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Tourism: Repackaged holidays

By Michael Omondi in Nairobi
Posted on Thursday, 17 March 2011 12:01

Hoteliers are scrambling to increase capacity due to a ?welcome rebound in visitors, ?as Kenya’s tourism board ?broadens its appeal to tourists from emerging markets and higher-end consumers

Read more on telecoms and infrastructure in our Country Focus on Kenya.

Kenya buzzed with the sound of construction last year as top-end hotels raced to adjust to soaring occupancy rates after two years of trimmed payrolls and scaled-back renovation plans. Post-election violence in early 2008 scared off holidaymakers who then faced lower purchasing power because of the economic slowdown soon after.

Now, the industry is bouncing back. Kenya has moved swiftly to rehabilitate its image thanks to an aggressive international marketing campaign dubbed “Magical Kenya”.?

“It’s a sea change. In 2008, everyone was preserving cash and retrenching staff. Today it’s expansion everywhere,” says Mahmud Jan Mohamed, chief executive of TPS Eastern Africa, which operates the Serena hotel chain. In September 2010, it completed a $20m rights issue to buy hotels and upgrade its existing facilities. TPS Eastern Africa joins others that are scrambling to upgrade and expand their facilities to benefit from new demand.

Last year was expected to show record results for Kenyan tourism, with the government predicting international arrivals would reach 1.2m, bringing in earnings of KSh100bn ($1.24bn), up from KSh62.5bn in 2009. Kenya’s visitor numbers had fallen by 30.5% to 729,000 in 2008, pulling down the sector’s earnings to Ksh52.7bn.

The Kenya Tourist Board (KTB) attributes the upturn to the marketing drive and the foray into new markets, notably the emerging economies of China, India and Russia.

“We shall continue with the same formula in 2011 of aggressive marketing in order to achieve a target of KSh110bn in the year,” said Muriithi Ndegwa, managing director of the KTB. The board doubled its marketing spend to $13m over the past two years, focusing on advertising and road shows.

In an effort to increase the industry’s resilience and diversification, the government is seeking to appeal not just to sun-starved European travelers looking for bargain safari and beach holidays, but also to higher-end consumers.

The tourism ministry has launched a product diversification strategy aimed at establishing Kenya as a destination for a wide range of activities including golf and bird watching. The Vipingo Ridge golf course in Mombasa and Nairobi’s Windsor Golf Hotel have been upgraded to international standards and a luxury course is under construction at Aberdare Hills in the Rift Valley. Last June international tour operators were invited to Kenya to evaluate the country’s courses.

Almost half of Kenya’s tourists arrive from the UK, US, Italy and Germany, but the industry is making an effort to tap markets in China, Russia, the Middle East, Spain, Portugal, Switzerland and Australia – all places where Kenya has hired new marketing development representatives. “Our target is to grow our arrivals to three million tourists by 2015 and increase their average spends from the current $500 to $1,000 by 2013,” said Najib Balala, the tourism minister.

Kenya’s airlines have expanded their capacity to meet growing demand. Jetlink, Fly540 and AirKenya have increased the number of flights to Mombassa, Masai Mara, Meru and Samburu. Kenya Airways also re-opened the Nairobi-Malindi route in December to serve the Italian tourists.

Owners have spruced up the Sarova Stanley in Nairobi, Sarova Whitesands beach resort in Mombasa, the Nairobi Serena and Mara Serena Safari Lodge. In Nairobi, at least seven five-star hotels have opened in the past two years, including the Ole-Sereni, Tribe Hotel and Crowne Plaza.

“Nairobi’s bed capacity has grown in excess of 2,000 in the past two years because of expansion of existing facilities and new hotels,” said David Gachuru, general manager of the Sarova Stanley, which won best luxury business hotel at the World Luxury Hotel awards last year. “But the additional capacity has increased competition, which has brought with it improved quality of hotels in the market as prices have stabilised.” Belgium’s Rezidor Hotel Group, which owns the Radisson brand, is opening a new hotel in Nairobi in 2013, while Starwood says it is in the market for an acquisition.

This article was first published in the February 2011 edition of The Africa Report.

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