According to real estate agents in Western Kenya, demand for accommodation and business travel packages is far outstripping the current supply, undermining the region’s marketing drives that seek to raise its profile as a business and leisure travel destination. Photo/ OLE-SERENI
It is Friday in Kisumu town and chances of getting accommodation if you hadn’t booked in advance are slim unless you opt for the dingy rooms in the outskirts of the city.
This is the new face of Western Kenya where demand for houses and hotels has far outstripped supply with investors rushing to cash in on the yawning gap.
Some kilometres away from the town, Bruce Madetea has built the new Sosa Cottages, a high-end 58 bed capacity resort in Gambogi, Vihiga County. This is not the only new hotel, there are a few others under construction.
“There is great potential in Western Kenya and the market is ripe,” Mr Madetea said.
“There is an urgent need for the establishment of medium to high-end hotels in the region. Many times we receive visitors, but they cannot find proper accommodation and this experience puts them off,” he said.
According to real estate agents in Western Kenya, demand for accommodation and business travel packages is far outstripping the current supply, undermining the region’s marketing drives that seek to raise its profile as a business and leisure travel destination.
However, analysts say high barriers to entry coupled with poor regulatory frameworks are hindering investment in hotel business.
Over the last two years, tourists numbers have risen with airlines flying to the region increasing.
Among the airlines on this route include Fly 540, Jetlink, Kenya Airways, East African Airlines and Aircraft Leasing Services, a move that has made possible for business travellers and tourists to easily access the region. In addition to these, there are some transport firms and individuals who operate chartered flights.
According to Joseph Okumu, the Kisumu airport manager, over 360,000 passengers went through the airport in 2009. “This number increased by 50 per cent last year to stand at 540,000,” he said. “Most of these arrivals were investors, eyeing business opportunities in the Western region,” he said.
This number is set to increase further when the upgrade of the airport to international standards is finally completed in the next few weeks.
While this might sound like good news for the region’s hotel industry, the absence of adequate accommodation facilities negates the potential gains to be made from this boon and dims the region’s economic prospects.
Unlike its counterparts Nairobi and Mombasa, Kisumu City has been starved of investment in accommodation and conferencing facilities targeting high-end corporate clients. This is despite the fact that the city is a favoured location for workshops and seminars particularly by non-governmental organisations and trade unions.
The Lake Victoria Tourism Association (LVTA) chairman, Nirmal Darbarl, high marketing costs and steep operating expenditure are making many prospective investors shy away from the region. “The cost of marketing Kisumu as a business tourism destination is very high and many people are skeptical of this market because there isn’t enough information about it out there”, he said.
“In addition to this, the Ministry of Tourism, and other marketing bodies like the Kenya Tourism Board, (KTB) concentrate more of their resources towards marketing Nairobi and Mombasa neglecting western Kenya,” he said.
The rising cost of land has also put off many investors despite the availability of large tracts of undeveloped plots some within the heart of the Central Business District (CBD).
Property agents blame unscrupulous businessmen and some Asian families for holding on to prime land particularly in Kisumu in an attempt awaiting higher prices.
“We have a lot of acres within and outside Kisumu’s CBD that have remained un-developed for decades”, said a property agent in Kisumu who declined to be named.
“The owners remain unwilling to sell and yet do not want to develop the land. It is currently impossible to obtain land within the CBD.”
Mr Madetea says marketing bodies like KTB need to do more to map out Western Kenya’s sites and accommodation centres as an incentive to the hotel industry in the region.
“What we would also like is more tolerance on the side of financial institutions.
The hotel industry is directly dependent with the tourism industry and this is a very volatile facet of the economy”, he said.
“For example in the 2008 post-election violence the industry suffered a great deal, but the financial institutions were still on our necks coming for collections every month,” he said.
The 2008 violence saw Western Kenya suffer greatly and the chaos scared off investors some of who are still reluctant to re-open their doors. Establishments like the Gulf Stream Hotel and Kimwa resort in Kisumu both of which enjoyed a huge following were vandalised and still remain empty shells yet to be renovated.
In addition to this, the region has fought hard to shed a negative tag as being the hot bed for negative political energy that undermines investment.
All these factors make investors uncertain of the returns and thus reluctant to pump millions in a seemingly unpredictable market.
KTB says it has not neglected the region in so far as marketing is concerned.
KTB managing director Muriithi Ndegwa said that they have put in place an elaborate plan of marketing Western Kenya and Kisumu as a tourist destination.
“We are running familiarisation trips with international investors and tourists to expose the western part of the country.
We are also working with stakeholders from the region to ensure that we market their products and services,” said Mr Ndegwa.
For operators who are already established in the region, however, business is booming and the available capacity has been stretched to the maximum.
Most of these operators are attributing the growth to an increased uptake of domestic tourism that has seen a surge in more local visitors.
According to Dr. Hezron McObewa, the owner of Le Savanna Resort, earnings from domestic tourism have greatly boosted the establishments in the region.
“Nowadays we see an increased awareness and tendency of Kenyans to take expeditions to far districts and counties outside their locations,” he said. The region is poised to win big with the opening of the Kisumu International Airport which is expected in the next few weeks. The hotel and tourism industry is expected to be one of the greatest beneficiaries of the new facility.
In addition to this, the city is well placed to be the capital city of the East African Community due to its strategic location.
Already the road network within the region is undergoing a major rehabilitation process and new industries are already setting up shop in urban centres like Kisumu, Kisii and Kakamega.
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