Swiss hotel chain Movenpick has entered Kenya, joining a host of
international hotels competing for space in the region’s hospitality
sector.
Movenpick Hotel that opened in Nairobi’s
Westlands on April 6 is the first in Kenya under the Movenpick Hotels
and Resorts, and is owned by Kampala-based Gold Course Hotel.
It
joins other global brands in East Africa such as Four Points by
Sheraton in Nairobi and Kampala and Radisson Hotel Group which operates
the Radisson Blu Hotels in Nairobi and Kigali, among others.
Competition
for business travellers, conference participants and holidaymakers is
expected to rise, with analysts forecasting more supply of rooms in
regional market in the medium term.
Return on investment
Other
global hotel brands angling to enter the region this year are Hilton
Worldwide, which is upgrading the 153-room Ubumwe Grande Hotel in
Kigali, under the Double Tree brand.
Hilton opened the Garden Inn near Jomo Kenyatta International
Airport in March, and Double Tree on the outskirts of the city centre as
part of the global hospitality chain’s $50 million plan to establish
100 hotels in Africa over the next five years.
In Dar
es Salaam, City Lodge is developing a 147-room facility that is expected
to open this year. City Lodge already operates in Kenya at Two Rivers
Mall, Nairobi.
In Kigali, some of the global hotel
brands are having difficulty setting up shop because of lack of
management contracts with local developers.
Movenpick,
the Ascot Group, Protea which is in Tanzania and Uganda, and City Lodge
which is in Kenya and Tanzania have been unsuccessful in securing local
partnerships.
Disagreements
Kempinski
pulled out of the Rwandan market in 2016 after it disagreed with the
owners of Hôtel Des Mille Collines after it signed a management contract
with Mickor Investment Holdings in 2014, but it was terminated just two
years later.
Uganda lacks solid presence of global
hotel brands despite having a number of sizeable properties. The country
has less than five hotels managed by international brands.
Disagreement
between developers and international brands has seen two brands —
Carlson Rezidor and the Hilton, eschew the management of Uganda’s
grandest property, the 296-room Pearl of Africa that opened doors this
month under the One&Only brand.
America’s Marriott Hotel has, however, announced plans to set up shop in Kampala and Nairobi.
The
firm is building a $98.8 million JW Marriott Hotel next to Villa Rosa
Kempinksi in Nairobi. It is also acquiring two properties in Uganda,
where it has operated the Protea Hotel for the past two years, after
acquiring South Africa-based Protea Hospitality Holding. Marriott is
already in Kigali.
According to analysts, mid-scale
hotels are popular as they offer a return on investment because they
give opportunity to the mass market segment.
In
Nairobi, the supply of top-rated hotel rooms has been growing from 1.1
million room nights in 2011 to hit 1.9 million in 2017. This has been
driven by a growing number of international arrivals which stood at 1.5
million in 2017.
The PricewaterhouseCoopers Hotel
Outlook 2017 report estimates that 13 hotels plan to open in Kenya over
the next five years, growing the bed space by over 2,400 rooms.
Hotel
revenue in Tanzania is projected to hit $3.5 billion in 2018, up from
$3.2 billion in 2017 and that of Kenya is expected to reach $8.3 billion
up from $7.8 billion. In total, Africa has 301 hotel projects in the
pipeline this year, accounting for 57,011 rooms.
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