Given the lodging industry’s strong dependence on inbound tourists, the travel bans imposed by the government in 2020 left lodging companies on shaky ground, with many having to update their policies to include flexible booking, cancellation, and duty of care policies. The steep decline in inbound arrivals caused a significant drop in demand for lodging, with many domestic consumers avoiding hotels due to safety concerns and lack of disposable income.
From April 2021, The Tourism Regulatory Authority (TRA) started to crackdown on Airbnb hosts who were not complying with regulations. Such regulations require hosts to register their services for a KES1,000 fee, make a payment of KES26,000 per unit owned, and pay taxes, namely 1% DST, 2% catering levy, 16% VAT, and 30% corporate tax.
Prior to the COVID-19 crisis, luxury hotels were seeing increasing demand. For example, upmarket lodgings in Nairobi motivated major international hotel brands to develop new properties in the Kenyan capital.
Although initial recovery in hotels is likely to be driven by mid-priced operators with their flexibility in prices and appeal to domestic consumers, luxury accommodation is expected to benefit the most from the return of inbound arrivals. The trend will lead to intensified competition across the category, as companies like Accor, which previously suspended their operations, resume all activities from 2022 in response to the projected demand.
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Understand the latest market trends and future growth opportunities for the Lodging industry in Kenya with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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This report originates from Passport, our Lodging research and analysis database.
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