This archive report was first published on 17 July 2019.
Kenya's hotel industry is undergoing significant changes, driven by the increasing internet penetration in the country. This has led to the emergence of online travel agencies, which have become a crucial channel for booking rooms and have diversified the customer base.
While hoteliers have expressed concerns about the high fees charged by these agencies, they have made efforts to rationalize their distribution costs and offer innovative solutions such as 'Zero-Cost Rate' and 'Pay at Hotel' schemes.
However, hotels need to focus on yielding all channels of room bookings, including conventional domestic and international travel agents, and employ revenue management strategies and appropriate technology to address the challenges in the industry.
One of the major challenges facing the hotel industry is the high staff attrition rate, which stands at approximately 30 per cent annually. This is comparable to other industries, but combined with the inadequate supply of new talent graduating from hospitality colleges, it has contributed to the talent crunch in the hospitality and tourism sector.
Hotel stakeholders are concerned that the increase in room supply and opportunities in parallel sectors are resulting in professionals shifting from the industry. To bridge this gap, efforts need to be made to invest in skills development, improve human resource practices, and make working in the hotel industry more attractive in terms of engagement, career advancement, and work-life balance.
Additionally, hotel owners need to understand the pros and cons of outsourcing the management of their food and beverage outlets to high-street brands and experts. This can help improve the performance of a key revenue department and contribute to the overall success of the hotel.
Finally, the hotel industry can learn from the innovations of sharing-service companies like Uber and Airbnb, which have implemented two-way ratings systems to improve safety and efficiency. Such innovations can help the hotel industry of the future.
