The rise and rise of hotel-branded residences

There is a growing wave in town. In a marked departure from the norm where hotels only sold traditional rooms for accommodation, major hotels in the country are adding the term ‘residences’ to their names to attract another set of guests who wish to live in the hotel compound in a homely structure but enjoying the same amenities as other hotel guests.

In many cases, these residences, or private suits, have been developed to cater for long-term guests who prefer the freedom of waking up and dining at their pleasure rather than going by the ‘bell’ governing the regular hotel guests.

In Kenya, some of the hotels offering this kind of accommodation include Movenpick Hotel and Residences with 94 studio and 53 one and two-bedroom apartments; Dusit Princess Hotel and Residences, both in Nairobi’s Westlands, and Radisson Blu Hotel and Residence at Nairobi Arboretum.

In this neighbourhood too, is the newest kid on the block, JW Marriott Hotel which has stirred the market with 51 serviced apartments including three-bedroom apartments with a maximum occupancy of seven people each.

On the edge of Karura Forest, Kwetu Nairobi, Curio Collection by Hilton with its African-themed detail, will propagate the legacy of the globally acclaimed group through apartment-style living.

Sarova Panafric, one of the more established hotels in the city, has been running 42 serviced apartments for decades. 

At the coast, Sun N Sand resort in Kikambala offers a wide range of residences including executive suites that can accommodate a family of more than six people. Further north in Watamu, Hemingways Residences, a cluster of 21 exclusive apartments afford investors the ability to invest in the hospitality industry by purchasing a unit and earning a guaranteed fixed return of seven per cent for the first five years before handing it over to the developer for rental income generation.

In the past, such residences used to be on top of major hotels, according to an ABC News report with “controlled-access, but make up only a fraction of the building” as opposed to the current scenario where such residences occupy entire hotel blocks.

What though is informing the rising trend of hotel residences in the local hospitality industry?

According to Ross Evans, chief executive officer at Hemingways Collection, there exists a large and unmet demand for residences within Kenya’s leading hospitality brands.

For example, Evans says the group’s residences in Watamu, Kilifi, offer an investment proposition and a lifestyle opportunity for guests and brand supporters in an upmarket hotel environment. For investors, the prices of the apartments range from Sh52.5 million to Sh150 million.

“By becoming an owner of a residence, we are offering the best of both worlds. These include a sublimely spacious and luxurious coastal residence in one of Kenya's most sought-after coastal destinations and combined with a unique investment opportunity with a timely revenue-earning model. This offers peace of mind during a holiday with family and friends. In a residence setting, everything is taken care of and you can enjoy your holiday without worry,” says Evans.

Major hotel chains are keenly aware of the competition brought about by the influx of serviced apartments around the globe that are serving as alternative means of accommodation. In Nairobi’s Kilimani, Kileleshwa and Lavington suburbs, such serviced apartments have taken entire buildings and giving the hotels a run for their money.

Are these hotel residences about to change the traditional hotel business model? “Not really,” says Randy Ngala, the marketing and communications manager at Movenpick Hotel and Residences. “I don’t think the model is changing the traditional hotel model but adapting to modern-day needs that come with the times.”

Ngala says with modern-day work operations where individuals or families have to travel together for extended periods, it becomes a struggle to stay in confined spaces with just a bed and bathroom.

“The city has demand for those looking out for hotel comfort, facilities, and security but with a feeling of home. In addition, individuals want to have access to fine dining options but also be able to cook their desired meals from the comfort of their suites,” he says.

Mike Macharia, chief executive officer at Kenya Association of Hotelkeepers and Caterers says the sustained growth in key economic sectors has pushed up the uptake of hotel residences.

“There is always a demand for long-term accommodation options in Nairobi. When banks were going the digital way global technicians were coming to spend close to a year here when making interbranch connections. Some stayed here for 24 months and a hotel room would have been a lonely place. In the residences, such people can host visitors and discuss business matters,” says Macharia, adding the proliferation of serviced apartments in Nairobi is being driven by similar demands.

“Hotel residence living is complementary to the regular hotel room. The typical tourist is on short-term stay while some who opt for the residences might be on work permits for long-term stay in the country. We have also seen Kenyan families on short stays choosing the residences. They may eat in the main hotel but while the evening away talking in the residences rather than hog public hotel areas,” says Macharia.