Survey: US direct flights, airport expansion to boots hospitality industry

NAIROBI: The launch of direct flights to the US and the Government's campaign to promote local tourism are major factors set to propel the hospitality industry in 2016, a new report has shown.

According to the 2016 Cytonn Investment Business Outlook Report, the expansion of Malindi Airport to accommodate larger planes and upgrading of the Bomas of Kenya to become the largest conference facility in Africa would also boost in the sector.

As a result, the hotel industry is already gearing up to cash in from the anticipated increase in tourists and travellers traffic.

The report says about 700 more accommodation rooms are expected in Nairobi in not less than a year, mainly targeting the middle-class.

This will be a 14 per cent increase to the number of hotel rooms as per the 2012 statistics by Hotel Market Snapshot that estimated Nairobi to have over 5,000 rooms.

According to the report, the industry's performance has been on the decline due to its high dependency on the tourism sector which has been targeting mainly high-end markets.

"The performance was attributed to both internal and external shocks, specifically insecurity concerns and negative travel advisories. These resulted in a significant decline in bed occupancy, primarily due to reduced international tourists," the report noted.

Despite the shortcomings, international hotels did increase their investment through brands such as Simba Corporation, Golf View Hotel, Radisson Blu and Grand Sapphire.

"However, conferencing facilities saw a slowdown in 2015, hugely due to Government cut in spending on conferencing. We expect growth in conferencing in 2016 due to increased appetite from the business traveller as the industry diversifies from overreliance on tourism," it added.

The report also hinged on the 2016 5.8 per cent growth in gross domestic product (GDP).

"GDP growth will translate to disposable income in the market; increasing competition in the travel industry and bringing down air travel costs," said the report.