Airbnb Market Trends: Nairobi vs. Cape Town vs. Zanzibar [2025 Edition]

As global travel rebounds in 2025, African destinations are seeing mixed recovery patterns. For example, Tanzania (home to Zanzibar) has already exceeded pre-pandemic visitor levels, while the continent overall remains below 2019 arrivals. In the short-term rental space, Nairobi, Cape Town, and Zanzibar emerge as three standout markets, each with unique demand drivers. 

Recent data show Nairobi with a ~47% Airbnb occupancy and $44 ADR, Cape Town with 71% occupancy and a high ZAR1,663 ($93) ADR, and Zanzibar around 40% occupancy with a $49 ADR. This blog provides a data-driven comparison of these markets, examining occupancy, pricing, host income, seasonality, and the local factors (tourism trends, events, regulations) shaping each city’s Airbnb performance.

Nairobi, Cape Town, and Zanzibar are among Africa’s leading Airbnb markets. Nairobi is Kenya’s capital and largest city, a business and tech hub driving steady short-term rental demand. In fact, Airbtics ranks Nairobi as Kenya’s top Airbnb market (≈5,200 listings) with lenient regulations.

Cape Town is the premier South African tourist city, a global conference destination and scenic getaway, and it tops South Africa’s Airbnb rankings (≈19,000 listings). 

Zanzibar (the semi-autonomous Tanzanian island) is a renowned beach/resort destination; it’s Tanzania’s #2 Airbnb market (≈382 listings), serving a tourism-driven economy (roughly 27% of GDP). 

Comparing these three highlights contrasts in traveler profiles (business vs. leisure vs. resort), seasonality, and local factors, offering investors a broad view of Africa’s short-term rental landscape.

Nairobi’s Airbnb market is healthy but moderate. Occupancy is about 47% (typical listing booked ~172 nights/year), with an ADR around $44. A typical host income is roughly $7,000/year. There are about 5,187 active listings (Feb 2024–Jan 2025), making Nairobi the largest STR market in Kenya.

Peak demand occurs in December (holiday season), and seasonality is moderate (lowest occupancy around mid-year). Regulatory burdens are light, Kenya’s STR rules are lenient, but new safety-driven requirements are emerging: as of early 2024 the Kenyan government began requiring all Airbnb hosts to register with the Tourism Authority. This crackdown (spurred by high-profile safety incidents) may impose compliance costs.

Nairobi’s growth factors include robust business travel and conferences (Nairobi is East Africa’s economic center), plus growing tourism to Kenya’s national parks. However, risks include infrastructure challenges and any policy changes. 

Overall, Nairobi provides steady occupancy from a diversified traveler mix; data show a YoY revenue drop recently, possibly reflecting increased supply or pricing pressure, but the market remains attractive with growing digital nomad interest and mid-term rentals as common strategies.

Cape Town’s Airbnb market is very strong. Occupancy is about 71%, far above Nairobi and Zanzibar,reflecting high year-round demand. The ADR is roughly ZAR1,663 (≈$90–$95 at mid‑2025 exchange rates). A typical Cape Town host earns around R421,000/year (~$21,000). The market is huge: ≈19,100 listings (Feb 2024–Jan 2025), the largest in South Africa.

Cape Town’s peak month is February (late summer); winter (June) sees lower occupancy. Notably, Airbnb reports that hosts in 2023 welcomed 700,000 guests and contributed R14.4 billion to GDP, underscoring the economic impact.

Regulation in Cape Town is still light. A 2019 city bylaw limits short lets to 30-day stays, but enforcement is lax: as of late 2024 0% of ~18k listings had a registered license. Cape Town is actively debating tighter rules (e.g. host registration systems) given housing concerns. Key demand drivers include tourism, business events, and digital nomads. 

Cape Town hosts often enjoy solid year-round bookings thanks to conferences and vacation travel. Risks include potential regulatory crackdowns, housing affordability debates, currency volatility (affecting foreign tourism), and seasonal shifts. However, with 2019 guest levels only moderately exceeded, 2025 looks positive given continued international travel growth and Cape Town’s event calendar.

Zanzibar’s STR market remains smaller but focused on tourism. Occupancy is about 40%, with an ADR of $49. Typical host revenue is ~$7,000/year (similar to Nairobi). There are roughly 382 active listings (Feb 2024–Jan 2025). Seasonal peaks occur around January–February (the dry summer), while lower demand hits in the rainy/off-season. Notably, Zanzibar’s occupancy is lower partly because many listings are high-end villas with fewer bookings.

Crucially, in mid-2024 the Zanzibari government introduced strict new regulations for all non-hotel lodgings. Now every Airbnb host must register and obtain a license via inspection (e.g. fees ~£44–47, heavy fines for non-compliance)l. This adds a compliance cost and may weed out unlicensed rentals, potentially reducing supply.

On the upside, Zanzibar benefits from Tanzania’s booming tourism: the country surpassed 2019 visitor numbers in 2024. Ongoing infrastructure improvements (airport capacity, resorts) support growth. Yet seasonality, regulatory costs, and limited flight access remain challenges. Overall, Zanzibar’s market performance is driven by leisure tourism and resort demand rather than business travel, so occupancy fluctuates with tourist season and geo-political factors.

Occupancy Rates: Cape Town leads by a wide margin (71%), reflecting strong year-round demand. Nairobi (47%) and Zanzibar (~40%) have moderate occupancy. Lower-tier listings and seasonal tourism in Zanzibar keep its rate lowest.

Average Daily Rate (ADR): Cape Town is highest (ZAR1,663 ≈$93), aided by luxury demand. Zanzibar and Nairobi ADRs are much lower ($49 and ~$44* respectively), reflecting different property mixes (budget resorts vs. urban apartments).

Host Income: Reflecting the above, Cape Town hosts have far higher average revenue (≈R421K/year) than Nairobi or Zanzibar hosts (~$7K each). In terms of yield, Cape Town and Nairobi are comparable (~12% STR yield in Airbtics), but Cape Town’s higher ADR drives greater absolute earnings.

Listings Count: Cape Town has ~19,114 listings, Nairobi ~5,187, Zanzibar ~382. Larger supply in Cape Town/Nairobi can dampen YOY growth (Cape Town revenue up +15%, Nairobi down -12%).

Seasonality: All three see higher occupancy in austral summer (Dec–Feb) – Nairobi peaks in December, Cape Town in February, Zanzibar in Jan/Feb. Shoulder seasons vary: Nairobi’s lowest occupancy is mid-year (June), Cape Town’s is mid-winter (July), and Zanzibar’s is early spring (March).

These contrasts mean investment profiles differ: Cape Town’s market yields consistently high occupancy and income (though with housing debates), Nairobi offers stable business-travel demand year-round, and Zanzibar offers niche, high-season returns with emerging regulatory risks.

Several key factors shape these markets:

Tourism Volume & Events

Africa’s tourism is generally accelerating. Cape Town and Nairobi attract international travelers for leisure and business, while Zanzibar draws beach tourists. Cape Town and others are growing as conference and MICE hubs (e.g. tech summits, expos) which boost off-peak occupancy. For Zanzibar, Tanzania’s record tourism numbers feed into island demand, especially during global holiday seasons.

Digital Nomads & Remote Work

Post-pandemic, remote professionals are flocking to affordable, well-connected African cities. Cape Town and Nairobi both rank among hotspots for digital nomads, thanks to good internet, visa programs, and lifestyle. (South Africa and Seychelles have launched special visas; Kenya has eased entry rules, making long stays easier.) This trend lengthens stays and raises mid-week occupancy.

Economic Factors

Currency movements matter. A weaker ZAR can make Cape Town trips cheaper for Europeans/Americans, boosting demand (and vice versa). Similarly, Nairobi’s costs are attractive for some travelers, though inflation can cut local travel budgets. Business and NGO activity in Nairobi (headquarters for UN, African Union events) also sustains demand.

Seasonal Factors

Regional climates drive peak seasons. Cape Town’s summer and Zanzibar’s dry season coincide with European winter escapes, while Nairobi’s major peaks are holidays (Christmas) and events (New Year, local festivals).

Regulatory Environment

All three are relatively STR-friendly for now (lenient enforcement), but changes loom. Kenya’s new safety-focused mandate (host registration) and Zanzibar’s mid-2024 licensing regime signal tighter oversight. Cape Town has local bylaws that limit stays (max 30 days), and a national host registry is being debated. These regulations affect hosts’ costs and supply, and may shift bookings to regulated properties.

Local Policies & Taxes

Taxation (e.g. VAT or occupancy taxes) and incentives (tourism marketing) can influence markets. For instance, South Africa is exploring STR registration to improve transparency, whereas Kenya is focusing on safety. Such policies shape investor confidence and guest trust.

Each city’s market reflects a mix of these forces. Cape Town’s high occupancy is driven by its strong tourism appeal and events. Nairobi’s moderate growth ties to steady business travel and a liberal STR climate, albeit tempered by recent regulatory scrutiny. Zanzibar’s occupancy hinges on international leisure flows and now new compliance costs. Understanding these drivers helps hosts optimize pricing and marketing.

Nairobi (Kenya)

Opportunities: include strong corporate and conference travel, a large tech-savvy domestic market, and liberal STR policy (lenient licensing). 

Risks: involve recent government crackdowns (all hosts now must register, periodic security concerns, and infrastructure gaps (power or transport issues). Oversupply could emerge if too many new listings open; indeed Nairobi’s revenue dipped slightly YoY. Savvy investors can capitalize on Nairobi’s growth sectors (tech, healthcare) and relatively affordable entry prices.

Cape Town (South Africa)

Opportunities: stem from high international tourism (leisure and business) and premium pricing. With occupancy at ~71%, many hosts enjoy strong cash flow. Exchange rate swings can favor foreign guests. 

Risks: include potential overregulation: Cape Town has debated limiting listings to protect housing. A national registration system may be imposed. Other risks: power cuts or load-shedding affecting visitor experience, crime perceptions, and a saturated central market (existing 19k listings).

However, Cape Town also has mature STR infrastructure (professional management, dynamic pricing tools) which can maximize revenue. The market’s resilience to Airbnb saturation (per Airbnb’s data, rising rents are more from other factors is a positive sign.

Zanzibar (Tanzania)

Opportunities: lie in surging beach tourism and development of new resorts. The island’s charm and improving connectivity (new flights, investment in tourism) underpin demand. 

Risks: are mostly regulatory and seasonal: the 2024 licensing lawsl raise entry costs for hosts and could reduce unlicensed supply (potentially raising occupancy for compliant listings, but also reducing flexibility). Zanzibar’s market is highly seasonal, which can double occupancy swings. Infrastructure (water, roads) can be less reliable. 

Investors must also navigate Tanzanian bureaucracy and currency fluctuation. Niche opportunities exist in eco-tourism and luxury villas, but these may see lower occupancy if prices are high. Overall, Zanzibar offers high upside in peak season but requires managing policy and seasonality risks.

Looking ahead, all three markets appear poised for moderate growth if broader tourism trends hold. The UNWTO predicts global tourism will fully recover by late 2024, and Africa’s may catch up gradually. Key forecasts:

Continued Recovery: We expect occupancy and ADR to climb in line with overall travel demand. Nairobi and Cape Town are likely to see steady gains from business and leisure segments. Zanzibar should benefit from Tanzania’s growing visitor numbers, especially if climate remains favorable.

Price Adjustments: As occupancy rises, hosts may lift ADRs. Cape Town’s ADR could grow with continued premium demand. Nairobi’s ADR has room to grow if business travel increases further, though competition may temper rates. Zanzibar’s ADR may stabilize as supply tightens due to licensing.

Regulation Effects: Expect the new rules to filter out marginal listings. In Kenya, mandatory registration may increase trust (good for brand) but might deter casual hosts. In Zanzibar, licensed listings will likely command higher rates, raising overall ADR but potentially reducing total occupancy percentage. Cape Town’s regulatory environment will be key: any enforcement of license rules could constrain supply, benefiting compliant hosts.

Seasonality Smoothing: Digital nomads and extended-stay travelers may smooth occupancy dips. If cities like Nairobi offer better visa or co-working options, mid-season occupancy could inch up. Similarly, targeted off-season promotions (e.g. Cape Town winter deals) may reduce seasonality.

Economic Factors: Currency and inflation will play roles. A strengthening African currency vs. dollar/euro could make these cities more expensive for foreigners. Global economic headwinds (if any in 2025) could slow discretionary travel, which mainly affects resort-driven Zanzibar more than business-heavy Nairobi.

Innovation and Niche Markets: Hosts who leverage data-driven pricing, unique experiences, or long-term rental mixes may outperform. Eco-tourism and wellness stays are growing trends (especially in Zanzibar and Cape Town), and Nairobi could tap more into domestic tourism segments.

In summary, unless a major disruption occurs, Airbnb markets in these cities should continue their positive trajectories. Cape Town’s market seems strongest in the short term, while Nairobi’s steady fundamentals and Zanzibar’s tourism boom promise long-term opportunities. Smart investors will watch regulatory changes and diversify across peak/off-peak periods.

For prospective hosts or investors, these insights suggest several action points:

Data-Driven Decisions

Use up-to-date market analytics (like Airbtics/AirDNA) to set prices and forecast revenue. Each city’s performance profile is different – what works in Cape Town (high ADR, focus on luxury) may not work in Nairobi (mid-priced, business focus).

Regulatory Compliance

Stay ahead of licensing requirements. In Nairobi, register with TRA to avoid fines. In Zanzibar, secure the tourism commission licensel. In Cape Town, consider obtaining local permits (or align with any new regulations) to ensure uninterrupted operations.

Seasonal Strategies

Price strategically around seasonal peaks. For example, raise rates in Cape Town’s summer and offer discounts in winter. In Zanzibar, capture holiday travelers (Christmas/New Year) and plan for lean months. In Nairobi, leverage the consistent business travel to maintain occupancy even off-peak.

Diversification

Consider offering experiences or targeted niches (e.g. family-friendly in Cape Town, corporate stays in Nairobi, eco-lodges in Zanzibar) to differentiate listings. Converting some inventory to long-term stays or co-living during low season can stabilize income.

Monitor Trends

Keep an eye on tourism developments (new airlines, hotel competition, city events) and macroeconomics (exchange rates, inflation). For instance, post-2025 events like Africa Cup or COP might temporarily spike demand in specific locations.

By understanding each city’s market drivers, hosts and investors can better align their offerings to demand – maximizing occupancy in growth months and revenue year-round. With Africa’s tourism on the rise, Nairobi, Cape Town, and Zanzibar each offer compelling, but distinct, Airbnb opportunities.