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Pricing of National Park Visits in Kenya: The Case of Lake Nakuru National Park

12 July 2013
Publication Type: Working Paper
JEL Code: C24, C25, I31, Q26

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.

Working paper 357
1 July 2013
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