KAMPALA, Uganda (AP) -- Mombasa and its sandy white coastline beckon vacationers, but on a recent day Harald Kampa watched helplessly as more than 100 guests checked out of his hotel, heeding a British government warning that the coastal region should be avoided because of fears that a terrorist attack might be imminent.
The alert from Britain and similar warnings from the U.S., France and Australia are impacting Kenya's tourism industry, with the possibility of layoffs looming. Tourism creates about 10 percent of the country's jobs, according to the World Travel & Tourism Council.
More than 900 tourists have cut short their vacations since the warning was issued on May 14 by Britain, according to the Kenya Association of Hotelkeepers and Caterers. TUI Travel, a major British leisure travel group, even took the step of cancelling all its flights to Mombasa until October.
Through the month of October, more than $57 million in tourism-related revenue is expected to be lost, the Kenya Tourism Federation says.
"We are really on our knees," Lucy Karume, the head of the federation, told The Associated Press. "The industry has been drastically hit."
She said on Tuesday that there have not yet been any layoffs in the tourism industry that she has heard of, but she is worried they might start in June.
The Kenya Tourism Federation urged Britain to reverse its warning, saying it hadn't taken into account the impact on investments and employment.
At Kampa's Diani Sea Resort 35 kilometers (20 miles) south of Mombasa, only 20 of 157 guests remained after last week's exodus that came as a result of the British warning of the "big threat of terrorism, including kidnapping," in Mombasa and other parts of Kenya.
Hotels, clubs and restaurants along Kenya's 500-kilometer (310-mile) coastline fear financial losses as global tour operators rethink the region's place as a top-end holiday spot.
"This means that we will face a very tough future," said Kampa, who considers the area generally safe.
But in November 2002, militants bombed in Israeli-owned luxury hotel near Mombasa, killing 10 Kenyans and three Israelis in one of the deadliest terrorist attacks along Kenya's coastline. Assailants also fired two missiles at an Israeli airliner taking off from Mombasa's airport. Both missed.
Adding to the security concerns is the reach of al-Shabab -- Somalia's al-Qaida-linked insurgent group. Last September, it launched an attack on a mall in the inland capital, Nairobi, that killed at least 67 people. The Islamic extremist group said it was in reprisal for Kenya's military presence in Somalia. Kenya sent troops into neighboring Somalia in 2011 to fight al-Shabab after its members had carried out some kidnappings in Kenya, including along the coast.
Shortly after Britain's terror warning, two bombs exploded in a Nairobi market, killing at least 10 people and wounding 70. The U.S. Embassy has increased security around the embassy grounds in the capital.
Even before the latest travel warnings, tourism was taking a hit. Tourist arrivals had grown from 1.2 million in 2008 to 1.8 million in 2011, but then dropped to 1.7 million in 2012 and fell even further to about 1.5 million last year.
Tourism entrepreneurs are urging President Uhuru Kenyatta's government to spend more on sprucing up Kenya's image. They want an aggressive marketing campaign and tax breaks in the aftermath of tourists fleeing the country.
Kampa, the hotelier, said he believes his losses will reach $740,000 through October.
"Our biggest fear is that this will drag on until the next season," he said.