Policy Paper No. 03 of 2001 on Effects of Visa Waiver and Increase in Airport Tax on Kenya's Tourism Industry

Abstract

This paper analyses the likely impact of the visa waiver introduced in June 1999 and the increase in airport tax in December 1999 on Kenya’s tourism industry. The visa waiver policy was intended to resuscitate the tourism industry but indications are that this objective has not been achieved. The countries excluded from the waiver perceive it as discriminatory while some of the benefiting countries perceive the policy as a suspicious strategy of luring tourists and covering up of the country’s tourism problems. Furthermore, because there has been no discernible increase in tourist arrivals, the waiver has led to loss of government revenue and necessitated compensatory measures such as doubling of air passenger service charge, with serious implications on the cost-competitiveness of air transport in Kenya. The waiver has also led to an increase in the unit cost of visa administration because not all visitors are included in the waiver. There is therefore no compelling reason for the visa waiver particularly in the absence of clear-cut criteria for selecting the benefitting countries.