in 2019 was Sh1.7billion on tickets, airline operating fees, and ancillary products and services. This has been projected to plunge by 60 per cent by the end of 2020.
The estimated losses by the travel industry alone are severe enough to create job losses across the sectors. The full impact of the crisis is expected to last at least three quarters, with quarter two of 2020 being the low point and the travel industry has over one thousand travel agencies, and it is projected that a majority of the travel agents are facing an imminent risk of collapse.
The association pushed for immediate intervention saying that it is imperative that the Government steps in to provide immediate relief measures for the industry.
“Temporarily shutting off travel from the US, Europe and India have already exacerbated the situation caused by the heavy impact of coronavirus on the travel industry and the over 500,000 Kenyans whose jobs depend on travel. We have and will continue to engage with the government on policy steps that are necessary to ensure that travel agencies, 80 per cent of which are small businesses can continue keeping their employees.”
“There are countless stories of travel businesses working hard to earn a day’s living. But the cold reality is that they cannot support their employees if they don’t have any customers, and they don’t have customers because of the actions needed to stop the spread of coronavirus. Government intervention is required to address the operating expenses of these travel agents going forward”, Mr Mohammed emphasized.
The Kenya Association of Travel Agents is the national umbrella body for Travel Agents in Kenya, with a growing membership of over 170 Travel Agencies. It is Kenya’s largest and only membership organization for travel agents
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