Kenya’s hospitality sector performance is gradually recovering from the adverse impact of the COVID -19, according to 2021 market update by Cytonn Real Estate. The sector’s performance is expected to be boosted at least in the medium term, following the Government’s stimulus package to the industry players as well as the recent introduction of the Covid-19 vaccine.
The 2021 Market Outlook Report indicates that, “the hospitality sector has begun to gradually recover, supported by reopening of key tourism markets, financial aid from the government through the Post-Corona Hospitality Sector Recovery Stimulus Package by the Ministry of Tourism through the Tourism Finance Corporation (TFC) and other international agencies’ repackaging of the tourism sector to appeal to domestic tourists and relaxation of travel advisories”.
In 2020, the Nairobi Metropolitan Assembly’s serviced apartments rental yields averaged 4.0 percent, a 3.6 percent lower than the 7.6 percent recorded in 2019. The decline was attributed to a fall in monthly charges per Square meter as well as occupancy levels from Kshs 2,806 to Kshs 2,445 and from 79.4 percent to 48.0 percent respectively. The decline in performance was attributed to the subdued demand for hospitality facilities and services due to the COVID-19 pandemic, resulting in decline in international arrivals which have affected the performance of the tourism sector.
According to a Central Bank of Kenya survey of Hotels in September 2020, the average bed occupancy had improved to 24 percent of the total bed capacity in September from its lowest levels of 10 percent in May. This according to the survey was largely reflective of the lifting of travel restrictions in and out of Nairobi and Mombasa, and resumption of international flights.
But the Government’s provision of soft loans to hotels and related establishments through the Tourism Finance Corporation (TFC) is set to further boost performance of the hospitality sector and improve infrastructure opening up areas for investment.
A total of Ksh 2 Billion was set aside to support renovation of facilities and the restructuring of business operations by actors in the industry, a move that seeks to cushion the industry from the impacts of the COVID-19 pandemic.
Source: Mohammed Bomanso Issah (Real Estate Times Africa)