The growing number of hotel and restaurant brands opening up in Kenya are creating opportunities for other businesses, ranging from food production to private security.
In 2013, US hotel chains Hemingways and Best Western, as well as Europe’s oldest luxury hotel group Kempinski, launched new properties in the capital Nairobi. The market has also seen numerous new restaurant brands setting up shop.
Local companies specialising in interior design and fit-out are also flourishing thanks to this surge in activity.
Bobby Sound is a director at TechPro Systems, an interior contractor that has done work for a number of new hotels, lodges and restaurants.
The company started out in 1990 as a hobby for Sound and his father. The duo initially focused on making handcrafted furniture, but later diversified into doing interior fit-out and metal fabrication.
“Hotels and restaurants are our biggest market because individuals can only afford six chairs or one bed, yet hotels can afford bigger volumes. For instance we supplied 16 tons of furniture to a bush camp in the Maasai Mara when they opened. Selling in larger volumes enables us to offer products at more affordable rates. We are seeing more demand for our services as more new hotels near completion,” says Sound.
“The opening of new restaurants are also boosting our business. For instance, we worked with KFC in their three outlets in Nairobi. Lots of franchises are coming to Kenya, like South African brands Adega Restaurants and Ocean Basket. Naturally that is good for us because they require the services of local contractors,” he adds.
Nairobi is home to a number of franchises in the food industry, including South African brands Debonairs, Spur Steak Ranches, and Steers, as well as US chains Naked Pizza, KFC and Subway.
The franchising market in Kenya is steadily growing according to a 2013 report by the US Department of Commerce, with restaurants among the top performers.
“Franchises in the food, restaurant and beverages industries are the most successful… Kenyans are spending more time and money eating out or ordering in especially during work hours and the fast food industry has benefited greatly as a result,” notes the report.
Despite the opportunities, Sound says the lack of adequately trained and skilled craftspeople is a major hurdle.
“Infrastructure is also a big challenge. If I have to do deliveries I can only do one delivery a day because traffic is horrendous,” says Sound. “The cost of some raw materials is also high. Sometimes designers want us to use materials which can only be procured from outside but the cost of procuring material is very expensive and when you add on 25% tax… 16% VAT and 3% railway levy… the cost of material becomes too high.”
He notes that Kenyans are increasingly more appreciative of high quality, locally-made furniture.
“After about ten years now people have come back to buying local furniture because they have appreciated the fact that local handcrafted furniture lasts longer than the cheaper machine made products imported from China,” explains Sound.