Slow recovery in Kenya's hotel sector to persist in 2021, survey

**Utilisation of restaurant services (per cent of total capacity)**

NAIROBI, KENYA: Business is still slow for players in Kenya’s hotel industry with many investors reporting lower than normal forward bookings for instance.

Traffic from international visitors has also gone down due to a resurgence in Covid-19 infections in Europe and the United Kingdom.

In a study conducted last month by the Central Bank of Kenya’s MPC, 36 per cent of respondents noted that the resurgence in infections in Europe and UK has affected their business operations since they form a significant part of their clientele.

Only 19 per cent of respondents, particularly the small hotels, indicated that the rising infections in Europe have no impact on their hotel operations. They also noted that the government is a key consumer of their services in terms of conferences and should augment this by offering subsidies, tax holidays (waivers), and suspension of levies during the period of the pandemic.

In the survey, on average, about 50 per cent of hotels expect to resume normal levels of operations by end of the year.

The average hotel forward bookings for January were about 8 per cent and 6 per cent for February. Respondents particularly 5-star and 4-star hotels indicated that, while they take forward bookings for a period of up to three months, the reported bookings were generally lower than normal level of bookings with the difference fully attributed to the fears caused by the pandemic on customer travels.

However, respondents in the rest of the hotel categories indicated that a significant proportion of local guests were walk-in customers, who do not make prior bookings.

Change in Clientele
The Survey also sought to assess the type and average proportion of clientele (foreign and local) served by hotels in accommodation and restaurant services before and during the COVID-19 pandemic period.

Overall, local guests took up 84 per cent of accommodation and 79 per cent of restaurant services during the pandemic period, compared with 64 per cent and 70 per cent, respectively, during the period before the pandemic.
Respondents attributed the dominance of local guests mainly to the international travel restrictions imposed during the pandemic period.

Nevertheless, there was a slight increase in the proportion of foreign clientele in accommodation and restaurant services in the period December 2020-January 2021 compared with October-November 2020, with respondents attributing this to a rise in the number of foreigners following the reopening of international passenger flights since August.

Employment

The industry was among those adversely affected in March when the first case of Covid-19 was detected in the country. Restrictions such as lockdowns and temporary closure of airports impacted heavily on the sector leading to retrenchments of staff.

The survey which assessed changes in employment reported a recovery to the pre-Covid levels in February 2020.

“The results show that employment in hotels continues to recover towards pre-COVID levels, averaging 60 per cent in December 2020 and 57 per cent in January 2021 compared with 53 per cent in November and 37 per cent in May.”
The rise in employment is attributed to increased demand for hotel services during the Christmas festivities that called for the hiring of additional staff.

“The pace of recovery in employment for the sector has however been tempered by fears of a resurgence in COVID-19 infections. The continued rise in COVID-19 cases globally had resulted in a lower inflow of foreigners/tourists, further denting their business prospects.”