Terrorism not only cause loss of lives and property, but also has long negative effects on the economy. Tourism in Kenya is paramount because it is the second largest source of foreign exchange revenue. The sector contributes to about ten percent of Gross Domestic Product (GDP) and employs about nine percent of the total wage workforce in Kenya. Over the years, tourism has become an extremely competitive business necessitating a paradigm shift in the development and management sector. In the early 2000 tourism started relinquishing because of terrorism. These terror attacks were followed by subsequent negative travel advisories issued by Kenya’s tourism markets which made economy to decrease. Between 2000 and
2015 linkages between terrorism and tourism has become a major issue which need attention this is because it has reduced consumers and firms and states at large extend expectations for the future and has forced the Kenya government and the private sector to invest more in security matters. The purpose of this study was to analyze the economic consequences of terrorism in Kenya’s tourism sector. The searcher used descriptive research design to analyze the problem of terrorism and also relied on secondary data. Data was analyzed using both descriptive and finding presented in form of tables, figures, pie charts and graphs. The research concluded that terrorism does affect tourism and economy of Kenya. However, the study recommends the government and the relevant sectors must come up with crisis management framework in managing the pre and post terrorism effect which will help to boost tourist confidence and also avoid travel advisories from its market sources.