The Kenyan government is to establish a refurbishment fund for loans to hotel owners to bring their facilities to international standards.

Kenyan Tourism Minister, Najib Balala, says the Government is in negotiations with the African Development Bank to secure funding of Ksh10 billion (just under $100 million).

Balala says when the deal is sealed, the Kenyan government will plough the funds into a refurbishment fund to be lent to investors to upgrade their ageing facilities. He says the fund will cater specifically for hotels that were built many years ago, but whose owners lack cash to finance renovations. “New hotels will not benefit from the refurbishment fund.”

Balala says the fund is part of Government’s efforts to support product development. As a result of a three-year tourism downturn, he says investors in the hotel industry lack funds for upgrading their hotels to modern trends. The Minister didn’t indicate when the funds would be available.

The Kenya Association of Hotelkeepers and Caterers has been lobbying the government to set up a fund to offer affordable loans to hoteliers to finance the upgrading of their facilities. According to the latest hotel classification results by the Tourism Regulatory Authority, only three hotels at the Kenya coast were rated five-star, while Mombasa’s top hotels were ranked four-star.