Rise of Airbnb giving hoteliers sleepless nights

As hotels in the Coast and around the country continue to suffer from the economic effects of the Covid-19 pandemic, with some closing down, holiday homes are thriving under the Airbnb platform.

Since its launch in 2008, the accommodation listing platform has amassed millions of rooms worldwide, hosting tens of millions of clients. Locally, it is now shaking the very foundations of the tourism sector, pushing up property market prices as its key model of self-catering takes enterprising Kenyans by storm.

In Mombasa, there are hundreds of these establishments, with residents listing extra rooms in their houses, and others buying apartments for the purpose of renting them out as holiday homes.

The holiday homes now have swimming pools, are located near the beach and others have gyms within the building for guests to use. As if that is not enough, they have now employed chefs, drivers, housekeepers, gardeners, and security guards, just like in hotels.

Hotel business threatened

This has threatened the hotel business, which have traditionally offered accommodation to tourists on leisure or business.

Apart from offering room to negotiate with the client, house owners allow a family to stay in one house, unlike in hotels where they must book different rooms. At the homes, a customer can make their own food or request a meal of their choice.

Ms Rachel Wachira, the owner of Rataj Residences, a three-bedroom apartment in Nyali, which she listed on Airbnb last September, said business is thriving. To compete with hotels, she is now adding value to her listing, and is flexible with the pricing.

“Instead of someone paying Sh40,000 a night for one room in a five-star hotel, they can get a three-bedroom apartment, with a capacity of six people at only Sh12,000. The room comes with a sea view, a swimming pool and is also near the beach, exactly what the hotel would offer,” she says.

Some home owners offer services such as transfers from the airport, and the railway and bus stations, tours around town and breakfast for the guest.

“The number of homes is so high and so is competition, that is why I thought it wise to add various services to my apartment to attract more clients,” she says.

She offers breakfast that is included in the cost, a chef on request, toiletries and drinking water.

“Customer experience is key because they are the ones who will refer you to another client and another one, so we make sure that they are given the best services. In Mombasa, drinking water is so essential, yet costly and one must constantly take it. That is why I offered this to my clients,” she says.

Unlike hotels that restrict the number of people sleeping in one room, Ms Wachira says her rule is that there should be no more than six people renting her apartment. The number can, however, be seven if the customer negotiates.

Chef for guests

Ms Fridah Martin, who owns four holiday homes in Mombasa and Diani, offers a chef for guests.

Her apartment comes with a swimming pool, and guests can freely use the gym.

“All they have to do is to give me a budget, buy the food then I get someone to cook for them,” she says.

She explains that Mombasa has more clients than Diani, as most of her guests in Mombasa are businesspeople either picking imported vehicles from the port of Mombasa or those attending conferences.

“Diani is seasonal because people go there for holidays and leisure. This happens when schools have closed or the Christmas holidays. However, for Mombasa, there are always meetings and conferences and in addition, some people who want to just spend a night out,” Ms Martin explained.

She added that she would not want to expand the business now as she predicts a tough economic environment when the government imposes tax and other levies on their businesses.

According to Ms Martin, since the pandemic hit, people want to spend their holidays differently, and majority prefer to have private spaces as a family.

For instance, she says hotels offer buffets and restaurants where many people eat in one place, putting off those who fear contracting Covid-19.

Mr Andrew Sakwe, 31, who manages and owns apartments in Mombasa, Malindi and Nairobi sees holiday homes as the future of accommodation.

“They give you a totally different experience, you want to feel at home away from home. People get value for twice what they get in a hotel,” he says.

It is, however, not just the efficiency of Airbnb that is allowing them to grow. The current restrictions such as curfew, have also helped people discover more about the holiday home, which can be rented out for one night.

This is more common in Nairobi, where home owners who depended on foreigners -- either expatriates or researchers -- are now targeting local residents.

“Sometimes a group of friends just wants to hold a birthday party for the whole night, and they will book the house. This is because clubs have been closed and no one is allowed out past curfew. So, they are better off in a residential apartment,” he explained.

Ms Wachira says due to pressure and competition, hotels will have to adjust their operation models to fit those of holiday homes.

“At some point, hotels will just have to be operated like holiday homes, they will have no choice,” he says.

The homes have offered jobs to many -- drivers, chefs, travel agents, booking agents and salespersons.

Their fear, however, is that regulatory agencies in Kenya will start tracking them down for payment of various levies as is done by hotels.

Economic opportunities

Airbnb has given Kenyans the opportunity to create new economic opportunities for themselves by monetising a spare room or a local experience, in places where such opportunities were often limited.

Traditionally, established hotels have always enjoyed the lion’s share of the country’s tourism spoils, but Airbnb is quietly changing that.

In 2019, AirBnb took away more than Sh500 million from the traditional tourism earners and placed it in individuals’ pockets, and with the trend quickly catching on, the amount is bound to rise, with expectations that it will double in the next four years.

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