Radisson Blu: Why we decided to set up in Kenya

Radisson Blu General Manager for Kenya Jens Brandin.

Global hotel chain Radisson Blu officially opened the doors to its first East African establishment last month. This has set into motion the hotel’s advance across the region.

The hotel is managed by the Carlson Rezidor Hotel Group, which already has 31 hotels across the continent, and is planning on doubling this number. At least three of these are set to be operational in Kenya by next year.

According to Jens Brandin, Radisson Blu’s general manager for Kenya, the country’s relatively developed hospitality sector and rapidly growing consumer class provides great opportunities for growth.

“Kenya has a big safari attraction and leisure is a big market in tourism, but our main offerings are to business travellers. The growing number of multinationals in the country and an expanding consumer base make this the right time and place for us to be,” he told Business Beat.

Slow growth

Kenya is ranked the fifth-most competitive tourism and travel market in sub-Saharan Africa, but it lags far behind regional leaders South Africa, Mauritius and Seychelles.

According to a recent report from the World Economic Forum, Kenya ranks 78th in the global tourism market out of 141 countries, with its strengths being natural resources (11th globally), brand visibility online (10th globally), and it leads Africa in the number of known species of mammals, birds and amphibians.

The country is also home to one of the largest diplomatic communities in Africa.

However, growth has been slow, and according to the Kenya National Bureau of Statistics (KNBS), Kenya’s bed capacity in 2010 stood at 17,161. By 2014, this number had only grown marginally to 19,877.

Of this capacity, 20 per cent is in Nairobi, 46 per cent at the beach and hinterland areas of the Coast, 11 per cent in Central Kenya, and the rest distributed almost equally in the Rift Valley, Western and Nyanza.

However, Kenya has one of the highest ticket taxes, a factor that dampens prospective visitors’ interest, giving Tanzania, Ethiopia and Rwanda the upper hand.

But Mr Brandin says the business travel segment of the industry has not been fully exploited and could reap big returns for the economy.

“Ethiopia has the headquarters of the African Union and might seem like the political centre for East Africa, but Nairobi is definitely the economic hub, given its centrality and infrastructure,” he said.

He added that the hotel industry’s development, relative to other sub-Saharan African countries, makes accessing crucial goods and services easier.

“In Nairobi, you can get almost everything in a short period of time, and as a hotel, we need a reliable supply pipeline for technical support and skills. These are all available with Utalii College, which is one of the best hotel educational facilities in the world,” Brandin said.

He added that shifting dynamics in consumer demographics has necessitated a shift in the hospitality industry.

“Twenty years ago, we moved with the normal global GDP development cycle — five years up, two years down — but in the last five years, things have moved from one crisis to another, and the effects have been felt in the hospitality industry,” he said.

“Now the priority is in finding new opportunities and developing the best product and the best service to differentiate one’s brand and achieve success.”

Hotel chains in Europe and America, like their counterparts in the financial sector, are venturing out of their traditional markets of mega towns and cities in developed countries, to developing countries.

“A lot of companies today are doing business all over the world, and the profile of the business traveller has changed from the traditional 50-year-old white male,” said Brandin.

“This has a big part to play in the design of hotels, because while before the typical guest would get to the hotel, watch TV and order room service, nowadays, people want to come out of their rooms and work from open spaces getting entertained, and you have to build your premises with this in mind.”

Existing opportunities

Insecurity has been a major challenge, with the tourism industry bearing the brunt of terrorism-related attacks.

“Travel warnings are unfortunate and they affect traffic, but this is something we have no control over,” said Brandin.

“We, however, ensure we provide the safest environment for our guests and workers, and we are lucky that with the space we have, we can carry out the required security checks at least 100 metres from our entrance.”

Brandin is optimistic that the current challenges are temporary, and the existing opportunities for business travel outweigh the hurdles.

Two other Radisson Blu hotels are set for opening within the next year — Park Inn along the city’s Waiyaki Way, and a smaller Radisson Blu at the Arboretum.

And with the Government set to scale up capacity at the Bomas of Kenya to 15,000 delegates from 2,500, and turn it into the biggest convention centre in Africa, the business travel segment is looking even more promising.

This move is set to complement improvements made at the Kenyatta International Convention Centre (KICC), which is currently the largest source of business tourism. Last year, the facility hosted dozens of high-profile business meetings, including the World Trade Organisation’s ministerial conference.

“The KICC is key for the well-being of business tourism in the city, and if we can have one or two major conferences each month filling up our hotels for a week, we’d be good,” said Brandin.