(Reuters) - Kenyan hotelier TPS Eastern Africa posted a 35.7 percent decline in half year profits on Thursday, putting the fall in visitor numbers down to euro zone debt woes and security risks in Kenya.
The operator of a chain of luxury hotels, lodges and tented camps under its Serena brand, said in a statement travel advisory warnings about terrorist attacks in Kenya, issued this year by the U.S. and other western governments, had been a major challenge during the high season.
However, it said there were some bright shoots on the horizon, including growth in Tanzania's tourism sector.
"The forecast business outlook for the peak season from July to October (for east Africa) is at healthy levels", TPS said in the statement.
TPS profits fell to 170.1 million shillings ($2.03 million) in the six months to 30 June, down from 264.7 million shillings during the same period in 2011.
Kenya sent its troops across the border into Somalia in October to fight militant group Al-Shabaab. The Somali rebel group has since retaliated by setting off several explosions across Kenya.
Tourism businesses in the country have been complaining about a decline in European tourists on the back of the euro zone debt crisis for some time, with Kenya Airways on Wednesday reporting an 18.8 percent decline in passenger numbers travelling to Europe.
"The volatile economic environment in East Africa characterised by inflationary pressures associated with increased energy and interest costs, negatively impacted results for the period," TPS said.
Earnings per share fell to 0.90 shillings from 1.36 shillings. ($1 = 83.9500 Kenyan shillings) (Reporting By Drazen Jorgic; editing by James Jukwey)