Tough times for Nairobi Hotels as Occupancy Falls 11 percent

By Isaac Korir / March 12, 2018



Kenya Named as Hotspot for Luxury Hotel Investments

Nairobi hotels recorded the lowest occupancy among 14 African cities in 2017 regardless of the boosted Kenya’s total bed space by new establishments and the increased number of tourists compared to 2016, according to industry researcher HTI Consulting.

The occupancy rating included cities like Windhoek, Dar es Salaam, Lagos, Lusaka, Monrovia, Addis Ababa, Accra, Cape Town, Gaborone, and Dakar. Nairobi recorded the lowest with a decline of 11.1 percent.

The study report shows that there was an increased growth in new supply with 8.7 percent increase in available rooms. This is despite the challenges faced during the August 2017 General Election. The study notes that the supply growth was by 478 rooms, of which 334 were internationally branded.

Data collected by the Tourism ministry earlier shows how the contribution of tourist arrivals from East Africa enhanced the country’s overall tourism arrivals to from 1.34 million in 2016 to 1.47 million in 2017. However, the numbers remain below the peak of peak of 1.83 million recorded in 2011.

Due to the increase, the country’s revenue jumped 20 percent in 2017 amidst the efforts of recovery from a series of unfortunate events like terrorist attacks, which shied away tourists.

Earlier on in February 2018, Najib Balal, Tourism secretary, stated that the revenue earned from tourism, which is one of Kenya’s main earners apart from horticulture and tea, amounted to 120 billion shillings.

“Kenya grew stronger in 2017 as a tourist destination owing to positive visibility. This was achieved regardless of a busy electioneering season that threatened to minimize tourism activities,” Mr. Balala said.

In the HTI report, Dar es Salaam had a decline in occupancy of 9 percent following Nairobi. This was linked to unpredictability by the investors concerning the new government policy that limited business travel to the city.

“Direct flights, which are imperative for tourists also reduced the leisure demand for Dar es Salaam,” the study noted.

Other cities that had lower occupancy performance include Addis Ababa and Gaborone whose decline in growth in 2016 was 10 percent and 7.1 percent respectively.

“Regardless of the increase in supply, these cities are experiencing a decline in demand owing to political upheavals and the economic constraints driven by mining (Gaborone),” concluded the study.





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