Money Markets

Nairobi’s five star hotels among Africa’s most expensive

STR Global says the average daily rate for a room in Nairobi’s high-end hotels is Sh13,000 and Sh10,685  in Cape Town
STR Global says the average daily rate for a room in Nairobi’s high-end hotels is Sh13,000 and Sh10,685 in Cape Town 

Major international hotel chains in Nairobi rank among the most expensive on the continent.

Research by STR Global, a consultancy firm that covers the global hotel industry, says it costs more to stay in Nairobi’s high-end hotels than it does in most of the other major African cities.

STR Global says the average daily rate, year-to-date, for a room in Nairobi’s high end hotels is $153.58 (Sh13,000), while in Cape Town it is $125.78(Sh10,685), Sandton and surroundings $126.28 (Sh10,727).

Lagos topped the list with a $283.06 (Sh24,046) average daily rate. STR Global data looks at the average daily rate for a room at a major hotel, capacity and occupancy rate all of which are sourced directly from hotels.

Transaction costs

“In order for the data to be comparable, we collect three room indicators; revenue, availability and the number sold, all sent directly from the hotels,” STR Global director of business development Thomas Emanuel told the Business Daily.

The average daily rate is also net of taxes and transaction costs.

Data for Nairobi looked at 1,724 hotel rooms from the high-end hotels categories in brackets of upscale and luxury hotels.

Mr Emanuel said the sample of Nairobi is not big enough to be broken down further, which could give finer details on where each of the major hotel chains lie.

The hotel lobby, Kenya Association of Hotelkeepers and Caterers (KAHC) says the high-end hotels are those that have a four or five-star status with an average rate of $200 (Sh17,000) per day.

STR Global said Nairobi’s strategic advantage as the hub for East and Central Africa means more people make a stop in the capital en-route to other destinations and is a beneficiary of increasing trade amongst African countries.

Data from the Economic Survey 2012 shows in 2011 Kenya hosted an estimated 309 international conferences up from 294 in 2010, a 21 per cent increase.

The conferences attracted 33,566 delegates up from 30,554 in 2010 or a 10 per cent increase.

The government is also looking for new markets from the Middle East and the Far East which has added a new revenue stream for the tourism and trade industries.

“Nairobi is no longer relying on Europe and the US as source markets,” said Mr Emanuel.

This year, while Korean Air added Nairobi as a new route Virgin Atlantic was exiting citing difficulties in operations.