US Policy of AID Cuts & Tariff Affects Kenya’s Hospitality Sector

(3 Minutes Read)

Hotel industry players reported less business due to lower conference bookings, particularly from Non-Governmental Organisations (NGOs) and other donor-funded programs.

US President Donald Trump’s recent policies and tariffs are negatively impacting Kenya’s hospitality sector, with hotels reporting lower conference bookings from donor-funded programs and Non-Governmental organisations (NGOs).

61% of respondents to a survey of CEOs by the Central Bank of Kenya (CBK) said they were impacted by the recent US tariffs and other policy changes.

On January 24th, Trump issued a ‘stop work order’ for USAID, halting all foreign aid programs—except those for Israel, Egypt, and emergency food aid.

In April, Trump announced 10%-50% tariffs on imports from all countries, which has created uncertainty and disrupted trade.

The hotel industry players reported less business due to lower conference bookings, particularly by Non-Governmental Organisations (NGOs) and other donor-funded programs. Other firms expect to be impacted through higher cost of imports for inputs and finished goods, lower earnings from exports, particularly to the U.S once African Growth and Opportunity Act (AGOA) Agreement lapses, increased cost of production due to inflationary pressures emanating from higher costs of goods and services, lower consumer demand due to reduced disposable income resulting from lower profits and loss of incomes, second round effects on local businesses relying on clients that have been affected by the tariffs and policy changes.”

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Apart from the hotel and travel sectors, other industries likely to feel the brunt include automotive parts, electronics, and raw materials like steel and aluminum—essentially anywhere where the U.S. is a key market. The freight sector will also experience a slowdown due to decreased export volume.