The owners of Tribe Hotel are increasing their investments in Gigiri area by building a Sh1.2 billion budget hotel to capture the growing demand from companies and diplomatic institutions.
Green Hills Investment, which runs the Tribe Hotel and Village Market, has informed authorities of its plans to build low-cost hotels to be known as Green Hill which will have 200 rooms and a conference centre.
It is eyeing visitors living in luxury homes surrounding the Gigiri diplomatic zone, which is home to the UN, embassies and foreign staff.
Green Hill will join the growing list of global chains like Radisson Blu, Villa Rosa Kempinski, Best Western and Easy hotels which are expected to set up in Nairobi within the next two years targeting luxury and business travel.
“Majority of visitors and tourists cannot afford the services at Tribe Hotel (a five-star) and the construction of Green Hill Hotel (three-star) will benefit many people as its services will be relatively cheaper,” Green Hills Investment said in a letter to the environmental watchdog Nema.
“Due to the success of Tribe Hotel, the rates achieved through sales to corporate and diplomatic clients have proved expensive for the UN visitors who normally look for less expensive accommodation with the possibility of savings.”
Construction of the hotel will see businesses located within the Village Market shopping complex being displaced in a bid to build 700 new parking spaces and link Green Hill to Tribe.
The building housing Steers restaurant, NIC Bank and Village Bookshop is earmarked for demolition while a Nakumatt Supermarket outlet will be expanded to include a new parking lot.
Water slides and swimming pools will be moved while the popular Maasai Market will close temporarily.
“People who have leased business outlets within the block that will be demolished will lose their businesses,” added Green Hills Investment.
Once Green Hill hotel is open, it will have to compete with established players such as Inter Continental, Fairmont Norfolk, Nairobi Serena, Sarova Stanely, and Sankara.
These hotels, and the new ones, are looking to cash in on the growth in Kenya’s tourism egged on by a rise in conference, business and leisure visits.
In the last count in early 2012, Nairobi had a bed capacity of approximately 10,000.
Mike Macharia, chief executive of the Kenya Association of Hotel Keepers and Caterers says the city needs another 15,000 to 20,000 beds to compete effectively with global players.
“With the ongoing investment in roads and communications as well as other infrastructure, other properties can be on the outskirts and people would still make it to the city to transact business,” he said in an earlier interview with the Business Daily.