Hospitality Sector Declined By 83.3% In Second Quarter Of 2020

The hospitality sector was the worst hit by the COVID-19 pandemic as businesses either closed down completely or operated under minimal capacity.

This was mainly due to the reduced number of tourist arrivals as the government issued a travel ban on international flights into and outside the country and the restriction of movement in select cities within the country.

As a result of the fear of contracting the virus and adhering to social distancing measures enforced by the government, hotels, and restaurants recorded significantly low occupancy rates especially in Q2’2020 and Q3’2020.

The negative impact of the pandemic is evidenced by the decline in the hospitality sector’s contribution to GDP through accommodation and food services by 83.3 percent during the second quarter of 2020 compared to an expansion of 12.1 percent during the same period in 2019.

The total number of international arrivals through Jomo Kenyatta International Airport (JKIA) and Moi International Airport (MIA) recorded a 71.5 percent decline from 1.2 million persons between January to September 2019 to 0.3 million during the same period in 2020.

This is however an increase from 13,919 persons in August 2020 to 20,164 persons in September 2020 according to the Kenya National Bureau of Statistics (KNBS), Leading Economic Indicators – September 2020, indicating the gradual recovery of the tourism sector.

Despite this, the sector has remained resilient evidenced by investor focus, with Accor Hotels and Radisson Hotel Group announcing that they would continue with their expansion plans in Kenya and the African region as a whole despite the slump in the sector due to the COVID-19 pandemic.

Additionally, Hyatt, a US-based hospitality chain announced plans to build a 225-room facility in Nairobi along Mombasa road, marking the brand’s entry into the Kenya hospitality market.

The move by these brands shows investor confidence in Kenya’s hospitality industry despite being one of the hardest hit by the COVID-19 pandemic. Is there hope during this festive season?