Kenya tourism body fears impact of political crisis

NAIROBI (Reuters) - Kenya's tourism earned 65.4 billion shillings (480.5 million pounds) in 2007 but a recovery in the key sector could be wiped out by a political crisis in the country, tourism authorities said on Wednesday.

"Kenya's tourism stakeholders have worked tirelessly over the last seven years to rebuild the industry after the slump of 1997, earning the country 65.4 billion in 2007," a newspaper statement by the Kenya Tourism Federation (KTF) said.

The country received 56.2 billion shillings from tourism in 2006. KTF said the sector pays 20 billion shillings in taxes to the government.

KTF said the industry could be forced to sack about half of the 250,000 people it employs to cope with losses arising from unrest over the disputed re-election of President Mwai Kibaki that degenerated into bloody chaos.

Many tourists have cancelled their holidays to the country famous for bush safaris and white sunny beaches.

"A big percentage of tourist bookings for the first half of 2008 have been lost and those for the rest of the year hang in the balance awaiting the outcome of political developments," the statement added.

Former U.N. Secretary General Kofi Annan is in the country to hold talks with Kibaki and his challenger Raila Odinga to solve the unrest that has killed 650 people.

In 1997, similar ethnic clashes in a suburb of the former resort town of Mombasa left scores dead and devastated the industry.

Terrorist attacks in 1998 and 2002, at the American Embassy and an Israeli-owned hotel near Mombasa, almost brought the whole sector to a halt.

(Reporting by Helen Nyambura-Mwaura; editing by Tony Austin)