Indian firm signs deal to manage four-star hotel in Nairobi

Sarovar Hotels & Resorts, an India-based hotel management firm, has signed a deal with Kenyan businessman Kiran Patel to build a four-star hotel in Embakasi, Nairobi.

The 144-room hotel, to be constructed on land owned by Mr Patel, will be called “The Premier”.

The hotel’s location near the Jomo Kenyatta International Airport is meant to attract business travellers, whose number has been on the rise as more investors come to Africa through Nairobi, the hub for the region.

Mr Patel has “diverse interests in automobiles, real estate, finance and cement,” according to a statement by Sarovar disclosing the investment.

Contacted for comment, Mr Patel declined to disclose the cost for the hotel project pending conclusion of agreements with the parties involved, only describing the investment as “big”.

“The Premiere will be our third hotel in Africa and second in Nairobi, which is an established hub for business and culture,” said Sarovar Hotels & Resorts managing director Anil Madhok in the statement.

“India is increasingly showing interest in Africa as a market and we too are of the belief that Africa has a huge potential in the hospitality segment.”

The Premier will increase Sarovar’s footprint in East Africa, where it already has a presence.

The firm runs the Heron Portico in Nairobi and the New Africa in Dar-es-Salaam in addition to 60 hotels across 40 cities in India.

Major global hotel chains have recently opened shop in Nairobi to cater for business travellers and leisure tourists.

(Read: Nairobi ups the stakes in luxury hotels market)

Data from the Economic Survey 2013 shows the number of business travel arrivals increased by 1.7 per cent to 236,000 in 2012 from 232,100 in 2011, unlike tourist arrivals which fell by 7.6 per cent to 1.22 million from 1.32 million over the same period.

Business travel has been a growth driver for the hotel industry over the past decade, and the trend is expected to continue spurred by more opportunities emerging in the region.

“Bed nights have increased by 8.7 per cent compound annual growth rate over the past decade, driven by new entrants, primarily international chains targeting the business traveller and investments by local enterprises targeting the high-end market,” said an investor report on TPS Serena by Standard Investment Bank.

The Economic Survey 2013 shows that there were 18,849.6 bed-nights available in 2012, an 8.2 per cent increase from 17,419.6 in 2011.

The SIB report added that new markets, especially Asia, are raising their share of business travellers.

Sarovar’s entry comes after those of Dusit International of Thailand, Dubai-based Emaar Hospitality, Radisson Blu, Park Inn by Radisson, Best Western, Richard Branson’s Virgin Limited Edition and Kempinski which intend to operate hotels in the country.