(NAIROBI, KENYA) – Kenya’s domestic tourism fell below target in the year to June 2026 as the rising cost of living squeezed household budgets, even as overall sector earnings hit a record KES 564 billion ($3.9 billion / GBP 2.9 billion).
Domestic bed-nights reached 5.1 million in financial year 2025/26, a marginal 1.8% rise from 5.01 million a year earlier, the State Department for Tourism said in its latest industry performance report.
The bookings fell 600,000 short of the government’s 5.7 million target.
The Tourism department blamed the shortfall on economic pressure facing households.
“Domestic travel was affected by local inflationary pressures and high cost of living impacting disposable income,” it said in the report.
The figures point to a widening contrast in Kenya’s tourism industry, where international visitors and higher spending travellers are generating stronger earnings while rising prices make holidays harder for many Kenyans to afford.
Kenya’s total tourism earnings rose to KES 564 billion ($3.9 billion / GBP 2.9 billion) against a target of KES 529 billion ($3.7 billion / GBP 2.7 billion), beating the annual goal by KES 35 billion ($242 million / GBP 183 million) as the sector continued its recovery.
The earnings rose by KES 105.8 billion ($732 million / GBP 553 million) from KES 458.2 billion ($3.2 billion / GBP 2.4 billion) in fiscal year 2024/25, an increase of 23.09% in a year.
Domestic bed-nights, however, grew far below the pace needed to meet the latest target, rising by less than 2%, or about 90,000 bookings.
The weak domestic performance came as inflation continued to weigh on household spending, with real earnings largely stagnant.
Kenya’s average annual inflation rose to 4.87% in the year to June 2026 from 3.56% a year earlier, according to the Kenya National Bureau of Statistics.
Higher prices for food, transport, accommodation and other essentials leave less money for discretionary spending such as holidays and weekend trips.
The tourism numbers give a fresh indication of how the cost-of-living squeeze is changing consumer behaviour as the wider industry records its strongest earnings in years.
International tourism provided the biggest boost, with 2.79 million visitors in the review year, a rise of 15.29%, or 370,000 foreign guests, from 3.42 million a year earlier, against a target of 2.8 million.
The department said the international target was narrowly missed because of “global economic headwinds”, including the Middle East crisis which began at the end of February and led to cancellations of flights and hotel bookings.
It also cited competitive pressure from other destinations in the region, with Rwanda strong in conference tourism and Tanzania in safari products.
Despite the near miss on arrivals, international visitors generated enough spending to push tourism earnings well above the government’s target.
The department said earnings were driven by “a strong recovery in high-value segment spending and favourable exchange rate dynamics during the period”.
The figures point to stronger spending by international visitors helping to offset weaker growth in domestic travel.
Domestic tourism remains critical to hotels, restaurants, tour operators, transport companies and attractions because Kenyan travellers provide business throughout the year and help cushion the sector from external shocks.
A prolonged squeeze on household disposable income could therefore have wider consequences for businesses that rely heavily on local tourists.
Domestic bed-nights have risen from 3.83 million in 2021/22 to 5.1 million in 2025/26, showing a long-term recovery from the disruption caused by the Covid-19 pandemic.
The latest performance is below the government’s ambition by about 10.5%.
The shortfall is significant because domestic tourism has become an important pillar of Kenya’s strategy to reduce reliance on foreign visitors and make the industry more resilient to international shocks after the Covid shutdowns.