Hotels recovery up as virus rules relaxed
By Peter Theuri
| Feb 4th 2021 | 2 min read
The hospitality industry that faced a sickening blow in 2020 with some prime hotels winding up operations or shipping out, is slowly showing recovery signs.
According to the Kenya National Bureau of Statistics’ quarterly Gross Domestic Product (GDP) report, the accommodation and food service sector posted an under-par performance in quarter two of last year, contributing Sh4 billion to the GDP.
This was lower compared to Sh18 billion recorded in the first quarter of 2020 (January to March). Quarter three contributed Sh13 billion to the economy, showing recovery signs, though it was the slowest quarter since 2015.
It was in the second quarter that most restrictions were enforced, including on travel.
In April 2020, President Uhuru Kenyatta ordered cessation of movement into and out of Nairobi, Mombasa, Kilifi and Kwale counties to curb the spread of Covid-19. Mandera was later added to that list.
The sector formally employed over 82,900 people. Together with trade services, it engaged over nine million people in 2019.
The sector was the worst hit by the virus, contracting by 83.3 per cent in the second quarter of 2020 compared to an expansion of 12.1 per cent in the same period in 2019, according to Central Bank of Kenya’s Monetary Policy Committee Hotels’ Survey.
Dusk to dawn curfew and restrictions on gatherings saw hotels and entertainment joints close with the hospitality industry limping.
Even market behemoths such as Intercontinental Hotel and Fairmont the Norfolk sent their staff home and shut down.
Those that remained in operation worked with minimal staff. The closure of international skies saw tourist destinations face low traffic.
And even historical events such as the migration of wildebeests were devoid of the usual pomp and colour, with only a handful of tourists present to watch.
The night curfews killed a robust city nightlife, with city pubs and hotels closing down completely. The hotel industry was most affected in Nairobi.
The average bed occupancy for hotels outside Nairobi averaged 33 per cent in December 2020 and 24 per cent in January 2021, compared to 19 per cent and 17 per cent respectively for the Nairobi area.
“The slow recovery of hotels in Nairobi is associated with the increased number of reported cases relative to the rest of the country,” KNBS said.
The accommodation and food service sector activities contracted by 57.9 per cent in 2020 compared to an expansion of 9.8 per cent in 2019.
The sectoral contribution fell by 0.8 per cent points to 0.6 per cent from the 1.3 per cent recorded in quarter three 2019.
Last year, Tourism Cabinet Secretary Najib Balala said the virus had gobbled up half of the industry’s revenues. “We lost 50 per cent of our revenue of Sh160 billion with the second half of the year being as good as zero,” said Balala.
Recovery, alongside the development of vaccines, will boost the industry.
Last month, Health Cabinet Secretary Mutahi Kagwe announced that AstraZeneca vaccine would be available this month.
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