Crisis to resilience: tracing direct, indirect and induced tourism impacts in Kenya’s economy

Tourism shocks can propagate well beyond visitor-facing industries through production networks, factor incomes, and household consumption. This study estimates the economy-wide effects of the COVID-19 tourism shock in Kenya using the Kenya Tourism Satellite Account (TSA) 2019 and publicly available Kenya Social Accounting Matrices (SAMs). Separate product-level final-demand shocks are constructed for inbound and domestic tourism in 2020 and 2021 relative to the 2019 benchmark. The combined visitor-demand contraction is estimated at KSh338.8 billion in 2020 and KSh174.2 billion in 2021. Using the 2019 Kenya SAM, these shocks generate estimated economy-wide gross-output contractions of KSh770.8 billion and KSh408.8 billion, respectively, alongside factor-value-added effects of KSh396.1 billion and KSh206.8 billion. Direct tourism employment-equivalent contractions are estimated at approximately 508,000 positions in 2020 and 249,000 in 2021. Inbound tourism accounts for most of the persistent 2021 shortfall, while domestic tourism recovers substantially faster. Transportation, accommodation, and food services experience the largest effects, with sizeable spillovers into trade, processed foods, agriculture, and business services. Structural sensitivity analysis using the 2021 Kenya SAM yields approximately 10% lower gross-output effects while preserving the direction and principal sectoral ranking of the findings. The results demonstrate both Kenya’s vulnerability to external tourism-demand shocks and the value of domestic tourism resilience, supporting policies that strengthen domestic and regional markets, supply-chain resilience, economic diversification, and inclusive crisis-response mechanisms.