Kenyan hotel rooms to stay empty

Saturday May 23 2015

Tourists at a hotel in Mombasa, Kenya. PHOTO | FILE

Tourists at a hotel in Mombasa, Kenya. Security concerns and tourists’ preference for other countries will see hotel occupancy in Kenya fall further this year, says a new report. PHOTO | FILE 

By SCOLA KAMAU, TEA Special Correspondent

Security concerns and tourists’ preference for other countries will see hotel occupancy in Kenya fall further this year, says a new report.

Stay nights are expected to decline by 2.8 per cent from 3.6 million in 2014 to 3.5 million this year, with occupancies just above 50 per cent. Revenue for the hotel industry is predicted to fall by 4.1 per cent from $585 million in 2014 to $561 million in 2015.

“We look for a recovery beginning in 2016, but it will not be until 2018 before stay unit nights return to the level seen in 2011,” the PWC Hospitality Outlook report released last week says.

In Mauritius, the average occupancy rate is predicted to rise from 63.1 per cent in 2014 to 63.7 per cent in 2019. Revenues are predicted to reach $736 million in 2015 from $725 million in 2014. Nigeria’s hotel revenues will fall by 2.3 per cent from $428 million to $418 million.

The report has been released at a time Kenya is working to attract more tourists and investments in a bid to revamp its hospitality industry.

For example, the Kenya Tourist Board is visiting Australia, China and India to market the country as a safe destination once again while the Tourism Recovery Task Force begun a drive to use social media to reach potential tourists.

On its part, Kenya Airways is working to market and promote Kenya as a tourist destination in South Africa.

Resumption of flights to Liberia came as a relief to both Kenya Airways and businessmen. The Kenyan Ministry of Health lifted the suspension imposed in August 2014, for persons who had visited Liberia following the Ebola outbreak. KQ, which started operations between Accra and Monrovia on March 29, will now sell transit traffic through Nairobi to its entire network.

KQ introduced new flights to China in 2014 and is considering a new destination in India.

Global hotel investors meeting in Addis Ababa said African governments should invest more in infrastructure, open air routes, and anti-corruption efforts besides financing developers to enable the continent to compete favourably for new global hotel investments. Kenya alongside Angola, Nigeria, Rwanda and Senegal have planned five major airports, which will attract hotel investors.

According to Kenya’s Ministry of East African Affairs, Commerce and Tourism, the country is diversifying into other tourism products in specific counties.

“Instead of relying solely on beach and safari holidays for marketing, we are promoting conferencing and county tourism to attract more visitors, while engaging the international media to portray Kenya as a safe destination,” said Cabinet Secretary for East African Affairs Phyllis Kandie.

“In the near-term, however, we expect concerns about terrorism to remain an issue, exacerbated by the Garissa attack,” says the PwC report.

Additional hotels have lined up investments, implying renewed confidence. Five medium-sized hotels (over 700 rooms) will be built in Nairobi in the next two years while the Simba Corporation is opening three mid-priced hotels.

At the upper end of the market, the Golf View Hotel (220 rooms), the Radisson Blu (256 rooms) and the Grand Sapphire (196 rooms) are scheduled to open this year. Over the next two years, approximately 1,600 rooms are expected to be added, with additional airport hotels expected in subsequent years.

However, more global hotel chains are lining up aggressive investments in Mauritius, Nigeria and South Africa — countries that top tourists’ preferences — implying confidence in availability of occupants of those rooms including tourists.

In Mauritius, available hotel rooms are predicted to increase at a rate of 2.8 per cent annually rising to 14,630 in 2019. The average occupancy rate will rise from 63.1 per cent in 2014 to 63.7 per cent in 2019. The number of tourist arrivals to Mauritius increased 4.6 per cent in 2014, exceeding the one million level for the first time.