Air Connectivity, Visa-on-arrival Policies to Bolster Kenya’s Hotel Sector Growth – Report

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Kenya’s hospitality sector is poised for further growth in the next five years bolstered by growth in air connectivity, visa-on-arrival policies, growing demand for experiences and adventure according to PwC’s Hotels outlook: 2019–2023.

According to the report,  Kenya has been said to among the next fastest growing with compound annual increases of 7.4%. “Kenya’s appeal as an adventure destination, with more flights, and new hotels will continue to grow.”

The PwC outlook projects that Kenyan hotel room revenue will expand by 7.4% compounded annually, rising to $731 million in 2023 from $511 million in 2018. 

Guest nights will total an estimated 4.6 million in 2023, a 3.4% compound annual increase from 3.9 million in 2018. 

“The hotel market benefited from the growth in tourism in 2018 and posted an 18.2% increase in guest nights. If tourism declines in 2019, we would look for guest nights to fall as well and we project a 5.1% decrease. Thereafter, the strong fundamentals of the Kenyan market should prevail, leading to a rebound in guest nights from 2020.” 

However, besides the increased marketing activities to make Kenya desireable, “Kenya has a low ranking with respect to safety and security and lags well behind Mauritius in it tourist service infrastructure, factors that we expect will limit growth in tourism over the forecast period,” the report cites.

The report that covered, South Africa, Nigeria, Mauritius, Kenya, and Tanzania notes that:  

Overall room revenue in South Africa, Nigeria, Mauritius, Kenya, and Tanzania rose 7.4% in 2018, up from the 1.9% increase in 2017, principally reflecting a 28 percentage point turnaround in Kenya, a 15.4 percentage point turnaround in Tanzania, as well as a 7.2 percentage point improvement in Nigeria. 

Mauritius continued to grow at double-digit rates in 2018 but room revenue growth in South Africa fell to only 0.5%.

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