The recent decision to shut down USAID operations across the globe is more than a diplomatic shift—it’s an economic earthquake. The travel and hospitality industry, which thrives on NGO-driven activity, is staring at a direct revenue loss of $126 million in 2025.
Kenya is the fifth-largest recipient of USAID funding, with over $630.9 million allocated in 2023. While much of this funding went into health and humanitarian programs, a significant portion fueled travel, conferences, and accommodation—the backbone of Kenya’s hospitality sector.
Who Will Feel the Heat?
NGOs and development organizations rely on business travel for three critical functions:
- Program Implementation – Field visits, monitoring, and evaluation missions.
- Training & Capacity Building – Workshops, seminars, and large-scale conferences.
- Administrative Functions – Meetings, policy discussions, and multi-agency collaborations.
With over 115 USAID-funded initiatives in Kenya stalled, NGOs are slashing budgets. Hotels, airlines, transport providers, and event spaces are the first to take the hit.
The Hardest-Hit Regions
While hotels in Nairobi and Mombasa are already feeling the slowdown, those in Kisumu, Homa Bay, Isiolo, Garissa, Marsabit, Turkana, Kilifi, and Ukunda—where NGOs form a major customer base—are at risk of losing 30% to 60% of their revenue overnight.
Hotels in Nairobi face a 3% dip in business travel and conferences, but for establishments in NGO-dependent areas, the impact is far greater. With no immediate alternative revenue stream, the hospitality sector is facing one of its most abrupt market shifts in years.
The Bigger Picture: What’s Next?
At the time of writing this, President Trump has also suspended refugee resettlement funding, further disrupting one of Kenya’s most NGO-reliant sectors. The International Rescue Committee (IRC), which resettled over 570,000 refugees in 2023, depends on extensive hotel stays, travel logistics, and meeting spaces—all now uncertain.
What Can Hotels & Travel Players Do?
Survival will depend on fast, strategic pivots. Out-of-city hotels must now aggressively court corporate clients, domestic travelers, and regional business events. The shift won’t be easy, but those who adapt quickly will have the best chance of weathering the storm.
This isn’t just a policy shift—it’s a hospitality crisis. Will the sector rise to the challenge?