Life & Work

Nairobi ups the stakes in luxury hotels market

hotels

Final touches Villa Rosa Kempinski Hotel on Nairobi ‘s Waiyaki Way. Jennifer Muiruri

If there is one thing that stands out on Waiyaki Way, Nairobi, it’s the eye-catching pink development, with white trimmings, surrounded by BMW billboards.

With the construction cranes having been removed and the paint work done, this building stands out along the lower end of the highway near the Museum Hill flyover as the final touches are done in preparation for its official opening in the first quarter of 2013.

This is not another office or apartment block, it’s a brand new hotel called Villa Rosa Kempinski.

The 200-roomed hotel, owned by the Simba Colt Group, hence the BMW billboards, is one of the many hotels currently under construction as the city looks to increase the number of quality beds available and position itself as a world class destination.

At least five top-end properties are expected to open their doors in the next year or so, promising to add at least 900 beds to what’s already available in the city.

Global chains Radisson Blu, Park Inn by Radisson, Lonrho Hotels and Best Western are joining local hospitality groups to open up new properties in the city in the next 24 months.

Already two new properties – Eka Hotel on Mombasa Road, and Boma in South C - have opened their doors this year, putting in the market an additional 170 and 140 rooms respectively.

“It is very good that we have these hotels opening up. It builds confidence in Kenya and particularly Nairobi as a destination and tells the world that there is quality accommodation in Kenya as they would experience anywhere else in the world,” says Mike Macharia, chief executive of the Kenya Association of Hotel Keepers and Caterers.

“ We can now host big conventions here without worrying about the availability of quality beds.”

At the last count, earlier in the year, Nairobi had about 10,000 such beds, explains Mike, adding that the city needs another 15,000 to 20,000 beds to compete effectively with other world players.

“With the ongoing investment on roads and communications as well as other infrastructure, all the properties don’t have to be in the city centre, they can be on the outskirts and people would still be able to make it to the city to transact their businesses,” he explains.

For years, Nairobi was seen as a mere pit stop where travellers would land enroute to a safari or to the beach, however, this has changed in the past decade with the city becoming a major regional hub.

These new hotels are looking to cash in on the growth in tourism egged on by the rise in conference, business and leisure visits that has led to high demand for bed capacity.

Quality beds

This rising profile of Nairobi as the premier destination in the whole of the East African region, has led to an increased demand for quality beds capacity and local and foreign investors are partnering with high quality hospitality brands in order to cash in.

Villa Rosa Kempinski, headquartered in Germany, will feature a presidential suite on the 10th floor and three concept restaurants, including an all-day diner. It will also have a bar and a cigar lounge, conference facilities targeting business travellers and a ballroom able to accommodate 500 people.

In the heart of Upper Hill, on Elgon Road, the cranes are still up as construction of the mutli-storeyed Belgian brand Radisson Blu Hotel continues.

Set to be opened in early 2014, the 240-room hotel, owned by Elgon Road Development, is expected to bring into the market top of the range conferencing facilities, fine dining and spa treatments as well as its international loyalty programme.

These properties don’t only promise to increase the bed capacity of the city in the sun; they are offering top-end luxury, fine dining, wide range of wine in their premises, spas and top-of-the-range conferencing facilities, among other features.

These are not only for the hotel residents, but are open to all who want to enjoy the finer trimmings associated with quality hotels.

Major international brands including the Marriot, Inter Continental Hotel Group and Hilton are looking to move into the Kenyan market or increase their presence for those already here.

The Lonrho Group from the UK has also expressed interest in making a re-entry into Kenya’s hotel business with the construction of a 200-room hotel. They are yet to reveal where they want their hotel.

“All the big boys are eye-balling this destination. Even with the new players, we are yet to start feeling the pinch, there is room for all of us,” says Ole Sereni’s general manager, Ghulam Samdani.

“The opening up of these hotels is great for Nairobi as it brings the city alive and puts it on the global hospitality network,” he adds.

Located on Mombasa Road, Eka Hotel, by SAMCO Holdings, recently opened its 170-room property close to Ole Sereni. From his office, Ghulam has a good view of the new property whose investors opted to work with a local hospitality group bringing on board Peter Ngori, who has vast experience in the industry and one of the investors in the hospitality group, to run the show as the Managing Director.

The investors brought in over $10 million to put up the facility.

The boutique hotel with its black detailed wall paper boasts top-of-the-range conferencing rooms, board rooms, an open dining area and the second Spur Restaurant, a steakhouse franchise restaurant chain from South Africa.

Demand

“The opportunity is there, we will continue seeing growth and it will take another three years or longer for the supply to outpace the demand,” said Peter, in an interview with BDLife when the property opened.

Boma Hotel, in South C, is the newest property in town having opened its doors for business just this past September.

Owned by the Red Cross, it’s the humanitarian organisation’s second property, after Red Court Hotel in the same area, which opened in 2008, to boost its revenue streams.

These two hotels are following in the footsteps of Sankara, which opened its doors in 2009, and has risen to be one of the leading five star properties in the city.

Other properties that have opened their doors this year including the Chinese East Land Hotel n the Kilimani area and the 30-roomed tranquil 1° South on the edge of Karura Forest.

Leisure Park Hotel, a 126-roomed property, near the Nairobi Arboretum, is currently under construction and is expected to open its doors in 2014.

The Belgium-based Rezidor Hotel Group, which is behind the Radisson Blu, is also set to open another 126-bed boutique hotel, Park Inn by Radisson, in Westlands, by mid-2013. AMS Hotels is the local developer.

Hemingways Collection, which owns luxury properties in Watamu, Malindi and the Maasai Mara, is also currently putting the finishing touches on its 45-room luxury Nairobi property, set to be opened early next year in Karen.

Also looking to open its doors next year is a 96-room hotel in Hurlingham, which will be branded by an international hotel chain Best Western.

The property sits where the popular Kwality Hotel used to be.

14 Riverside Drive, which is better known for its high-end offices is currently putting the finishing touches on its 100-roomed property, which is scheduled to open in the next couple of months. The development, by the family behind Tile and Carpet Centre, comprises of five office blocks, restaurants and retail space.

Once these properties are open for business, they will join other key players including Inter Continental, Fairmont Norfolk, Nairobi Serena, Sarova Stanely, Safari Park, Windsor, Tribe and Sankara.

“We believe there is room for continued supply of top range accommodation in the market,” said Rohan Patel of Sankara.

His sentiments are shared by Ghulam, of Ole Sereni, who says despite the newcomers, business is still vibrant and growing in the city.

According to him, what matters is the type of product one is putting in the market.

Older players

These older players are, however, not taking a wait-and-see stand.

They, too, are investing in their older properties by modernising them and looking for new investments where they can have more presence in the city.

Southern Sun, a South African hotel chain, is looking to grow its footprint in the city and is scouting for another property.

“Yes, we are looking at opening another property. I cannot comment on details now as we are in negotiations with local partners to expand in Nairobi,” said the General Manager, Paul Norman.

For now, the hotel has invested in a new kitchen and is installing new flat screen TV’s in all its 170 rooms by the end of this month.

Sankara Hotel is investing in a new car park and recently opened a high-end pub on its top floor. Ole Sereni, on the other hand, is looking to continue wooing guests, especially locals, with its investment in a new fine dining restaurant to be opened by the end of the year.

This upward spiral is expected to continue as the city absorbs the additions to the hospitality market between now and 2014.