Nairobi has been ranked as the third most expensive city in Africa to sleep in compared to other cities surveyed in a study. The city also recorded a 2.5 percent rise in hotel room rates compared to the same rates last year. The study alludes to rising demand, coupled with low quality hotel services that inform the prices.
The survey of prices of international grade hotels in selected major African cities was produced by hospitality research firm STR Global.
In the survey the average rate in US$ (constant currency) for a hotel room in the first six months of this year in Addis Ababa was $231.78/ night. This compares with $215.75 for a room in Lagos, $144.76 in Nairobi, $122.30 in Cape Town, $105.73 in Casablanca, $103.54 in Cairo, $72.90 in Johannesburg and $70.70 in Sharm El Sheikh.
When one notes that the price of a hotel room in Nairobi is almost double that in Jo’berg and the room rate in Addis is 60 percent more expensive than Nairobi, one is tempted to ask how prices can be so different. The result of this is that conferences would rather choose the city that is cheaper.
Thomas Emanuel, Director of Business Development, STR Global, says
“A great deal of the reason for the difference in rates across major African cities is simply supply and demand.” Addis Ababa has a shortage of top quality hotels.
However, with the Ethiopian economy growing at a rapid rate of more than 10 percent per annum for the whole of the last decade, with more conferences coming to the city by virtue of its status as the seat of the African Union and with Ethiopian Airways on a similar growth trajectory to the country, thanks to new routes and increased passenger numbers, there is a high demand for premium hotel rooms. By comparison, Johannesburg is a long-established, sophisticated international city, with a large number of 5* hotels and a competitive market for accommodation.
In the face of the recent terrorism incidents in Kenya, Nairobi’s hoteliers have chosen to maintain rates but they have suffered with lower occupancy. Perhaps some may consider to further reduce their rates to increase occupancy but they also need to lobby government to ensure the country is safer hence promote the industry.