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Tourism Investiment Opportunities in Kenya

Introduction
Tourism is one of the major foreign exchange earners in Kenya and is second to agriculture, last year (2007) it earned approximately US$ 800 M. The sector is growing at an average rate of 14.6 % per annum and it employs approximately 500,000 individuals both directly and indirectly. The industry contributes 10% to the Gross Domestic Product (GDP) of the country and plays a key role in improving the balance of trade by bringing in foreign exchange. The visitors’ arrivals in the country have been increasing exponentially for the past years to hit a record mark of 2 million tourists last year (2007) . The Tourism sector has been unveiled as one of the six key drivers towards the government achieving Vision 2030, which is an economic development plan aimed at transforming the country into a middle level income country by 2030. The other pillars are agriculture, retail and wholesale, manufacturing, business process outsourcing (BPO) and financial services. The strategy aims at making Kenya one of the top 10 long haul tourist destinations, offering diverse and high end experiences by 2012 to a target five million tourists. The vision objectives will be achieved through aggressive marketing campaigns in the source markets, incorporation of niche tourism products such as birding, sports, conference tourism and ecotourism, re-branding of existing products, building of three resort cities (one in Isiolo and two in the coast) and creating of an enabling policy through the enactment of the Tourism Bill 2008. Tourism is a powerful driver for alleviating poverty and creating wealth as the industry has unique characteristics that make it a strategic driver for poverty alleviation and wealth creation, namely; resilience of the sector, labour intensiveness, tourists travel to destinations hence no shipping cost is incurred, most attractions are located in marginalized areas, most tourism SMEs require little capital to initiate and the fact that it has been recognized as a poverty alleviation tool in most developing countries poverty alleviation strategies. However, it is worth noting that tourism also has its challenges that stakeholders and development practitioners should appreciate; seasonality, dependence on international peace and international fuel prices. For example, tourism was highly affected by the post election violence in Kenya. During the first quarter of the year (2007) the occupancy rates in the hotels dropped from an average of 85% to 20%. In the first half of year 2008 about 561,000 tourists visited the compared to 873,000 visitors from the same period in 2007. Kenya has a variety of tourist attractions ranging from the pristine white sand beaches along the coastline to rolling savannah plains full plain game, and snow capped Mt. Kenya to a diversity of cultural heritage that is demonstrated by the existence of 42 tribes. Tourists visiting the country are hosted in key tourist destinations, such as; Maasai Mara, Amboseli, Mid Rift, Western Kenya, Northern Kenya and the Coast.

 Amboseli tourist destination
Amboseli tourist destination is located in the South Rift Region and it’s composed of Amboseli National Park and the adjacent Group Ranches of Mbirikani, Kuku, Kimana, Rombo, Olgulului-Olarashi, and Selenkei. Amboseli tourist destination is famous for the big five and for having the highest single concentration of elephants in the world. In addition, Amboseli has spectacular sceneries and the landscape is enhanced by Mt. Kilimanjaro in the background. Tourism activities in this destination includes game drives with opportunities of night game drives in the group ranches, photography, walking safaris and locals cultural heritage experiences. Amboseli destination attracts approximately 153,193 visitors who are accommodated in 27 tourist establishments(see annex 2). The number of tourist beds available in the destination is estimated at 674 beds, while the occupancy rate is averaged at 80% for convectional hotels and 40% for SMEs. Tourists visiting this destination stay for an average duration of 2.5 days, and their average spending is estimated at 200 US$ per tourist per day. In terms of employment the destination have employed approximately 1,700 individuals both directly and indirectly. To tap from tourism benefits the local community members have created group ranches, initiated community owned SMEs such eco-camps and cultural villages, entered into joint partnerships with private investors, applied for employment in tourism establishments and sought supply contracts with hotels in their neighbourhood.

Accessibility to Amboseli Tourist Destination
The destination can be accessed through a number of transportation means, roads and airstrips.The main road into the destination from Nairobi is via Namanga (240 km) on the Nairobi – Arusha Road. The road is tarmac upto Namanga but is badly corrugated and potholed in places from Namanga to Meshanani Gate (75km). The other road and via Emali (228 km) on the Nairobi – Mombasa Road. The road is tarmac up to Emali and murram from Emali to Remito Gate (64 km) Access from Mombasa is mainly through Tsavo West via Kimana (Olkelunyiet) Gate. Amboseli National Park has a single airstrip for light aircraft at Empusel gate. Other airstrips exist at Kilimanjaro Buffalo lodge and Namanga town.

Accommodation facilities in the destination
Accommodation in the destination ranges from five start hotels to moveable tents in campsites. Two five star lodges are located inside the park (Serena and Oltukai ) while others are located at the periphery of the park; Tortilis camp, Amboseli Sopa Lodge and Kibo Slopes camp. The communities has signed joint-venture agreements with private investors which has lead to the creation of luxury low impact camps; Ol Donyo Wuas, Olkanjau Tented Safari Camp, and Amboseli Porini Camp,Leopard camp and Kimana lodge.

Tourist Attractions & activities in the destination
Amboseli tourist destination is renowned for the spectacular view of Mt. Kilimanjaro and it abundance of wildlife including the big five. The destination offers unsurpassed opportunity to observe the highest concentration of elephants in the world. The popular tourist activities in the destinations includes game drives (night game drives are available in the adjacent group ranches), mountain climbing, balloon safaris, photograph shooting, walking safaris, and birds shooting (governed by quotas).

Amenities in the destination
Security in the destination is good although there are few remote sites where security can’t be guaranteed. Security in the park is provided by armed KWS rangers while in the neighbouring group ranches security is provided by game scouts. Water is readily available from permanent and seasonal streams from Mt. Kilimanjaro, some areas are quite dry and water is only available from boreholes.

Group Ranches in the destination
 The wildlife dispersal area for Amboseli National Park comprises of six group ranches; namely; Mbirikani, Kuku, Kimana, Rombo, Olgulului-Olarashi, and Selenkei group Ranch. Below is a short description of the group ranches.

a) Mbirikani Group Ranch The group ranch has 4,633 members and the total population is well over 6,000. It covers 125,893 hectares. It is in Loitokitok Division, Mbirikani Location. The ranch started in 1978 and is a 1200 km2 area of semi-arid grassland and bush, communally owned. The region is ecologically important, as it is the wet season habitat for an abundance of wildlife, which migrates from the neighbouring national parks and converges on the plains during the wet season. Mbirikani is located about 150kms south east of Nairobi and about 50kms north of the border town of Loitokitok which is at the foot of Mount Kilimanjaro. To the east are the Tsavo and Chyulu Hills Game Reserves while about 45kms to our west, is the world famous Amboseli National Park.These lands provide the dispersal area for the wildlife from the protected area. The ranch has the only remnants of Amboseli Rhino’s monitored by community scouts.

 b) Kimana Group Ranch
Kimana Group Ranch is a communally owned property. The group ranch lies within the Tsavo-Amboseli ecosystem, which encompasses more than 25,120 hectares and is home to one of the most abundant free ranging wildlife concentrations. The group ranch has been sub-divided into individual parcels but a 5,000 hectares sanctuary is still intact.

c) Kuku Group Ranch
Kuku group ranch covers about 400 square miles of African wilderness, owned by Maasai herdsmen. The property stretches from the Chyulu Hills to the foothills of majestic Mt. Kilimanjaro, the highest mountain in Africa (19,342 feet). The altitude ranges from 3,000 to 6,900 feet, so the land includes a number of different habitats. Biodiversity is extremely rich. Kuku Group Ranch has an area of 96,000 hectares and a membership of over 2,000. It shares a common border with the West Chyulu game conservation area and Tsavo West . It has a lot of wildlife on the ranch, which include the endangered wild dogs among the many species. Habitats range from the grasslands of the savanna to green river woodlands and cool mountain forests. The Chyulu Hills on Kuku Group Ranch were formed by very recent volcanic activity; some of the lava outflow age less than 200 years.The hills are well known for their great biodiversity. The ranch also contains pools, springs, two rivers and a lake, making it a draw for great numbers of large game.

d) Rombo Group Ranch
Rombo group ranch is approximately 30 Kms from Loitokitok town. The ranch covers approximately 38,365 hectares, it is the less developed in terms of tourism activities when compared to other group ranches as it only has one tourist amenity Olowuara Camp. The ranch is located Rombo division in Loitokitok District

e) Olgulului Group Ranch
Olgului group ranch is also owned by the local community and it has about 147,050 ha acres of land and approximately 3,000 members. The group ranch borders Amboseli National Park on the South Eastern side boarder Kilimanjaro National Park in Tanzania. The famous Kitenden corridor which join Amboseli and Kilimanjaro is situated here. The ranch has a public campsite which is run by the group ranch. Concessions have also been signed with tour operators to allow their visitors use the Kitirua concession area which runs along Tanzania –Kenya boarder and act as migratory/Dispersal area for Both Amboseli and Kilimanjaro National Parks Wildlife.

f) Selenkei Group Ranch
Eselenkei/Emotoroki Group Ranch is located some 110 km south-west of Kajiado Town, and 95 km from Loitokitok town. The ranch has no common border with Amboseli National Park . The ranch covers an area of 74,794 hectares and has 1,155 registered members. The community have Eselenkei sanctuary 5,000ha and proposing to set another one along their Mbirikani Olgulului boundary.

The Kenya advantage
Potential investors can take full advantage of tourism investment opportunities through direct investments or joint-ventures with Kenyan entrepreneurs. Opportunities also exist in this sector in the construction of tourist hotels and game lodges all over the country. Kenya is a vast country with a wide range of potential tourist attractions, which have not been fully exploited. Currently, the tourism industry is mainly concentrated at the country’s coastal area and in the National Parks and Game Reserves. As a policy matter, the Government of Kenya is strongly committed to the regional diversification of this very important industry to other areas for some good reasons. Similarly, the potential for the domestic market has not been fully exploited. There is also need to identify other tourist attractions besides the existing National Parks, Game Reserves and the Beach. In order to extend the length of stay of “safari” tourists in Kenya, emphasis will be put into the development of inland “resorts” situated close to the national parks and game reserves. It is noted that the main constraint to the development of such resorts has been lack of sufficient investment capital. Participation in such investment ventures will, therefore, be very much encouraged by the Government of Kenya in order to exploit the tourism potential in those areas. Below is a range of good reasons why investors should invest in Kenya.
a) A Range of Tax Treaties and Investment Promotion and Protection Agreements.
Kenya has a number of tax treaties and investment promotion and protection Agreements. Exports from Kenya enjoy preferential access to world markets under a number of special access and duty reduction programmes. Kenya is signatory to various agreements aimed at enhancing trade amongst member states.

b) Multilateral Trade System (MTS)
The World Trade Organization (WTO) is the only international organisation dealing with the global rules of trade between nations. The overriding objective of the WTO is to ensure that trade flows as smoothly, freely and predictably as possible. Kenya has been a member of the WTO since its inception in January 1995.

c) ACP/Cotonou Partnership Agreement
Exports from Kenya entering the European Union are entitled to duty reductions and freedom from all quota restrictions. Trade preferences include duty-free entry of all industrial products as well as a wide range of agricultural products including beef, fish, dairy products, cereals, fresh and processed fruits and vegetables.

d) African Growth and Opportunity Act (AGOA)
Kenya qualifies for duty free access to the United States of America (USA) market under the African Growth and Opportunity Act enacted by USA. Kenya’s major products that qualify for export under AGOA include textiles, apparels, handicrafts, etc.

e) Generalised System of Preferences (GSP)
Under the Generalised System of Preferences, a wide range of Kenya’s manufactured products are entitled to preferential duty treatment in the United States of America, Japan, Canada, New Zealand, Australia, Switzerland, Norway, Sweden, Finland, Austria, and other European countries. In addition, no quantitative restrictions are applicable to Kenyan exports on any of the 3,000-plus items currently eligible for GSP treatment.

f) Investment Protection Guarantee
The constitution of Kenya guarantees protection of life and private property. The Foreign Investment Protection Act guarantees against expropriation of private property by government. Kenya is a signatory to and Member of the Multilateral Investment Guarantee Agency (MIGA) an affiliate of the World Bank which guarantee investors against loss of Investment to political problems in host countries. Kenya is also signatory to International centre for Settlement of Investment Disputes which is a channel for settling disputes between foreign investors and host governments The constitution of Kenya guarantees protection of life and private property. The Foreign Investment Protection Act guarantees against expropriation of private property by government. If expropriation ever occurs, it will be for public good and prompt compensation must be given. Kenya is a signatory to and Member of the Multilateral Investment Guarantee Agency (MIGA) an affiliate of the World Bank which guarantee investors against loss of Investment to political problems in host countries. Kenya is also signatory to International centre for Settlement of Investment Disputes which is a channel for settling disputes between foreign investors and host governments

g)Bilateral Trade Agreements
Kenya has signed bilateral trade agreements with several countries around the world. Some of the countries are already members of existing schemes offering market access/duty reduction preferences as above.

 Tourism investment opportunities in Amboseli
This section describes six potential tourism investment opportunities in Amboseli tourist destination, the carrying capacity for the park has been exceeded and these investiment opportunities are located in the group ranches surrounding the park. The potential investments are in form of joint-ventures between locals and the private sector, where communities will provide land for the creation of conservancies/sanctuaries and the investors to develop tourism facilities in these areas. The visitors’ arrival in Amboseli Tourist Destination is growing exponentially and there is need to increase the number of beds through the incorporation of low impact camps. The carrying physical carrying capacity of the park has been exceeded and further investments can only be done outside the park. So far the group ranches have set aside about 45000 hectares for wildlife conservancies and sanctuaries which are managed by the group ranches. Currently there 3 functional sanctuaries, and 3 concession areas with 4 eco-lodges and 2 campsites. Currently, four group ranches have set aside land for the creation of four sanctuaries which will play host to approximately 6 low impact eco-lodges. These establishments will be in the form of joint-ventures between private investors and the group ranches. This is aimed at enhancing conservation of natural resources and increase revenue from tourism enterprises. The various potential investment opportunities are outline below.

a) Mbirikani Group Ranch – Rhino Sanctuary
The group ranch has carved 5,000 hectares (from the 125,893 hectares they own), which have been earmarked for the creation of a rhino sanctuary. Within proposed sanctuary they have identified a spectacular site (see photo inset) where a low impact camp can be developed. The site is located on top of a hill which has a cliff on one end, the cliff provide a panoramic view of Amboseli National, Maparasha hills, Mt. Kilimanjaro, Mt. Meru, Mt. Longindo, and Chyluu hills at the horizon. Sun downer and dinning tables could be perched at the edge of the cliff to enable the tourists take a glance of the magnificent surroundings. An artificial watering hole will be ideal at the bottom of the cliff, this will grant the tourists with an unmatched opportunity of viewing wild animals as they water and wallow in mud. Potential tourist activities ranges from walking safaris and night game drives to rock climbing and cultural heritage experiences. Piped water is readily available and is a short distance from the site. The potential investor will be expected to develop a low impact camp, access road and game drive tracks.

b) Selenkei Group Ranch – Conservation Sanctuary
Selenkei group Ranch is 74,794hectares, so far they have in collaboration with a local investor they have developed a wildlife sanctuary and they are in the process of creating a second one. The proposed sanctuary will be 5,000 hectares, and adjacent to the other sanctuary. A fabulous site has been zeroed on for the construction of an eco-camp, the site is next to the seasonal Olkejiado River and the vegetation is characterised by an Acacia Tortilis riverine forest. The acacia tree canopy provides as ideal and serene environment for tourists to relax, enjoy the mother nature and unwind from stress. Ideal activities in this site would be game drives including night game drives, walking safaris, photography and cultural heritage experiences. The potential investor will develop an exclusive eco-camp and develop game drive tracks. Security is good but there is need to incorporate private security men and more game scouts. The area is relatively dry and there is need to sink a borehole for guaranteed access to water throughout the year.

c) KUKU Group Ranch -Conservation Sanctuary
Kuku group ranch is approximately 96,000 hectares and is located in central division in Loitokitok district. Kuku has three accommodation facilities which have developed in close collaboration with private investors; Kambi ya Kanzi, Nyati Camp and Maasai field Centre. The group ranch has reserved further 7,000 hectares for the development of a new sanctuary. A wonderful site has been earmarked for the establishment of an eco-camp, the site is next to a permanent stream with cold water. The site is endowed with an acacia riverine forest. The proposed tourist activities in this site include; walking safaris, night game drives, photography and cultural heritage experiences. The investor is expected to develop a low impact eco-lodge and develop game drive tracks to facilitate game drives within the sanctuary. Security in the region is perfect but there is need of private security staff and engagement of game scouts. Water is readily available from the permanent stream, although it requires purification.

d) Rombo Group Ranch- Conservation Sanctuary Rombo group ranch is the biggest with approximately 38,365 hectares, its located in Rombo Division in Loitokitok Division. The group is approximately 30 Kms from Loitokitok. The ranch has a vast parcels of virgin lands that are ideal for tourism development. The terrain ranges from hills, flat plains and valleys which play hosts to both seasonal and permanent streams. There is only one accommodation facility in the group ranch, (Olowuaru Camp). The group ranch has completed a zoning exercise and 24,000 Acres have been set aside for the creation of a sanctuary. Three low impact accommodation facilities are proposed at different vocal points in the sanctuary. The seasonal Mokoine Rivers passes through the proposed sanctuary and acts as a natural border between kuku and Rombo Group ranch. The potential investor(s) will develop 3 low impact eco-lodges and establish amenities such as game drive tracks. Water is available from the seasonal Mokoine River but it needs to be purified. The security status in the region is fair, but there is need to increase the game scouts and employ private security personnel for each accommodation unit.

Conclusion
The development of these facilities will play a paramount role in increasing the number of beds available in the destination and at the same time guarantee the accrual of tangible benefits for communities from tourism business. The creation of sanctuaries on the other hand will enhance conservation of biodiversity in the destin