Despite a challenging global economic backdrop, the first six months of 2011 have seen Kenya enjoying a steady increase in spend by international Visa cardholders visiting the country.
According to data generated by VisaVue Travel - Visa's global transaction information service - the Kes 19.2 billion(US$205) million spent in Kenya by Visa cardholders between January and end-June this year represents more than half (52.8 per cent) of the overall annual Visa card spend recorded in the country during the whole of 2010. This points to the likelihood that Kenya's tourism industry is set for another very positive year.
Importantly, the 10.3 per cent increase in Visa cardholder spend over the same period in 2010 is not merely the result of inflationary pressures or price increases, but comes on the back of a corresponding 14 per cent year-on-year rise in Visa card transactions for the same period.

Who is spending the most?

Of the more than Ksh18.7 billion (US$200) million spent by Visa cardholders in Kenya in the first half of 2011 some Kes 14.3billion (US$160) million, or 78.1 per cent was by visitors to the country from the United States, the United Kingdom, Germany, Canada, South Africa, France, Sweden, Italy, Norway and Australia.

Of these, the top three source markets were the United States, which was up 4.2 per cent in terms of total visitor transaction volumes compared to the corresponding period in 2010, the United Kingdom, which rose by 12.6 per cent and Germany, which showed a very encouraging 28 per cent increase in visitor transactions.

How much is being spent?

While the average receipt amount for transactions conducted on Visa cards in Kenya in the first half of 2011 was Kes 19,260 thousand ($205.67), which is down 3.2 per cent on the same period in 2010, visitor transactions from typically high-spending countries like India, Denmark and South Africa, showed increases in average transaction values of between 0.2 per cent and 7.7 per cent.

Where is it being spent?

The three main merchant types at which the majority of Visa card spending has taken place over the first half of 2011 have remained consistent with previous years.

Remaining merchants (including railroads, marinas, ATMs, financial institutions, insurance companies, and money transfers), accommodation suppliers and travel agencies enjoyed the lion's share of the total transaction spend, all showing significant year on year increases of between 9 and 13 per cent in total Visa card income for the period.

Comparative spend by top 10 inbound source markets in H1 2011

Comparative spend by top 10 inbound source markets in H1 2011

Source: VisaVue Travel Data: H1 2010 and H1 2011

According to Claire Olverman, Visa Africa Head of Cross Border Product, the steady increases in Visa card transaction volumes and total value is an encouraging sign, particularly since it comes on the back of similar year on year increases witnessed in Kenya between 2009 and 2010.

"While it may be the case that the more than 10 per cent increase in Visa cardholder spend in Kenya for the first half of 2011 is still a partial consequence of the raised profile of African countries as a result of the 2010 FIFA World Cup," Olverman explains, "the fact that these increases have now occurred over a number of consecutive periods, points to a consistent and potentially sustainable upward trend – particularly in the vital Kenyan tourism industry."

The data would appear to confirm this positive sentiment, with the pleasing increase in first half 2011 spend building on the already firm platform of Ksh 36.4 billion(US$387.9) million Visa card spend seen in Kenya on 2010 – itself a healthy 11.2 per cent increase on 2009 spend figures.