Kenya Hotels Risk Ruining Their Own Business

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The Ministry of Tourism has set the ambitious goal of ensuring that one out of two beds in the industry is occupied by a domestic tourist by the end of next year.

This goal will prove elusive if the behaviour of hotels in key tourism destinations at Christmas and other peak times persists. Attention is often paid to the conduct of players in the matatu industry whenever Christmas or Easter comes around as fares suddenly treble compared to non-peak levels.

Much less notice is taken of the behaviour of major hotels especially those at the Coast when the festive season comes around. Prices regularly shoot through the roof at this time of the year with some hotels charging as much as four times their normal rates. This is a free market economy and it is well accepted that the laws of demand and supply often mean that when demand rises, so will the price of goods and services. The problem with the logic behind some of the charges being levied by the hotels at this time of the year is that in the long run it does not constitute smart business.

Charging rates that are far in excess of off-peak charges is not the best way to build customer loyalty. Considering that domestic tourists already account for a third of visitors to local hotels a better strategy to make this cadre regular visitors and to ensure they come not just during the peak season is to treat them with the courtesy of valued customers whether it is Christmas time or not.

This would go some way in helping to meet the ambitious targets set for the tourism industry under the Vision 2030 framework. Domestic tourists are more likely than foreign visitors to ignore activities that cause shocks to the industry such as terrorism attacks or post-election violence and to be a steady source of income for the industry.

If locals develop the perception that the industry is behaving like a usurer because of demand, they are more likely to take their money elsewhere such as the trip to the village which was the characteristic holiday destination of days past.