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International hotel investors shun the Coast

A beach hotel in Malindi
A beach hotel in Malindi. FILE PHOTO | NMG 

Kenya’s hospitality industry has seen an influx of international chains setting up properties, mainly concentrated in Nairobi, while shying away from the coast which is widely considered the country’s tourist hub.

International hotel chain, Accor, has cited low investor confidence in the destination and low international demand as some of the key reasons it has not set up a hotel at the Kenyan coast.

“Investment has slowed down due to low investor confidence and demand has been flat over the past 10 years because of various reasons,” said Accor Chief Executive Officer Middle East and Africa, Mark Willis Tuesday.

Nairobi, meanwhile, has seen increased interest by global investors with nearly all 20 hotels currently in the pipeline to be set up over the next five years slated for the capital.

“The country needs stability to create investor confidence. There is also need for proper infrastructure and investment by the government and international investment will follow,” said Mr Willis.

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While the coast has become a popular destination for local tourists, international visitors have remained sceptical in the wake of travel advisories issued in the past by their governments on Kenya. These advisories have been occasioned by terror attacks as well as kidnappings of foreigners along the coast.

The bulk of hotel investment in Kenya outside of Nairobi has been by local players such as Sarova and individual investors. International brands have shied away from the beach and bush terrain in Kenya, save for a handful.

The government has been making attempts to offer incentives such as park space to global brands in a bid to woo investment outside the capital.

“We have been screening opportunities at the coast and we want to be ready when it is back on the map with European travellers,” said Alexis Janoray Head of Development Africa & Indian Ocean, AccorHotels.

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