Capital Markets

Kenya, SA hotspots in luxury hotels investment

Park Inn, in Westlands, is owned by AMS Hotels Ltd and managed by the Carlson Rezidor Group. PHOTO | SALATON NJAU | NMG
Park Inn, in Westlands, is owned by AMS Hotels Ltd and managed by the Carlson Rezidor Group. PHOTO | SALATON NJAU | NMG 

Kenya and South Africa have been tipped as the next continental hotspots in luxury hotel investment.

A new report released at the World Travel Market 2017 conference held in London between November 6 and 8 says the investment would be underwritten by continued flow of top-dollar clients to the region.

“South Africa and Kenya are expected to register strong growth in luxury hotels as Sub-Saharan Africa continues to be popular with luxury travellers,” says Euromonitor International’s Top 100 Cities Destination Ranking 2017 report.

It comes against the backdrop of a string of heavy investments by leading luxury hotels in Kenya last year. The list includes Accor Hotels, Hilton, Carlson Rezidor, and Acacia Premier.

Nineteen hotels are expected to come to Kenya shortly, with a total of 3,453 new rooms in the pipeline, according to a report by Lagos-based consultancy W-Hospitality Group.

Strict classification

A hotel must meet stringent criteria to be classified as luxury.

It must offer luxurious accommodation and public areas including a spacious reception hall, 24-hour reception and room service. The cleanliness, maintenance, hospitality and delivery of services must adhere to high standards.

Five-star hotels must have a restaurant with a high quality menu and at least one permanent luxury suite comprising three separate rooms — a bedroom, lounge and bathroom.

Hotel chains in Kenya are increasingly facing pressure from ultra-affluent clients who demand special service.

Super rich

Knight Frank’s 2017 wealth report released in March shows that Nairobi’s population of the super-rich grew at the fastest rate in 2016, beating Uganda, Tanzania and Rwanda.

The report, which notes that hard economic times which prevailed in the year did not slow down wealth accumulation, shows Kenya created 900 dollar millionaires in 2016.

This raised the number of the super rich to 9,400, representing an eight per cent growth from 2015 total of 8,500.

The new group of super-rich Kenyans includes 30 individuals whose assets are valued at more than $10 million each, 10 ultra-high-net-worth individuals with more than $30 million each, and two millionaires with more than $100 million each.

Hospitality industry though has slowed down lately.

Those assets worth more than $1 million excluding primary home.