| Abstract: |
This study analyses the factors influencing pricing of National Park visits in
Kenya. A two step regression procedure is used to develop a pricing mechanism
for Lake Nakuru National Park (LNNP). In the first stage, count data models
are applied to estimate the Trip generating function to LNNP and in the
second, the results from count data models are used to simulate visitation as
price varied through an increase in the gate fee to LNNP. The simulated data
is used to estimate the demand curves for LNNP. The finding shows that the
current price set-up at LNNP of Ksh. 7,050 for international tourists and Ksh.
1,000 for domestic tourists is in fact cost recovery. However, there is
greater scope to raise more revenue from an increase in entry fees. The study
proposes price increase for international visits from the current Ksh. 7,050
(US$75) to Ksh.20,000 (US$230) in the medium term. This will yield a total
revenue estimated at Ksh. 2,823 million (US$33 million) without major decline
in visitation days. With regard to domestic visitors, the Kenya Wildlife
Service (KWS) can increase the price from the current Ksh. 1,000 (US$11.8) to
Ksh. 2,000 (US$ 22) over the same horizon. This price increase will yield
revenue equivalent to Ksh. 288 million (US$ 3.4 million) but also lead to a
decline in visitation levels from domestic group by 30 percent. |