Hoteliers have been hit by disruptions ahead of the festive season, a new survey by the Central Bank of Kenya (CBK) shows, as guests increasingly opt for cheaper accommodation on short-stay rental platform Airbnb when attending conferences or on leisure trips.
The CBK survey of hotel executives, conducted in November, found that bed occupancy has dipped in successive months since July as they struggled to retain guests who attend conferences at their facilities during the day and later turn to cheaper Airbnbs for accommodation at night.
“Respondents cited that the forward bookings are being hindered by weak consumer purchasing power, the ongoing rains, the business slowdown at the end of the year, inflated costs at the hotels due to commissions charged on online bookings, and increased competition from Airbnbs,” the survey noted.
The CBK survey of at least 84 hotels across the country last month comes at a time when families are planning trips and vacations to celebrate this year’s Christmas festivities.
Hoteliers blame their woes in part on government austerity measures, which have seen public institutions cut back on training and travel, for the low demand they have witnessed in recent months, which has also affected forward bookings.
The low hotel occupancy has also been linked to the prevailing squeeze on disposable income amid a flurry of new levies such as the housing levy and the Social Health Insurance Fund eating up a sizeable chunk of employees’ payslips.
There has also been a trend for more families and groups travelling together to rent short-stay accommodation, which they see as cheaper and more private.
The survey found that bed occupancy levels, restaurant services and conference activities in the hotel sector had improved in October compared with the same month last year, especially after recovering from the disruption caused by the nationwide Gen Z protests in June and July. However, the occupancy levels were still below expectations.
In contrast, Airbnbs in the country have recorded growing occupancy and revenues throughout the year. For example, in August, short-term rentals in Nairobi recorded an occupancy rate of 38 percent, an eight percent growth year-on-year, and just six percent shy of last year’s peak rate of 44 percent, according to data by Airbnb performance tracker AirDNA.
In Mombasa, listings grew 13 percent to 1,132 in August, while the occupancy rate remained steady at 34 percent. Kisumu’s short-stay home listings improved by 44 percent to 220, and occupancy remained the same at 25 percent.
The latest CBK survey shows that by November, average forward bookings for hotels were 58 percent for December, 46 percent and 43 percent for January and February 2025, respectively.
About half of company executives asked about their optimism for the next year cited concerns about “austerity measures by the government” as one of the factors expected to affect economic performance next year.
