The Central Bank of Kenya (CBK), recently released the Market Perception Report for March, 2024. The survey is aimed at recording perceptions on selected market indicators for the previous quarter, the next quarter, the next one year, next two years and the next five years.
The survey targeted Chief Executives and Senior Officers in 354 private firms – 84 of which were hotels. Hotel sector cuts across the Hospitality Real Estate industry within commercial real estate. CBK requested hotel respondents to share data on bookings received in advance, covering the period between March and June, 2024. Analyzed data showed improved forward bookings during this period, compared to the same period in 2023. Note that this is an off-peak season for hospitality industry.
“Respondents indicated that the industry was picking up with increasing foreign guests and increasing international travel. However, respondents cited low local business arising from high cost of living and low purchasing power, austerity measures by government affecting conferencing/ meetings business, unfavourable park rates, increased flight charges, foreign bookings being done close to the arrival dates, most locals not booking prior to arrival, and the mushrooming of Airbnb’s, which for a long time were not being regulated as reasons for the low forward bookings,” reads a part of the report.
Additional data in the report shows that hospitality businesses in Nairobi have the best performance. Bookings covering the 2nd quarter of the year are significantly higher than those witnessed at the same time last year – with the month of June receiving a near double digit in forward bookings.
Hospitality real estate was one of the worst hit sectors after the pandemic which reduced international travel significantly. Airbnb’s have also disrupted traditional hotel businesses and the sector is constantly reinventing itself to keep up with the trends. This report shows that hospitality real estate might be on a promising recovering path.
In a separate report released at around the same time, firms in different sectors reported improved performance in the first quarter of the year 2024. The Real Estate sector is one of the sectors that witnessed improved activity in Q1, according to the CEO’s Survey March 2024.
“Firms reported improved business activity in 2024 Q1 compared to 2023 Q4. Firms in sectors such as the
agriculture, health, real estate, education, ICT and communication, wholesale and retail trade recorded
increased activity, with expectations of further improvement in Q2 2024 compared to Q1 2024,”
Firms that experienced growth cited strategies such as improved talent management, customer-focused service delivery and expansions into new markets as the key drivers for growth. They also mentioned several domestic constraints that stood between them and expansion in the near future. These include, the cost of doing business, increased taxation, a difficult economic environment and decreased customer purchasing power.
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