Hotel Capacity in Kenya Expected to Increase by 2021, PwC

Hotel capacity in Kenya is expected to go up by 13 percent in the next four years, PwC has stated.

This is due to an estimated increase of hotel rooms to 21,000 from the current 18,600.

Some of the factors that have been noted to boost the increase include the opening of 13 new hotels in Kenya by the year 2021.

According to the African Insights Hotel Outlook 2017, guest nights are expected to build on their recent momentum and rise at a 4.1 percent compound annual rate in the next five years, a move said to have been helped by an increase in flights to Kenya, lower park fees, stable economy and ongoing growth in domestic tourism.

Among the international hotels expanding or setting up in Kenya include Sheraton, Ramada, Hilton, Best Western, Radisson, Marriott, and Movenpick.

However, occupancy rates will decline over the next two years before edging up from 2019 due to the oversupply of rooms.

Guest nights will total an estimated 4.4 million in 2021, a 4.1 percent compound annual increase from 3.6 million in 2016, noted the PwC report.

The report projected Kenya to expand at a 7.5 percent compound annual rate, helped by a strong domestic economy, government investment in infrastructure, and growth in available rooms that will limit room rate growth.

The tourist market in Kenya rebounded in 2016 following four years of decline. International arrivals fell from 1.82 million in 2011 to 1.18 million in 2015 as terrorist attacks and travel advisories issued by a number of countries curtailed visits to Kenya.

In 2016, however, the United States, the United Kingdom, and France lifted their travel advisories on Kenya and foreign visits to Kenya rebounded, rising to 1.31 million in 2016.

Kenya’s domestic economy, which has been healthy in recent years, further improved with a 5.8 percent rise in real GDP, its largest increases since 2013. This increase contributed to a 33 percent rise in domestic tourism.

Guest nights, which declined a cumulative 15 percent between 2011 and 2015, also rebounded with a 2.9 percent increase in 2016. The average room rate edged up 2.2 percent in 2016 and room revenue grew 4.9 percent.

Kenya’s economy is expected to remain strong, growing at a 6.3 percent compound annual rate over the next five years, more than twice the expected growth in global GDP.

PwC projects inflation to increase to 12.0 percent in 2017 and to average 11.4 percent compounded annually during the next Image courtesy of Tsogo Sun five years.

Kenya’s revenues with grow by 7.5pc annually helped by a strong domestic economy, incentives and government investment in infrastructure.