The Contribution of Tourism Investments and their Impact on the Local Economies of Kenya: A case study of Nakuru County

Abstract

Tourism is one of the fastest-growing sectors in the world. It contributes about 10% of the global Gross Domestic Product. It further creates about 5% of direct jobs. The sector has been shown to have a strong multiplier effect on all aspects of the economy. Globally, about 20% of jobs generated over the past five years are related to tourism. Tourism development stimulates growth by attracting new foreign direct investment (FDI) and building new facilities. This study sought to establish the contribution of hospitality and tourism investments to the local economy of Kenya, taking Nakuru County as a case study. The study adopted a descriptive survey research design, accommodating qualitative and quantitative methods; both primary and secondary data. Purposive sampling was used to select 51 out of 151 tourism and hospitality investments in the study area. Secondary data were obtained from tourism and hospitality published and unpublished reports from government and non-governmental organisations. Quantitative data were analysed through descriptive statistics, and content and regression analyses. Salaries of staff, park entry fees, and curio shops constituted 2%, 21.3% and 0.5%, respectively, of the total revenue generated in the study area. Regression analysis results indicate that tourism investment accounted for a 36.6% improvement in the economy, as shown by the values [R Square=0.366, F (1, 151) = 87.311, p<0.05]. Tourism and hospitality investments contributed Kshs 10.12 billion, which was 54% of Nakuru County's gross domestic product, showing that tourism and hospitality investments contribute significantly to the local economy and, by extension, to the country’s economy