International investors in Kenya have been known to make decisions that seem counterintuitive to their business interests. A case in point is the practice of hiring expatriate managers in the hotel industry, despite having capable local staff. This was highlighted in an anecdote shared by columnist Wycliffe Muga, who recounted a conversation with a Kenyan hotel owner who explained that European tourists preferred to stay in hotels managed by fellow Europeans. This reasoning was based on the assumption that European management was a guarantee of high standards.
The practice of hiring expatriate managers was not limited to the hotel industry, but was also prevalent in other sectors. However, as time went on, investors began to question the necessity of hiring expatriate staff, especially when local Kenyans were capable of running the operations efficiently. The high salaries and benefits paid to expatriate managers were a significant burden on the businesses, and investors eventually began to wean themselves off this practice. Today, expatriate managers are a minority in Kenya's hotel industry, with local staff taking on more senior roles.
The shift away from hiring expatriate managers was driven by economic reality, rather than any change in attitude towards local staff. Investors realized that they could save on costs by hiring local staff, who were willing to accept lower salaries and benefits. At the same time, the number of European tourists visiting Kenya continued to grow, contradicting the initial assumption that a European manager was necessary to attract visitors.
This phenomenon is not unique to Kenya, but is a common trait among international investors. They often make decisions based on self-serving rationalizations, which are later adjusted when economic reality sets in. In the case of Kenya, investors have come to realize that local staff are capable of running successful businesses, and have adjusted their policies accordingly.
The hotel industry is a significant contributor to Kenya's economy, with over 100 beach resorts along the Indian Ocean coastline. The industry has grown exponentially over the years, with European tourists being a major source of revenue. However, the industry has also faced challenges, including the need to adapt to changing economic realities.
The experience of Kenya's hotel industry highlights the need for investors to be aware of their own biases and assumptions. By making decisions based on self-serving rationalizations, investors can end up harming their own interests. In contrast, by embracing local talent and adjusting to economic reality, investors can achieve long-term success.
As Kenya looks to the future, it is clear that the country will continue to attract international investors. However, investors would do well to learn from past experiences and avoid making the same mistakes. By embracing local talent and adapting to economic reality, investors can achieve success in Kenya's growing economy.
Key points
- International investors in Kenya often make self-serving decisions that are later rationalized as enlightened policy.
- The practice of hiring expatriate managers in Kenya's hotel industry has largely been phased out in favor of local staff.
- Economic reality often forces investors to adjust their policies and adapt to local circumstances.
