Airlines, hotels hit with refunds crisis on lockdown cancellations

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Economy

Airlines, hotels hit with refunds crisis on lockdown cancellations


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Passengers disembark from a Jambojet plane at Jomo Kenyatta International Airport, Nairobi. FILE PHOTO | NMG

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Summary

  • Airlines and top hotels are faced with multi-million shilling refund claims after Kenya restricted travel in and out Nairobi and four surrounding counties.
  • Airlines and hotels face losses in the wake of cancelled bookings for the high season of Easter.

Airlines and top hotels are faced with multi-million shilling refund claims after Kenya restricted travel in and out Nairobi and four surrounding counties, throwing Easter holiday plans into disarray.   

Airlines and hotels face losses in the wake of cancelled bookings for the high season of Easter when most carriers and firms in the hospitality business had recorded full bookings.

Now, thousands of travellers are faced with the options of vouchers for future travel or uncertain cash refunds for air tickets and room payments for unused services in the wake of the disruptions.

Most hotels and carriers are inclined to customers accepting vouchers which allow them to travel in future, while conserving the much-needed cash to remain afloat.

“We will allow the tickets to be used for the next three to six months without penalties,” Safarilink chief executive Alex Avedi told the Business Daily yesterday. “This is a big blow to tourism, too. We may have to close operations again.”

Kenya Airways said it has suspended domestic flights to comply with new anti-coronavirus lockdown measures announced by President Uhuru Kenyatta on Friday.

Mr Kenyatta announced travel restrictions in the capital Nairobi and four surrounding counties to slow surging Covid-19 infections.

Under the new curbs, Nairobi and the counties of Kajiado, Machakos, Kiambu and Nakuru would be treated as one zone, and residents would be barred from crossing over to other areas.

The sale of alcohol in the areas has been banned and restaurants ordered to do takeaways.

The new restrictions come a week before the Easter holiday, when many Nairobi residents traditionally visit family in other parts of the country.

The strict measures have cut off the flow of tourists, mainly domestic travellers, from the capital and surrounding counties to Indian Ocean beaches in Mombasa, Kwale and Kilifi.

Travel to high-end hotels in the shores of Lake Naivasha has also been curtailed with most facilities enjoying full bookings.

Osotua Luxury Resort on South Lake Road in Naivasha in mulling whether to make cash refunds or offer future travel.

“We have both options. But I’m totally disappointed at the current events of Kenya. Still trying to wrap our heads around the situation at hand,” said Osotua Luxury Resort general-manager Jimmy Musangal.

The hotel was fully booked during Easter and was receiving bookings linked to the 2021 World Rally Championship (WRC) Safari Rally in June.

The rally will take place inside the Great Rift Valley between June 24 and 27.  

The Safari was last a WRC event in 2002, exiting the calendar after sanctions over safety and commercial viability.

The restrictions are a blow to Kenya’s tourism, which was starting to receive business after being hard hit by the coronavirus crisis the whole of last year.

Mohamed Hersi, the director of operations at Pollman’s Tours and Safaris said that they are in talks with guests to reschedule travel.

“We are asking guests to reschedule their travel,” said Mr Hersi, without giving details.

While customers are hesitant to take vouchers due to the uncertainties over the restrictions, airlines and hotels reckon they are short of cash for refunds given they had committed costs based on the advance revenues from the early bookings.

“The value of these tickets will remain valid for a period of 12 months from the 29th March 2021,” budget carrier, Jambojet, said.

Kenya, heavily reliant on tourism, began Covid-19 vaccinations on March 5, with the government saying it hoped the campaign would mark the beginning of the end of the pandemic.

But three weeks later the President cited the soaring infections and daily deaths since the pandemic began.

Kenya had reported 130, 214 cases and 2,117 deaths in total by yesterday. The President said the positive test rate hit 22 percent last week compared with January’s two percent. 

This month, an average of seven Kenyans have died each day of the virus, up from three a day in January and February.

“Whereas the foregoing measures will have a negative impact on the economy, these measures are temporary … the cost of not acting now will be far much greater,” Mr Kenyatta said in his Friday addresss.

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