A conversation I often have across East African markets goes something like this: An investor or lender, usually based outside the region, presents a feasibility model built around peak-season leisure occupancy, applies a discount for “political risk” and concludes that the deal is marginal. Yet the hotels being evaluated are often branded city properties in Nairobi, Kigali or Addis Ababa, primarily serving business travelers, conference delegates and diplomatic traffic, with leisure tourists frequently representing a secondary demand source.
This mismatch between how East African urban hotels are modelled and what actually fills their rooms is more than a technical issue. It systematically misprices both risk and opportunity.
Writing in this column in June 2025, fellow ISHC member Trevor Ward of W Hospitality Group identified a persistent gap between hotel pipeline activity and actual openings across Africa, arguing that more deals need to be signed. He is right. But more deals will materialize only when the underlying demand case is properly understood. The challenge is not simply financing; it is the demand analysis that comes before it.
For decades, East Africa built its global tourism reputation around wildlife, mountain gorillas, beaches and spectacular natural landscapes. Those assets remain foundational, continuing to underpin investment in leisure destinations and gateway markets. But over the past two decades, the demand profile supporting branded urban hotels has evolved in ways that many feasibility models still fail to capture.
The MICE example: Demand is built, not inherited
Rwanda provides the clearest illustration, and one I watched develop firsthand. Following the establishment of the Rwanda Convention Bureau in 2014, supported by the World Bank and the Rwanda Development Board, the country deliberately developed its meetings, incentives, conferences and exhibitions sector through investment in the Kigali Convention Centre, international bidding capacity, a streamlined visa regime and sustained government commitment. World Bank-supported data show conference delegates increased from about 17,950 in 2014 to more than 35,100 in 2016, while MICE revenues rose from US$29.6 million to US$47 million. By 2023, the sector generated a record US$95 million from 160 events and more than 65,000 delegates.
Although activity softened in 2024 — 115 events, 52,000 delegates and US$84.8 million in revenue, according to the Rwanda Development Board’s 2024 Annual Report, following the Marburg virus outbreak, the decade-long trajectory remains unmistakable. The RDB’s 2025 report, published in April 2026, confirmed a recovery: 165 events generating US$94.7 million, a new record.
What Rwanda demonstrates is that hospitality demand can be deliberately cultivated. That has direct implications for hotel underwriting. A convention hotel serving a MICE-driven market has a fundamentally different demand profile from one dependent on leisure tourism: Booking windows are longer, midweek occupancy is stronger, ancillary spending is typically higher and seasonality is lower. Applying leisure-market assumptions to such an asset produces the wrong occupancy forecast, the wrong revenue per available room expectations and, ultimately, the wrong investment decision.
Don't forget commercial demand
Nairobi remains East Africa’s commercial and financial center, where branded city hotels are supported primarily by corporate headquarters, regional business, diplomatic missions, development organizations and conference activity rather than safari tourism. Addis Ababa derives a similarly resilient demand base from its role as headquarters of the African Union and the UN Economic Commission for Africa, reinforced by Ethiopian Airlines’ continental network. Dar es Salaam strengthens as a commercial gateway; Arusha draws conference and institutional demand. JLL’s Hotel Destinations East Africa report (2024) noted renewed investor interest driven by stronger urban performance and recovering air connectivity. It is this commercial and institutional demand, not the leisure tail, that keeps many urban hotels financeable through the shoulder months.
This does not eliminate supply risk. JLL’s Fiona Craw, vice president of the Hotels and Hospitality Group for sub-Saharan Africa, has noted that Nairobi absorbed more than 2,000 branded hotel rooms between 2023 and 2025, contributing to occupancy and rate pressure. But supply cycles should not be confused with structural demand weakness. As Radisson’s Daniel Trappler, senior director of development for sub-Sahara Africa, has observed, growing demand across corporate, institutional and MICE segments has historically balanced Nairobi’s supply influx. Markets with that diversified demand base generally absorb new capacity more effectively than those dependent on seasonal leisure. Investors who conflate the two will keep passing on markets that don’t deserve to be passed on.
Pipeline data reinforce this point. CoStar’s coverage of the 2025 W Hospitality Group pipeline report noted that Kenya tied for second among African markets for hotel openings in 2024, behind Morocco, while Ethiopia and Kenya both have nearly 80% of their pipeline rooms under active construction, among the highest ratios on the continent. International operators including Marriott, Hilton, Radisson and Accor continue expanding across East African cities, reflecting confidence in commercial, institutional and MICE demand rather than safari tourism alone.
The gap, as Trevor Ward argues, is between deals signed and hotels opened. From my experience advising projects across the region, financing constraints and execution risk explain much of that gap, not an absence of demand. Closing it requires treating corporate travel, MICE and institutional demand as distinct segments, each with its own booking pattern and seasonality, rather than collapsing them into a single undifferentiated market.
The right investment question
The question investors should ask about an East African urban hotel is not, “How many tourists visit this country?” It is, "What mix of demand segments supports this asset, how seasonal are they and what do they imply for stabilized performance?"
Event pipeline data from the Rwanda Convention Bureau, corporate account depth in Nairobi’s Upper Hill and African Union meeting schedules in Addis Ababa are the inputs that matter for underwriting branded urban hotels in this region, not national tourist arrival statistics.
East Africa’s wildlife, beaches and nature-based experiences remain among its greatest competitive advantages and continue to underpin important leisure investment. The argument is not that they have become less important. It is that they no longer explain the performance of much of the region’s branded urban hotel stock. These markets have earned a more sophisticated investment narrative, and investors willing to evaluate them through the right demand lens are likely to make better-informed decisions.
Dr. Emmanuel Nsabimana is co-founder and chairperson of The Boonies Africa, a hospitality and tourism consultancy focused on East Africa, and an Associate Member of the International Society of Hospitality Consultants. During seven years heading Rwanda's tourism regulations, he participated in the preparation and execution of more than 100 international MICE events and represented Rwanda in East African Community policy discussions on regional tourism and hospitality integration.
This column is part of ISHC Global Insights, a partnership between CoStar News and the International Society of Hospitality Consultants.
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