Kenya looks to business tourism to drive growth

With leisure tourism in Kenya impacted by current global perceptions of the country’s security situation, the industry is turning to the business travel segment to make up the shortfall, with increasing emphasis being placed on the meetings, incentives, conventions and exhibitions (MICE) segment.

Prospects

It is hardly surprising that Kenya has turned to this niche to stimulate growth. MICE is increasingly recognised globally as a key component of a healthy tourism industry. In Kenya, this is especially true given the current spending trends in the leisure and business markets. According to the World Travel and Tourism Council (WTTC) leisure spending – contributed to by inbound tourists, but driven by domestic tourists – generated 62.5% of direct travel and tourism GDP in 2014, down from its 2013 figure of 65.4%. Business spending, however, is growing. In 2014 it generated 37.5% of direct GDP, up from 34.6% in 2013. In 2015 this segment is anticipated to increase by a further 5.4%, to reach KSh150.9bn ($1.7bn). The WTTC forecasts an annual growth rate of 5.3% for the sector until 2025, reaching KSh252bn ($2.8bn). Leisure spending, on the other hand, is expected to grow by just 2.8% in 2015, totalling KSh245.3bn ($2.7bn) by the end of the year. Forecasts project growth of 5% each year until 2025, reaching KSh400.6bn ($4.4bn).

The business segment has been largely immune to the negative effects felt by the wider industry, and the government has been extremely active in bidding for conferences. In 2015, Kenya is set to host three international conferences that will bring in a combined total of 21,000 local and international delegates to Kenya. At the top of the bill is the 10th World Trade Organization Ministerial Conference, to be held in Nairobi in December 2015. This is the first time that the event will be held in sub-Saharan Africa. Some 7000 delegates are expected, contributing KSh4.08bn ($44.9m) to the local economy.

Work To Do 

Although the event is good news for hoteliers in the capital, the hope throughout the tourism industry is that the country can use this achievement to help build a more sustainable and respected MICE industry for the long term. The initial signs are good: in the decade leading up to 2013, the number of conferences increased by 58%. However, to grow both the quantity and quality of conferences, it has been recognised that improvements need to be made to local infrastructure, “The MICE market offers a lot of potential for Kenya, and demand across Africa is already high,” Fred Simiyu, CEO of the Kenya International Convention Centre, told OBG, “However, much needs to happen in terms of infrastructure development, to enable the country to capitalise on the sector.”

The Future

To increase Kenya’s capacity for MICE events, the government intends to construct new convention centres in Mombasa, Kisumu and central Kenya, developments that many within the industry feel are much needed. Alnoor Kanji, managing director of the English Point Marina, told OBG, “Mombasa and the entire coastal region hold huge potential as MICE destinations, but they are not being sufficiently developed.”

One notable project in the pipeline is the Bomas International Conference and Exhibition Centre, pegged for construction in Langata outside Nairobi. Set to be the largest of its kind in Africa, local media reports that, upon completion, facilities will include an exhibition hall built for 15,000 people, a conference centre with capacity for 10,000 and five luxury hotels. The project however, which could cost up to KSh50bn ($550m), has been delayed as the government seeks private sector tenders.

The completion of these plans will significantly boost Kenya’s ability to attract greater MICE activity to the country, thus enabling the sector to become a significant driver of the tourism industry’s growth.

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The Report: Kenya 2016

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Table of Content

Tourism chapter from The Report: Kenya 2016

Tourism chapter from The Guide

Tourism chapter from Table of Content

The Report: Kenya 2016

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