Demand for hotel services rises in spite of slow year

What you need to know:

The increased construction and expansion activities, especially by Kenyan-based firms, were driven by the need for growth amid competition from global brands such as Sheraton, Ramada, Marriott, Radisson Blu and Movenpick which entered the market in the last few years.
Earlier in the year, Sarova Group signed a management deal with Woodlands Hotel Limited worth Sh1.3 billion to supervise operations of the four-star facility in Nakuru.
The pact was in line with Sarova’s strategy of partnering with investors to manage hotels at a fee, other than building its own.

The hospitality sector deviated from the poor performance witnessed in other real estate segments to record an upward trend as a result of increased demand for hotel services from both leisure and business travellers.

The increased construction and expansion activities, especially by Kenyan-based firms, were driven by the need for growth amid competition from global brands such as Sheraton, Ramada, Marriott, Radisson Blu and Movenpick which entered the market in the last few years.

Earlier in the year, Sarova Group signed a management deal with Woodlands Hotel Limited worth Sh1.3 billion to supervise operations of the four-star facility in Nakuru.

The pact was in line with Sarova’s strategy of partnering with investors to manage hotels at a fee, other than building its own.

“The 147-room Sarova Woodlands Hotel targets the hospitality performance in the area that recorded a high average daily rate of $218 and a total revenue par available room of 81 despite a relatively low average annual occupancy of 29 per cent in 2016, which is set to be boosted by both local and international leisure and business travellers in Nakuru,” said investment firm Cytonn.

Other Kenyan-based hotels also tried to reclaim their position amid competition, with Nairobi Serena Hotel embarking on expansion and refurbishing of existing facilities, while Ole Sereni Hotel is building a new facility adjacent to its Mombasa Road branch.

Crowne Plaza opened a new mixed-use annex adjacent to the hotel, while Hilton will expand to Pinnacle Towers building in Upper Hill by 2020.