A top European hotel chain is set to open shop in Kenya next year, ushering in competition for the growing number of tourists at a time of increased interest in the country’s hospitality business by multinationals.
The Rezidor Hotel Group of Belgium, owners of the Radission brand, said Friday it will start operations as it seeks a bigger share of Africa’s hotel business.
Listed at the Stockholm Stock Exchage, Rezidor joins Starwood Hotel & Resorts, which holds the Sheraton brand, and Southern Sun of South Africa that are turning to Kenya to expand their business and increase room capacity in the country, especially in Nairobi where conference tourism has been on the rise.
Their entry into the Kenyan market look set to shake-up the premium hotel market that has remained in the hands of Serena, Hilton, Intercontinental and Sarova chain of hotels in what players say will keep prices stable.
“Africa lacks internationally branded hotel rooms or shows a dated hotel inventory in many cities, which is why it is one of our key markets for future business development. This emerging continent offers huge natural resources, improved infrastructure and increasingly stable systems,” said Kurt Ritter, President and CEO of Rezidor Hotel.
It will open a 126-room hotel in Westlands as it seeks to renew its global battle with Hilton Hotel that it competes against in a number of countries in Europe and Middle East.
Rezidor operates in 62 countries with more than 400 hotels and generated sales of over 812 million euros (Sh99 billion in 2010).
It will be counting on its financial muscle and global expertise to gain market share in Kenya.
Tourism is recovering and players in the sector say they expect arrivals to increase and earnings to hit the Sh100 billion from last year’s Sh73.7 billion.
Nairobi has witnessed a rising number of international conferences in recent years, feeding the market with new demand that has also caught the attention of new entrants.
Africa has become a major investment destination for hoteliers with South Africa, Egypt, Nigeria and Kenya being major targets.
Despite the slump that began in 2008 soon after the post-election violence followed by the global financial crisis, Kenya has retained the image of a viable tourist destination.
In the last three years, Nairobi’s bed capacity has grown in excess of 2,000 as the city is rapidly growing into the preferred business and leisure hub.
The additional capacity has increased competition, which has brought with it improved quality of hotels in the market as prices have stabilised, says David Gachuru, the general manager of Sarova Stanley.
The new capacity has been brought home by upgrades by existing players and new entrants like Ole Serani, Sankara and Crowne Plaza.