Growing middle class fuels Kisumu town’s new business boom

Every Friday evening in the lakeside town of Kisumu, the music plays as revellers dance the night away. A growing middle class and a booming economy have revived the town’s fortunes as companies race to cash in on its strategic location.

Dancing is no longer a weekend activity. On Thursdays, revellers stream to the latest attractions – Club Signature located in downtown Kisumu on the 4th floor of Maseno University’s Retirement Benefit’s building and known for its rhumba beats – and the Buccaneers Night Club whose popularity is pegged on pole dancing every Thursday.

Kisumu is also a business destination. The number of people flying in for the weekend has increased and budget airline company Fly 540 recently announced plans to increase flights from the current two to four by the end of the year.

Mr Nickson Ooko, the airline’s director of compliance and government affairs, said the decision was informed by rising demand for travel by passengers moving into the town. He said that owing to Kisumu’s central location, passengers prefer using it as an entry to other areas.

The old airport is no more. In its place stands the new Kisumu International Airport that serves western Kenya, including the small airstrips of Busia, Bungoma and Kakamega. The convenience has lured more travellers as the number of flights and comfort levels increases.

Kisumu Airport manager Joseph Okumu said they are in the process of renovating more runways to tap growing demand.

“We have completed a new cargo apron, parallel taxiway and an additional car park. We also have a new flying school called Sky One.” The airport also expects to put up a new hanger, cargo transit shed, cargo park houses, a new restaurant and an airport hotel.

That Kisumu has experienced immense growth in the last two years is no longer in doubt. Coupled with its strategic location in East Africa, the town has witnessed an influx of people rushing to benefit from various opportunities.

The result has been new businesses with supermarkets, malls and hotels being built to accommodate visitors. The growth has also required the expansion of basic infrastructure and improvement of roads.

The county executive for Roads and Physical Planning, Mr Vincent Kodera said the poor state of roads linking Kisumu to other counties had affected the flow of goods. Mr Kodera said it had become difficult accessing towns that border the county, which have great business potential. The county has 900 kilometres of roads.

“We did a survey of our roads and the situation was disappointing. We want to make the roads passable to open up our county to key trade partners in the region,” he said.

According to Mr Kodera, the expansion will first focus on town service roads before embarking on those linking major towns.
The most affected roads, he said, were in Manyatta and Dunga areas.

Mr Kodera said they were also in talks with the Kenya National Highways Authority (KeNHA) and Kenya Rural Roads Authority (KeRRA) for assistance.

Kisumu is also experiencing the mushrooming of satellite estates, a sign of growing housing demand due to population increase. The latest is Nyamasaria estate, which until recently was a relatively underdeveloped area. Now it boasts a modern supermarket, Ukwala, and a shopping mall. There are more small businesses, petrol stations as well as bars that have been refurbished to attract new patrons.

It’s the same over in Kondele, Riat Hills and Maseno where new businesses are also springing up. Kondele, for instance, now boasts three fully equipped hospitals with the likes of Avenue Hospital joining the league of Aga Khan Hospital. The other is Jaramogi Oginga Odinga Teaching and Referral Hospital.

According to Avenue Hospital’s regional manager Vicky Okoth, Kondele has one of the fastest growing population, with a corresponding demand for health services.

Banks have not been left behind as financiers move to tap money circulating in the area. The Co-operative Bank was the first to put up a branch.

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Last month, the county government pulled down stalls at the Oile market following complaints that it was delaying the construction of the Kisumu-Nairobi-Kisian bypass. County officials said they were acting on complaints by engineers working on the road, which is under the Northern Corridor Transport Improvement Project.

The county assembly’s Tourism committee had supported the demolition, which sparked riots as the traders lost property worth millions of shillings.

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The hotel industry has not been left behind. More facilities are expected to fill the current gap in luxury and business accommodation, raise the region’s hospitality benchmark and attract more tourists through new landmark properties.

Mr Anyal Robinson, chairman, Western Kenya Hospitality Leaders Association, said that because Kisumu is easily accessible and within easy reach of neighbouring countries, it is a natural hub for trade and a strategic transport route in the region. As a result, they are working towards increasing the bed capacity.

A new luxury and business facility, Acacia Hotel, is due to open soon and it will be the first four-star hotel in the region.
Mr Robinson said that plans by the county government to improve water transport from Jinja to Mwanza and Kisumu has also led to increased investment in the hotel accommodation industry.

“Opportunities provided by the county governments’ earmarking of tourism as a key sector for development, mapping of tourism sites and aggressive marketing of hotels and tourism sites will create more rooms for hotels,” he said

He said several positive activities have contributed to the perception of the hotel accommodation business as a lucrative venture that enjoys huge profits.

These include the opening of the airport, improved road transport, improved service by hotels, renovations and rebranding of the hotels, increased number of malls and supermarkets, more marketing by the Kenya Tourist Board, Lake Victoria Tourism Association and the Kisumu Hotel Managers Group.

“The hotel industry began more than 100 years ago with four main ones, which until six years ago dominated the market, including Nyanza Club, Sunset, Kisumu and Imperial hotels,” he said.

He added that Kisumu has witnessed unprecedented growth in the hotel industry, with over 10 facilities put up in the last five years.

“Some of the new hotels include Parkview Safari Hotel and Apartments, The Vic, Great Lakes, Acacia Premier Hotel, Le Savanna, Impala Eco-Lodge and Impala Sanctuary, Royal City, Sovereign, PrideInn Hotels and Jumuia Guest Resort. Most of them have less than 50 rooms with the largest having 103 rooms,” he said

The average annual bed occupancy rate is over 50 per cent for the top 10 hotels according to 2013 results. Munira Gilani, CEO and owner of Imperial Hotel, said they would open Imperial Express Service soon.

“Imperial Express will be a place that you can come in and out any time you want and get anything you want. There will be nothing like room services; you get everything you want at the click of the button,” she said. “The demand for the facilities is high. What we need is to market our area to attract more tourist.”

International schools have continued to attract more students prompting their expansion.

Makini School, which was initially in Kibos hosting kindergarten and primary sections, has since bought land in Kondele to build a school which will host the kindergarten as the Kibos one remains for the primary section.

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