When two of Nairobi’s most iconic 5-star hotels—the InterContinental Nairobi (closed in 2020) and Hilton Nairobi (closed in 2022)—shut down operations, many expected a quick sale or new investors to jump in. Yet, years later, neither property has found a buyer.
Why?

Below is an in-depth look at the real reasons behind the prolonged stagnation.

1. Outdated Buildings Requiring Massive Renovation

Both hotels were built decades ago:

• InterContinental Nairobi – opened in 1969

• Hilton Nairobi – opened in 1969

Although iconic, the buildings are old and expensive to modernize. A buyer would need to invest billions of shillings just to bring the structures up to global hospitality standards:

• Outdated plumbing and electricals

• Inefficient layouts that no longer fit modern 5-star room requirements

• High energy consumption

• Asbestos or outdated materials requiring special removal

• Old kitchens, outdated fire-safety systems, elevators, HVAC etc.

In many cases, renovation costs can exceed the cost of putting up a completely new hotel.

2. Complex Ownership Structures

Both hotels are tied up in complicated shareholding arrangements involving governments, private investors, banks, and international franchise agreements.

InterContinental Nairobi

• Co-owned by the Kenyan government, local investors, and the InterContinental Hotels Group (IHG).

• Divestment requires approvals from multiple entities.

• Legal issues surrounding shareholder exit and valuation stalled progress.

Hilton Nairobi

• Partly owned by the Kenyan government (via KTB).

• The land parcel the hotel sits on involves long leases and county approvals.

This complexity discourages investors who prefer clean, straightforward acquisitions.

3. Location Challenges Have Become More Pronounced

When these hotels were built, they sat at the heart of Nairobi’s business district. But today:

Hilton Nairobi (CBD)

• Located in a congested, aging CBD with limited parking, security concerns, and declining night traffic.

• Large international brands now prefer Westlands, Gigiri, and Upper Hill—areas with modern mixed-use developments and better accessibility.

InterContinental Nairobi

• Though close to Parliament and Uhuru Park, the area is less commercially attractive than it once was.

• Its isolated layout and outdated external appearance make rebranding costly.

Modern luxury hotel investors want high-growth zones, not old CBD environments that require urban renewal.

4. Hospitality Market Shift

Nairobi’s hospitality landscape has evolved:

Newer competitors

Hotels such as:

• Kempinski

• Radisson Blu (Upper Hill & Arboretum)

• JW Marriott

• Movenpick

• Trademark Village Market

• Two Rivers’ upcoming hotels

• Multiple serviced apartment complexes

These offer modern rooms, flexible conferencing, tech-enabled experiences, and abundant parking.

Shift toward serviced apartments

Investors are pouring money into:

• Airbnb-ready units

• Serviced apartments

• Mixed-use developments

These offer better occupancy rates and higher ROI than old 5-star hotels.

Demand shift

Corporate clients and expatriates increasingly prefer:

• Westlands

• Lavington

• Gigiri

• Kilimani

• Upper Hill

The CBD is no longer the preferred premium location.

5. The Buildings May Be More Valuable as Land Than Hotels

Both hotels sit on prime Nairobi land. For many investors, the best economic decision is:

• Demolish

• Redevelop into mixed-use towers, e.g.:

  • Offices

  • Residential apartments

  • Retail

  • Smaller boutique hotel

But demolition and redevelopment require:

• Huge capital

• Approval from heritage, planning, and environmental departments

• Agreement from all shareholders

• A new anchor tenant or brand

This becomes a long-term investment with delayed returns—discouraging buyers who want quicker ROI.

6. Post-COVID Financial Caution

After the COVID-19 shock, where hotels globally collapsed:

• Investors became cautious about acquiring large traditional hotels.

• Banks tightened lending for hospitality acquisitions.

• Investors prefer asset-light models (management agreements, not ownership).

Buying a massive old hotel is seen as high-risk without long-term certainty.

7. The Asking Prices Are High (Relative to Renovation Cost)

Because the land is prime and the hotels are historically iconic:

• Sellers want top-dollar pricing.

• Buyers calculate total acquisition cost = purchase + renovation, which ends up enormous.

• Many investors walk away because the deal doesn’t add up financially.

A buyer would essentially pay premium land rates, only to spend billions more making the hotel competitive.

8. Government Bureaucracy Delays Everything

Any transaction involving:

• Public land

• Government shareholding

• Taxation

• International hotel groups

… attracts slow bureaucratic processes.

Investors find this time-consuming and unpredictable.

So, Why Isn’t Anyone Buying Them? (In One Line)

Because the cost, complexity, and risk of reviving the old Hilton and InterContinental far outweigh their investment attractiveness—despite their iconic status and prime location.

Will Anyone Eventually Buy Them?

Yes—eventually. But likely for:

• Redevelopment, not reopening.

• Mixed-use skyscrapers rather than traditional 5-star hotels.

The CBD is gradually shifting toward retail, government, and lower-cost hotels, not luxury hospitality.