A new Knight Frank report shows Kenya is attracting more attention from foreign hospitality investors, driven by rising international tourist arrivals, stronger hotel sector performance, and ongoing investment in tourism-supporting infrastructure.
According to Knight Frank’s Kenya Market Update H1 2026, the accommodation and food service sector expanded by 14.7% in the first quarter of 2026, up from 8.0% growth during the same period last year. The growth was supported by strong gains in international arrivals through the country’s main entry points
International arrivals through Jomo Kenyatta International Airport (JKIA) and Moi International Airport (MIA) increased by 13.1% to 506,622 passengers during the first quarter of 2026, compared with growth of only 0.8% in the same period in 2025.
The improving tourism numbers are encouraging international hotel operators and developers to expand their presence in Kenya, particularly in Nairobi, the Coast and emerging tourism destinations.
Tourist Arrivals Give Hospitality Sector a Boost
The rise in visitor arrivals has translated into higher demand for accommodation, food services and tourism-related facilities across the country.
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Knight Frank notes that hotel performance improved during the review period, although the recovery remains uneven across different regions. Average hotel occupancy nationwide increased slightly to 29.29 % with the best-performing markets continuing to be Nairobi and the Coast.
The Coast accounted for 50.09% of all occupied room nights, while Nairobi accounted for 22.71%, underscoring their dominance in Kenya’s tourism industry. Occupancy levels were in the 60% range along the Coast and around 50% in Nairobi.
This has created favorable conditions for hospitality investors seeking to tap into growing demand from both leisure and business travelers.
Global Hotel Brands Deepen Presence in Kenya
The strengthening tourism market has attracted established international hospitality brands looking to expand their African operations through Kenya.
One notable development highlighted in the Knight Frank report is the entry of Choice Hotels International into the African market through Kenya.
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The global hotel franchisor added three properties to its portfolio, including an Ascend Collection property in the Maasai Mara and the rebranding of La Maison Royale Westlands and La Maison Royale South C under the Clarion and Quality Inn brands.
The expansion reflects growing confidence among international operators in Kenya’s tourism prospects and the country’s role as a gateway to the wider East African market.
The report says the arrival of a new global hotel operator shows investors still view Kenya as an attractive location for hospitality investment, despite economic and geopolitical uncertainties in other markets.
Foreign Investors Eye Kenya’s Coastal Tourism Market
Kenya’s coastal region is emerging as one of the most attractive destinations for new hospitality investments.
During the Future Hospitality Summit Africa, Diar Group, the UAE-based owner of CityBlue Hotels, announced partnerships to develop Oceara Residences by CityBlue in Watamu and Diani Residences by CityBlue in Diani Beach.
The developments show growing foreign investor interest in Kenya’s beach tourism market, which continues to attract both local and international visitors throughout the year.
Beyond traditional hotel developments, investors are combining hospitality projects with branded residential accommodation, allowing visitors and property owners to access hotel-style services while creating new revenue streams for developers.
The trend is becoming more common in premium tourism destinations where demand for long-term holiday accommodation continues to grow.
Knight Frank Report Shows Rising Investor Interest in Nairobi Serviced Apartments
While coastal destinations remain attractive, Nairobi continues to draw significant investment targeting business travelers, diplomats and expatriates.
The Knight Frank report highlights plans by The Ascott Limited, through a partnership with Britam, to manage a new serviced apartment development in Kilimani.
The project reflects rising demand for extended-stay accommodation as Nairobi strengthens its role as East Africa’s leading commercial, diplomatic and financial hub.
Serviced apartments have become increasingly popular among long-stay visitors because they offer greater flexibility than traditional hotels while providing many of the same amenities.
Knight Frank says investor interest in this segment demonstrates confidence in Nairobi’s ability to attract international businesses, development agencies and professionals seeking accommodation for prolonged stays.
The report highlights the opening of the 205-room five-star Encore Hotel in Nakuru, showing growing confidence in secondary cities and emerging tourism markets.
Nakuru has benefited from improved infrastructure, population growth, and its strategic location along major transport corridors, making it an attractive destination for both business and leisure travel.
The expansion of hospitality facilities into regional cities suggests investors are beginning to identify opportunities beyond Kenya’s traditional tourism centres.
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