Hilton’s Evolving Kenyan Story

Nairobi’s hospitality industry drives VT growth.

by Shem Oirere, EW Correspondent 

American multinational hospitality company, Hilton Worldwide Holdings Inc., has recently served the East Africa vertical-transportation (VT) industry with both hot and cold prospects by closing its 53-year-old Nairobi Hilton Hotel in Kenya shortly after opening two modern outlets in idyllic locations far from the Nairobi CBD. 

Hilton, which has managed and franchised a broad portfolio of hotels and resorts since its founding by Conrad Hilton in May 1919, shut down the Nairobi Hilton Hotel on December 31, 2022, leaving behind fond memories that traverse the tapestry of Kenya’s social, political and economic history. Hilton Hotel, which was opened on December 17, 1969, by Kenya’s founding President Jomo Kenyatta, was among major hotel brands in Nairobi that pioneered VT in East Africa’s hospitality industry. It was 40.57% owned by the government of Kenya through International Hotels Kenya.

The hotel was originally fitted with Otis gearless units by the East African Elevator Co., the 1964-founded pioneer lift engineering company initially incorporated as Waygood Elevator Co., Ltd. It was renamed Otis Elevator Co. Ltd. to reflect its representation as the sole agency in East and Central Africa for Otis. The company was then renamed East African Elevator Co. Ltd. (EAECL) in 1989. Details on how many units were fitted at the Hilton originally were not immediately available, but EAECL indicates on its profile page it installed at least five new units at the hotel between 1997 and 2022.

 Although the Nairobi Hilton Hotel’s cylindrical, imposing building, which has dominated the skyline for more than five decades, will remain open for a new tenant, the exit of the hotel from the property added to a trend observed since the outbreak of COVID-19 in the first quarter of 2020. Earlier, the iconic five-star InterContinental Hotel, also in Nairobi and partly owned by the government with a 33.83% stake through Kenya Hotel Properties Ltd., closed its doors in August 2020 after more than 50 years in Kenya’s hospitality industry.

A report by the Ministry of Tourism and Wildlife on the impact of COVID-19 on tourism in Kenya said:

“Although the pandemic came during the low tourist season in Kenya, the hotel sector experienced an abrupt and unprecedented drop in hotel demand that led to closure of most hotels, and some hotels have consequently sent some staff on paid and unpaid leaves.”

For the VT industry, however, the closure of the Nairobi Hilton Hotel “only really affected the service provider who was looking after the equipment at that time, so its effect on the overall maintenance market was very limited,” according to Ian Blackman, managing director of Nairobi-based Elevator Concepts Ltd. (ECL), Kenya’s premier provider of lift and escalator installation and maintenance services and the sole distributor of Nidec Elevator products in the East Africa region.

The maintenance segment of the VT industry can only be significantly impacted if “a number of buildings close due to widespread economic downturns, for example.” The status of the Hilton Hotel’s lifts remains unclear, but industry experts offered a few options as to what happens to VT equipment when a tenant vacates a tall building, leaving it unused for a long time.

“If elevators are going to be unused for extended periods, they should be ‘mothballed’ until the situation changes,” Blackman said. He explained that this process “would include the removal of the suspension ropes and the overspeed governor rope and safely positioning the car and counterweight in the lift shaft — usually in the pit, if it is safe to do so (i.e., if it never floods).” The main supply should be disconnected and secured including locking and labeling to prevent accidental reinstatement of power, and if necessary, any delicate components or finishes removed for secure storage, Blackman added.

On a positive note, Hilton Worldwide had, prior to shutting down the Hilton Hotel in Nairobi, opened new outlets including a Hilton Garden Inn 7 km from East Africa’s biggest airport, Jomo Kenyatta International Airport. A few kilometers from the Hilton Garden Inn is the Kwetu Nairobi. The property, which is nestled on the edge of the Karura Forest, is part of Hilton’s recently developed brand, Curio Collection by Hilton, and is the first in East Africa with unique features. In Swahili, “Kwetu” means “our home” or “our place,” and “this will be central to creating a home-away-from-home experience for guests,” according to Hilton. “The much-anticipated hotel will feature 102 impeccable rooms, in five individual, but interconnected, blocks of varying sizes, themes and designs,” Hilton added.

Kwetu Nairobi’s blocks overlook the peaceful forested landscape, each with its own private butler to cater to the needs of guests, Hilton explained, adding: 

“Kwetu Nairobi is home to 10 state-of-the-art meeting rooms for corporate meetings and events and is set against a beautiful backdrop of garden greenery, waterfalls and forest views in a truly contemporary African setting.”

The opening of the new Nairobi hotels appears to be a global strategy by Hilton to address emerging customer tastes and comfort. In early 2023, the hotel chain said it had approved 36,000 new rooms for development across the globe during the second quarter, bringing Hilton’s development pipeline to 440,900 rooms as of June 30, 2023, up 7% from June 30, 2022.

Hilton also added 14,000 rooms to its system in the second quarter, resulting in 11,200 net additional rooms in Hilton’s network during the period, according to a company release.

But with the opening of new outlets in serene Nairobi environments, Hilton is not only set to welcome more visitors to this city of 4.4 million people, but has also created an opportunity for VT equipment suppliers and maintenance businesses.

That Kenya’s hospitality industry is a driver of growth in demand for modern VT solutions is not in doubt. In the new 2023 Economic Survey, Kenya National Bureau of Statistics Director General Macdonald Obudho reported:

“[The] number of international visitor arrivals through Jomo Kenyatta International Airport and Moi International Airport increased from 692,900 visitors in 2021 to 1.2 million visitors in 2022. The number of hotel bed nights occupied increased from 5.5 million in 2021 to 7.0 million in 2022. Overall bed occupancy rates increased from 20% in 2021 to 26% in 2022, while the number of conferences held increased by 25.6% to stand at 10,558 in 2022.”

The booming tourism industry in Kenya has previously seen some of the major hotel brands launch expansion plans to tap into business opportunities, with Best Western Hotel previously indicating plans to open up to five outlets, while Hyatt and Rotana targeted at least two hotels each. Marriott, Radisson, Pullman, Novotel and Protea hotels were eyeing single outlets, according to a recent market report by international market consultant PwC. The Kenya National Bureau of Statistics expects a total of “3,700 rooms to be added during the next five years, a 3.4% compound annual increase” for the country.

For Hilton, the closure of the Nairobi Hilton Hotel did not necessarily translate into a goodbye to Kenya’s hospitality market and the VT businesses associated with the industry. It would appear the global hotel chain strategically opted out of a location that is perpetually inconveniencing its visitors with chaotic traffic jams and the noise associated with downtown nightlife to a more serene environment with modern lift and escalator solutions.