Kenya hotel industry surpasses expectations with continued growth

Hilton Nairobi, Kenya, Africa

According to PwC’s African Insights Hotel Outlook: 2017-2021 report, Kenyan hotels are expected to see positive growth across the country. 

Kenya's hotel stock is set to grow over the next five years with 13 new hotels. These new properties, which will add 2,400 guestrooms while expanding Kenya's hotel capacity by 13 percent and exceeding last year’s expectations. According to PwC’s report, the number of available guestrooms will rise at a compound annual increase of 2.5 percent from 18,600 in 2016 to 21,000 in 2021. “Helped by an increase in flights to Kenya, lower park fees, a stable economy and ongoing growth in domestic tourism, we project guest nights to build on their recent momentum and rise at a 4.1-percent compound annual rate during the next five years,” PwC said in a statement. 

The global hotel chains expanding or launching in Kenya include Sheraton, Ramada, Hilton, Best Western, Radisson, Marriott and Movenpick. Although PwC forecasted increased investment activity in the country, it also predicted that occupancy will drop over the next two years before rising again in 2019 from guestroom oversupply. In 2021, Kenya hotels are forecasted to gain a total of about 4.4 million guest nights, a 4.1-percent compound annual increase from 3.6 million in 2016. 

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Outside of Kenya, South Africa and Mauritius recorded double-digit growth in hotel revenues last year. For 2017, PwC predicted further positive growth for the two countries. While PwC forecasted South Africa's revenue will rise by 10.1 percent in 2017, Mauritius' revenue will grow by 6.2 percent compounded annually to 2021. PwC predicted that Nigeria will garner the most rooms revenue over the next five years. Meanwhile, Tanzania also recorded strong growth in 2016 with a 7.7-percent increase to $224 million in 2016. PwC predicted that as guest nights increase again in 2018 and grow by a compound annual rate of 2.4 percent through 2021, room revenue will rise by 6.9 percent.