Nairobi's hospitality industry expected to pick up in 2018 after gruelling election period

The industry has been hard hit by the effects of the recent elections

Nairobi's hospitality industry is expected to pick up next year following a decrease in growth on the back of a gruelling election period.

A report by Cytonn Investments on the hospitality sector in the Kenyan capital says the sector experienced an upward trend in the first half of the year but has been constrained by the effects of the Kenyan Elections.

International arrivals went down by 7.4 per cent in August due to heightened political activities having come from a 12.6 per cent increase in the period between January and July 2017.

"International arrivals at the Jomo Kenyatta and Moi International Airports increased by 12.6% between January and July 2017 from 482,470 persons in 2016 to 543,146 persons in 2017."

"In August, however, arrivals declined by 7.4% due to political noise during the electioneering period," the report says.

The hotels market was also hard hit by the extended election period with average daily rates and occupancy declining by 18% and 2.4%.

"Hotel Average Daily Rate has declined by 18.0% from Kshs 13,909 in 2016 to Kshs 11,789....average hotel Occupancy has declined by 2.4% points from 53.0% in 2016 to 50.6% due to political noises that resulted in cancellation and postponement of planned visits."

Even then, Cytonn terms the slow growth as a temporary phase adding that it expects the sector to pick up towards the end of the year and in 2018.

This given factors such as improved security, increased government marketing efforts, growth of MICE and domestic tourism.

"In 2017, we project a 6.2% increase in international arrivals, a 4.2% growth in tourism earnings, and a slight increase in contribution to GDP to 1.2% from 1.1% in 2016," the report notes.

It earmarks serviced apartments and 4-star hotels as areas where the sector is likely to experience growth from.

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