Local hotel revenues are annually expected to grow by an average of 9.6 per cent, rising from Sh39.8 billion last year to Sh63 billion by 2022.
The major reason for the increased revenues for hotels in Kenya is continued rebound in tourism.
Analysts also cited the growing prominence of the country as an experience destination.
Kenya will have the second fastest growing hotel room revenues after Nigeria in sub-Saharan Africa over the next five years, a projection by audit and financial advisory firm PricewaterhouseCoopers shows.
Local hotel revenues are annually expected to grow by an average of 9.6 per cent, rising from Sh39.8 billion last year to Sh63 billion by 2022. Nigeria’s will likely grow by 12.6 per cent during the five-year period beginning this year but the absolute amounts – rising from Sh13.2 billion to Sh34.7 billion in 2022—will remain lower than Kenya’s.
The major reason for the increased revenues for hotels in Kenya is continued rebound in tourism, new hotels, improved infrastructure and political stability.
The analysts also cited the growing prominence of the country as an experience destination, indicating it is able to offer beach, bush and city or urban tourism experiences.
“Kenya will benefit from a rebound in tourism, new hotels, its growing prominence as an experience destination, infrastructure upgrades, and the expectation of political stability,” said PwC in the report titled Hotels Outlook: 2018-2022.
Among the five countries considered in the report, Tanzania was classified as having the third highest annual compounded growth rate at 9.1 per cent over the five-year period.
The report adds to the growing projection of Kenya as a major beneficiary of global tourism with credit rating agency Moody’s having forecast an increase in Chinese tourists to Kenya in a separate analysis released early last week.
The domestic tourism industry recovered in 2016 when earnings rose to Sh99.69 billion from Sh84.6 billion in the previous year. The performance was even better in 2017 when the total earnings hit Sh119.9 billion with hotels alone earning Sh39.8 billion of the amount. In 2015, the total industry earnings had fallen compared to 2014 when they stood at Sh87.1 billion.
W Hospitality Group recently said there are about 20 major hotel brands lined up to locally open shop in the next five years.
Of the 20, at least 14 are set to commence operations by next year. Best Western Group tops the list of the hotels planning to start operations, with six properties under construction.
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