Global hoteliers pour big money into Kenya hotel investments

JW Marriott to open hotel in Kenya
JW Marriott plans to open a luxury hotel in Westlands, Nairobi. PHOTO/COURTESY
Top global hotel chains seeking to tap into the Kenyan tourism sector are increasingly lining up huge investment for the country, according to a study by PricewaterhouseCoopers(PwC).

The 2016-2020 PwC report says that plans are underway for the construction of 16 five star hotels in Kenya over the next four years – underlining the country’s growing profile as a regional business hub.

The expansion is expected to provide an additional 2,600 rooms from 18,100 in 2015 to 20,700 in 2020 thereby growing the local tourism industry’s bed capacity by 14 percent, a 2.7 percent compound annual increase in available rooms over the next four years.

The study shows that Kenya’s economic growth and its status as a regional multinational businesses hub have been vital in attracting new hotels targeting foreign and domestic tourists as well as business expatriates.

“Kenya’s economic growth has been strong and the scheduled hotel investments indicate confidence in the country’s growth trajectory. The booming construction industry, access to Mombasa port and the country’s continued resilience and ability to address challenges such as insecurity have also contributed largely,” the report said.

In addition, urbanisation, skilled work force, emerging middle class, devolution and improved infrastructure have contributed in positioning Kenya as a destination of choice for many investors.

Among the hotels to be put up is Hilton Nairobi Garden Inn near the Jomo Kenyatta International Airport in Nairobi – the second investment in the country by Hilton International after Hilton Nairobi.

The global chain also plans to open a third outlet at Hass Towers currently under construction in Upper Hill Nairobi. On completion, Hass Towers, at 330 meters high, will be the tallest building in Africa.

The Swiss based Movenpick Hotels and Resorts in Westlands is set to launch its operations before the end of the year while the Best Western Premier Nairobi has already opened its doors with plans to open its second outlet in Nairobi in the last quarter of 2017.

The upcoming four star Park Inn by Radisson targeting corporate clientele is relying on its location in Westlands and vicinity of the United Nations Headquarters in Gigiri to bag conferences, exhibitions, meetings and business travellers

Other international brands targeting high end consumers include JW Marriot, Accor, Four Points by Sheraton, Louvre Hotels Group, Sarovar, Pullman and Ramada.

Despite the occupancy rates in Nairobi and Mombasa remaining high and prospects of major hotel investments, the report indicates that the occupancy rate will fall over the next two years before picking up in 2018, as capacity grows more than demand due to concerns about political stability occasioned by the 2017 elections.

“We project a 5.7 percent decrease in 2016 and an additional 3 percent decline in 2017 before a recovery in 2018 after the 2017 elections with growth averaging 1.1 percent compounded annually through to 2020,” PwC said.

The Kenyan tourism sector continues to be among the fastest growing industries of Africa’s economy.

Despite recent terrorism challenges, the country is developing into one of the world’s best travel destinations with its rich culture, wildlife and natural beauty.