Iconic city hotels staring at bleak future

They dotted the city’s skyline hosting major conferences and playing host to global delegates. But with the Covid-19 pandemic taking a toll on business, their return to operations continue to be bleak even as industry experts project some lifeline for them.

Seventeen months after Covid-19 pandemic hit the shores of Kenya, the hospitality sector remains one of the most affected in Kenya’s economy.

According to the recently released Economic Survey 2021, the number of beds occupied in the period dropped significantly from 9 million in 2019 to only 3.8 million in 2020.

But these grim statistics can be better exemplified by the continued closure of iconic city hotels that remain out of business months later.

Among the hotels include Intercontinental Hotel on parliament road, Laico Regency on Market Street, Norfolk Hotel on Harry Thuku Road, Raddison Blu in Upper Hill and Dusit D2 at 14 Riverside.

“For two of the hotels, Intercon and Dusit, the chains exited…. Fairmont hotels and Radisson, are still shut and our conversations are that they will reopen…..it is just that at the time these decisions were being made the covid situation was very fluid,” says Mike Macharia, Kenya Association of Hotel Keepers and Caterers (KAHC).

Covid-19 aside, some of the establishments were already facing financial turbulence and the pandemic just worsened the situation, while others had change of ownership with industry players alluding that new owners could be waiting for an opportune time to reopen.

“But now we have a proper vaccine rollout. We are hopeful these hotels will come back, we don’t think they are going to exit permanently…,” sadded Mr. Macharia.

For Intercontinental, the most iconic and historical of the list, the die seems cast with word on the streets that its owners have recommended auctioning of movable assets as they wait for a consultant report on how to repurpose the building for a more viable business.

The continued shutdown is also related to the establishments business models that heavily relied on business travellers and conferences. These have been significantly cut down.

“In terms of sector, just around 25 to 30 percent, for us to break even we need at least 42% in terms of capacity…like coast hotels are benefitting from alot of traffic from upcountry…. Nairobi hotels are not getting that,” says Mr. Macharia.