Boston, MA -- (SBWIRE) -- 12/24/2013 -- Following the terrorist attack carried out by Islamist militants belonging to al-Shabaab terrorist organisation on Nairobi's Westgate shopping mall in September 2013 BMI has revised its 2013 tourist arrivals forecast down sharply. We now feel that a 20% fall in tourist arrivals is likely, with risks remaining to the downside, should the security situation remain precarious.

Even before the deadly attack on Westgate, the most lethal attack by Islamist terrorists in 15 years in Kenya, the government had announced that H113 tourist arrivals were down by 12%, at 495,978, according to an October 2013 report by Bloomberg. Tourism revenues were also down by 7.4%, over FY12/13 (July-June) to reach KES96.24bn, according to a September 2013 report on the local Capital FM website.

Given that H213 has now seen not only this dreadful attack on civilians in the country's capital, but also a significant fire at Jomo Kenyatta International Airport (JKIA) in August, it is clear that 2013 will likely see a sharp fall in tourist arrivals. Several governments, including the US and the UK, have also reissued earlier travel advisories warning against the threat of terrorism within Kenya.

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Beyond 2013 much will depend on how quickly the authorities can regain control of the domestic security situation. Most analysts, including BMI, believe that the Westgate attack was a 'one-off' incident, with a low probability of a similar event happening again over the short term. That said, the blow to tourist confidence will clearly be felt for several months, especially as the Westgate was popular with both tourists and expatriates in Nairobi. Indeed, there were several foreign nationals killed in the attack.

Over the medium term, BMI would expect the tourism industry to recover from its current difficulties and we continue to predict steady growth (in the order of 3.675% a year) over 2014-17. However, even with this growth, this would still indicate that tourist arrivals will not return to their 2011 peak over the course of our five-year forecast period.

In terms of key source markets for inbound tourism, BMI expects the UAE and the UK to remain key contributors of tourists to Kenya. The UAE will be the largest single source market for inbound tourism, according to our calculations, as the two countries develop further business and cultural ties. We also believe that there will continue to be strong growth in arrivals from new markets, such as India and China, which will more than offset declines in arrivals from traditional source markets.

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