Kenya’s luxury hospitality sector is experiencing a significant upswing, fueled by a consistent increase in international tourist arrivals, a stable and growing national economy, and an expanding middle class with greater disposable income.
Industry experts, who are slated to address both the opportunities and challenges within this dynamic market at the upcoming East Africa Property Investment (EAPI) Summit in Nairobi, attribute this robust growth to the nation’s unique combination of breathtaking natural landscapes, strategic geographic positioning, and supportive governmental policies that are collectively attracting substantial investment in high-end tourism and hospitality ventures.
The intricacies and potential of this thriving sector will be a central point of discussion at the 12th annual East Africa Property Investment (EAPI) Summit, a premier real estate event scheduled to take place in Nairobi on May 7th and 8th, 2025. The summit is expected to gather over 450 global investors, leading developers, and seasoned real estate professionals who will convene to explore lucrative investment opportunities not only within Kenya but also in neighboring Tanzania (including Zanzibar), Uganda, Rwanda, and Ethiopia – all nations currently exhibiting promising indicators of economic recovery and increasing political stabilization.
Speaking on the impressive growth trajectory of Kenya’s hospitality industry, Bani Haddad, the Founder and Managing Director of Aleph Hospitality, emphasized the country’s significant yet still largely untapped potential. “Kenya presents a great opportunity for hospitality investment due to its unique combination of untapped potential, economic stability, strategic location, and government incentives. Add to that a 35% increase in international visitors and a growing middle class with disposable income. It’s clear that the demand for quality hospitality services will continue to rise, offering promising opportunities for local and international investors,” Haddad stated. Aleph Hospitality, it is worth noting, stands as the largest independent hotel management company operating across the Middle East and Africa.
Echoing this sentiment, Mark Dunford, the CEO of Knight Frank Kenya, highlighted the critical role of improved air connectivity in sustaining this upward trend and ensuring a continued influx of tourists into Kenya. “Jomo Kenyatta International Airport must remain a hub for the Sub-Saharan Africa region with additional long-haul flights to support along with further investment in the other local airports,” Dunford asserted, underscoring the importance of infrastructure development in supporting the sector’s growth.
Fiona Craw, the Vice President of the Hotels & Hospitality Group at JLL Africa, further elaborated on the investment dynamics, noting that Kenya’s hospitality sector is attracting significant capital, particularly in key areas such as Nairobi and the world-renowned Masai Mara. This substantial growth is being propelled by robust demand across a diverse range of segments, including corporate travel, leisure tourism, the burgeoning MICE (Meetings, Incentives, Conferences, and Exhibitions) industry, and government-related travel.
Nairobi’s strategic position as a pivotal economic and transit hub within Africa, coupled with the Masai Mara’s globally recognized status as a premier safari destination, further fuels this strong investment trend. Craw also pointed out that the ongoing infrastructure development initiatives within Kenya, especially in Nairobi, are significantly enhancing accessibility and bolstering the country’s efforts to firmly establish itself as a leading MICE tourism destination on the continent. “This strategic positioning is driving demand for high-quality accommodation and state-of-the-art meeting facilities,” Craw explained.
Despite the undeniably promising opportunities that abound within Kenya’s luxury hospitality sector, experts participating in the upcoming EAPI Summit acknowledge several pertinent challenges that could potentially hinder the industry’s sustained growth.
“Kenya’s hospitality industry, while exhibiting resilience and growth, faces several challenges such as security concerns, regulatory hurdles, supply chain disruptions, and human resource challenges. The high cost of financing and inflation-driven operational costs further strain businesses,” noted Aleph Hospitality’s Bani Haddad, providing a balanced perspective on the sector’s landscape.
Haddad further emphasized the need for collaborative action to overcome these obstacles: “For Kenya to solidify its position as a premier global investment destination, collaboration with government and private sectors is key to improving infrastructure and security. Streamlining land acquisition and development approvals will cut delays and costs, making business easier. Diversifying suppliers can ease supply chain issues while investing in talent retention will boost efficiency and service quality”.
Visa complexities also represent another potential hurdle that could impede the continued expansion of Kenya’s luxury hospitality sector. However, experts point out that visa-related challenges are not unique to Kenya, with many other countries across the African continent facing similar issues related to ease of travel and entry for international visitors.
Mark Dunford of Knight Frank Kenya directly addressed this issue, stating, “There are a number of issues facing the industry at present. The easiest of these issues to overcome would be the simplification of the visa/entry process to tangibly encourage visitors.”
Another significant factor that potential investors should carefully consider is the reported oversupply of hotel rooms in certain areas of Nairobi, which intensifies competition among hotel operators. JLL Africa’s Fiona Craw estimates that Nairobi has recently experienced a substantial increase in hotel inventory, with over 2,000 new hotel rooms entering the market in a relatively short span of just 18 months. “As a result, market performance is expected to face downward pressure throughout 2025 as the sector works to absorb this new inventory,” Craw cautioned.
Daniel Trappler, the Senior Director of Development for Sub-Sahara Africa at Radisson Hotel Group, partially concurred with Craw’s assessment regarding the oversupply in specific urban areas of Nairobi. However, Trappler also highlighted that there are still certain nodes within the city that represent pockets of significant value and are currently underserved. He believes that the introduction of the right brand in these strategic locations could effectively capture market share and attract guests, particularly with brands that the Radisson Hotel Group does not yet have operational in the capital.
Trappler suggested that investors with access to adequate capital are well-positioned to capitalize on these specific market opportunities, noting that both the entry-level luxury brand Radisson Collection and the lifestyle upscale brand Radisson RED could offer strong returns for owners if developed in the right locations within Nairobi. The Radisson Hotel Group, he added, is actively seeking to expand its presence in Nairobi in this regard.
Despite the challenges of potential oversupply and intense competition in certain segments, there are clear indicators of continued growth and excellence within Kenya’s hospitality sector. Marriott International, which maintains a significant presence in Kenya through its city hotels in Nairobi and its well-established safari lodges in the Masai Mara, reports experiencing strong and sustained growth in its business operations.
Jugal Khushalani, Marriott International’s Senior Director for Development in the East Africa region, affirmed this positive outlook, stating, “There remains an increased appetite for high-end experiences in the market, positioning us to further expand our portfolio of luxury brands through urban hotels and safari lodges. Kenya is positioned for sustained growth across all segments, and we remain committed to growing our footprint in the country and supporting the growth of its tourism sector.”
The consensus among industry experts is that despite the short-term challenges that the sector may encounter, the long-term outlook for Kenya’s hospitality industry remains decidedly positive. They have proposed several innovative strategies that could effectively address these challenges while ensuring sustained and robust growth within the lucrative luxury market. These proposed solutions for sustained growth include:
Exploring and implementing public-private partnerships and offering government-backed incentives to reduce the high costs of financing for new hospitality developments.
Encouraging and supporting high-end resorts in adopting comprehensive eco-friendly initiatives, such as the utilization of solar energy and the implementation of marine conservation programs, to align with the growing global trend favoring sustainable luxury tourism.
Continuing strategic investments in Jomo Kenyatta International Airport and other regional airports across Kenya to significantly improve accessibility for long-haul international travelers.
Emphasizing the continued importance of personalization in luxury travel by developing and offering exclusive and tailored experiences such as private safaris, curated cultural tours, and secluded beachfront villas that cater to the discerning preferences of affluent travelers seeking unique and unforgettable experiences.
With strategic investments in infrastructure and a concerted collaborative effort between government entities and private sector stakeholders, Kenya is well-positioned to solidify its already strong reputation as a premier destination for luxury travel within Africa. The country’s diverse and compelling offerings – ranging from world-class wildlife safaris to idyllic coastal retreats – continue to attract discerning travelers from across the globe who are seeking truly unforgettable and high-end experiences.
ABJ/APA