Hotel industry back to pre-Covid levels – CBK
By John Otini, August 1, 2022The hospitality sector continues to recover significantly towards the pre-Covid-19 levels with major hotels that had closed reopening, a new Central Bank of Kenya (CBK) survey shows.
Average bed occupancy and utilisation of conference services has recovered across the country to above pre-pandemic levels, according to the study. Hospitality sector remained strong in June and July with conferencing above pre-Covid-19 levels across the country, lifting employment in the sector.
“This was mainly on account of an increased number of vaccinated adult population, and removal of Covid-19 restrictions,” CBK said in its latest industry survey.
Bed occupancy improved significantly in Mombasa and Nairobi surpassing pre-Covid-19 levels. Foreign guests in both accommodation and restaurant services continue to improve in line with the rising number of international tourist arrivals.
Forward hotel bookings for the period August to November 2022 are also strong, especially in Mombasa and Nairobi, indicating recovery in demand.
Extent of recovery
During the survey conducted between July 4 and 15, to assess the extent of recovery of the sector, following full reopening of the economy, respondents were also requested to indicate whether their enterprises were operating in June and July 2022.
All hotels interviewed reported to have been operating during the period, implying that the hotels that had closed due to the Covid-19 pandemic had reopened.
The doors of Nairobi’s iconic Fairmont The Norfolk reopened on April 4 after 21 months of closure while the Radisson Blu reopened its Upper Hill Nairobi outlet the following month after a 16-month shutdown amid the Covid-19 pandemic following the acquisition of the establishment by new management. Low bookings due to the pandemic pushed the establishment sto halt operations.
On average, bed occupancy improved significantly in Mombasa and Nairobi in June on account of improved tourist arrivals and the economic environment. Most of these hotels reported full occupancy.
However, hotels in the rest of the country reported reduced activity in July, as bed occupancy and conference services dropped across the country at the start of the new fiscal year. In line with the level of bed occupancy and seasonal nature of the sector, the average utilisation of restaurant services improved in June and July 2022 indicating confirmed recovery. Hotels in Mombasa, particularly benefited from the high tourist arrivals and improved economic environment. Respondents indicated that on average, the utilisation of conferencing services improved to above the pre-Covid-19 levels across the country.
“This growth is attributed to normal business cycles in conference services as corporate and government institutions increased their conferences and workshops towards the end of the fiscal year,” the survey said.
Active employees
The survey also assessed changes in employment in the hotels sector. Respondents were requested to indicate the number of active employees engaged by the hotels in June and July 2022.
The results which were expressed as a share of the pre-Covid-19 number of employees show that overall employment levels stabilised around 83 per cent in June and July 2022. “The survey further established that businesses generally adjust the number of casual employees depending on the levels of business, reducing the casual employees when the demand declines and hire them as business improves,” CBK said.
As the demand for the hotel services declined in July, the share of casual employees increased from 17.3 percent to 26.9 percent in Mombasa. A similar trend was observed
for Nairobi and the Rest of the Country.