In Kenya, tourism has been recognized as one of the key drivers of economic growth and poverty reduction. This is because tourism has a great multiplier effect that is able to catalyze growth in all sectors of the economy. The sector has been performing well and it was anticipated that international arrivals would reach the 2 million mark by the end of 2012. However, there was a decrease by 0.3% from 1.785 million in 2011 to 1.780 million in 2012 and 1.5 million in 2013. The decline could be attributed to the euro zone crisis coupled with perceived insecurity in the country. Kenya is ranked 135 out of 140 countries globally by the Travel and Tourism Competitive Index on safety and security concerns. Therefore, the purpose of this study was to examine the effects of insecurity on performance of the hotels. The study was guided by the following specific objectives: to determine the indicators of vulnerability of the hotel facilities towards insecurity; to find out the current hotelstandards of security within the hotel facilities; to evaluate the effects of insecurity on the hotels performance; to profile crime trends and security threats in the hotel industry.