The hospitality sector, which was among the hardest hit sectors during the Covid-19 period is on a continued recovery path, according to the latest market update report by Knight Frank.
During the six months period to December last year, the report notes that by November, the number of tourists arriving in the country had surged by about 74.5 per cent compared to a similar period in 2021.
The performance is attributed mainly to the opening up of international travel as air travel restrictions ease among nations.
“It is also as a result of the festivities which traditionally occur during the second half, especially the fourth quarter, when there is always a surge in demand for hospitality services as schools break and employees go for holidays,” says the report.
The performance is nevertheless below the 2019 levels, the best hospitality year Kenya has ever experienced.
According to the Kenya Tourism Board, the hospitality sector is so far about 70 per cent recovered from Covid-19 pandemic and is expected to fully recover by 2024.
Through the Market Perception Report by CBK for the month of November, there were increased forward bookings for the months of November and December last year as well as this year’s January and February projecting a positive trend in months to come.
This is attributed to economic recovery from the Covid 19 pandemic and the resumption of international travel.
Also in the firm’s market update report, it is projected that the country's general economic growth rate is set to further decline in the coming few years.
According to the World Bank, Kenya’s GDP was expected to record about 5.5 per cent growth rate in 2022 compared to 7.5 per cent in 2021, representing a two per cent decline.
The slower growth was precipitated by the prolonged drought that brought food insecurity to many households, and the August elections.
“Going further, the growth prospects are also expected to be hit by the high inflationary pressure which stabilises above the Central Bank of Kenya ceiling of 7.5 per cent,” the report reads.
The latest inflation data by the CBK for the month of January puts inflation at 9.0 per cent have reduced slightly from 9.1 per cent in December.
“The continued rise in interest rates and further weakening of the Shilling against the US dollar will also stall the country’s economic growth rate going forward,” says the report.
