An upsurge of unregistered tourism establishments at the coast, mainly in Mombasa, Malindi and Kwale, is worrying major hotel proprietors as they have to contend with competition posed by the cheaper facilities being fashioned as private holiday homes.
The tourist villas being listed on reservation websites like Booking.com do not appear on lists of licensed tourist establishments, but are cock full with international tourists at the expense of major hotels.
The elegantly furnished private homes have mushroomed in recent years, operating undercover disguised as vacation rentals, to avoid regulation and taxes.
Major hotel industry players warn that the government is losing millions in revenue while others have not carried out an environmental impact assessment to guarantee safety of tourists.
“There are more than 280 vacation rentals that could be operating illegally along the beaches of Diani and Ukunda in Kwale county alone, giving unfair competition to licensed hotels,” says Mohammed Hersi, chairman of Kenya Tourism Federation.
Speaking to the press recently, Hersi said illegal tourism facilities are now everywhere along the coastal strip from Diani, Mtwapa, Watamu, Malindi and Lamu, taking up substantial business.
“A 10 bedroom villa next to a five star hotel can be fully occupied throughout the year, raking in huge profits with minimal operation costs,” he avers, adding that at least two out of every ten tourists coming into the country end up being booked into a villa.
He urges the Tourism ministry to crack down on hotels, lodges, and camps operating illegally, though, he concedes, it is difficult to identify the proprietors of the facilities as they offer online accommodation-rental services.
“It’s rather tricky as the owners of the facilities when caught claim it is a family vacation home,” notes Hersi, adding that the owners of the furnished apartments charge less than half the cost of accommodation in a five star hotel, but make enormous profits because of minimal operational costs.