22 April 2014

Kenya: Hotel Development in Kenya Slackens

THE hotel construction boom witnessed over the last two years in the country appears to be slowing down with major global chains now looking to set shop in neighbouring countries.

The 2014 hotel development pipeline report published by W Hospitality Group shows that developers and hotel management companies are now eyeing South Sudan and Rwanda which have debuted in the top ten rank this year.

Last year, Kenya was ranked sixth in the top 10 countries by number of hotels in the pipeline and fifth in terms of total number of hotel rooms the projects would generate.

"South Sudan makes its debut with two hotels totalling 435 rooms between them... and Congo is to have two new branded hotels, the first development in the past three years," states the 2014 report.

Ethiopia and Senegal have also been edged out of the top 10 countries with the highest number of hotel development projects by Ivory Coast and Rwanda. Egypt, Morocco and Algeria are the top three in the ranking while Rwanda is ranked seventh.

"The continent generally has never been an easy place to do business and is likely to remain more challenging than Europe or even China. However, the lack of quality hotel rooms, not just in the capitals but also in secondary cities is so marked that the major international chains now cannot ignore the opportunity," said Chairman of Bench Events Jonathan Worsley.

Bench Events is the company that organises the annual Africa Hotel Investment Forum.

The report does not state why hotel projects have slowed down in some of the countries that have been attracting hotel investments such as Kenya.

However, the country has over the last two years seen the entry of Best Western, Kempinski and Hemingways among other big brands in the hospitality industry and the slow down could signal that investors are taking a pause.

Also, property developers in the country have lately decrying the increased taxes by county governments warning that they are curtailing many projects.

The country's tourism business is also undergoing a rough patch because of insecurity issues a fact that could have led hotel investors to hold their plans for the moment.

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