Kenya’s strategic position as a regional hub is expected to continue attracting international investors as serviced apartments reinvent to survive.
When Heri Heights, a well-known serviced apartment in Nairobi transitioned into a SureStay Collection by Best Western, the results were almost immediate. Within a year, the property recorded a 25 per cent increase in short-let revenue, a shift that is increasingly becoming the norm in Kenya’s evolving hospitality sector.
Across Nairobi, a growing number of local hotel and serviced apartment owners are moving away from relying solely on booking platforms such as Airbnb and Booking.com, opting instead to partner with international hospitality brands to remain competitive in a tightening market.
For years, listing on global booking engines was enough to guarantee visibility and steady bookings, but as more players entered the market and economic pressures reduced local travel spending, the strategy began to show its limits.
“It is relatively easy for someone managing a small portfolio, perhaps 20 units and below, to achieve full occupancy. The same cannot be said for someone managing 100 units and above, particularly under the current economic circumstances,” says Mary Mutheu, Legal Counsel at Trianum Hospitality.
According to Mutheu, the challenge lies in how booking platforms operate. While they are effective at converting visitors already browsing their sites, they are not designed to actively drive traffic to specific properties especially when those properties are competing against thousands of similar listings globally.
For larger investors, this creates a ripple effect: lower occupancy rates, declining rental income, rising operational costs and ultimately, reduced property value.
“If you are managing a large portfolio, you need to adopt innovative strategies to market your product to potential guests even before they reach the booking engine. That is why many local hoteliers are now associating with premium brand names like Best Western, Hilton or Marriott to increase visibility and unlock access to clients that would typically be out of their reach.”
The numbers support this shift. Market estimates show that serviced and branded apartments in Nairobi recorded an average occupancy of about 72 per cent in 2024, significantly outperforming traditional short-stay hotels, which averaged around 52 per cent.
This performance gap has made branded residences increasingly attractive, not just to property owners but also to investors looking for stable returns in an uncertain economic environment.
Wytze van der Berg, Vice President of International Operations at Best Western Hotels, says global branding offers trust, something local operators often struggle to build on their own.
“When you are locally branded, you are largely marketing within your own borders. A traveller from Europe, Asia or America is more likely to first look for what is familiar before considering a new, unknown brand,” he explains.
This familiarity plays a critical role in decision-making, particularly among international travellers who prioritise consistency in quality, service and experience.
A growing number of local hotel and serviced apartment owners are moving away from relying solely on booking platforms.
“If you have a strong online presence, they may find you, but brand visibility gives you a clear advantage because it builds confidence even before the guest arrives,” he adds.
A 2025 report by the Kenya National Bureau of Statistics (KNBS) highlights the broader context driving this transformation.
The hospitality sector recorded its weakest performance in five years, weighed down by economic pressures and stiff competition from regional destinations such as Rwanda and Zanzibar.
Yet even as traditional hotels struggled, branded residences showed remarkable resilience.
Industry players attribute this to shifting traveller preferences. Today’s guests are increasingly seeking personalised, secure and flexible accommodation options, characteristics that serviced apartments are well-positioned to provide, especially when backed by global standards.
In addition to higher occupancy rates, branded residences are also generating stronger revenues. This is partly due to their ability to integrate additional income streams such as spas, restaurants and lifestyle amenities that enhance the guest experience while boosting profitability.
“The fact that the branded residency market performed well despite the overall decline in hotel occupancy shows that timely intervention can help a property survive tough times,” says Mutheu.
But the trend is not just about survival, it is also about expansion.
Dave Kimani, a professional revenue manager specialising in accommodation, notes that the branded residency model is gaining traction globally because it benefits both local operators and international brands.
For global brands, partnerships offer a faster and more cost-effective way to enter new markets without having to build infrastructure from scratch.
Mary Mutheu Muna is the Legal Counsel, Trianum Hospitality.
“Local partners provide deep insights into consumer behaviour and immediate access to existing distribution channels, supply chains and supplier networks. They also help navigate complex regulatory and cultural environments, making market entry smoother and more sustainable,” says Kimani.
At the same time, local operators benefit from the brand equity, marketing power and international reach that these partnerships provide.
However, the transition is not without its challenges. One of the biggest barriers for smaller investors is cost.
To meet international standards, property owners are often required to do extensive upgrades from furniture and fittings to plumbing, electrical systems, kitchenware and digital infrastructure.
“When you approach international brands, they will give you a long list of requirements. You may need to upgrade almost everything from interiors, signage, technology and all of this must be done in a cost-effective way,” says Edwin Omondi, an estate agent specialising in digital booking solutions.
In some cases, brands also require a minimum number of units, sometimes 200 or more, making it difficult for smaller, independent operators to qualify. This has raised concerns about the future of small-scale hospitality businesses.
Omondi says that as competition intensifies, smaller players may need to rethink their strategies, including forming partnerships among themselves to pool resources and compete more effectively.
“The rise of global brands is putting pressure on independent hotels. Many travellers are being absorbed into branded properties, and if you remain independent, it becomes increasingly difficult to compete,” he explains.
Still, experts say smaller investors are not entirely locked out of the opportunity. For those with fewer units, differentiation remains key. This could mean targeting niche markets such as business travellers or long-stay guests, investing in unique design and personalised experiences or strengthening digital marketing beyond traditional booking platforms.
In some cases, smaller properties can also align themselves with “soft brands” flexible branding models that allow them to maintain their identity while benefiting from global distribution networks.
Looking ahead, Kenya’s strategic position as a regional hub is expected to continue attracting international investors and travellers. As global brands expand their footprint across Africa, the demand for high-quality, standardised accommodation is likely to grow. For local operators, this presents both a challenge and an opportunity.
“The market is becoming more sophisticated. There was a time when a hotel could be run as a family business and still succeed, but today, the expectations are much higher both in terms of standards and how the business is managed,” says Mutheu.
This shift is forcing players across the hospitality value chain to rethink their approach from design and operations to marketing and customer experience.
It is clear that visibility alone is no longer enough, credibility now drives bookings.
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