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Jumia Travel launches the Hospitality Industry Report Kenya 2016/ 2017

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Nairobi, 25th January 2017: For the second time, the Kenya Travel Hospitality Report by Jumia Travel sheds light on major travel trends in the country, looking at how the local sector compares with counterparts on the global map; it’s rapid development, impending barriers and the impact of technology on the changing domestic travel landscape.

“The findings are compiled from data gathered from the 2000 plus Kenyan hotels partnering with Jumia Travel, showing not only an increase in the absorption of technology in the sector, but also remarkable growth in domestic travel spending’ Remarked Cyrus Onyiego, during the launch.


The Kenyan Factor

GDP Growth

Kenya ranks 9th on the African economies in 2015

GDP by sector

Tourism contributed indirectly to 10% of Kenyan’s GDP in 2015

Tourism & employment

Tourism contribute to 9.3% of the total employment

Internet penetration

74% of Kenyans have internet connection

    • In 2014, travel contributed 4.1% to the total GDP, highly boosted by an improved budget allocation. However, these efforts were greatly hampered by a spate of terrorist attacks and subsequent travel advisories that marked 2015, resulting to a drop in GDP contribution at 3.8%.
    • The USD 1b sector however showed some remarkable improvement towards the end of 2015, as hoteliers in the coastal province, which accounts for more than 60% of inbound tourist arrivals reported above 80% bookings as compared to 50% made in the previous year during the same period.
    • The positive effects of the efforts were felt in the first quarter of 2016, with an economic growth of 5.9%, mostly attributed to improved tourism performance especially in the hotel sector. Several high profile (Barack Obama and the Pope for exemple) visits as well as global conferences such as Africa Travel Association, The World Ministerial Conference and TICAD boosted new confidence in Kenya as a safe destination.
    • Kenya is recognized worldwide as a leading tourist destination, being the second time holder of the prestigious Leading Safari Destination accolade by the World Travel Awards in 2015.
  • The country’s fame as a conference and business destination is rising fast; with the capital Nairobi, beating Johannesburg to clinch the leading Meetings and Conference City in Africa in 2016. In 2015, conference tourism grew to 15.6% from 12% of total number of international arrivals in 2014, with further growth expected in 2017.

Carmen Nibigira

Carmen Nibigira

Chief Operating Officer – East Africa Tourist Platform

“Packaging East Africa Destination”

Is there any noticeable increase in travel or/and trade post-adoption of the EA Visa? And, what is the stand for Tanzania?

The introduction of East Africa Single Tourist Visa has greatly reduced the cost of visa-acquisition and therefore heightened the opportunity to experience multi-country packages. Although Tanzania and Burundi are yet to embrace the same vision, we still participate in joint marketing events. For instance, we had a joint stand at the Magical Kenya Travel Expo 2016 where Tanzanian and Burundian companies were present. The same happened during the Pearl of Africa Expo in Uganda, as was for Karibu Fair in Tanzania and during Kwita Izina in Rwanda in September. Even at the London World Travel Market, we are hosting a joint road-show where Tanzanian and Burundian companies will be present.

Is there a standardized way of packaging cross-selling to avoid unnecessary rivalry and sometimes animosity between tour operators and countries at large?

From the out-look; tourist arrivals are on the increase. In Kenya for instance, as of April 2016, the total tourist arrivals by air were 261,404; a 14% growth when compared to the same period in 2015 when it had 231,038 arrivals. EAC partner states simply complement each other. When packaging the region, the focus is on complementary products and services. In this case, while Kenya is endowed with beaches and world-renowned parks like Maasai Mara, Uganda is home to the world’s best white-water rafting rivers and the highest concentration of bird species. Rwanda, on the other hand, is home to endangered mountain gorillas. Never to forget, Tanzania’s renowned safari circuits and breath-taking Zanzibar beaches. Burundi is equally fascinating with warm hospitality, vibrant cultures, unrivalled heritage and diverse Lake Tanganyika recreational opportunities.

What would you say is the future of domestic tourism across the region?

Almost 50% of tourism in Kenya is domestic tourism; at the same time, our regional partners- Uganda & Rwanda are aggressively marketing domestic tourism & even launched domestic tourism marketing initiatives. For the first-time, Uganda and Rwanda have allocated funds for marketing domestic tourism. The future of tourism in East Africa is embedded in the vision of One Destination with multiple cultures and products. After all, with a population of 160 million and 10% of which is a potential market, it makes sense to invest on inter and intra-regional tourism.

Estelle Verdier

Estelle Verdier

Managing Director Eastern and Southern Africa

“What is driving the industry?”


The Hospitality Outlook

Cyrus Onyiego

Cyrus Onyiego

Country Manager Kenya

“The Role of OTAs in
the Kenyan Hospitality Market”

    • At 10 % contribution to the country’s GDP, the sector takes up a major fraction of the economy, and foreign exchange – second only to Agriculture. Kenya’s T&T total GDP contribution falls notably higher above the continent’s average score of 8.1%.
    • The sector’s contribution to employment in the country stood at 9.3% in 2015. This is expected to rise by 1.1% in 2016 to 1,582,000 jobs and rise by 2.9% pa in 2026, overall contributing to 9.5% of total employment.
    • Kenya continues to attract hotel investments; great evidence of the global investor confidence in the country’s tourism sector.
    • A number of new hotel chains opened in 2016, increasing the bed count by over 2,000. These include among others Radisson Blu, Golden Tulip, Royal Tulip. Many other luxurious hotels are still in development and a number of them should open in 2017: Hilton Garden Inn and Hilton Upper Hill – which will make the continent’s tallest hotel, City Lodge Hotel Group will also open a property by the same title at the much hyped Two Rivers Mall, while Four Points by Sheraton will brand its second property, which has been operating as Best Western Premier.
    • Conference tourism (MICE) is valued at KES. 30 billion (285 millions US $); hotels account for 60 per cent of this total value
  • Domestic travel spending grew to 59 % in 2015 compared with the previous 41 % (2014) from foreign receipts.

The Domestic Overview

Jumia Travel

Average price in the most popular destination

Region Demand Average price
Nairobi 37% 69 USD
Mombasa 20% 71 USD
Rift Valley 20% 88 USD
Malindi,Lamu 6% 67 USD
Mount Kenya 5% 201 USD
Kisumu 5% 49 USD
Diani Beach 5% 120 USD
Masai Mara 2% 256 USD

Bookings by Star Rating

Average Price Per Night


Issa Latiff

Issa Latiff

Head of Revenue – Royal Tulip Hotel

“Tapping Into the Growing
Corporate Travel Market”

Kenya is globally recognized as a leisure destination; however, the growing emergence of business hotels is prove that the country is tapping into the corporate travel market, how are the guests’ expectations changing?

There are more hotels coming up; Royal Tulip for instance just opened it’s doors to the corporate traveler in Nairobi. Next door we have Park Inn by Radisson, Swiss Contact is marking territories in Westland, in Lower Kabete, we have Pullman’s coming up amongst several others eyeing the growing sector. This means that Nairobi is more than qualified and equipped to meet the growing demand. Apart from this, the government is supporting the growing MICE frontier by establishing conferencing centers of international repute – like the planned center at the Bomas of Kenya. With this in mind, hotels too have stepped up to care for the business traveler with installation of state-of-technology business center and conferencing facilities, and improvement in service speed as well as extra services.

Is there any established preferences in hotel culture and style for business travelers?

Business travelers, and especially those travelling on the company’s budget have a culture to retain and a guideline to follow; therefore, their itinerary is highly rigid, and will mostly have identified particular hotel, and formed a relationship with them. Due to global and regional travel, it’s almost certain that they are more likely to settle on a chain or group. On the other hand, private business travelers do not have to answer to any culture (apart from what they have set as their own) and so have more room to experiment and try different properties and offers. They are also more likely to have higher expectations as value-for-money is one of their governing insights, thus prompting the hotels to meet the business traveler demands. OTA or Direct Booking; there is no clear divide, it all goes back to the culture, however, hotel staff maybe able to sway this to their favor (direct bookings) through opening communication, and providing personalized experience.

What’s your best advice to anyone looking to invest in a Chain Hotel Group?

I think the biggest downtime of chain hotels is the inability to adapt locally in their different locations. For instance, waking up in the same hotel in Accra as you did in Nairobi or Cairo is super boring! Under Louver Group, we are allowed to experiment with our interiors, colour combination and the lounge ambience as long as we retain the 94 rooms and adhere to the lighting guideline, which are the markers of our royal brand. Other than that, we try to integrate local trinkets in our set up, customize our products to avoid duplication but retain the culture and great service consistency from all perspective.

Travel Contribution to GDP

Domestic vs Foreign

41% Foreign visitor spending

59% Domestic spending

Leisure vs Business

67.5% Leisure spending

32.5% Business spending


Destination Searches by Customers

Lowest demandHightest Demand


E-Tourism

Sources of traffic

By gender

Hotel search by amenities

    • Kenya has one of the leading mobile penetration in Africa at over 80%, internet connection also takes a remarkable lead at 69%.
    • The value of eCommerce in Kenya is evaluated to be Ksh.4.3billion (4.2M US $). Although notably lagging behind peers such as South Africa, Morocco and Egypt, improving internet connectivity and high uptake of mobile payments is expected to boost growth in coming years.
    • Globally, the number of bookings made on the internet stand at 148.3 million while the % of same day hotel reservations via smartphone stand at 65%.
  • Kenya is largely viewed as a leisure destination, however, it’s location as East Africa’s economic hub and African New Technologies hub, has bolstered the country as a business destination leading to the growth of business travel.

Travelers Behaviour Insights

Esther Njoroge

Esther Njoroge

Head of Customer Service Kenya

“Retaining the human face
in the online marketplace”

As the online marketplace embraces digitization, how do you manage to retain the humain face touch and connection?

We have 24 hour support through phone calls, as well as Live Chat for customers who may wish to make contact at the time of booking, or when visiting our website. This ensures that customers who want to relate have adequate and effective channels. However, we must not forget that a fraction of tech savvy customers prefer to remain totally independent; for such, we do not interfere.

How do you endear yourselves to the customer, from the pre-travel arrangements, to the actual stay and post-travel?

Before and after check in, each guest is assigned one of our Travel Advisors who is always in contact with both the guest and the hotel to ensure everything flows seamlessly. We have scheduled calls to interact with our guests at various intervals during the planning, their stay and post trip. Also, our platform allows reviews to enable guests express their opinion on both the process as well as their stay. We usually call to find out whether they enjoyed their stay and to gather their recommendations.

Customer service is key to attracting and retaining customers, how much value do customers place on reviews? What interfaces and tools do you have to boost your interaction?

With the advent of technology and it’s rising impact on the tourism sector, it is almost a rule for customers to check online reviews before booking a hotel, or boarding a flight to any destination. Study indicates that, any traveler is likely to visit about fourteen different websites while planning their travels. With this in mind, we encourage our customers to post their reviews; if for instance we get negative feedback from any aspect of our process, we hastily attend to the same and look for ways to make up for the lapse. This information is also shared with our partner hotels, to help them improve on the services in question.

How much in advance travelers are searching online?

Percentage of search Time before
44% Less than 1 week
15% 1 to 2 weeks
19% 2 weeks to 1 month
15% 1 to 2 months
7% more than 2 months

How much in advance travelers are booking online?

Percentage Time before
25% Same day
22% 2 days
17% 2 to 3 days
6% 3 to 4 days
5% 4 to 5 days
3% 5 to 6 days
2% 7 days
20% more than a week

New Technologies in Hotel Management

Payment method

Devices used for bookings

Device Percentage
Computer 70%
Smartphone 30%

Yared Kifle

Yared Kifle

Head of Revenue Management Kenya

“Using Technological Solutions to Drive Revenue”

Dynamic pricing and timely response to market demands are key to designing a great offer in the hotel industry, what process does your team follow for the best result?

Maintaining continuous communication and free flow of information with our hotel partners is key. We inform them of upcoming events and seasonal occurrences to enable them manage their rates accordingly.
Some of the technologies we use to effect this is the extra net; which allows hotels unrestricted access to their profile on our platform, thereby enabling them to adjust prices, update availability and confirm reservations.

Please outline the innovations and technologies that Jumia Travel has adopted for seamless revenue management process.

We integrated the web version of the extra net which hotels use to access their profile on Jumia Travel and adjust price, inventory and confirm reservations and check-ins. Besides, we connect to different channel management systems that hotels use to allow us access to real time price and inventory. So far we are connected to Siteminder and plans are underway to add Nights Bridge, Wealthy Walker, and Ezee.

From your observation about Kenyan hotels on Jumia Travel; is there any trend or established behaviour pertaining to revenue management?

The Kenyan market is seasonal and competitive. Hotels are always trying to offer more value for less money. And the trend that this has created is a greater online presence. I see many hotels actively managing their prices on our platform. They aggressively engage the team, request advice on effective practices and offer special discounts. Out of the 21 countries our EA team works with, Kenya has the highest users (hotel managers) of our mobile and web extra net. Managers know online is where the future is and Jumia Travel is helping them grow their presence daily. Another trend to note is the realization by hotels that resident rates convert very well. Last year we had very few hotels offering special rates for East African citizens. Now, we have more than 25% of our partners that have resident rates. And these rates are giving them very good business. The Jumia Travel revenue management team continuously encourages hotels to take advantage of the East African market that responds strongly to resident rates.


 

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