Hospitality is one of the sectors that Covid-19 hit hardest in Kenya. Before the pandemic, the sector was a major contributor to the strong performance in the service sectors. It formally employed more than 82,900 people and, together with trade services in 2019, engaged more than nine million people.
After expanding by 10.3 percent in 2019, the pandemic squeezed the sector to contract by 57.9 percent in the third quarter of 2020 compared to a contraction of 83.3 percent in the second quarter.
Hasnain Noorani, founder and group managing director of PrideGroup, that has investments in diverse sectors, including hospitality, the travel industry, transport and energy spoke to Business Daily how the sector has been adapting and the projections for 2023.
Rate the performance of the hospitality industry in Kenya in 2022?
The first two months of 2022 started on a slow momentum because of fears related to the Covid-19. These fears had negatively impacted the industry, with the Meetings, Incentives, Conferences and Exhibitions (MICE) segment being the most affected.
However, things started picking up in March, thanks to domestic tourists and MICE events that helped the hospitality and the wider tourism sector begin to recover. There was a bit of uncertainty because of the August 9 General Election, however, the smooth transition of power helped to stabilise the sector.
Towards the end of the year, we have seen the hospitality sector pick up thanks to the local and international markets. People have not travelled for more than two years, and this has been a perfect time for them to do so. Cruise ships and more charter flights have started coming into Mombasa, showing signs of growth.
What should we expect in 2023?
I am very optimistic about the opportunities in Kenya's hospitality sector over the next couple of years. I strongly believe that the exponential growth in tourism is going to start in 2023. Strong partnerships between the private sector and the government is key to defining the growth.
What makes you think that 2023 will be a better year ?
I am confident that tourism will significantly improve thanks to the lessons learned from the pandemic. Covid-19 left many people locked up at home, which is when they realised the value of travel. People realised that money kept in the bank is of no value if, for example, it’s not spent on travel. So because of that, many people are now spending money on experiences and travelling. So, 2023 will be a better year for travel because of several factors, including the conclusion of a General Election and the completion of major infrastructure projects such as the Nairobi expressway. Again, we now have direct flights from Mombasa to Dubai, courtesy of Kenya Airways. This kind of move means that more airlines may also be allowed to fly into Mombasa, thus creating other growth opportunities.
When should we expect to see hotel earnings in Kenya go back to pre-pandemic levels?
Next year we should be back to the pre-pandemic level. These are personal projections based on the opportunities I see in the industry. One of the key concerns is the global recession.
Which lessons did you learn from the Covid-19 pandemic?
One of the biggest lessons was prioritising the safety of guests. As you know, the pandemic exposed hoteliers to safety gaps within their establishments, especially those related to health. At PrideInn, for instance, we have learnt to have systems in place that ensure safety. For instance, having a list of preferred suppliers to ensure supply chain remains intact and safe. We also learnt the importance of maintaining excellence in service. Companies that had built the reputation of offering excellent services have been quicker to recover than those with poor services.
Which trends will shape the hospitality business in 2023?
For starters, the recognition of the sector regionally and globally, and its positive ranking will drive business. Other factors include intensive marketing through lobbies such as the Magical Kenya, improved security and increased sporting and leisure.
What is PrideInn Group doing to tap into the MICE destination?
In the past three years, we have invested heavily across all our hotels by building our MICE facilities to international standards. We look forward to working with various associations like the Kenya National Convention Bureau to tap into the huge MICE market. Kenya gets a small proportion of the MICE business that comes into Africa.
Why so?
The reason has mostly been connectivity and infrastructure. For instance, before the construction of the Nairobi Expressway, traffic within Nairobi City and on Mombasa road was unbearable, which can be a problem in attracting world-class MICE events.
Is the hospitality business finally getting enough government support?
Yes, we are getting the support we need from the Government. The State has been incredible, and we appreciate the fact that our new Cabinet Secretary has been keen to listen to us. Tourism needs a special understanding.
What informed your decision to open PrideInn Mara Camp Hotel and PrideInn Plaza in 2022?
We had confidence in the environment we operate in. We also did not view the elections as a hindrance, which is why we launched the hotels a few months before Kenyans went to the polls. Secondly, we knew that once the government completed the construction of the Nairobi Expressway, travel would improve for local and international tourists.
Where else should we expect to see you expand your footprints in 2023?
As we have previously revealed, PrideInn plans to open hotels in every county in the next 10 years, and plans are in motion. We are approaching this in different ways, including taking over new properties as well as building our own facilities. No specific budget has been set-aside for this as we are still doing more market research.
Apart from hospitality, which other businesses do you have interests in?
Aside from PrideInn, I have invested in several sectors, including the technology space, energy, real estate and transport, among others. Our latest company is AirDuka, an online marketplace that connects buyers to sellers. My decision to establish the company came after I realised that some sellers had the perfect product but needed help to reach customers. It has been a year since the launch of the business, and it is growing exponentially.
