Kenya’s hospitality industry to remain vibrant: report

Kenya’s hospitality sector is expected to remain vibrant supported by growth in international tourists’ arrivals and positive economic growth, the latest industry report indicates.

The report also reveals that security may be a hindrance to the growth due to scares following the Dusit D2 attack in early this year.

The report by Kenya’s leading professional service providers, Pricewaterhouse Coopers (PWC), tourists’ arrivals grew by 37.7 per cent to two million last year from 1.5 million the previous year.

1.8 MILLION TOURISTS

However, the report says this is expected to drop by 13.6 per cent to 1.8 million tourists this year, growing gradually by 1.3 per cent to approximately 2.2 million by 2023.

Available rooms increased by 5.2 per cent to 20,100 last year from 19,000 the previous year which recorded the largest growth in the last five years.

“This was a result of new hotel openings such as City Lodge, Hilton Hotels and Movenpick,” says the report released last month.

At the same time the report says additionally 3,700 rooms are expected to come into the market from the hotel pipeline that includes hotel brands such as Pullman, Radisson, Novotel, Protea, Hyatt among others.

INCOME DROPPED

There was a remarkable improvement in average hotel occupancy rate which rose from47.3 per cent in 2017 to 53.2 per cent last year representing a 5.9 per cent increase.

Interestingly, average daily rate income dropped from Sh13,500 in 2017 to Sh13,100 last year which is attributed to a decline in room rates.

However, the report paints an optimistic picture this year saying the average daily rate is expected to grow by 3.8 per cent to Sh13,600 before increasing to Sh15,900 by 2023.

Sadly, hotel room revenue is expected to decline marginally by 1.6 per cent to Sh500,000 million this year down from Sh510 million last year.

“This fall in guests could be attributed to a precarious security situation,” says the report.

ECONOMIC GROWTH

Apart from economic growth and security which greatly contributed to the 2018 hotel performance other indicators include increased air connectivity as new flight routes were introduced and expansion of airline capacities which has made domestic flying relatively affordable.

The Magical Kenya promotional campaign, which increased Kenya’s attractiveness, especially to audiences such as United States, Europe, India, and China also contributed to hotel performance last year.

The biggest hindrance to the sector still remains safety and security and insufficient tourist service infrastructure.

The PWC hotels outlook which covered the period between 2019 -2023 also provided an overview of the hotel industry in South Africa, Mauritius, Nigeria, Tanzania and Namibia.