Overview of Hospitality in Kenya: Recent Developments
Starting 1st Feb 2016, VAT charges on National Park fees were scraped and KWS Park fees were capped at USD 60 (down from USD 90) to boost both domestic and international tourism. The government scrapped landing fees for chartered planes at Mombasa and Malindi International Airports from January 2016 to June 2018. A subsidy of USD 30 was given for every passenger disembarking in Kenya starting 1st Feb 2016; visa fees for children under 16 were scrapped.
There are plans to expand the JKIA and Malindi airports so they can handle more visitors Construction of Port – Reitz Mombasa Road and the Dongo – Kundu Bypass that will allow tourists to travel to the South Coast (Diani) without using the ferry, is on-going Kenya Ferry Service intends to buy two new ferries for the Likoni Channel crossing at the Coast.
Technological enhancement through implementation of e-visa application system since 2015 has enabled easy application and payment online and not at entry point at the airport as was before. As at 2016, only 15.6% of international arrivals were from Asia compared to Europe at 40.9%.Kenya is therefore increasingly targeting Asian markets such as China and India to boost the sector.
Trends in the Sector
Fractional home ownership and time share
Fractional home ownership involves multiple buyers purchasing a vacation home or resort and allocate usage rights based on time. When none of the owners is using the resort, they let it out and receive rent revenue. These are popular in the Rift Valley, the Mount Kenya region and the Coastal region e.g. at Aberdare resort.
Increasing of Market Stake by International Hotel Chains
The hotels sector has continued to attract international hotel chain companies as they seek to expand and secure market share in the sector either through full right branding or renovation of available facilities to enhance capacity. Hotel chains such as Radisson and Marriot have opened hotel outlets over the year and set to open more hotels in Nairobi. Ramada and Mövenpick are amongst the international brands scheduled to open additional hotels in Kenya during the next five years.
Improved Hotelier Service Standards
In November 2016, eight hotels including, Dusit D2, Radisson Blu Hotel and Tribe Hotel among others secured 5-star ratings through Gazette Notice No 9591 by the Tourism Regulatory Authority, this affirms the efforts put in place by various players in the hospitality sector to delivery high quality services of global standards.
This is being carried out to enhance operational efficiency by combining different hotel uses e.g. serviced apartments and hotels in one building, and sharing facilities such as parking, lobby, gym and fitness facilities. This has been done at Yaya Hotel & Apartments in Kilimani and will be seen in projects that are under construction e.g. Ole Sereni expansion and Avic Towers in Westlands both of which will have serviced apartments and hotels
MICE (Meetings, Incentives, Conference & Exhibitions)
Both local and international conferences increased by 17.4% and 4.1%, respectively from 2015 to 2016 faster than the 5-year y/y average change of 5.2% and (-5.5%), respectively from 2012 to 2016 highlighting the increasing demand for conference facilities in the country. MICE hospitality is mainly driven by local conferences and delegates accounting for 94.3% of all conferences held in2016. Growth in MICE is attributed to improved security, holding of high-profile conferences which increase international confidence in Nairobi as a conference center and devolution that has resulted in the increase in number of conferences and meetings held at the county levels.