Kenya’s hospitality industry’s bold growth faces headwinds

• Kenya’s hospitality industry stands at an inflection point. It has the wind in its sails—growing demand, strategic geography, and rising investor confidence.
• However, headwinds persist: policy inefficiencies, infrastructure gaps, visa challenges, and market saturation in some urban segments pose a big threat.
• Still, with a coordinated effort between the public and private sectors, Kenya is poised to redefine luxury travel in Africa.

Kenya’s luxury hospitality industry is undergoing a remarkable transformation. Buoyed by a 35 per cent surge in international visitor arrivals, an expanding middle class, and a stable macroeconomic environment, the East African country is fast emerging as a magnet for premium travel experiences.

According to hospitality industry experts, this is no coincidence. Kenya’s unique offering—a compelling mix of untamed natural beauty, iconic wildlife safaris, a robust airline hub, and pro-investment policies—is proving irresistible to both travellers and investors.

As global tourism rebounds post the COVID-19 pandemic, Kenya’s hospitality industry is positioning itself as a critical player in Africa’s high-end travel market. From the savannahs of the Masai Mara to the upscale conference rooms in the capital, Nairobi, the country is increasingly seen as fertile ground for sophisticated hotel development and leisure services.

This momentum has caught the eye of potential investors and the upcoming East Africa Property Investment (EAPI) Summit, slated for May 7-8, 2025, in Nairobi, will shine a spotlight on this shift. Organzers project that the gathering will attract over 450 investors, developers, and thought leaders from across the region and beyond.

Hospitality sector investor sentiment: From interest to action

Bani Haddad, Founder and Managing Director of Aleph Hospitality—an independent hotel management firm in the Middle East and Africa—views Kenya as ripe for investment. “Kenya presents a great opportunity for hospitality investment due to its unique combination of untapped potential, economic stability, strategic location, and government incentives,” he says.

According to Haddad, the swelling demand for quality accommodation, especially in the luxury tier, offers long-term promise for stakeholders willing to bet on Kenya’s hospitality future.

Echoing this optimism is Mark Dunford, CEO of protery tracker Knight Frank Kenya, who believes that improving air connectivity is central to sustaining tourism flows. “Jomo Kenyatta International Airport (JKIA) must remain a hub for the Sub-Saharan Africa region,” he asserts. “Additional long-haul flights and more investment in local airports are critical.”

A tale of two markets: Safari luxury and urban ambition

Kenya’s appeal lies in its dual tourism identity. On one end, there’s Nairobi — a bustling commercial centre and continental transit point. On the other, the world-famous Masai Mara, where high-end safari lodges promise bucket-list experiences for global tourists.

“Robust demand in both leisure and MICE segments is powering growth,” explains Fiona Craw, Vice President at JLL’s Hotels & Hospitality Group in Africa. “Nairobi’s positioning as an economic and aviation hub, combined with ongoing infrastructure development, is fuelling interest in upscale accommodation and meeting spaces.”

For Craw, this urban expansion complements the allure of Kenya’s natural wonders, especially as the country leans into MICE tourism as a diversification strategy.

Pressure points: Cracks beneath the surface

But behind the optimism lies a fragile ecosystem. The hospitality industry, while vibrant, faces a matrix of operational and regulatory challenges threatening to slow its growth momentum.

“Security concerns, regulatory delays, supply chain disruptions, and human capital constraints continue to strain operators,” Haddad warns. Inflation-driven costs and expensive financing options further complicate an already tough operating environment.

Land acquisition and approval processes remain notoriously slow. Meanwhile, inconsistent infrastructure in key regions complicates logistics and service delivery. For investors, these issues translate into project delays and budget overruns.

To address these systemic hurdles, Haddad advocates for deeper collaboration between government and private actors. “We need streamlined approvals, better infrastructure, diversified supply chains, and talent retention strategies,” he notes.

Visa complexities: An easy fix with big impact

Among the more frustrating roadblocks is Africa’s opaque visa regime. Kenya, like many of its neighbours, grapples with bureaucratic red tape and high visa costs—a deterrent to spontaneous travel and regional tourism.

“It’s one of the easiest fixes,” says Knight Frank’s Dunford. “Simplifying entry processes can tangibly encourage more visitors. A seamless travel experience is part of the premium service expectation.”

Indeed, regional tourism could thrive if intra-African mobility were treated with the same urgency as international connectivity. Yet today, only a fraction of African nations offer visa-free travel to their neighbours.

Room to grow or too much room? The oversupply dilemma in hotels

While demand for luxury accommodation remains high, some experts are sounding the alarm over oversupply—particularly in Nairobi city.

According to JLL’s Craw, over 2,000 hotel rooms were added in just 18 months, leading to potential downward pressure on average room rates and occupancy levels through 2025. “This glut could suppress margins and challenge profitability,” she cautions.

Daniel Trappler, Senior Director of Development for Sub-Saharan Africa at Radisson Hotel Group, offers a more nuanced take. While acknowledging oversupply in some zones, he believes there are still untapped micro-markets within Nairobi.

“Certain nodes remain underserved,” Trappler says. “With the right brand—like Radisson RED or Radisson Collection—and optimal location, there’s room for strong ROI [return on investment]. Investors with access to patient capital and brand clarity can win big.”

Read also: Why tourism in Africa is more than game drives and getaways

Brand power: Who’s betting big on Kenya?

Global hospitality heavyweights are doubling down on Kenya. Marriott International, which operates both city hotels and safari lodges in the country, reports healthy growth in East Africa.

“There’s a rising appetite for high-end, curated experiences,” says Jugal Khushalani, Marriott’s Senior Director for Development in East Africa. “Urban hotels and safari lodges are both seeing momentum. We’re committed to expanding our footprint in Kenya.”

This vote of confidence by global brands underscores Kenya’s long-term viability, especially when operators tailor offerings to a luxury-focused, experience-driven clientele.

Strategies for sustainable growth

To maintain its upward trajectory, Kenya’s hospitality sector must pivot toward resilience and sustainability. Industry leaders propose several strategic levers to secure the sector’s future:

1. Alternative Financing Models

Blended finance approaches—particularly public-private partnerships—can reduce the cost of capital for developers. Government-backed loan guarantees and tax incentives could also spur investment.

2. Green Tourism Initiatives

Eco-conscious luxury is no longer optional. Resorts and lodges are embracing solar power, water recycling, and marine conservation to align with global sustainability benchmarks and appeal to ESG-sensitive investors.

3. Air Access as a Growth Engine

Enhancing international and regional air connectivity is essential. Jomo Kenyatta International Airport’s modernization, coupled with strategic upgrades to secondary airports, will determine Kenya’s accessibility to global travellers.

4. Hyper-Personalization of Guest Experiences

Affluent travellers want more than plush rooms — they seek meaningful moments. From private safaris and curated cultural immersions to remote beach villas and personalized wellness retreats, Kenya’s edge lies in its capacity to deliver unique experiences at scale.

Africa’s Premier Playground for Luxury Travel?

Kenya’s hospitality sector stands at an inflection point. It has the wind in its sails—growing demand, strategic geography, and rising investor confidence. But headwinds persist: policy inefficiencies, infrastructure gaps, visa challenges, and market saturation in some urban segments.

Still, with a coordinated effort between the public and private sectors, and a shared vision for innovation, Kenya is poised to redefine luxury travel in Africa. From boardrooms in Nairobi to bush lodges in the Mara, the nation is crafting a compelling case for itself as the continent’s most promising destination for upscale tourism and hospitality.

Read also: Kenya’s safari tourism scene gets a luxury boost as hotel chain Marriott expands