NAIROBI, Kenya, May 22 – Kenya’s luxury serviced apartment market needs over 1000 serviced apartments in the next three years.
Britam Chief Executive Benson Wairegi says the demand for luxury serviced apartment is growing fast due to the growth of business tourism in the country.
In 2016 Kenya hosted 243 global and continental meetings in 2016 that attracted thousands of participants and many heads of State and government.
According to the World Travel and Tourism Council (WTTC), leisure spending contributed to inbound tourists, but driven by domestic tourists – generated 62.5 percent of direct travel and tourism GDP in 2014, down from it’s 2013 figure of 65.4 percent.
Business spending, however, is growing. In 2014, it generated 37.5 percent of direct GDP, up from 34.6 percent in 2013. In 2015 this segment increased further by 5.4 percent to reach Sh150.9bn.
“Britam’s decision to venture into the property and real estate development is part of the groups’ diversification strategy meant to reduce portfolio risk and exposure to the volatile stock exchange market,” Wairegi said.
A report by Cytonn Investments shows that the serviced apartment subsector is performing better than hotels in Nairobi. Apartments, on average, have 90 percent occupancy rates while revenue per available room stands at $127 (Sh12, 874).
This occupancy is 29.6 percent higher than hotels and is 33.5 percent cheaper on average than a hotel room.