Opportunities for Micro and Small Scale Businesses in the Tourism Sector: The Case of The Kenya Coast1

Tourism has been considered as an economic boon in Kenya as it is the largest contributor to the country’s foreign exchange earnings. In the past, Kenya has concentrated on developing large scale tourism but this has led to high foreign exchange leakages as well as minimum benefits to the locals. In order to benefit the local economy, focus is now shifting to developing linkages between tourism and the local economies. This paper analyzed the proportion of hotel products purchased from MSEs and the opportunities available to micro and small businesses (MSEs) in the hotel industry in Kenya. Data from a survey of 49 hotels was used to determine the opportunities for MSEs in the hotel sector in Kenya. From the analysis, MSEs were found to have most potential in hotel food supply, child care services, room cleaning services, garbage collection, handicrafts and souvenir as well as maintenance and repair services. The results have implications for the role of tourism in small business growth and improving rural livelihoods and poverty alleviation.