The landscape of the Kenyan hospitality industry is undergoing a seismic shift as Airbnb’s exponential growth reshapes the way travelers experience accommodation. With a rising presence in major towns across the country, Airbnb is disrupting the traditional hotel business model and claiming a share of the market that has long been dominated by established hotels.
Over the past decade, Airbnb has transformed into a global giant in the online accommodation marketplace. In Kenya, the hospitality sector is gradually experiencing a transformation as traditional hotels and lodgings face the increasing popularity of Airbnb services.
A recent assessment by Weekend in Business reveals a decline in room prices and occupancy rates across hotels as Airbnb takes center stage in providing affordable accommodation with household amenities. This shift has caught the attention of landlords who own holiday homes in key towns such as Nairobi, Kisumu, Nakuru, Naivasha, Mombasa, Nyeri, and Nanyuki.
This trend, however, spells a challenge for iconic hotels like Outspan, The White Rhino, Treetops, and Greenhill Hotel in Nyeri County. These long-standing hotels, renowned for traditional accommodation, are now grappling with the threat posed by the surge in demand for Airbnb offerings.
Linet Murage, the owner of Hampton’s Apartment in Nyeri, recognizes the changing landscape. She explains that Airbnb’s competitive edge lies in its negotiable pricing, allowing clients to enjoy extended stays. In 2021, she converted her house into a holiday home to respond to the growing demand for alternative accommodations. However, her journey was far from easy.
“I was a casual laborer in 2019 and began saving from my meager earnings. I invested my savings in furnishing and decorating my house. After the pandemic hit, I noticed that those seeking accommodation were increasingly shifting towards towns with holiday homes,” shared Ms. Murage.
Her persistence led her to venture into the Airbnb business, and she has expanded her holiday home enterprise by renting the neighboring property and transforming it into another Airbnb unit.
The success of Airbnb in Kenya is attributed to factors such as the vast supply of properties available at varying price points, often more competitive than traditional hotels. The platform also facilitates easy bookings and transactions while collecting commissions on each booking.
However, critiques have surfaced. According to studies, Airbnb has faced criticism for lacking comprehensive security guarantees for guests, evading taxation in certain jurisdictions, and its ability to swiftly add new supply without stringent regulations.
This shift in the hospitality landscape is particularly beneficial for entrepreneurs like Linet Murage, who have seized the opportunity to capitalize on Airbnb’s surge. The model allows individuals to capitalize on existing spaces and create a unique experience for guests without owning the property.
As Airbnb’s popularity grows, competition between traditional hotels and the platform intensifies. Ms. Murage believes that excellent customer service sets her apart, offering amenities such as breakfast, laundry, toiletries, and even a chef upon request.
The rise of Airbnb has prompted a disruptive impact on the Kenyan hotel industry, much akin to how Uber transformed the taxi industry. This shift aligns with the broader trend of embracing disruptive technologies and online marketplaces.
Experts believe that the desire of homeowners to generate income by sharing their spaces has led to the unlocking of untapped potential through Airbnb. Home-sharing platforms are gaining traction as travelers become more aware of the unique benefits they offer compared to traditional hotels.
The change has prompted property owners to align with the Kenya Revenue Authority (KRA) and ensure that their businesses are registered, demonstrating a willingness to embrace Airbnb as a legitimate business model.
In response to this competition, hotels are adjusting their pricing strategies and leveraging their amenities to attract guests. Despite the challenges, Airbnb’s ascent in Kenya’s hospitality industry offers a glimpse into the future of accommodation, where technology, convenience, and affordability converge.
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