According to the Knight Frank 2018 Hotels report, Kenya has 68 global hotel brands, topping Nigeria and Tanzania. Brands such as Sheraton, Ramada, Hilton, Best Western, Radisson, Marriott, and Mövenpick have expanded their presence in Kenya in the past two years, adding to the growing number of international brands.
Major brands that have announced Kenya expansion plans include Marriott International which will open at AVIC International’s building in Westlands, Nairobi, and Hilton Hotel, which will open at The Pinnacle in Upper Hill.
But why are investors opting for International Brands?
Lower Financial Risk
Most of these hotel brands do not own property but have the expertise to run one in any part of the world. They usually enter into a partnership contract with a developer. Therefore, the financial risk to the developer and land owner is minimized, especially if the Hotel brand is creditworthy.
Quick Uptake
A quick uptake of International Brands’ products is guaranteed especially when oversees clientele decide to visit locally and with the recent introduction of direct flights to the United States by Kenya Airways, that should boost U.S. travel to Kenya. And if we maintain the wining streak as World’s Top Safari Destination, more tourists are expected to come.
The PwC hotel outlook report released in 2017 projected the number of available rooms in Kenya will increase from 18,600 in 2016 to 21,000 in 2021, a 2.5 per cent compounded annual increase. Assuming a period of relative stability, we expect tourism to Kenya to increase at a 6.9% compound annual rate, rising to 2.06 million in 2022 from 1.47 million in 2017.
Rapid Expansion
The partnership with global brands comes with more financial muscle. The Best Western Group tops the list of hotels in the pipeline, with six properties already under construction. One in Naivasha and the rest in Nairobi. The Radisson Hotel Group, which already has two operational properties in Nairobi, is set to open a third one this year.
Sources
• The Knight Frank 2018 Hotels Report
• The PwC Hotel Outlook Report
• Business Daily
• The East African
Hospitality (K) Consult Limited is a Kenyan owned company. We have a pool of highly certified experts with a wealth of experience in specialized fields. We help hotels unearth their full business potential as well as provide solutions and support to our clients.