Credit: pixabay

Global editing firm PwC recently released the Hotel Industry Outlook for African countries from the year 2017 to 2021. The report gives insights into the state of the industry in various African countries including Kenya. According to the report, Kenya’s attraction for investors in the hotel industry was boosted by relatively stable economic growth projections and imp-roving security.

In addition, Kenya was named the 9th best destination in the world and the top in Africa by Rogue Guides of the United Kingdom in 2016. This saw the number of visitors increase to 1.31 million in 2016 from 1.18 million in 2015.

Further, government incentives like elimination of certain fees and charges for foreign visitors together with the improvements in infrastructure have also improved the country’s appeal as a leisure as well as a business destination.

Such developments, along with a stable economy, have continued to attract international hotel brands to Kenya. Some of the international hotel brands scheduled to open branches in Kenya in the next five years include Sheraton, Ramada, Hilton, Best Western, Radisson, Marriott, and Mövenpick.

In total, 13 new hotels are expected to open by 2021, adding 2400 rooms and expanding the hotel capacity by 13% with a 2.5% compound annual increase in available rooms over the next five years. With an increase in flights to Kenya, lower park fees, a stable economy, and ongoing growth in domestic tourism, PwC projects that guest nights will build on their recent momentum and rise at a 4.1% compound annual rate over the next five years.

From the report, average room rate growth, a measure of the average booking price per night for hotels, slowed in 2016. This contributed to the rebound in stay unit nights which is the accommodation capacity of a hotel. However, room rates are expected to grow at moderate rates (projected to average 3.3 per cent annually through to 2021) as hotels look to sustain their recent expansion in the face of growing competition.

Further projections indicate that occupancy rates will decline over the next two years before edging up in 2019. Hotel occupancy rate is expected to 57.4% in 2021, up from 52.9% in 2016, but still well below the 66.1% rate achieved in 2011.

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