Hotel reservations in Kenya remain higher than last year’s levels ahead of the December holiday season, while businesses are cautiously planning recruitment amid persistent inflation and rising operating expenses, according to a survey by the Central Bank of Kenya (CBK).
The CBK’s September survey found that average advance bookings for October 2026 stood at 59%, compared with 46% during the same period in 2025. November bookings also increased to 56%, up from 51% a year earlier.
However, December bookings are projected to decline to 53%, compared with 58% recorded in December 2025, signalling a potentially weaker peak festive season.
Despite the mixed outlook, the CBK expects economic activity to remain moderate in October and November before gaining momentum in December, supported by holiday spending, increased lending and government infrastructure expenditure.
Businesses also expressed general optimism about Kenya’s economic prospects over the next 12 months, citing anticipated growth in private-sector credit, infrastructure investment, exchange-rate stability and improved agricultural production.
The hospitality sector continues to benefit from demand for safaris, conferences, corporate and government functions, local festivals and domestic tourism.
According to the CBK, hotel demand is expected to strengthen in December as schools close for the holidays, festive-season travel increases and more international tourists arrive, particularly in Nairobi and other major urban centres.
The survey was conducted during the first three weeks of September and covered 96 hotels among 349 non-bank private-sector firms, alongside commercial banks and microfinance institutions.
Businesses Adopt Cautious Hiring Strategies
Employment projections remained mixed as companies weighed expansion plans against the need to control expenditure and improve operational efficiency.
Banks anticipated stronger recruitment in 2026 than in 2025, driven by business expansion, efforts to attract new employees and demand for specialised skills.
Among the banks surveyed, 31% identified business growth as a key factor influencing their hiring plans. An equal proportion cited the need to recruit new talent, while 16% pointed to the diversification of employee skills.
The outlook among non-bank businesses was less uniform, reflecting rising operating expenses and differing conditions across industries.
Hotels identified business expansion as the leading influence on recruitment decisions, accounting for 17% of responses. Cost-cutting measures followed at 14%, while industry contraction, efficiency improvements and the recruitment of new talent each accounted for 11%.
The findings indicate that some hospitality businesses are preparing for increased demand, although recruitment is likely to remain measured as employers balance growth prospects against the cost of running their operations.
Rising Inflation Threatens Business Growth
Inflation remains a significant concern for businesses, with survey respondents expecting price pressures to persist over the following three months.
The anticipated increases were attributed to food supply constraints, higher fuel and energy prices, rising transport expenses and disruptions in the global economy.
Higher energy prices could push up electricity bills, manufacturing costs, distribution expenses and transport charges, placing additional pressure on businesses and reducing consumers’ purchasing power.
The CBK noted that improved agricultural output following the short rains, a stable exchange rate and the stabilisation of international oil prices could help ease inflationary pressures.
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Government interventions aimed at controlling price increases, alongside the prevailing monetary policy stance, were also expected to contribute to price stability.
Over the medium term, respondents anticipated that inflation would remain around the midpoint of the CBK’s target range. However, fluctuations in global commodity prices, geopolitical tensions and weather-related disruptions continued to pose risks.
For hotels and other businesses that rely heavily on consumer spending, higher operating costs could coincide with reduced disposable incomes, potentially constraining demand.
The survey also highlighted declining consumer purchasing power and rising fuel and operating expenses as factors that could limit borrowing and slow business activity.
The CBK cautioned that persistent inflation, international economic uncertainty and the possibility of unfavourable weather conditions could weaken the pace of economic recovery.
To support businesses and sustain growth, respondents called for more affordable and predictable energy, fuel and water costs, improved infrastructure and logistics, access to cheaper credit and stronger tourism promotion.
