KCB Venture - Hospitality Surviving the Pandemic

TRENDS&INTEL KCBNEWS COMMENTARIES TRENDS&INTEL MAINSTORY NOT FOR SALE Corporate Magazine | October - December 2021 Hospitality Surviving the pandemic

Contents Hospitality sector: Surviving and adapting to the new normal In 2020, the hospitality industry recorded subdued performance attributed to the COVID-19 pandemic which resulted in reduced demand for facilities and services. 20 10 37 06 Growth in tourism support sectors signal speedy industry recovery For decades, Kenya’s tourism sector has stood out as one of the country’s leading foreign exchange earners. 49 Word from the editor .........................................................4 Opinion ..............................................................................5 Trends & Intel ....................................................................6 Main Story .........................................................................8 KCB News ........................................................................40 3

WORDFROM THEEDITOR Hospitality sector surviving through innovation, resilience and adapting to change M The hospitality industry and supporting sectors such as aviation and tourism, are among those that took a beating when travel bans, lockdowns, social distancing and other measures were announced in attempts to contain the virus. To stay afloat and avoid shutting down completely, hotels and other players in the hospitality sector came up with new ideas and offerings to keep customers coming while still observing health protocols and directives. This edition is about resilience, innovation, adaptation and survival. It covers various businesses in the hospitality sector and what they did and continue to do in order to make profits and thrive despite the economic slow-down, with eyes fixed on recovery as things slowly return to normalcy with increasing COVID-19 vaccine coverage. There is focus on new offerings such as staycations and daycations. These helped provide an environment to either work away from home or away from distractions or simply a place to rest and relax. Foreign tourist destinations such as Mauritius and Seychelles offered Visas to tourists who were ‘working from home’ so that they could continue holidaying while working. The return of the World Rally Championship was a shot in the arm to various businesses including hotels and wildlife sanctuaries. The motorsport event not only brought much needed revenue, but also put Kenya’s tourist destinations on the world map. Drive-in concerts have been featured where entertainment seekers got an opportunity to have a good time while observing health protocols. Music and drinks flowed in open spaces at the safety of revellers’ cars or near their cars without mingling with the crowd. Tours and travel companies were hit immediately after bans on travel and gatherings. Cancellations were the order of the day until the government started reopening the country and the economy. To survive, they focused on tailor-made local safaris and other packages to attract domestic tourists. This edition also covers the aviation industry and the new products they came up with following the ban on international travel and what they continue to do today to keep business afloat and on a path to recovery. any sectors of the economy experienced a slump at the onset of the COVID-19 pandemic when countries across the globe put in place drastic measures to contain the spread of the virus. To stay afloat and avoid shutting down completely, hotels and other players in the hospitality sector came up with new ideas and offerings to keep customers coming while still observing health protocols and directives. KCB Group Director; Marketing, Corporate Affairs & Citizenship Rosalind Gichuru Project Co-ordinator and Assistant Brand Manager Marketing and Communications Linda Amboye Editor and KCB Bank Corporate Communications Manager Peter Mwaura KCB Group Corporate Affairs, Kencom House, Nairobi Tel:0711087000 or 0732187000 / 0711012199 www.kcbgroup.com Facebook: KCB Group Twitter: @KCBGroup Instagram: @KCBGroup Give us your feedback at: contactcentre@kcbgroup.com KCB Venture is published for KCB Group by Oxygène MCL venturemag@oxygene.co.ke www.oxygene.co.ke KCB Venture is available online - https://ke.kcbgroup.com/our-blog/ kcb-venture ©2021 No part of the contents may be reproduced without prior permission from the publishers. All advertisements and non-commissioned texts are taken in good faith. While every care is taken to ensure accuracy in preparing the magazine, the publisher and KCB Venture assume no responsibility for effects arising therefrom. Enjoy the read. Rosalind Gichuru Editor-in-Chief 4

OPINION The hospitality sector’s true recovery is a wait-and-see game By Esther Masese Waititu T extend the measures for the umpteenth time. In South Sudan and Burundi, the pandemic has exacerbated already existing vulnerabilities resulting in long- term implications for economic growth and development. It has been the perfect storm for the region. Unfortunately, all these have kept tourists at bay, especially tourists from Europe where most East African nations are still in the red travel list. Foreign travel screeched to a halt in 2020. And in 2021, the tourism industry is at slow speeds probably due to the economic uncertainty. Nonetheless, tourism is critical to regional economies and every effort must be made to steer the industry back to the path of success. Interestingly, the potential economic effects of the contraction in tourism doesn’t just impact the hospitality sector. The cascading effect is significant due to links with upstream sectors such as agriculture, labour, and manufacturing. Coupled with changing behaviour of tourists, reduced discretionary spending, and changing spending patterns, the hospitality sector will have to reimagine operational agility and resilience to navigate the uncertainties of doing business in a world wracked by the pandemic. From a banking perspective, gauging recovery of the hospitality industry is a lot like poker: you play the hand you’re dealt as best you can and you never know what the next one will bring. Until then, the hospitality sector’s true recovery is a wait-and-see game, a game of poker dependent on the luck of the next hand. Unfortunately the pandemic has dealt the sector a bad hand. pandemic still has a long way to go. Uganda and Rwanda had to introduce a new round of lockdown to contain the spread of the virus, while Kenya had to he global rollout of the COVID-19 vaccine has given the economy the much needed shot in the arm. Vaccination efforts are driving renewed optimism about containing the pandemic. We see better days. The rollout heralds what hopefully is the beginning of the end of what has been a ghastly pandemic that has ravaged much of the world’s physical and economic health. In the tourism and hospitality industries, COVID-19 containment measures including lockdowns, visa controls, curfews, and tough strict standard operating procedures (SOPs) created a precarious business climate for restaurants, hotels, bars, cafes, and other businesses dependent on guests. These measures are steadily being relaxed. They have been a roadblock, significantly impacting the bottom line of businesses in the travel industry. In essence, the financial damage wrought by the pandemic is felt across broad swathes of the economy, with tourism and hospitality remaining one of the hardest-hit industries globally. Across East Africa, tourism hotspots including the Coastal region, Maasai Mara, Serengeti, Bwindi, Nyungwe, and Bujumbura are open to visitors. And, while the visitors are yet to peak the pre- pandemic numbers, the surge, especially from domestic tourists, has been a ticket to recovery for various players in these sectors. But just when we thought, we were out of the woods, we have witnessed an uptick in new cases of COVID-19 across the region. The outbreak of the highly infectious Delta Variant and the callous third wave is grossly impacting the hospitality sector; with worries that the These measures are steadily being relaxed. They have been a roadblock, significantly impacting the bottom line of businesses in the travel industry. In essence, the financial damage wrought by the pandemic is felt across broad swathes of the economy, with tourism and hospitality remaining one of the hardest-hit industries globally. The writer is the Director Corporate Banking at KCB Bank Kenya 5

TRENDS&INTEL TOURISM Growth in tourism support sectors signal speedy industry recovery A For decades, Kenya’s tourism sector has stood out as one of the country’s leading foreign exchange now including a wide array of experiences available to both international and local visitors. In September 2021, the Kenya National Bureau of Statistics, (KNBS), unveiled revised economic figures that provide a more accurate insight into how much each of the various sectors of the economy contribute to the Gross Domestic Product, GDP. The revised figures indicate that economic output from the accommodation and food services sector that was previously estimated at KSh71 billion as at 2019, is undervalued by more than 30 per cent. “The revised nominal gross value added s many African states capitalised on their mineral resources to launch their economies into global markets after independence, Kenya leveraged on its rich biodiversity and tropical all-year-round climate to position the country as a must-visit destination in the continent. The past decade has seen the country’s tourism sector evolve, as shifting trends in demand and a growing middle-class fuel a boom in the industry. Kenya’s tourism offering today goes beyond the traditional beach and Safari game drive packages, with the catalogue earners. 6

TRENDS&INTEL TRENDS&INTEL bitumen roads grew by more than 400 kilometres in the past year while 157 kilometres of super highway were built. “The construction of the Nairobi Expressway which is a 108-kilometer lane-length, with an estimated construction cost of KSh 60 billion was 10 per cent complete as at 31st December 2020,” explains the statistics office in its report. The Nairobi Expressway is a private-public partnership project that is earmarked for completion at the end of 2021 and is expected to drastically cut traffic on the busy Mombasa Road and in extension Nairobi’s central business district by up to 70 per cent. The Expressway will further provide a direct link to the Jomo Kenyatta International Airport, JKIA, and will see a typical trip from Nairobi’s Westlands to the airport cut down from an average of 45 minutes to less than 15 minutes. Other projects besides the Nairobi Expressway expected to boost growth of the tourism sector post-COVID-19 include the construction of the 2.1km floating bridge across Mombasa’s Likoni Channel that was completed at a cost of KSh2 billion. The Liwatoni Floating Bridge was opened to members of the public in December 2020 and has drastically cut congestion at the busy crossing point and reduced reliance on the dilapidated ferry system that for long discouraged some prospective travelers seeking to cross between the coastal islands. Several other infrastructure projects such as the Mau-Summit-Rironi Highway, that begun in June 2021, and the planned Mombasa Cable Car project, are expected to spur more investments in the respective tourism circuits and broaden the variety of experiences for visitors eager to travel once the pandemic abates and normalcy resumes. occupancies by domestic tourists between 2014 and 2018,” said the IFC in a recent sector report. “The growth has been credited to digital campaigns, growing disposable income among Kenyans and efforts to promote affordable alternatives to five-star resorts,” the corporation added. Infrastructure development has been identified as one of the key catalysts for recovery and this was highlighted by the significant growth in the building and construction sector in 2020 even as other sectors reeled from the effects of the pandemic. According to the KNBS, the construction sector registered a growth of 11.8 per cent in 2020 compared to a growth of 5.6 percent in 2019, emerging as one of the best performing during the difficult pandemic year. Cement consumption rose significantly from 6.1 million tonnes in 2019 to 7.4 million tonnes in 2020 representing an increase of 21.3 per cent while commercial banks advanced KSh119 billion in loans and advances to the sector over the same period. Much of this boom was attributed to public infrastructure projects such as roads where construction of (GVA) was consistently higher than the previous estimate for the period 2015-2019, but the magnitude of change was comparatively higher in the more recent years,” explained the KNBS. “The sector’s revised level of GVA was estimated significantly higher at KSh 119 billion in 2019, up from KSh 71 billion in the previous estimates,” the agency added. KNBS says the significant revision was attributed to expanded coverage of the sector activities through better coverage of informal rooming activities as well as improved quality of benchmark data used in the compilation of earnings. In compiling numbers for the revised earnings’, KNBS drew data from estimated revenues made by conventional hotels and motels, small and medium lodging facilities, high- end and small restaurants. Additional industry data was drawn from monthly hotel surveys, tax administration records, integrated surveys of services and analyses on informal rooming services such as the growing number of Airbnbs spread out across the country. Apart from giving a more nuanced picture of the sector’s true value over the past five years, the revised industry numbers further give stakeholders a picture of some of the key sectors and sub-sectors linked to tourism in Kenya, which could help in speeding up post- pandemic recovery efforts. According to the International Finance Corporation, IFC, the tourism sector in developing markets such as Kenya was hardest hit by the COVID-19 pandemic disruption due to a slump in international arrivals. According to the IFC, Africa’s growing middle class, its soaring population of young travelers hungry for adventure and the recently launched African Continental Free Trade Area (AfCFTA) are among drivers that could spur recovery and future growth of the sector. “Even before COVID-19, Kenya enjoyed a 55 per cent rise in bed night Infrastructure development has been identified as one of the key catalysts for recovery and this was highlighted by the significant growth in the building and construction sector in 2020 even as other sectors reeled from the effects of the pandemic. 7

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MAIN STORY Hospitality Surviving the pandemic 9

MAIN STORY Hospitality sector: Surviving and adapting to the new normal In 2020, the hospitality industry recorded subdued performance attributed to the COVID-19 pandemic which resulted in reduced demand for facilities and services. 10

MAIN STORY T he sector contracted by 9.3 percent in the first quarter from home, which resulted in reduction of hotel services particularly for restaurants and conference facilities; curfew hours, which reduced the number of working hours and the time people could spend out; partial lockdowns, which reduced inter-county tourism; and government certification requirements for proprietors to re-open their businesses. The pandemic had the power to have far-reaching effects on the sector, long past the lifting of travel restrictions and regional lockdowns. According to the Kenya Institute for Public Policy Research and Analysis (KIPPRA), on average, 97 percent of the hotels were operating in January 2021 compared to 89 percent in October 2020 and 71 percent in July 2020. “During this period, hotel operations declined to 72 percent in March 2020 and further to 35 percent in May 2020 reflecting pressure on the industry due to COVID-19 measures. However, with the easing of COVID-19 measures and the opening of the economy in July 2020, the sector has been on a recovery journey, albeit slow until a partial lockdown was announced in April 2021,” KIPPRA states. The institute projects that hotels constituted the majority of the 1.72 million people who lost their jobs due to the pandemic. “The industry experienced high unemployment rates as 67 percent of the hotel industry employees lost their jobs in May 2020. However, due to the easing of COVID-19 restrictions and increase in demand for hotel services during the Christmas festivities, most staff resumed work, leading to an increase in employment, 60 percent, towards the end of the year,” KIPPRA further states. In the liquor sector, it is estimated that more than 250,000 workers lost their jobs. The National Bar Owners Association says this was occasioned by the government’s order to close all pubs to contain the spread of the virus. “We started feeling the pain of the pandemic after three months, and we started realising that our businesses might go under. During the partial lockdowns, there was uncertainty of the continuity of our businesses, some survived while others completely closed down,” says National Bar Owners Association Secretary- General Boniface Gachoka. Before the pandemic, the association had a membership of more than 65,000, but following the outbreak, 15,000 bars, hotels and liquor outlets were permanently shut down. In the aviation industry, the International Air Travel Association (IATA) estimated that airlines globally were losing up to KSh 11.3 trillion (USD113 billion) in passenger revenues. Kenya Airways estimated that it lost at least KSh800 million a month, noting that the situation was subject to change due to restrictions implemented in global travel space. The national carrier went ahead to institute measures which included; reducing the salaries of all staff by 50 percent and 80 percent for the CEO, they sent non-critical staff on annual leave immediately, cancelled 65 percent of their flights and put 50 percent of the aircraft on long-term storage. In addition, domestic air operations requested the government to provide Ksh3 billion to cushion the struggling industry due to passenger decline as a result of the pandemic. “Some of these measures undertaken include constructive negotiations with lessors to of 2020 and by 83.3 percent in the second quarter, compared to an expansion of 12.1 percent in second quarter of 2019. The sector has always been a key contributor to the strong performance in the economy, contributing on average 1 percent of Gross Domestic Product (GDP) over the last 10 years. In addition, the sector directly employed 82,900 people and, together with trade, indirectly engaged nine million others in 2019. At a disaggregated level, the sector contributed over 10 percent to the GDP for Kwale, Mombasa and Nairobi counties in 2017. The pandemic effects are largely attributed to containment measures implemented by the government to curb the spread of COVID-19. They included social distancing, which slashed the holding capacity of restaurant; suspension of both domestic and international flights resulting to a decline in tourist numbers; working According to the Kenya Institute for Public Policy Research and Analysis (KIPPRA), on average, 97 percent of the hotels were operating in January 2021 compared to 89 percent in October 2020 and 71 percent in July 2020. >>> 11

MAIN STORY >>> Noorani, says they realised that the government needed assistance at the time, and as a Kenyan business, it was their responsibility to ensure that they curb the spread of the deadly virus. “We offered to have our hotels in Nairobi as quarantine facilities, not with an aim of making profits, but to support the government and Kenyans in curbing the spread of COVID-19.” Pride Group consists of a total of eight hotels with the flagship being PrideInn Hotels and Resorts. Royal Tulip Canaan Nairobi General Manager Bhupendra Kumar says the hotel served Ministry of Health workers, staff of various hospitals and accommodated repatriated flight passengers and crews. “We improved our safety and hygiene standards. Listed our hotel on the Ministry of Health quarantine facilities,” Mr Kumar says. Equally, there is an opportunity to sell hotels instead of closing them, which comes at a time when private equity financing and buyoffs have also been found to be a good alternative financial solution and source of economic development, due to ease of financial accessibility, entrepreneurial diversification, and ability to outperform other asset classes. For instance, recently, South African’s City Lodge Hotel Group, an international hotelier, announced plans to sell its three Kenyan-based hotels namely, the 127-room Fairview Hotel in Nairobi, the 171-room City Lodge Hotel in Two Rivers, and the 84-room Town Lodge Hotel in Upper Hill, to private equity fund Actis, a United Kingdom– based investment firm. The three hotels, which have been in operation for the last seven year, were set to be sold at a cost of KSh1 billion amidst the vaccination as a priority in the next six months, will be in business earlier than anybody else. People want to be safe when they come to our country” he said. Mr. Balala notes that 2021 is going to be a year of vaccination, and 2022 the year of recovery, and adds: “We will only go back to where our figures were in 2019, in 2024”. Official data shows that 2019 was a great year as the country surpassed the 2.1 million mark for visitors who entered Kenya. “2020 was a shocker due to the COVID-19 pandemic, we lost over 82 percent of tourism, there were lockdowns all over the world including Kenya, and now we are recovering,” says the CS. The Ministry has already added hospitality workers to the frontline in the fight against the deadly virus with mitigation measures, including operationalization of vaccination programs which encompassed service providers in the hospitality sector. The ministry has further set aside KSh 500 million (USD 4.7 million) to help the tourism sector recover. Part of this money has been used to restore destination confidence to ensure that Kenya remains as a preferred travel destination globally while the rest is being used for the post COVID-19 recovery strategy in all key source markets. Although the pandemic came during the low tourist season in Kenya, the hotel industry experienced an abrupt and unprecedented drop in hotel demand that led to closure of most facilities. However, some hotels adapted ways of staying above the waters such as being on the government’s COVID-19 quarantine list. The Founder and Group Managing Director of Pride Group hotels, Mr Hasnain restructure aircraft lease term; austerity measures to reduce costs, including foregoing director’s remuneration; deferred salaries for staff; reducing and deferring capital expenditure; freezing recruitment, and implementing voluntary leave options and staff redundancies,” Kenya Airways says in a statement. Any country that puts vaccination as a priority in the next six months, will be in business earlier than anybody else. People want to be safe when they come to our country, says Najib Balala, CS Tourism and Wildlife. Survival strategies To remain afloat, the government launched new COVID-19 protocols for the sector. The new measures were termed as part of the “new normal” for health and safety regulations by Cabinet Secretary for Tourism and Wildlife Najib Balala. “Any country that puts Najib Balala, Cabinet Secretary Ministry of Tourism. 12

MAIN STORY regional and international MICE market share, conference tourism has the potential for generating enormous returns to the country because of its high impact on local host communities. exercising more caution. Secondly, travel advisories - with countries such as Britain and United States issuing advisories due to increased caution in the country due to COVID-19, crime, and terrorism - will also be a challenge to the sector’s performance in the future. Future outlook The sector’s growth is projected to remain neutral in 2021. This is as a result of expected gradual recovery support by way of financial aid from the government through the Post COVID-19 Hospitality Sector Recovery Stimulus package, repackaging of the tourism sector to appeal to domestic tourists and relaxation of travel advisories. However, the sector will continue to experience key challenges such as various COVID-19 waves which are likely to see travel restrictions by most countries and people Royal Tulip Canaan Nairobi General Manager Bhupendra Kumar says the hotel served Ministry of Health workers, staff of various hospitals and accommodated repatriated flight passengers and crews. Mr Hasnain Noorani, founder and group managing director of Pride Group Hotels. Mr Bhupendra Kumar, the general manager Royal Tulip Canaan Nairobi. these assets. The government is also prioritising conference tourism in order to boost the hospitality sector. Mr Balala observes that the Meetings, Incentives, Conferences and Exhibitions (MICE) market is a resilient sector because it involves meetings of people from diverse sectors of the economy and can help the country reduce its dependence on beach and safari tourism. The MICE segment has been forced to adapt to the pandemic, with some events shifting online and others being deferred amid global travel restrictions, social-distancing protocols and prohibitions on mass gatherings. According to the Kenya National Convention Bureau (KNCB), a government entity whose mandate is to sustainably increase Kenya’s The Founder and Group Managing Director of Pride Group hotels, Mr Hasnain Noorani, says they realised that the government needed assistance at the time, and as a Kenyan business, it was their responsibility to ensure that they curb the spread of the deadly virus. overall operational loss concerns generated mainly by City and Town Lodge hotels due to a slow business environment since December 2019, coupled with the group trying to minimise its existing debt through selling 13

MAIN STORY Staycation and Daycation concept that has kept our hotel afloat 14

MAIN STORY >>> Mourine Oloo, Social House Marketing Manager. When you come to a social house, you enter a living room, that’s the reason why we don’t even have a reception. You will be received by our staff we fondly call “marafiki”, meaning friends, in the living room to welcome you to the house. We wanted to make this space as friendly as possible for our clients, says Mourine When you enter your house, there is a sitting room, bedroom among other rooms. That’s the concept The Social House Nairobi was going for when they were building the hotel and introducing the new concept to the market, says the marketing manager, Ms. Mourine Oloo. 15 15

MAIN STORY such a time as this. “We looked at the spaces that we have and decided to make them according to our customers’ needs and good thing is we already had spaces that could be used as work spaces and meeting spaces even for an hour,” she said. Traditionally 80% of hotel business is based on sale of rooms, with the pandemic and minimal travels, this side of business was highly affected. However, Social House decided to sell theirs differently and came up with staycations where one would book a room for a day or even a few hours to have a meeting, rest or even work and check out without having to necessarily follow the usual check-in and check-out protocols of hotels. “Our staycation, worked perfectly. We did not only introduce this vacation, but also introduced daycation where you can come and utilise a room, have your meetings, or if you just wanted to get away for the day, or maybe you want to do your work at home but there are kids or dogs barking and a lot of interferences. We decided to create our spaces to cater for that. So our bedrooms turned into spaces where people can utilise for more than just a bedroom,” says Mourine. The team found that there was a new crop of clientele coming up, young entrepreneurs looking for space to work as well as network. The COVID-19 pandemic led to an increase of business owners as some decided to start their businesses after being laid off, with others choosing to diversify their incomes to stay afloat. According to the Kenya National Bureau of Statistics, (KNBS), registration of companies in Kenya has increased by 52.9 percent over the past year. Moureen says these clients have been key to their business, however, they Social House entry way. I entertainment joints. This took the team back to the drawing board. “We had just opened the doors of the hotel but had to shut down, barely before making any progress. We had to be innovative to remain in business and keep our young hotel afloat,” says the marketing manager. After months of compulsory curfews and lockdowns, Kenyans had to work from home, but after a while, they started looking for places where they could work while keeping their safety. At the same time, there was the other group of people who were suffering from cabin fever and wanted to be in a different environment. That’s when Mourine and the team knew that the hotel was built for n February 2020, Mourine and the team were gearing up We had just opened the doors of the hotel but had to shut down, barely before making any progress. We had to be innovative to remain in business and keep our young hotel afloat, says the marketing manager to finally open the doors of The Social House Nairobi, a concept they had worked on for years, and were expecting to bring something new to the market. However, the much anticipated opening would only last for three weeks before they shut down. Three weeks after opening, the first case of COVID-19 was announced in the country and the government set up measures to combat the spread of the virus, the first measure being to shut down places with a high potential to increase the spread of the virus such as hotels, bar, recreational facilities and other 16

MAIN STORY social media pages. “We did numerous trainings for our staff on how to treat our guests and how to ensure their safety and that of guests as they tackle their tasks everyday while serving them. This has been very instrumental for our house because both the guests and staff are able to feel comfortable while they are within our premises,” she says. In order to keep their doors opened, the hotel had all its employees vaccinated and did capacity building on customer care and how to work in the new normal to ensure that guests receive quality service. The pandemic brought about a new way of doing business, it has continued to push bands to be innovative to cater for the changing needs of clientele. According to Mourine, this is just the beginning as they embark on an expansion drive to open more outlets across the country with a key focus on Mombasa to add on to their Alba Hotel in Meru. being able to open their doors again. However, the concept favored The Social House as they had more offering than traditional hotels. Currently, the hotel has four restaurants, seven events and meeting spaces and 83 bedrooms which are occasionally converted to private dining and meeting rooms. “Our concept has really worked in our favor, we don’t have the same set up that a normal hotel has and as we opened, we didn’t have a rule book of how things should be, we entered the market with a mindset of changing things as per our environment, guest tastes and preferences and the trends around us,” Mourine says. Social media has been instrumental for businesses especially during the pandemic. The Social House has been maximizing on this space to market the hotel, restaurants and introduce new offerings such as staycations and daycations which many people got to know about through their have had to adjust to their needs as most of them including corporate clients are looking for short term stays, like a day or even an hour to utilize the space for a meeting or to complete some tasks. This led to the diversification of their spaces including their rooms that were turned to meeting rooms and private dining areas due to the demand of the spaces. “These entrepreneurs are young, and they are always looking for a social setting where they can work, network, connect with like-minded people and at the same time entertain their clients or colleagues and that is the service we are offering them here. Others just need space for a Zoom meeting for a few minutes or an hour and we had to make the necessary adjustments to cater for this too,” says the marketing manager. The hospitality industry was the most affected by the COVID-19 pandemic as hotels shut their doors, with some not Our concept has really worked in our favor, we don’t have the same set up that a normal hotel has and as we opened, we didn’t have a rule book of how things should be, we entered the market with a mindset of changing things as per our environment, guest tastes and preferences and the trends around us, Mourine says Social House, Lavington Nairobi. 17

MAIN STORY Outsmarting the pandemic by office and home food deliveries: The story of DeeDee’s Kitchen and The Gastronome I In March 2020, when the pandemic was about to change nearly every aspect of life with dramatic shifts in work, travel bans, business shutdowns and lockdowns, Diana Amunga Muriithi was opening the doors to her first business – DeeDee’s Kitchen – a food delivery venture. the pandemic gave me an upper hand because restaurants were really hard hit and they had to close down, and that’s when my business really picked. At the time, I was getting referrals through my friends, my husband’s friends and basically word of mouth. It was easy getting the word out there because people knew me and they knew where the food was coming from,” she says. At the beginning of the pandemic, people’s daily lives and routines including the way they access goods was disrupted. Government- t was an idea hatched in 2019 after quitting her job. One day, bored mandated lockdowns kept consumers at home, changing normal shopping and eating habits. Restaurants closed down, and those that could, relied on take out services. So for many people, home or office deliveries were the solution; one like Diana was providing. When she started out, Diana did the cooking and delivery of food on her own. But on days she was overwhelmed, her nanny stepped in to help prepare the food. And when business really began picking up, she hired two women to help with the cooking at home, Diana decided to cook lunch and take it to her husband at work. Her husband shared the meal with his colleagues who enjoyed it so much they asked him to tell her to start cooking as a business. Diana did not waste time pondering over the idea. “At the time I was applying for jobs and they were scarce. So I figured, why not? Let me start. Starting at the onset of 18

MAIN STORY and her brother to do deliveries as well as a digital manager to help with marketing online. “My business is not so taxing because by 2:00 pm, I’m done and back in the house. But it’s been difficult, there are days I feel overwhelmed because I have to juggle between being a mom of three boys, a wife, a student and an entrepreneur. It’s not easy,” says the business woman. Diana holds a degree in Public Communications from Daystar University, a higher diploma from the International Chartered Institute of Public Relations and is currently pursuing a master’s degree in Corporate Communications. DeeDee’s Kitchen menu consists of authentic African traditional food such as brown ugali, kuku kienyeji, mukimo, mbaazi and managu. But on Fridays and midweek, she mixes it up with fast foods such as burgers, French fries and fried chicken. As the business continues to gain a foothold in the food delivery business, it is also relying more and more on online orders than it did by word of mouth when it began. Today, more consumers are shopping online frequently and in greater numbers as the COVID-19 pandemic continues to reshape the world. “Social media is far reaching. Sometimes I meet people I went to high school and primary school with who’ve seen my work on social media and tell me ‘you’re doing a good job’. People also see the photos and videos we post online and they’re actually interested in our food. The online world has brought me a big clientele,” says Diana. COVID-19 has caused many food businesses to move their business models and operations online to avoid closing their doors. They have had to adapt to this shift to continue supporting their employees, generate income and deliver quality services and products to their customers. The Gastronome is one such food company that has had to innovate and take their food online and deliver it directly to homes and offices. Before the pandemic, The Gastronome provided food to people in the workplace particularly in embassies, banks, factories, onsite locations for television and film production and other corporate markets. However, with businesses shutting down because of COVID-19, The Gastronome’s processes had to shift online to maintain the business. “By March 2020, we had lost 90 per cent of our business and we had to send everybody home and then begin restructuring. The situation forced us to innovate and pivot towards home deliveries and an online range of products,” says Roni Karani, The Gastronome CEO and Co-founder. The restructuring, unfortunately, saw the company downsize from 150 employees to 40 and its income greatly reduced. But gradually, the country’s economy is opening up and Diana Amunga Muriithi, Founder DeeDee’s kitchen. Social media is far reaching. Sometimes I meet people I went to high school and primary school with who’ve seen my work on social media and tell me ‘you’re doing a good job’. People also see the photos and videos we post online and they’re actually interested in our food. The online world has brought me a big clientele, says Diana. that means The Gastronome is back in business, albeit in a new normal where services are provided via online channels. “Before the pandemic we were on online platforms, however, we were not actively pushing that avenue. But now, because of COVID-19, it’s the only platform we have and we’ve became more aggressive. “We’ve grown the sales from our online platforms more than we did before COVID-19. We’ve actually grown from losing the 90 per cent and making losses to breaking even and now we are profitable. We hope to continue growing and also look at retail as an option,” says Roni. With offices re-opening and events gradually making a return, things are definitely looking up, not just for The Gastronome and Diana, but the hospitality industry as a whole. 19

MAIN STORY ‘Working from home’ at a holiday destination A limit movement from place to place unnecessarily, hence the increased popularity of remote working. For countries, adjustments to ensure that they continue thriving was and still is key. For Mauritius, their heavy reliance on tourism pushed them to revolutionize the concept of remote working. They did so by issuing their Premium Travel Visa which allows non-citizens to stay and work remotely for up to one year in the country. The visa, which they introduced in October 2020, was a solution to remote workers to help in navigating through some of the issues they faced that included working in overcrowded spaces and dealing with cabin fever. This idea is proving to be a win- win for Mauritius and workers as the country gains economically from what the employees spend, and the workers get to enjoy working in an idyllic setting, a pandemic. Globally, remote working has been one of the most appreciated adjustments. Research by findstack shows that 16% of companies are 100% remote and 85% of managers believe that having teams with remote workers will become the new norm. We have slowly, but surely gravitated towards the concept of remote working. For the majority of us, this concept before the pandemic was foreign. Working involved leaving your home, working for an average of seven hours at the office, then heading back home to attend to family and personal matters. In most cases, it was largely focused on whether or not you are seen, and how many hours you spend seated in front of your desk. Since the outbreak of the pandemic, this model of work changed as it was essential for everyone to maintain social distance, avoid physical gatherings and s a country that heavily depends on tourism, Mauritius found itself facing economic turmoil as a result of restricted movement and bans on air travel that came with COVID-19. The restrictions cut off the steady stream of tourists who flock to the country each year to enjoy its mix of sandy white beaches, tropical climate, diverse culture, while staying at their luxurious hotels. In the first four months of 2020, statistics show that tourist arrivals had dropped by 33.9% while tourism earnings are estimated to have fallen by 3.8% year- over-year, in the first two months of 2020. To sustain its economy and its people, something different and unique to their situation needed to be done. Almost a year into the ‘new normal’ era, people have adjusted to living in 20 20

MAIN STORY these countries are taking to adjust to the new normal. Without an end in sight, being flexible, innovative, and open to new ideas is the way to go to ensure that we thrive and not just survive during the pandemic. countries that adopted this visa model, stipulating their guidelines of qualification which include the minimum annual salary requirements, insurance covers needed, criminal history, and stay durations. It is commendable to see the initiatives surrounded by beautiful waters that the Island offers, thus boosting productivity. To be eligible for the free visa, one has to be a retiree, remote worker, parent of children studying in Mauritius, or a visitor. These people have to prove that they work for a business outside the island and have plans to stay in the country for a long time. Following closely behind, Seychelles introduced their remote work visa for applicants between the ages of 28 and 58. This visa, offered under the Seychelles Workcation Programme, is also only eligible for people who work remotely for companies and businesses overseas. Outside the continent, several other countries, especially those that rely on tourism, introduced their own versions of the remote working visa. The Cayman Islands, Dubai, Barbados, Spain and Germany, to mention but a few, are such Change is inevitable in life. You can either resist it and potentially get run over by it, or you can choose to cooperate with it, adapt to it, and learn how to benefit from it. When you embrace change you will begin to see it as an opportunity for growth, Jack Canfield. 21 21

MAIN STORY Tours and Travel: Adapting to the new normal 22 22

MAIN STORY Tours and Travel companies were among the hardest hit by the COVID-19 pandemic, but to remain in the game, some devised tactics to survive. I n 2020, the COVID-19 pandemic took the world by storm and brought it to a virtual standstill. One of the economic sectors that was the most hard-hit was travel and tourism, despite recording a whopping 1.5 billion tourist travels internationally in 2019. The spread of COVID-19 across the globe saw heightened uncertainty in the tourism sector as players required up-to- date and reliable information before deciding on the next move. Airlines were grounded, hotels closed, and strict travel restrictions imposed. The United Nations World Tourism Organisation (UNWTO) 2020 estimates show that the pandemic dealt an unprecedented blow to the sector by drastically reducing international tourist arrivals in the first quarter of 2020 to a mere fraction, compared to the same period in 2019. Since then, the sector has been facing challenges such as how long the pandemic will last and travel restrictions, in face of global economic recession. Many countries are implementing a wide range of measures including easing travel restrictions to mitigate the impact of COVID-19 and stimulate the recovery of their economies, with Kenya, a top tourism destination in Africa included. Data from the Ministry of Tourism and Wildlife indicates that Kenya is the third largest travel and tourism economy in Africa after >>> 23 23

MAIN STORY with guests whose travel had been affected by the pandemic and as such they had implored upon them to relax their cancellation policies in order to give guests confidence in making future bookings,” says Anthony Achieng, TOSK Chief Executive Officer. In addition, KATA, the umbrella body of travel agencies with a growing membership of over 200 travel agencies, addressed the anxiety and distress amongst customers as airlines delayed in processing air ticket refunds. The association had to request International Air Travel Association (IATA) to act urgently and compel its members to fast-track refunds processing for the customers who had booked flights through travel agents during the crisis period. “In our engagement with IATA, they sighted that airlines were facing unprecedented high volume of global refunds requests, and this had been the main cause for the processing delays,” says Ms. Agnes Mucuha, KATA Chief Executive Officer. During the crisis, several airlines responded to the refund requests by issuing vouchers under the name of the booked passenger instead of cash. This threw travel agents in a crisis as customers were demanding full refunds in ‘cash’, saying that they had no immediate travel plans in the foreseeable future. Similarly, the travel agents could not assign the vouchers on other bookings owing to the issuing restrictions. This further deepened the stalemate between the customers and travel agents owing to the inflexibility demonstrated by the airlines issuing the refund vouchers. management of the infections, they brought the domestic tourism in the country to a sudden standstill. These presented the sector with an unprecedented set of challenges, from airlines to tour operators, travel agents, hotels, national parks, guests, employees, families, and friends. Resort in the tropical region. Recovery journey In June 2020, the government launched a virtual tour in a live stream campaign to showcase game safaris as part of the MagicalAwaits campaign led by the Kenya Tourism Board (KTB) that aimed at ensuring the world and travellers remained connected to Destination Kenya, even during the COVID-19 lockdown period when there was restricted movement globally. The government also took the opportunity to promote domestic tourism, as it waited for the lifting of travel restrictions, with strict conformity to guidelines and protocols issued by health experts. Players such as Tour Operators Society of Kenya (TOSK) and Kenya Association of Travel Agents (KATA) also came in handy to save the situation. TOSK, a membership organisation of SME and MSME tour operators and other service providers in the tourism sector, assured Kenyans that all their members had adhered to government directives and protocols issued by the Ministry of Health. “The society’s Public Relations team was in constant touch with the relevant authorities to get the latest updates on the COVID-19 situation in the country, and on cancellations, members were working closely >>> South Africa and Nigeria. The country’s tourist arrivals grew by 3.9 percent from 2.02 million tourists in 2018 to 2.05 million tourists in 2019. Domestic tourism grew from 3.6 million in 2017 to 3.9 million in 2018, recording a 9.03 percent growth. “Domestic travel supports and develops local and national economies, provides a rationale for infrastructure upgrading, disperses visitors geographically across regions and to least-visited rural areas, bridges the seasonality gap, creates employment opportunities and cushions destinations in times of crises,” reads in part a Ministry of Tourism and Wildlife report on the impact of COVID-19 on tourism in Kenya, the measures taken and the recovery pathways. However, the pandemic forced the government to implement drastic measures to contain the contagion some of which included the enforcement of a night curfew, social distancing, emphasis on staying and working from home, and closure of borders for countries with high risk of spreading COVID-19. Whilst these measures helped in the Domestic travel supports and develops local and national economies, provides a rationale for infrastructure upgrading, disperses visitors geographically across regions and to least-visited rural areas, bridges the seasonality gap, creates employment opportunities and cushions destinations in times of crises. 24 24

MAIN STORY Tactics Individual firms had to devise tactics to survive the crisis. Luxurious hotels reduced their prices, and several lodges and camps charged unprecedented lower prices for accommodation, and they were filled to capacity. Many domestic tourists took up offerings from tours and travel companies with passion. Tours and travel companies devised marketing strategies to remain in the game. At Air-Kenya, a safari airline in East Africa which flies passengers around the region’s world-famous destinations, passengers would be assisted to amend their travel plans, and engineering and flight crew made sure the planes were in good condition. “Adapting is the key to continue to sell. We adopted ways of prioritising customer well-being, we were flexible when the customers weren’t able to travel; gave options of postponement with no charges,” says Ms. Diana Cherono, AirKenya sales manager. At the airline, even whilst travel was still in suspension, the company continued to put up conversations and updates through its communication and social media channels, so as to keep the brand on the minds of customers for when travel was to resume. “The ultimate strategy is to prepare for recovery when this crisis subsides, and that is what we are focusing on. Vaccinating the population is a great position to be in. Adhering to the global adopted procedures and protocols, Kenya and East Africa at large will be among the destinations on the green list, meaning it’s safe to visit,” says Ms. Cherono. The airline is confident that by providing a reliable service and observing COVID-19 client’s specifications to ensure maximum comfort, relaxation and thrilling adventure. Some of the packages include mountain climbing safaris, seasonal holiday packages, camping safaris, and flying safaris. Many other firms have adapted health protocols to remain in business, from passenger screening, taking COVID-19 tests and rearranging their premises to allow social distancing, among others. By following these guidelines, travellers’ confidence is boosted. The COVID-19 pandemic is still affecting passenger flows, and many players in the industry are continuously prioritising safety by enhancing measures to prevent the spread of the virus and will continue to do so to be able to increase and maintain passenger confidence whilst travelling in the region. protocols as directed by the aviation regulators, it will be able to adjust to the “new normal”, where safe and virus free travel is a must in any future travel plans. At Bonfire Adventures, a tours, travel and events company, clients are being advised on available choices, special promotions and advice on the quality and value of travel products. The company gives a wide variety of travel options and quotes from competing travel suppliers. The company also sources all aspects of a client’s trip including the air ticket, accommodation, car rental and excursions. This way, a client does not have to call various hotels, airlines, car renting companies and excursion planners at the intended destination. Another firm, Bountiful Safaris & Tours, customers are offered tailor-made safaris which are customised to a The ultimate strategy is to prepare for recovery when this crisis subsides, and that is what we are focusing on. Vaccinating the population is a great position to be in. Adhering to the global adopted procedures and protocols, Kenya and East Africa at large will be among the destinations on the green list, meaning it’s safe to visit, says Ms. Cherono Camping in the wild. 25

MAIN STORY Local airlines adjust operation models to survive economic downturn The impact of the COVID-19 pandemic on the aviation industry has been severe. The travel restrictions imposed by many countries and regions adversely affected the sector. G lobally, the pandemic led to an increase in debts to US$220 billion, forcing many airlines to seek state support in order to survive. The crisis highlighted the need for urgent action to cushion airlines from the health and economic consequences of the pandemic and set the stage for lasting recovery. As a result of this, governments injected almost US$227 billion to keep the industry alive. Budget carrier Jambojet, which currently flies to five destinations - Mombasa, Diani, Eldoret, Kisumu and Malindi - from its primary hub at the Jomo Kenyatta International Airport (JKIA), is also operating a direct flight from Mombasa to Kisumu and Eldoret. And in a bid to diversify its product offering, the airline launched charter services in October 2020. 26

MAIN STORY global health authorities, as well as following guidelines provided by the World Health Organisation (WHO) and International Air Transport Association (IATA) to safeguard passengers’ well-being. The national carrier has partnered with United Kingdom-based logistics firm Skyports, to offer drone services as it seeks to diversify its income sources and cut reliance on passenger travel. The government is further providing financial support to the airline to help it implement its turnaround program and meet its financial obligations. Budget carrier Jambojet, which currently flies to five destinations - Mombasa, Diani, Eldoret, Kisumu and Malindi - from its primary hub at the Jomo Kenyatta International Airport (JKIA), is also operating a direct flight from Mombasa to Kisumu and Eldoret. And in a bid to diversify its product offering, the airline launched charter services in October 2020. Jambojet is further spreading its wings to North Kivu capital, Goma, in Eastern Democratic Republic of Congo, and the Coastal Island of Lamu, as part of its expansion program. Jambojet chairman Vincent Rague says: “Three years ago, we embarked on an expansion plan that would see us expand our network across the region as well as grow our fleet. We had to put on hold some of the plans due to the COVID-19 pandemic. We are excited to launch these two new routes, and look forward to what is to come.” The budget carrier is taking advantage of the huge opportunity the African market has to offer, and the rising demand for air connectivity in the region. “There is a growing demand for air transport across the continent, with IATA projecting that Africa will become one of the fastest growing aviation regions within the next 20 years, with an average annual expansion rate of almost 5 percent. We, as Jambojet, are keen to be part of this growth,” adds Mr Rague. African Airlines Association (AFRAA) in its African airlines’ performance updates for June 2021, notes that, in regard to intra-African connectivity, Mauritius continues to be the most impacted hub, with a reduction of 98 percent of possible connections to/from African airports compared to February 2020. The report adds that connectivity at Nairobi JKIA in June declined mainly due to schedule adjustments and frequency reduction by national carrier, Kenya Airways. In Kenya, the impact of the pandemic on the industry’s operations was significant as travel restrictions reduced the number of flights and frequencies to all destinations across the entire network. In 2020, Kenya Airways (KQ) uplifted 1.8 million passengers, a 65.7 percent drop from 2019. Approximately 70 percent of this number flew with the airline between January to March 2020, indicating how severely depressed demand was a result of the pandemic. The airline’s passenger revenue dropped to KSh 33,705 million from KSh 103,631 million in 2019, a 67.5 percent drop. In addition, Capacity of Available Seat Kilometres (ASKs) went down to 5.3 billion from 16.7 billion in 2019, with cabin factor declining to 65.3 percent, 11.7 percent lower than 2019. Cargo operations were the silver lining for Kenya Airways during the lockdown. The airline deployed cargo freighters and converted some of its wide body passenger aircraft to freight essential supplies across Africa, Asia, Europe and the Middle East. The airline experienced a prolonged recovery rate in its capacity owing to strict quarantine rules, global travel restrictions, and limited demand. The re-introduction of lockdowns to contain additional waves of COVID-19 infections in various countries, further impacted recovery. “Despite this challenging operating environment, we have ensured that our network plan has the flexibility to adapt as needed and respond to changes in demand once restrictions are lifted,” says Kenya Airways Group Managing Director and CEO Allan Kilavuka. The airline’s management further took a series of cost-cutting and cash conservation measures to ensure continued operations and KQ’s survival post the pandemic. “Some of these measures undertaken include constructive negotiations with lessors to restructure aircraft lease terms; austerity measures to reduce costs, including foregoing director’s remuneration; deferred salaries for staff; reducing and deferring capital expenditure; freezing recruitment and implementing voluntary leave options and staff redundancies,” KQ’s management states in a report. In response to the outbreak, Kenya Airways has put in place several measures to maintain the highest levels of safety, security and hygiene. These include: activation of crisis management protocols to proactively address situations as they arise and implement appropriate actions, and working closely with both local and 27

MAIN STORY Filling the entertainment void with Drive-In Concerts W Among Kenya’s seemingly endless box of mysteries, there are few more perplexing than the partying spirit. Kenyans love partying. hen COVID-19 struck, it threw the entertainment industry into a hodgepodge. The public health restrictions led to cancellation of festivals, concerts, closure of entertainment spots, and a ban on public gatherings. Many social events were either limited or put on hold in efforts to control community transmission of the virus. The industry was caught in a bind. Even the related entertainment sectors were significantly impacted. Movie productions were stopped, movie theatres closed, events, premieres and entire marketing and distribution campaigns were either postponed or cancelled. According to the World Economic Forum June 2020 White Paper, the COVID-19 pandemic has been characterized by dichotomies in the media, entertainment and culture industry. Digital consumption flourished as advertising dropped. Demand for quality, differentiated content grew as production of some media stopped altogether. “Many entertainment providers have faced challenges in meeting the high demand for entertainment during the crisis. Sports events, reality shows, and ongoing serials have stalled. Formats such as news and talk shows have shifted to new production setups to mitigate virus risk, and user-generated content has found an Many entertainment providers have faced challenges in meeting the high demand for entertainment during the crisis. Sports events, reality shows, and ongoing serials have stalled. 28

MAIN STORY affair before expanding it to other regional towns across Kenya. “Even with the pandemic, people, especially creatives and artists must find a way to survive; drive- in experience is not just an opportunity to entertain, but we’ve been able to put food on the table and sustain our families during these tough times,” the DJ added. Today, there are various installations of this concept with related names. We have Park and Tunes hosted in amusement parks around Nairobi, while Park and Vibe is hosted in Mombasa. All these concerts offer a safer environment for people to have some fun and show artist support. “While every venue and experience is different and there is always a risk, drive- in concert venues offer significantly better opportunities to watch the show at a safe distance from others compared to their traditional counterparts,” Martin Githinji, a regular Park and Chill concert fan said. Similar views were shared by Margaret Wafula, another Park and Chill fan, who has been working from home since March 2020. “Drive-in Concerts have been a great opportunity for people to break out of their bubble and feel more like themselves again after being confined, isolated, and cooped up in the house,” Ms. Wafula told Venture. These concerts can be staged safely and steps can be taken to keep people from leaving their cars and approaching the stage, or debilitated people from gathering in masses and contracting the virus, DJ Makena added. As 2021 slogs on and the COVID-19 pandemic containment measures remain uncertain, the entertainment industry will continue exploring creative ways of bringing fans and revellers an opportunity to be more present during live- streamed concerts. audience through TikTok, YouTube, Facebook, and more. Physical production has been most affected,” the report stated. However, the insatiable appetite for entertainment only triggered creative ammunition in the public. Across the country, revellers looking for outdoor fun began frequenting parks, going for hikes, mountain climbing, going for morning jogs, and game drives. But these outdoor fun activities were just but a temporary balm. They couldn’t replace the pub experience that Kenyans had grown attuned to, says Mkala Mwagesha, a veteran entertainment writer. “It’s good to work out. Its’s good to climb mountains. They relieve us from cabin fever. Yes, they will bring familiar feels to those who miss the full concert experience, but they do not deliver the feeling of connection and communion that pre-pandemic shows did,” Mwagesha said. “They quell the cravings but don’t deliver as much of a high. They are not as raucous. They are not as high octane. They are devoid of the serendipity experience you feel when you attend a physical experience,” he added. Then, several months after most of the lock-down restrictions had been relaxed, and a semblance of normalcy began emerging, artists and promoters hit on at least one viable alternative: the drive-in concert. The concept involves driving to a concert venue and having fun in the car (or sometimes right outside). Artists are increasingly turning to drive-in concerts as the concept has evolved. Kenya had its first drive-in experience when DJ Pierra Makena hosted Park and Chill in July 2020. Park and Chill is an outdoor event where revellers show up with their cars and have a good time enjoying great music mixes from the DJ. “I had my first gig at Nairobi Primary School. I had invited 50 friends and we had a lot of fun. I played music as they danced and made merry in their cars,” DJ Makena said. “In the subsequent weekend, we had a second event with over 100 people attending. At this point, the venue couldn’t accommodate all the cars, we had to turn other revellers away,” she said. As the popularity of this event surged, DJ Makena sought an alternative venue. She moved her events to Carnivore Simba Salon, where she got the smallest venue. Word would soon spread and in less than two months, she hosted the biggest concert ever and started charging gate fees. Owing to the popularity of this event, she made it a weekly DJ Pierra Makena, Founder Park and Chill. Artists are increasingly turning to drive-in concerts as the concept has evolved. Kenya had its first drive-in experience when DJ Pierra Makena hosted Park and Chill in July 2020. Park and Chill is an outdoor event where revellers show up with their cars and have a good time enjoying great music mixes from the DJ. 29

MAIN STORY World Rally Championship breathes life into Naivasha’s hospitality industry For the management of Hyriss Hotel in Naivasha, hosting the World Rally Championship was the turning point, having opened its doors during the coronavirus pandemic. T he hotel played host to most of the activities including the preparations for the Equator African Rally Championship (ARC), a precursor to the main WRC event. With nearly a two-year lull occasioned by the pandemic, hosting the event was a silver lining for the players’ in the sector with Hyriss manager Geoffrey Mariga confirming that all the 65 rooms at the hotel were booked during the event. “Hosting the event was a shot in the arm for many of us in the fledgling sector with the disease having hit us hard with layoffs and almost zero business,” he said during the interview. The seasoned hotelier said they were very strategic to remain a cut above the competitors and hired experienced staff to run the show prior to the event. “Previously, we were operating with skeleton staff, but on learning what was at stake, we summoned a meeting to deliberate on how best we could leverage the country hosting the event,” added Mr Mariga. Luckily, the hotel secured some crucial contracts with the race organisers, a feat that accorded them a quick financial turnaround. “We were able to extend the services beyond the Equator rally to the actual hosting of the event, we ensured that we remained consistent in terms of service delivery,” he said. Unlike other hotels that hiked prices to cash on the influx of visitors, their rates remained constant, and they intend to keep it that way despite the allure of quick bucks. Mr. Mariga disclosed that they will be partnering with other hotels to co- host the event come next year, when the rally will be staged again in the lakeside town of Naivasha. Also reaping the benefits of the rally is the management of Viewers Park hotel situated at the central business district with the proprietor, Mr George Nga’ng’a, terming the event a “master stroke.” The hotel owner said room occupancy was beyond capacity, coming at a time when they were struggling to stay afloat due to the effects of the coronavirus pandemic. “We were also able to enjoy lighted streets which was not the case before,” disclosed Mr Nga’ng’a. He admitted that the hotel was reeling from the “pandemic shock” after the government put stringent measures to help curb the spread of the disease. “Most of the hoteliers, in keeping in line with government directives, operated at bare >>> 30

MAIN STORY Moments captured during the WRC in June 2021. Unlike other hotels that hiked prices to cash on the influx of visitors, their rates remained constant, and they intend to keep it that way despite the allure of quick bucks. 31

MAIN STORY >>> managers with the requisite skills and the know-how to handle international guests. “The training was then cascaded down to the respective hotels and organisations, with at least 10,000 hospitality workers benefiting,” added Mr. Mwangi. Those who underwent training were also enlightened on COVID-19 adherence protocols in line with the standards set out by the motorsport organisers. To upscale the training, 40 trainers of trainers (TOTS) recently successfully graduated, their core mandate being to train their teams on food safety, a key component for international guests. “We are not leaving anything to chance as we prepare to give our guests the best the country has to offer in the next five years when we host the subsequent events,” he added. And hoteliers have not been left behind in cashing in on the profits gained during the event. One of the leading proprietors is putting up a 3,000 seater auditorium. An upbeat Mr. Mwangi said the investor Nakuru County Tourism Association Chairman David Mwangi, in a candid interview, talked of the sector’s recovery, courtesy of Kenya hosting the internationally acclaimed event. “Prior to the staging of the motorsport event, the sector was operating with a workforce of about 25 percent. The industry was on its knees with industry players at sixes and sevens,” said the chairman. Mr. Mwangi divulged that 70 per cent of workers had resumed duty, with a high number of them being recalled during the WRC event and the Equator rally. He termed the motorsport event a real boost not only on sector players, but also other stakeholders due to the trickle-down effect. Before the rally, the Association took workers on a series of trainings, including hospitality managers in readiness to host the championship. The purpose of the training, the chairman disclosed, was to equip senior minimum, but on the flipside, during the rally we were able to learn valuable lessons on how to control the disease,” added the proprietor. Speaking before the event, the WRC Safari Rally chief executive officer, Mr. Phineas Kimathi, said at least 10,000 international guests attended the event. He also disclosed that the iconic event was beamed live in at least 155 TVs with the audience being treated to a 25-hour quality production. Mr. Mwangi divulged that 70 per cent of workers had resumed duty, with a high number of them being recalled during the WRC event and the Equator rally. 32

MAIN STORY was able to acquire a 28 acre parcel of land near the main hotel, to specifically set up well designed tents for short stay guests. “The tent will be fully equipped with toilets and other social amenities and the target will be the WRC event that is coming up next year and subsequent years,” said the chairman. He was upbeat about the project with tents having proved to be popular with rally fans during the three-day event, each tent was averaging KSh 6,000 during the night stay, with the owners earning handsomely. Ms. Jane Kiongo had set up two tents after hiring the ground for KSh 1,500, with the gazebo going for KSh 6,500 per night. With hotels in Naivasha and surrounding areas fully booked, they cashed in on the opportunity. “Business is about taking risks…that is exactly what I did,” said Ms. Kiongo. “From the tenting experience, the hawkeyed investors were able to pick a lesson or two and that is what they want to cash in on during the next motorsport event albeit in a structured and hygienic manner,” added Mr Mwangi. Also put on the global map was the Naivasha based Presidential Pavilion built at the Kenya Wildlife Service Training Institute (KWSTI). The institute was the nerve centre of the event and enjoyed a rare spotlight both locally and internationally. While the WRC Safari Rally started in Nairobi, the competitive sections were around Naivasha, along with a power stage at Hell’s Gate National Park, where thousands of rally crazed fans made their way into the world renowned park. As galloping antelopes grazed in the fields, the zebras were foraging in the edges, making a dash to safety whenever a throaty rally car zoomed by adding to the thrills and palpable atmosphere. The buffaloes had retreated deep into the forested area as wildlife officers kept a keen eye on the wild animals known for being “temperamental” when their habitation is invaded Nevertheless, the park enjoyed credence in terms of free marketing with the number of local and international visitors having soared in the recent past, courtesy of the global sport. Private ranchers were almost smiling “Hotels in Naivasha, Gilgil were fully booked and there was a spill over to Elementaita and Nakuru,” he noted. Mr. Kinyanjui said as a county, they will be better prepared going forward to host the WRC event after the announcement by President Uhuru Kenyatta that Kenya will continue hosting the sport until 2026. The governor encouraged players in the hospitality industry to seize the lifetime opportunity for domestic tourism and hospitality growth that they can tap into ahead of the WRC Safari Rally 2022. Mr. Mwangi said players in the hotel industry will liaise with the government on how to ferry rally fans to Naivasha using the rail to avoid the heavy traffic jam. “We shall encourage the use of trains going by past experience. That way, we shall be able to avoid the heavy snarl-up that was witnessed during the WRC event, it is doable,” he exuded confidence. Motorists were stuck in traffic jams for hours as some of the roads were closed, suffering inconveniences, a fact that the Nakuru Governor alluded to while talking about the hit and misses during the event. From the tenting experience, the hawkeyed investors were able to pick a lesson or two and that is what they want to cash in on during the next motorsport event albeit in a structured and hygienic manner, added Mr Mwangi. all the way to the bank after part of their sanctuaries were used during the event. “Previously we were not as popular, but since the staging of the rallying competition, our fortunes have changed,” said a ranch owner. Nakuru Governor Lee Kinyanjui described hosting the rally after 19 years as a “learning experience for Nakuru County” especially on traffic management. “Nakuru will continue to upgrade the necessary infrastructure to enhance visitors’ experience,” he said. 33

MAIN STORY Bars and restaurants strive to weather pandemic as new trends emerge There was a collective sigh of relief amongst stakeholders in the hospitality industry on August 3, 2021. At a press conference with representatives from associations in the sector, Tourism and Wildlife Cabinet Secretary Najib Balala handed restaurants and bars a lifeline after months of closing early. I t was, simply: “Restaurants must close by 9pm. Everyone must leave by 8.30pm.” This meant more hours to operate and an opportunity to make more profits. As if by premonition of what would follow from law enforcers after the announcement, the CS clarified: “I understand some enforcement officers will go to restaurants and force them to close down at 7p.m. I want to make it very clear that 9p.m is when everything must be shut down. 8.30p.m you stop serving, 9p.m everybody is out.” Further, Mr Balala launched a revised set of health and safety protocols for the sector and advocated for self-regulation “since there has been a lot of confusion when it comes to hospitality establishments.” He tasked the Tourism Regulatory Authority with being the lead in self-regulation and asked the Authority to work with other agencies in ensuring that is done successfully. The sigh of relief in the industry was, however, short-lived. Barely a week later, the confusion the CS had tried to clarify was back and this time there was evidence on video. Two uniformed policemen stormed Spasso Bar in the upmarket Karen neighbourhood claiming 34

MAIN STORY Officials of the Pubs, Entertainment and Restaurants Association of Kenya (Perak) would later state that the harassment has continued across the country and identified several hotspots. They are: Karen, Lang’ata, Eastlands, and Westlands in Nairobi; Free Area, Bahati, and Kiamunyi in Nakuru; Kisumu, Kiambu Town, Malindi and Watamu, Murang’a, Diani, Nyandarua, Kakamega, and Nandi. “In all these places, our members report that the police have taken to raiding the restaurants way ahead of the prescribed closing time of 9p.m and taking away high-end alcohol, which they claim to be taking away as evidence of breach of curfew hours,” said Perak Nairobi chairman Frank Mbogo. The challenges faced by restaurant operators have been the story of the sector during the pandemic, with devastating effects. Statistics differ depending on the source, but by most accounts, more than 15,000 bars have been closed down since the onset of the pandemic. The first staggering blow to the industry was dealt three weeks after the first case of COVID-19 was announced when the government ordered the closure of all eateries, bars, and entertainment spots around the country. For an operator, closure means sending at least five people home as every establishment employs a manager, a supervisor and at least three waiters. The effect of closing 15,000 establishments is therefore rendering at least 75,000 While Mr Balala’s statement gave bar and restaurant operators hope that they would be allowed to operate past 9p.m, it has proved difficult to have that implemented as police have largely stuck to the guidelines issued by President Kenyatta. that the establishment had breached the law by being open and raided the bar area. They were recorded on video telling the operator to report them to the authorities as they selected a variety of high-end drinks, put them in a crate and left. Women enjoying a drink in a bar. >>> While Mr Balala’s statement gave bar and restaurant operators hope that they would be allowed to operate past 9p.m, it has proved difficult to have that implemented as police have largely stuck to the guidelines issued by President Kenyatta. 35

MAIN STORY >>> people jobless, with the effect extending to their dependants. There has been a raft of measures for the sector that operators have had to learn in order to ride out the storm. The pandemic has also forced member associations to be more active and to engage the authorities more as they fight to get the sector back on its feet. During the period that bars and restaurants were closed and later reopened to operate on limited hours, as they lobbied for an extension of the time together with vaccination of their employees under frontline workers, their customers were changing how they socialized and celebrated life. People were ordering drinks from online platforms, meeting in smaller groups and drinking more at home, and the sector was turning with the tide, adjusting to the new consumption trends. The results have been evident in the books of East African Breweries Limited, which reported 22 percent growth in the consumption of mainstream spirits and 32 percent in premium spirits. Overall, the consumption of spirits over the past year increased by 24 percent. Mainstream spirits are the likes of Gilbey’s Dry Gin, Smirnoff Vodka, Chrome Vodka and Black and White whisky, while premium spirits are the slightly more expensive range of Johnnie Walker whiskeys, Tanqueray Gin and Ketel One. “People are drinking better,” said Ms. Jane Karuku, the EABL Group Managing Director and Chief Executive Officer, as she announced the latest results. “We call it drinking better because we are consuming our brands in smaller groups. So, if for example, you have a family or a few friends in your house, you’re more likely to buy a better or more expensive drink than you used to do before.” As they drank better, consumers also realised that spirits cost more in bars, restaurants and nightclubs, because the operators have to pay for the staff, music and the lights that create the ambience. Without the need for all these, wines and spirits shops, online outlets and supermarkets offer more value for money to consumers. Entrepreneurs have also caught on, and there has been an explosion in the Couple sharing a meal in a bar and restaurant. e-commerce outlets in addition to setting up their own. Still, nothing beats meeting up with friends in your favourite restaurant or pub and listening to music, dancing and having a good time. The hospitality sector associations remain hopeful that they will eventually go back to operating for longer and at full capacity. For Perak and the Bar, Hotel and Liquor Traders Association (Bahlita), hope lies in increased vaccination and in the action they have seen taken in other sectors, such as transport, where Public Service Vehicles are now operating at full capacity. “We are of the opinion that we need to start having the national debate on the complete reopening of the economy. We have seen this already in the matatu sector and the enforcement is ongoing,” says Mr. Boniface Gachoka, the secretary general of Bahlita. His argument is that: “Most businesses operate the same way, taking loans from the same banks and repaying them the same way, and it’s time we began talking about how all Kenyans can be enabled to resume operating normally but safely.” People are drinking better, said Ms. Jane Karuku, the EABL Group Managing Director and Chief Executive Officer, as she announced the latest results. We call it drinking better because we are consuming our brands in smaller groups. number of wines and spirits shops. In Nairobi, the County Liquor Board reported that 1,648 liquor stores were opened in the capital city in 2020, about four times the 440 that were opened in 2019. The alcoholic beverages industry has responded to this trend by coming up with more canned beers, one-way glass bottles for takeaway – known as cash-and-carry in industry parlance – and established partnerships with 36

MAIN STORY Upgraded Isiolo - Moyale Road opening up hidden treasures of the North The road is turning promises of development into reality in a starkly beautiful land, where banditry, misery and poverty flourish. T he Isiolo-Moyale Road connects the towns of Isiolo, Marsabit and Moyale and is a component of the Lamu Port-South Sudan-Ethiopia Transport (Lapsset) Corridor project, connecting Kenya to Ethiopia, its neighbour to the north. The A2 Road was launched by former President Mwai Kibaki and completed under President Uhuru Kenyatta’s regime, and is now contributing immensely to businesses and development in Isiolo and Marsabit counties. The road is composed of three segments, Merille River - Marsabit, Marsabit - Turbi, and Turbi - Moyale, each segment being 121km long. Before tarmacking of the entire stretch from Isiolo – Moyale, which is approximately 505km long, it took three days to travel from Nairobi to Moyale and vice versa, but this has reduced to between 10 -12 hours. 37

MAIN STORY cross-border trade between Kenya and Ethiopia. “Already we have seen a lot of economic activities going on in the county because of that highway which has been completed. Today, we have the best road in the country connecting Nairobi to Addis Ababa in Ethiopia,” says Marsabit County Governor Mohamed Mohamud Ali. The value of land in some parts of the region is on an upward trajectory; new buildings and hotels are coming up especially in Marsabit and Moyale towns, and the county administration is encouraging investors to set-up businesses since the area has opened up. more small trading centres mushrooming on the route. With the completion of the highway, the road has opened up the region to investments and greatly improved connectivity as well as lowered the costs of transporting goods and services in the region. This is in addition to boosting At the time, no public transport company was operating on the route which required travellers to have a lot of patience, energy and money. The route was mostly plied by lorries and other four-wheel drive vehicles because of its unmotorable terrain. In most cases, from Marsabit towards Nairobi, the lorries carried cattle or goats and sheep. People travelled perched on top of trucks travelling northwards enduring the blistering sun. The few motorists on the route experienced breakdowns of all sorts, from tyre bursts or cracked wheels and petrol tanks to fan belt troubles, overturned lorries, and getting stuck in the mud during the rainy season. Until the tarmacking of the road, the only small trading centres after Isiolo were Archer’s Post, Merille, Laisamis, Log-logo, Karare then Marsabit Town. And between Marsabit and Moyale towns, small trading centres like Choba, Bubisa, Turbi, Sololo existed. Today, there are Already we have seen a lot of economic activities going on in the county because of that highway which has been completed. Today, we have the best road in the country connecting Nairobi to Addis Ababa in Ethiopia, says Marsabit County Governor Mohamed Mohamud Ali. Moyale Town The town has various economic activities with micro and small enterprises dominating the border town. Most retail in basic goods and services such as electronic shops, clothing and beauty shops, groceries, hardware shops, Loiyangalani Village in Kenya. Loiyangalani is a small town located on the southeastern coast of Lake Turkana in Kenya. 38

MAIN STORY positioning itself to reap from its diverse cultural heritage and abundant historical and geographical attractions through tailored investment in tourism. The region hosts at least 14 indigenous ethnic groups, has rich and diverse cultures and heritage, historical and geographical sites, iconic wildlife species and the biggest virgin landmass in a single geographical boundary, positioning the region to benefit from the tourism potential. Marsabit is also considered the ‘Cradle of Mankind’ (home of Koobi Fora), a world-renowned region of archaeological sites. This is where archaeologists discovered the largest ever collection of well-preserved hominid fossils dating between 1.3 and 2.1 million years old. Lake Turkana, is another major attraction site. The lake is the largest desert lake in the world, measuring about 5,000 square kilometres. The lake, with an estimated 500km long open shoreline with pristine beaches, presents an enormous and unexploited tourism potential besides being a critical source of livelihood for communities in the region for centuries. A woman from the Samburu community showcasing her beadwork. butcheries and motorcycle spare parts. Others are livestock markets, petrol stations, water vending machines, restaurants and cyber cafes. The town is also getting a facelift from new buildings being erected, and is expected with time to be an excellent staycation destination. Fatuma Nur Mumin, a business woman, is one of those who are taking advantage of the new-look town. The mother of four has been operating a retail shop for the last 30 years. She is currently putting up a four-storey building (a guest house) in her parcel of land adjacent to the highway. “The new road has opened up Moyale Town, we are now well connected to the rest of Kenya and we are taking advantage of the infrastructure development,” she says. The town further boasts of its first Islamic Shariah-compliant swimming and recreational facility. The ‘Wako Resort’ has separate swimming areas for men, women and children, with an ambient restaurant and an upcoming children’s playground. “We started operations in August 2020 and even though we are still developing the facility, the number of customers visiting the place is on the upright trajectory,” says Adan Oshe, proprietor - Wako Resort. Yakub Maalim Omar, a pharmacist who has been in the trade for the past The new road has opened up Moyale Town, we are now well connected to the rest of Kenya and we are taking advantage of the infrastructure development, says business woman, Fatuma Nur Mumin Hotels At the inception of the devolved system of governance, there was no authoritative data on tourism arrivals, employment records, hotel occupancy rates, revenues generated among other hospitality related issues, since the northern tourism circuit had not been fully connected to other national tourist circuits. Although hotels in the region are not strictly classified, there are 13 facilities which stand out, but with varied standards and bed capacity. These hotels include Marsabit Lodge, Jirime Resort, Nomads Hotel, Goff Hotel, Bonkole Resort, Chicho Hotel, Desert Museum Villas, Palm Shade Hotel, Oasis Lodge, Tilamari Lodge, Malaba Resort, Kalacha Bandas, and Al Yusra Hotel. In northern Kenya, there is so much splendour hidden behind the insecurity. As a result of this, one can easily think that part of the country has little to offer in terms of hospitality, but its diverse natural features, terrain, its people – who have unique cultures, make the region splendid. 17 years, says the major challenge in the pharmaceutical sector for many years in the region has been poor infrastructure. “In Moyale, we are about 850km from Nairobi and that has been a major challenge in terms of logistics and supply of pharmaceutical products. However, with a good road network from Nairobi - Moyale, this has eased transport and movement of goods,” he says. A recent market insight report by investment firm Cytonn indicates that Northern Kenya recorded growth in the number of hotel beds at 33.7 percent Compound Annual Growth Rate (CAGR) from 298 beds in 2011 to approximately 1,300 beds in 2016, stimulated by an increasing number of NGOs in the region and improving infrastructure specifically the Lapsset project. Tourism attractions and activities Currently, the region is in the process of 39

KCBNEWS FOUNDATION KCB Foundation helping youth create jobs in the hospitality industry Betty Kainyu, KCB Foundation Beneficiary. T Many stories will be told about businesses that started and thrived during the pandemic. One such story that cannot not go untold is that of Betty Kainyu. Circumstances had forced Betty to start her business earlier in the year. She had just had her second-born baby and was out of work as an insurance sales person. Her husband, also in the same industry, was facing challenges at work due to the reduced economic activity. However, Betty did not jump into the deep end of the hospitality sector completely blind. Cooking had always been her passion so much so that friends and family would he young mother of two beat the odds in 2020 by starting her catering business right in the middle of the COVID-19 pandemic. Most businesses, particularly those in the hospitality industry, were going through operational challenges, given the restrictions imposed by the Ministry of Health to limit the spread of the virus. 40

TRENDS&INTEL KCBNEWS Betty Kainyu, preparing food at her restaurant. 2jiajiri has five key pillars through which the youth are trained, and supported to start their own businesses. One of these is the domestic services pillar which is solely focused on the hospitality sector, having created 181 businesses so far. This is the pillar under which Betty received her vocational training. It hosts a number of sub-sectors including food and beverage, food production and service, baking technology, housekeeping and laundry, and catering and accommodation. “Under vocational training, the youth are technically skilled in their area of specialisation followed by setting up their enterprises and a comprehensive business development training comprising of legal, marketing and financial management support for businesses established by the beneficiaries,” notes KCB Foundation Acting Chief of Party Caroline Wanjeri. The Foundation then walks the journey with the young businesses until they become bankable and can secure business services from the bank. “So far, the Foundation has invested a total of KSh. 44.8 million in the sector pay her to cook for them from the comfort of her home. One day while watching television, she found out about scholarships offered in catering among other trades by KCB Foundation’s 2jiajiri programme. She applied and was accepted for a six-month course at St. Kizito Vocational Training Institute in Nairobi. 2jiajiri is a Swahili word that means “let us employ ourselves”, and is KCB Foundation’s enterprise development programme that skills and up-skills 10,000 youth annually by providing them with scholarships for vocational training in various trades in readiness for self- employment. Established in 2016, the programme aims to address the high rate of unemployment and is anchored on KCB Foundation’s shared value ethos; focused on solving societal challenges while generating value for the bank, especially in enterprise development. The rationale for providing the youth with vocational training is that the skills they acquire are a doorway to self- empowerment through self-employment, instead of waiting to be employed. Kenya has one of the biggest informal One day while watching television, she found out about scholarships offered in catering among other trades by KCB Foundation’s 2jiajiri programme. She applied and was accepted for a six-month course at St. Kizito Vocational Training Institute in Nairobi. labour markets in Africa, attributed to the inability of the formal sector to absorb the huge number of job seekers given the country’s youthful population. The Kenya National Bureau of Statistics (KNBS) – 2020 Economic Survey, reveals that 767,900 (90 percent) jobs were created in the informal sector last year. The total number of jobs created was 846,300. The same report notes that 5.3 million youth were jobless. >>> 41

TRENDS&INTEL KCBNEWS >>> opportunities, and surviving. On her part, Betty turned to marketing her products through the medium she knows best – WhatsApp. She also depends on referrals and moving door-to-door. “I have employed three ladies who go marketing the food in office complexes and other businesses. So far, the response has been quite good,” she says. Though she doesn’t disclose her sales figures, Betty says, rather modestly, that she’s now able to pay her bills. She looks forward to a fruitful collaboration with KCB Foundation in realising her ambition of opening a string of world class restaurants by tapping into the Foundation’s Business Development Support services as well as seeking financing to expand her business. also issued tenders for the supply of PPEs to beneficiaries under the tailoring subsector to help them stay afloat amidst the harsh business environment. Additionally, the Foundation restructured loans to allow moratoriums of three to six months to reduce the financial burden to the beneficiaries during the pandemic with authorisation and support from the bank. This allowed performing loans reasonable time to re-organise and recover against their loan obligations. The period also saw the Foundation intensify business development services to help small businesses quickly adapt to the changing environment, such as online marketing and cashless transactions, identifying new through skills training and issuance of loans to set-up the businesses,” adds Ms. Wanjeri. Just like other players in the sector, the KCB Foundation beneficiaries were affected by the government- imposed directives such as closure of eateries which led to shrinking operations including the closure of some businesses. Additionally, there was a surge in poor loan repayment as those with active loans were unable to meet their repayment obligations, resulting in the facilities going into arrears. As such, the Foundation stepped in to help the businesses to survive through several interventions, including provision of Personal Protective Equipment (PPE) and sanitary equipment, i.e. hand washing stations and sanitiser. It Betty Kainyu serving a customer. 42

KCBNEWS HOSPITALITY Local clientele keeping Ole Sereni open for business COVID-19 has caused untold disruption in every economic sector across the globe, with hospitality being among the hardest hit. The remedies used to protect people’s health such as travel bans, quarantine and social distancing, have however not made things easier for the sector, instead, they created untold challenges for the hotel industry. 43

TRENDS&INTEL KCBNEWS A n article by McKinsey and Company titled “Reimagining the $9 trillion tourism economy-what will it take?” says it may take up to 2024 for tourism spending to return to pre-crisis levels. Further, it says this upheaval may put at least 120 million jobs in the sector at risk. However, as vaccination awareness and drives surge forward and restrictions ease, hospitality industry players are cautiously optimistic that the end of the pandemic is on the horizon, which means the return of a favourable business environment. “We have not come out of survival mode, we are still trying to stay afloat. We only hope with the vaccination drives worldwide that there will be improvement and maybe a year or two down the line things will get back to what they were pre-covid, fingers crossed,” says J.B Singh, Group Chief Financial Officer Ole Sereni hotel. Since the start of the pandemic, hoteliers have been counting massive losses while others considered total shutdown having received 100 per cent cancellations. Five-star luxury hotel Emara Ole Sereni, is among many hotels that have had their business turned upside down by the outbreak which has shaken the hospitality industry. Construction of the five-star hotel began in 2015 and was completed towards the end of 201 and crowned with a soft opening. By March 2020, the hotel was fully functional with huge bookings. But things quickly changed when the first cases of COVID-19 were announced in the country. “Business was looking rosy, we were quite busy and we had huge, good bookings. But within a span of seven days, between 16th March and 22nd March, we had cancellation of business worth $2 million dollars. By 24th March, the facility was practically empty and on 25th March we closed down both Emara and 254 Ole Sereni. So in 10 days, we went from a bustling place to a completely empty hotel. That is the impact of COVID-19,” says Mr. Singh. It was a devastating experience. The hotel had to refund its clients and declare redundancies as well as reduce staff from 400 to 200 employees. “It was a question of survival,” he said about the layoffs. “Our industry is basically capital and labour intensive. We already had this huge facility created, constructed and ready for business, but with no guests. Keeping 400 staff without any earnings is difficult, so, we took a hard call and had to undergo a redundancy exercise around May-June. It was painful,” adds the group CFO. When government restrictions started easing up, Mr. Singh says the two hotels started opening up and rebuilding slowly. And to attract business, because there was hardly any and everyone was competing for the same pie, they decided to market the four-star 254 Ole Sereni We have not come out of survival mode, we are still trying to stay afloat. We only hope with the vaccination drives worldwide that there will be improvement and maybe a year or two down the line things will get back to what they were pre-covid, fingers crossed, says J.B Singh, Group Chief Financial Officer Ole Sereni hotel. J.B Singh, Group Chief Financial Officer Ole Sereni hotel. 44

KCBNEWS is a 15 storey five-star luxury hotel that caters to the MICE (meetings, incentives, conferences and exhibitions) market. The idea behind setting up such a facility was to provide businesses with big spaces for meetings and residential conferences. The hotel consists of three basement car parks which can accommodate up to 450 cars, with an additional outside parking which can accommodate 100 cars. The main ballroom, depending on the seating configuration, can sit between 600 and 1,000 people. There are also seven boardrooms, executive meeting rooms, restaurants, bars and a banquet facility. While Emara Ole Sereni did not get to enjoy a grand opening, Mr. Singh is confident that soon, in post COVID-19 times, it will get to showcase its potential in all its grandeur. “You know, we have a positive mindset, we are not going to lie down and wait for a doomsday prediction. I’m very positive that in a year or two down the line, we will overcome COVID-19, it is not going to be permanent. And once we overcome, we will be hitting the ground running, there is no doubt about that because of the kind of facility we have to offer, we’re in the top league,” he says. which is growing, and that has given us the confidence and the boost to keep on surviving.” He says the hotels are making enough to pay employees and other expenses. Fortunately, its banking partner, KCB Bank, has also given them a moratorium on a loan. KCB Bank and Ole Sereni’s relationship goes back almost 10 years ago when KCB Bank extended a loan to fund 254 Ole Sereni’s construction. Since 2011, the two companies have been partners in the growth of the two luxury hotels. The loan was completely paid off towards the end of 2017 and when plans to construct Emara Ole Sereni came up, they again approached KCB Bank and got funding. “Emara Ole Sereni has a grand design in its detailing and no costs were spared. In most of the public areas in the hotel, you will find huge Italian marble. The marble was sourced from Italy and shipped to Sri Lanka for cutting and polishing then it came back here (Kenya). Fixing the marble is a highly skilled job so we had to source for artisans and skilled labor from India who do this kind of construction,” says the group CFO. Emara Ole Sereni, situated on the periphery of the Nairobi National Park, as a three-star facility to cater to the mid-range requirement of guests. With the fourth COVID-19 wave, it’s difficult to predict when the hospitality sector will fully bounce back as numerous countries still carry travel bans, there are those that have still closed their borders, and those that are open have restrictions that require travelers to be fully vaccinated, have a negative COVID-19 test and quarantine upon arrival. Because of these travel bans, Ole Sereni’s clientele currently consists of local guests. “Today, majority of our business is local driven. We were surprised how resilient our local business population here is. If I can give you a rough estimate, earlier, our business was in the range of 60-40, 60 in favour of international business travels and 40 from locals. Now, it’s almost 80 to 90% local whereas business from international clientele is just a trickle,” he says. Mr. Singh continues: “We are getting a lot of local business and that’s why we are surviving. During weekends, people prefer coming out to have drink or stay overnight, you know, as a change, and that has caught on. Kenya, fortunately, has a big middle income population 45

TRENDS&INTEL KCBNEWS HOSPITALITY Royal Tulip Canaan Nairobi: Morphing from luxury hotel to quarantine facility at onset of COVID-19 “International standards, local flavours”. A pandemic, the hotel’s Corporate Social Responsibility (CSR) efforts were recognised by the Ministry of Health through certificates. The facility also received recognition from NSF - an American product testing, inspection and certification organisation - based in Ann Arbor, Michigan. The Royal Tulip brand was created in 2006, and now has 20 hotels in its collection, based in 14 different destinations, in the heart of extraordinary locations, in city centres or in business districts. Since the hotel adapted its CSR to respond to the pandemic, it never closed during the COVID-19 crisis. “When COVID-19 was at the peak, we served Ministry of Health workers, various hospital staff and we accommodated repatriation flight passengers and crews, although it took seven months to see business growth,” says Mr. Kumar. The hotel has been on top of quarantine facilities in Kenya, which has helped the facility to recover quickly. But that is not all, Royal Tulip Canaan Nairobi is 4-star hotel offering 94 tasteful rooms of different categories, and facilities such as a spa and health club, heated swimming pool, s the COVID-19 pandemic descended on the country unabated in 2020 and the number of cases soared, one hotel in Nairobi went against the wave of closures to remain open during the period. Royal Tulip Canaan Nairobi quickly adapted to the situation to keep its doors open as a restaurant offering the much needed quarantine facilities as the Ministry of Health worked day and night to prevent the spread of the disease at community level. Before the pandemic, the establishment had set up itself as a modern, spacious, and well-equipped hotel with an array of contemporary amenities located in Kilimani, Hurlingham area; a gem worth exploring. “Our slogan is international standards, local flavours,” says Mr Bhupendra Kumar, the general manager Royal Tulip Canaan Nairobi. The hotel is part of the renowned Louvre Hotels Group, a French brand with a portfolio that now includes more than 1,600 hotels in 54 countries, and a subsidiary of Jin Jiang International Holdings Co. Ltd, the world’s second largest hotel group. In 2020, at the onset of the COVID-19 46

KCBNEWS Royal Tulip Hotel. conferencing facilities and a plethora of food and beverage offerings. The hotel is within easy reach of various tourist attractions as well as corporate offices, shopping mall (Yaya Centre), dining and entertainment centres. The general manager points out that at the onset of the pandemic, the management changed strategies and action plans as per the situation. They quickly implemented government protocols and guidelines regarding the control of COVID-19. “We improved our safety and hygiene standards. Listed our hotel on Ministry of Health quarantine facilities. I believe this unsustainable model is not for long term. We have 47

TRENDS&INTEL KCBNEWS were optimistic about a strong recovery of the sector once the pandemic is contained. Mr. Kumar notes that the government has played a very supportive role towards the hospitality industry. The government announced a stimulus fund to revamp the industry. “There were many Zoom meetings organised by the Kenya Tourism Board (KTB) on how to survive and revive our operations during COVID-19. Hotels were given city county health support in terms of sensitisation and hygiene standards, and hotels workers were given priority as front line warriors to get vaccinated,” says the Royal Tulip Canaan general manager. The hotel management is all aware of the health and economic crisis that the industry is experiening around the world, and as Mr. Kumar puts it, they are looking for opportunities in this crisis. They are looking at hospitality through the lenses of the new normal. “We are configuring our products; that includes meal plans, cancellation policies, and added values, reviewing rate structures, boosting direct sales channels, and better revenue management,” he says. The Royal Tulip Canaan Nairobi combines luxury, elegance and personalised services. The facility appeals to exceptional stays, combining international standards and local flavours. A stay at the hotel is an opportunity to spend an unforgettable moment between nature and elegance. Hopes of swinging back to full luxury operations are high since the hotel is among top branded hotels in Kenya, and has been acknowledged by local authorities and international hospitality organisations for its efforts and services. The facility has been in the market for the last five years, gaining several milestones. Mr Bhupendra Kumar, General Manager Royal Tulip Canaan Nairobi. already passed the hard time. If we stick to our goals, we will survive and pass this crises,” he says. Mr. Kumar is confident that the hospitality industry will bounce back in recovery in coming years. A survey conducted by the Central Bank of Kenya (CBK) - to assess the extent of recovery in the hotels, particularly with the reopening of the economy and continued implementation of the government’s measures to mitigate effects of COVID-19 - found that on average, under the prevailing conditions, 50 percent of hotels expect to attain normal (pre-COVID-19) levels of operation between late 2020 and 2021. Despite the recent resurgence in COVID-19 infections, respondents There were many Zoom meetings organised by the Kenya Tourism Board (KTB) on how to survive and revive our operations during COVID-19. Hotels were given city county health support in terms of sensitisation and hygiene standards, and hotels workers were given priority as front line warriors to get vaccinated, says Mr Bhupendra Kumar, the general manager Royal Tulip Canaan Nairobi. 48

KCBNEWS HOSPITALITY Mövenpick Hotel & Residences Nairobi, a perfect spot to view the city B The hotel has implemented the AllSafe programme, a set of rigorous measures designed to protect and reassure guests that safety measures are adhered to at the facility, to prevent the spread of ways of staying above the waters such as being on the government’s COVID-19 quarantine list. Those who choose the facility as their preferred isolation centre are looked after very well, and because of the facility’s hospitality, it eases the burden of having to isolate and is the best place to quarantine if you have to do so. Further, the hotel became AllSafe certified, meaning that the facility prioritised health and safety, and elevated cleanliness protocols to protect their guests during the pandemic. Mövenpick Hotel & Residences situated in Westlands, Nairobi, has been offering a perfect spot to view the city since 2018 when it was opened. The hotel has the best panoramic views of the city. At the facility, one can dine in the revolving restaurant, enjoy Sunday brunch, and enjoy delicious international flavours. When the pandemic hit, affecting the hospitality industry, the hotel adapted COVID-19. 49 49

TRENDS&INTEL KCBNEWS Michael Flint, Mövenpick Hotel & Residences General Manager. Mövenpick Hotel & Residences General Manager Michael Flint says what they have been also endeavouring to do is to make the facility a destination to unwind and enjoy incredible cuisines and services. “It’s been an exciting ride through lockdowns, through COVID-19 protocols, trying to get some business both in the rooms and other amenities including food and beverages. In regard to events, we’re doing small weddings and a few business meetings as well. In everything we do, we adhere to COVID-19 protocols,” says Mr. Flint. The hotel has a superb gym on the 22nd floor, with cardio equipment, free weights and panoramic city views. The spa features a wellness menu with massages, facials, body polishes and beauty treatments. The hospitality industry was the worst hit by the COVID-19 pandemic as it contracted by 9.3 percent in the first quarter of 2020 and by 83.3 percent in the second quarter, compared to a growth of 12.1 percent in the second quarter of 2019, according to official government data. “I’m proud to say that we mobilised very quickly after the lockdown was lifted. We had some very creative ways of looking after our internal guests. We have long stay guests here in our 54 apartments. So we had to make sure that even though we were going through a lockdown, we were still meeting restaurant are managed by Chef Aris Athanasiou who has over 26 years’ of experience in some of the world’s leading hotels in Europe, Asia and Africa. Chef Aris has worked with Michelin-star chefs Alain Ducase, Martin Knghasser and Doxis Bekris, and his experience and travel combined with his traditional past inspire him to create unique flavours for his guests. The “Baluba Restaurant” offers delicious international flavours. The Sunday brunch at Baluba is a delightful experience for the entire family. The restaurant makes Sundays more interesting, from 12.30p.m to 4p.m, as guests indulge in scrumptious delicacies complete with live cooking and carving stations. For guests who are on a diet, the restaurant’s ‘Go Healthy’ selection offers healthy vitality juice blends to keep them up to speed. The restaurant’s dessert corner is Mövenpick Hotel & Residences General Manager Michael Flint says what they have been also endeavouring to do is to make the facility a destination to unwind and enjoy incredible cuisines and services. their expectations,” says the general manager. The hotel has more to offer such as “The View”, a 360-degree revolving restaurant, located on the 24th floor and has the best view of the city as well as a variety of Mediterranean and brand signature dishes from Switzerland. Culinary operations at the 50

KCB Venture - Hospitality Surviving the Pandemic

KCB Venture - Hospitality Surviving the Pandemic

Presentation Transcript

Surviving the Storm

Surviving

Surviving the Pandemic; Mental Health Issues

Surviving the worst!

Surviving the Storm

Surviving the supermarket

Surviving the Internet

Surviving the applewhites

Surviving the Applewhites

Surviving the Void

Surviving the Desert

The venture

Surviving the Viva

The KCB Brand Heritage; Regional Agenda

Surviving The Holocaust

KCB Presentation

Surviving the Titanic

Surviving the Applewhites

Surviving the HSPE

Mohari Hospitality- in Response to the Covid-19 Pandemic