An international hotel chain from Germany wants to set up resorts in Kenya as the sector reaps great returns from the growing tourism market.
Kenya has been identified as one of the countries that will add value to the portfolio of the chain known as Kempinski Hotels Worldwide, portfolio. Tanzania and Namibia have also been identified in the company's strategy to open five new hotels in Africa by 2009.
Speaking in Dar es Salaam, the group's chief executive officer, Mr Reto Wittwer, said the group was in talks with other parties to open its first facility in Kenya. "We are in talks with local hotel investors in Kenya to establish the first trophy hotel in the country," he said. The company usually prefers entering into management contracts for existing facilities.
Kenya Tourist Board (KTB) managing director, Dr Ongong'a Achieng, said the chain was among others that had expressed interest in establishing properties in the destination. Others eyeing the market are Accor Hotels and Prime Properties. "The entry of these chains will raise the profile of the destination and the value of tourists coming into the country," Dr Achieng' said.
Growth in tourist numbers has spawned a shortage in bed capacity, with the country only having 40,000 classified beds. "Without any new investments we will face an acute shortage and fail to meet the growing demand," added Dr Achieng'. Last year the sector rose to be the highest foreign exchange earner for the country with Sh 52 billion, according to the recently released half year results by KTB.
The sector is on its way to meeting its Sh62 billion target for this year, having earned Sh34 billion during this period. Recently, a South African company, Prime Properties, was in town scouting for hotels they could partner with.
The company is looking at upgrading existing facilities by injecting capital into the units. According to the Kenya Investment Authority, Sh 564 million is expected to be put into the tourism sector by three companies who are set to increase the destinations bed capacity.
Africa Mission Safaris Ltd and Karen Blixen are expected to put up camps, while Placid View Properties will put up a hotel to the tune of Sh 450 million.
Kempinski is one of the oldest hotel chains in Europe, having celebrated it 110th birthday this year. It is in talks with hotels in Nairobi. The company says it is seeking a management contract or a hotel to take over. But they could not reveal how much they plan to invest as the negotiations are at a delicate stage.
"We have not concluded anything yet and a deal is not a deal until it is a signed contract,"said Mr Witter.
In Namibia, the chain is looking at opening four hotels in four towns with the main one in the capital city, Windhoek. They are in the final stages of concluding a deal with the government of Tanzania to establish its first tourist lodge in the Serengeti Nature Reserve by the end of 2008.
Currently the chain has two hotels in Dar es Salaam and Zanzibar, Chad and Djibouti.