Big meetings drive hotel boom in Kigali

Published by Théophile Niyitegeka
On 28 December 2016 saa 12:58
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Hospitality, services hedge against unreliable commodity markets.

In the past few years, Rwanda has risen to become among the leading foreign direct investment (FDI) destinations in the Great Lakes, and even beyond.

This is particularly true when one considers a number of the biggest international hotel chains which have recently opened their doors: Kigali Radisson Blu, Serena, Park Inn, Sheraton, Zinc, Protea, and Golden Tulip among others.

All these hotel hotel brands are establishing in Rwanda with the aim of grabbing a slice of the regional conferencing pie as the country positions itself to make meetings, incentives, conferences and exhibitions (MICE) the base of tourism industry.

Demand for hotel rooms in Kigali has been driven by spectacular rise of Rwanda’s tourism industry in the recent past. Now with more than one million tourist arrivals each year, Rwanda’s tourism sector is presently the leading foreign exchange earner, raking in more than $300 million per year. According to Rwanda Development Board (RDB), Rwanda hosted 25,932 conference visitors last year, compared to 19,085 in 2014, indicating that the longterm outlook to the country’s MICE tourism segment is now very vibrant. Last year alone, MICE tourism earned Rwanda $29,million in revenues.

The booming MICE sector is a resounding vote of confidence in the reforms the country has been undertaking over the years in its bid to revitalise an economy that almost everybody believed would be in limbo for decades following the atrocious 1994 genocide against the Tutsi. It’s currently evident that Rwanda’s reforms on Ease of Doing Business are bearing fruit for both local and foreign investors.

With commodities becoming increasingly unreliable and unpredictable, Rwanda now can focus on the hospitality and service resource industry to spur its economy in this unpredictable times. A vibrant hospitality sector is expected to bring some level of stability to the Franc as more dollars are expected to come into the market.

Rwanda’s MICE ranking improves

The booming hospitality sector has ultimately improved Rwanda’s ranking in MICE tourism in Africa. The country presently ranks 7th in the continent, according to the International Congress and Convention Association’s 2015 report, which was released this year in May.

"We are proud of Rwanda’s entry into the top 10 host countries for major events in the continent," said Rwanda Convention Bureau chief Frank Murangwa. "As we are ramping up our MICE strategy... we look forward to attracting more largescale events and climbing farther up the ICCA rankings."

Each year, ICCA gathers data from 1,000 member companies and organisations from 90 countries worldwide and produces a report ranking meetings held on regular basis with over 50 delegates and rotating between at least three countries.

In 2015, Rwanda hosted 13 associations meetings and a total of 27 major conferences and events, including the 84th Interpol General Assembly, Transform Africa Summit, and the 7th East African Petroleum Conference & Exhibition. This year so far has seen the country welcoming several International conference and events. The African Nations Championship (CHAN) attracted over 15, 000 visitors while the World Economic Forum was attended by an estimated 2,500 delegates, according to RDB. In September, Rwanda hosted another big conference, Global Africa Investment Summit which also attracted more than 1,000 delegates.

The Africa Hotel Investment Forum took place in October and welcomed more than 700 delegates from over 45 countries across the world.

But even as Rwanda’s hospitality sector rides the wave of MICE industry, there is still high demand for high-end accommodation, driven by several highprofile international conferences now happening, and is expected in the future. This deficiency was laid bare when Rwanda hosted the World Economic Forum on Africa. According to RDB, the country hosted around 1,500 guests which stretched the hospitality industry to upper limit. All high-end hotels were full booked, forcing some guests to stay into average facilities, not what Rwanda wanted to project.

Seth Tugume, the head of Rwanda’s Hotels Association, confirms that hotel rooms in the country; vis-a-vis the demand is still wanting. He notes that more hotels need to be put up countrywide if Rwanda is to become a leading MICE hub regionally.

But what remains to be seen is whether these hotels are eventually going to be profitable. Last year, the hospitality sector was confronted by a major challenge when many mid-range hotels were put up for auction for their failure to pay back loans.

Granted, Rwanda has achieved so much when it comes to the hospitality industry. However, customer service still remains its Achilles Heel, according to many visitors. But indicators on the ground so far suggests that, despite all its limitations, the hospitality industry in Rwanda is going full throttle from now to the end.

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Kigali Convention Centre

Big meetings drive hotel boom in Kigali