Global hoteliers out for a piece of Kenya’s tourism

Kenya’s tourism industry should expect busy 2018 with inbound global hotel brands keen to expand local operations, according to Cytonn’s weekly report.

“We expect the hospitality sector to remain on its upward trajectory supported by increased international tourist arrivals, support from the government in the form of international marketing, increased entry of international hotel brands, and enhanced security within the country,” Cytonn Investments, weekly report.

Global hotelier, Radisson Hotel Group, announced plans to open its first residence in Nairobi’s Arboretum neighborhood in Q2’2019.

The property, which shall be under the Radisson Blu brand as Radisson Blu Hotel and Apartments, will have approximately 123 rooms and will add onto its current operational portfolio consisting of the 140-room Park Inn Hotel in Westlands, which opened in April 2017, and the 271-room Radisson Blu Hotel in Upperhill, which opened in November 2015.

The international hotel group also plans to introduce three more of its brands, that is, Radisson RED, Radisson Collection, and Radisson (timelines undisclosed), raising its total brand portfolio in Kenya to 5.

The heightened appetite for Kenya from international hotel brands attests to the growth and Hotels performance has been boosted by increased demand for premium hotel services from both leisure and business travelers.

The increase in international hotel brands is bound to boost the Meetings, Incentives, Conferences, and Exhibitions (MICE) industry by availing international quality conferencing facilities, which are a key pull factor for global conferences. Additionally, presence of well-known brands is an attraction for international tourists, due to brand loyalty, and thus is likely to encourage longer or frequent stays leading to increased sector earnings.

In 2015 and 2016, the sector showed signs of recovery with an Average Daily Rate of Sh14,026 and Kshs 13,909, respectively, 4.7 per cent and 3.8 per cent higher than the 5-year average of Kshs 13,395, where lower rates were recorded between 2011 and 2014, on account of insecurity caused by terrorist activities in Kenya.

According to Cytonn Hospitality Report 2017, the Average Daily Rate decreased in 2017 due to the protracted electioneering period that caused security concerns. Ability of Kenya’s hospitality scene.

The investment firm attributes the robust expansion drive by international hoteliers to, improved infrastructure such as airport renovations at the Jomo Kenyatta International Airport (JKIA), and Moi International Airport (MIA), and roads such as the Standard Gauge Railway,

Availability of express flights such as Nairobi-New York, Rwanda-Mombasa, Italy-Malindi, Paris-Nairobi, Qatar-Mombasa, among others, which have improved the convenience in transport for both business and leisure travelers, aggressive marketing by the Kenya Tourism Board, aided especially by the global recognition awards and positive reviews from travel agencies such as Trip Advisor, Reduced visa restrictions and visa on arrival for African nationalities, which was introduced in 2017, Nairobi’s regional status as a business hub, thus it is a key destination for business travelers to the Eastern Africa Region, and as well as increased demand for luxurious hotel accommodation services especially from the international tourists.

Over the January to July period, 2018 recorded an average increase in international arrivals, through the Jomo Kenyatta International Airport (JKIA) and Moi International Airport (MIA) of 12.5%, compared to 5.8% over a similar period in 2017.

According to KNBS Economic Survey 2018, tourism earnings increased by 20.3% in 2017 to Kshs 119.9 bn from Kshs 99.7 bn in 2016, whereas hotel occupancy increased by 11.3% to 7.2 mn bed nights in 2017 from 6.4 mn bed nights in 2016, thus indicating sustained demand for hotel beds.