Kenya’s hospitality sector is recovering steadily despite the many challenges experienced in the last 12 months, including inflationary pressures and stiff competition.
Several factors have helped to cushion the sector against challenges since the start of the Covid-19 pandemic in 2020.
At the beginning of the year, for instance, the easing of Covid restrictions, such as curfews and travel restrictions triggered the industry’s recovery.
The retraction of the restrictions led to an increase in tourist arrivals in the second quarter of the year, reaching 279,981 compared to 113,307 tourists who arrived in Kenya in a similar period the previous year.
In the nine months ending September, the Tourism Research Institute noted that the number of international arrivals that had jetted into the country totalled 1,063,647.
Another factor contributing to the hospitality sector’s recovery this year was the peaceful elections in August. Chaos and violence have marred previous electioneering cycles since 2007.
The chaos usually leads to massive cancellations of bookings and the issuance of travel advisories by foreign governments, some of the key source markets.
However, elections this year were calm, and so was the change of power. As such, operations in the sector remained largely uninterrupted.
The hospitality sector has also got massive support from events held in the country. Between 2021 and 2022, Kenya hosted events such as the World Rally Championship (WRC) 2022 and the World Under-21 Athletics Championships.
These events significantly boosted tourist arrivals, which translated into increased hotel bookings, especially in Nairobi, Naivasha and Nakuru.
Positive accolades towards the sector have also propelled the industry.
For instance, the World Travel Awards (WTA) voted Nairobi as Africa’s leading business travel destination, while Kenya was named Africa’s leading destination.
In 2022, Kenya was also voted Africa’s leading meetings, incentives, conferences and exhibitions (MICE) destination in the 3rd Annual World MICE Awards and various other awards for hotels and facilities in the World Luxury Hotel Awards 2022.
Also making the list of factors that propped up the sector was aggressive marketing.
During the year, industry players implemented different marketing strategies to appeal to local and international travellers.
For instance, Kenya hosted the annual Magical Kenya Travel Expo in Nairobi by the Kenya Tourism Board.
Mergers and acquisitions have also firmed up the year’s sector business.
For instance, Actis Limited completed the purchase of Fairview Hotel in Nairobi, City Lodge Hotel in Two Rivers, and Town Lodge Hotel in Upperhill from South Africa City Lodge Hotel Group.
At the same time, Kasada Hospitality Fund bought Crowne Plaza Hotel in Nairobi. Maanzoni Lodges acquired Nairobi’s 680 Hotel.
Despite the positive sides, the sector is grappling with challenges, key among them elevated cost of doing business.
Players continue to face increased inflationary pressures and depreciation of the Kenyan shilling.
Inflationary pressure, for instance, has forced hotels to review their prices upwards due to the rise in the prices of critical components, including fuel, wheat and cooking oil.
The rising cost of living has also limited spending power, limiting guests.
The sector has witnessed an increase in the number of hotels in operation, as well as serviced apartments.
Industrial data shows the average occupancy rate of serviced apartments has risen to 65.8 per cent in 2022, up from 61.5 per cent in 2021.
This, therefore, means that hotels will need to compete with serviced apartments to get guests.
Looking into 2023, players should ensure they stay on top of the game to build on the gains made in 2022.
Kenya Tourism Board (KTB) should continue to implement initiatives to support the sector.
Key among these will be marketing Kenya as a premier tourist destination on the local, national and international markets.
KTB will also be pushing for the implementation of the open sky policy which will allow more airlines to fly freely within the country, thus reducing the cost of air transportation.
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