Sunday, May 17, 2009

Serena Copes with Kenya Tourism Dip

TPSEA (Serena) the only listed Kenya tourism chain had sales of Kshs. 3.2 billion ($40 million) and profit of 223 million (~$3 million) for the year ended September 2008 both down 12% and 54% respectively from 3.7 billion and 416 million in 2007.

2008 was listed as one of the worst years for Kenya tourism with some smaller hotels going under receivership, laying off staff and shutting for prolonged periods

Saved by Tanzania?: Serena was a beneficiary of diversification as the group integrated its east Africa operations in 2006. For comparison, in 2007 Kenya accounted for 2/3 of sales and profit, but in 2008, Kenya provided 59% of revenue and just 25% of profit, while Tanzania had 41% of sales (1.34 billion) and 75% of profit (167m)

Unfortunately there’s no breakdown of income of properties they manage in Mozambique, Rwanda or Uganda. Serena owns or manages 8 properties in Kenya, 6 in Tanzania, 2 in Rwanda (Kigali serena, lake kivu serena), 1 each in Uganda (kampala serena), zanibar (serena inn) and mozambique (polana serena)

Invest in tough times: At a time when some banks have sworn off new tourism projects, Serena is using the downtime in the sector to expand. Serena will invest 400 million in Jaja Limited a to develop properties in Nanyuki and Elementaita once it gets shareholder approval. Shareholders will also get the same 1.25 shilling dividend as for the year 2007

Mt. Kenya seen from Nanyuki

No beef: The Farmer’s Choice chain, a related company, supplied 26 million shillings worth of meats & sausages to Serena in 2008, down from 33 million in 2007


kip said...

It is great Serena is investing when everyone is fearful, they will reap big time during the next boom. I was researching a holiday recently, most of Serena's competitors had similar prices. Serena was priced about 15% higher, they must be pretty confident that their strong brand will bring in the business.

Serena have a property in Kabul Afghanistan, I wonder how it is doing?

kachwanya said...

Having survived the aftermath of Post election violence and now almost surviving the worldwide economic crunch Serena investors should be rest assured that good times are ahead. Classic example of why companies need to diversify their operations

Mitzy said...

Serena is opening 2 more hotels in Afghanistan to add on to the one in Kabul that was attacked by insurgents on Jan 2008. They also have a property in Islamabad.

Maishinski said...

It's silly not to expand when *competition* is cutting back - especially if you had the resources and planned to do it anyway.

Anonymous said...


What "boom" is this that is coming when the global economy continues to worsen?

Maishinski said...

Anon 10.25
Thats how capitalist economies work. Cyclical phases. Boom-->Bust--> Boom--> Bust--> Boom--> Bust etc..

It's not about whether a Boom will come, its about WHEN the boom will come.

Those who profit from capitalism understand that. This is not the first recession and neither will it be the last.

Anonymous said...

Speaking of the tourism sector, remember not to go to any Nairobi Java House restaurant. Some tourists who went there had all their belongings stolen and when they asked the staff on the ground they were shown the "take care of your belongings" sign

Maishinski said...

@ Anon 9:55.

I sympathise with the tourists. Honest. BUT - sounds like they had it coming...

How incredibly dumb do you have to be to leave your stuff unattended, in a PUBLIC CAFETERIA, ANYWHERE IN THE WORLD, especially when it's CLEAR to all that you are a foreigner?

Wow, do they even do that in their own country?

Then to go ahead and fault Java management for telling them "errrm.. DUH!!"? Hilarious.

Some signs (e.g. "fasten your seatbelts", "take care of your belongings" etc) are made for stupid people.

The fact that MORE THAN ONE tourists were involved points to the degraded quality of tourists that we are now attracting. The tourism industry has truly sunk to the lowest levels.

Now the morons shall go back to their country and badmouth Kenya, Kenyans, Africa etc... Reversing the benefits of precious marketing dollars that our country spent in their country.

Honestly, we should start vetting tourists IQs as part of immigration process.

Anonymous said...

Serena is NOT TPSEA... TPSEA 'rents' the brand from AKFED... only the Tanzania & Kenya properties are in the TPSEA stable...

E-Nyce said...

gotta go w/ Maishinski, nothing wrong w/ Java House, except it gives the illusion of being a typical coffee/burger place at home. Tourists gotta remember where they are in their travels.


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