Guests attending conferences are opting for cheaper accommodation on the short-stay rental platform Airbnb, a new survey has revealed, dealing a blow to hotels in Kenya.
Hoteliers polled by the Central Bank of Kenya (CBK) said they are struggling to retain guests who attend conferences in their facilities by day, as many now opt for cheaper Airbnbs for accommodation by night.
This, the CBK said, is largely driven by the prevailing high cost of living, occasioned by inflation and the high cost of credit that has dampened private borrowing and consumption.
“According to the respondents, bed occupancy levels, restaurant services, and conferences were largely impacted by low business levels, arising from low spending power in the economy due to reduced disposable incomes,” CBK said in the survey.
“In addition, respondents indicated that some conference participants would not extend to accommodation but instead opted for other accommodation including Airbnbs.”
The drop in disposable incomes was occasioned by the high inflation rates and cost of credit that followed the raising of the Central Bank Rate (CBR) to the highest level in over 12 years earlier this year, dampening private borrowing and consumption.
Inflation has been cooling down, from a high of over nine percent last year, but lending rates by commercial banks have remained elevated, averaging at 16 percent in July, putting credit out of reach for many Kenyans.
The CBK survey reveals that this August, compared to last year, hoteliers saw a marginal rise in bed occupancy, and restaurant and conference services uptake, but all were still below expected levels.
The hotels polled recorded a 64 percent occupancy rate for beds, 62 percent for restaurant services, and 50 percent for conferences this August, a slight improvement from last year’s 54 percent, 54 percent, and 62 percent respectively.
Meanwhile, Airbnbs in the country have recorded growing occupancy and revenues throughout the year, as they prove to be better alternatives for guests, both local and international.
In Nairobi, for instance, the total number of listed Airbnbs grew by 23 percent to hit 4,049 in August, most of which have more than two bedrooms, beating hotel rooms which are currently 3,729 in total.
In August, Nairobi short-stay homes recorded an occupancy rate of 38 percent, an 8 percent growth year-on-year, and just 6 percent shy of last year’s peak rate of 44 percent, according to data by Airbnb performance tracker AirDNA.
In Mombasa, listings grew 13 percent to 1,132, while the occupancy rate remained constant at 34 percent. Kisumu’s short-stay home listings improved by 44 percent to 220, and occupancy remained the same at 25 percent.
Nakuru, however, saw a slight drop in listings by 4 percent, to 487, but the occupancy rate rose 3 percent to 24 percent in August.
