Gloabal hotels are flocking to invest in Kenya

A number of global hotels are seeking to establish their presence in Kenya.

International hotels are flocking in to invest in Kenya’s hospitality industry to cash in on the fast growing hospitality sector.

Over the coming few months, hotel chains including Kempinski, Emaar, Radisson Blu, Marriot, Park Inn Hilton, Lonrho, and Rezidor will come calling as the country positions itself as the financial, travel, and business hub in the East and Central African region.

The intention to set up was part of the announcements made during last week’s Africa Hotel Investment Forum held at Nairobi.

The Kenya Association of Hoteliers and Caterers (KAHC) has welcomed the move, saying it is a sign of investor confidence in the country.

“It is a very good thing to the industry. As a country, we are in a position to attract foreign direct investments,” said KAHC chief executive Mike Macharia.

However, he noted this will not necessarily translate to cheaper or lower rates but improved and quality service provision.

There is high demand for accommodation from both local and international clients, which has created the rising appetite of global brands seeking to cash in on the sector’s growth.

“At the end of the day, it’s the customers who will benefit given the quality of services on offer,” he said.

Making investments

The hotels said during the African Hotels Investment Forum in Nairobi last week, that they would be making investments in Kenya to cash in on the growing tourism and hospitality industry on the back of increased trade activity between Kenya and China, the Middle East, and other African countries.

Analysts at Standard Investment Bank said global brands are keen on partnerships with developers to manage their properties under their titles and executives in return for a fee.

Kempinski, established in 1897 as a luxury hotel group, is currently constructing the Villa Rosa Kempinski hotel on Chiromo road in Nairobi to be opened in a few months.

The hotel comprises a portfolio of 74 five-star facilities in 32 countries and continues to add new properties in Europe, the Middle East, Africa, and Asia.

Marriot is expected to sign an agreement by the end of the year to open a hotel in Kenya by 2015. The hotel chain intends to inject Sh127 billion ($1.5 billion) in Kenya, Ethiopia, Ghana, Benin, Gabon, Nigeria, and Rwanda by 2015.

Hilton looks to open two hotels in Nairobi, Rwanda, and Congo. Rezidor, another global chain, is set to open two hotels in Nairobi by 2014.

Accor plans to open 30 new hotels with nearly 5,000 new rooms in Kenya, South Africa, Angola, Nigeria, Ghana, Morocco, and Algeria, bringing its total room network on the continent to 22,000 by 2016.

Dubai-based Emaar Hospitality Group has signed a deal under its hospitality division to operate a property developed by The African Dream Collection under its premium brand, The Address Hotels & Resorts.

According to Southern Sun general manager Paul Norman, the coming of global hotel brands in the country will create an environment of new ideas and high quality service upon which competition will now be based.

Create room for ideas

“We need more hotels. We need more capacity in the country. This would create a room for more ideas and improved quality,” Mr Norman said.

He cited increased trade activities in the country which has led to a rise in the number of travellers seeking hotel services.

Kenya is also strategically positioned to serve the African, the Middle East, Asia, and Far East markets through the Jomo Kenyatta International Airport, whose expansion will see it handle 20 million passengers every year by 2021.

Growing interest in Kenya from China, India, and the United Arab Emirates (UAE) saw a 15.4 per cent rise in tourism numbers to 1.26 million last year. This is despite the travel warnings issued by the US and European governments to their citizens. Earnings rose 32.8 per cent to Sh98 billion in 2011.

Earlier this year, the Kenya Tourist Board projected the tourism industry to quadruple its earnings to Sh200 billion and more than double the number of tourists to the country to three million by the year 2015 through targeting the emerging markets of Brazil, Russia, India, China, and South Africa as well as the domestic and regional markets in Africa.




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