They say the rail services have opened up the coastal area to a new class of holidaymakers who were previously locked out of the beach destination.
The coast has mainly been relying on international tourists whose numbers dwindle every time western nations issue negative travel advisories.
The Madaraka Express service that was launched two months ago has so far ferried over 150,000 passengers between Mombasa and Nairobi and led to an increase in domestic tourists flocking the coastal region.
Hoteliers say more holidaymakers are visiting their facilities due to the efficiency, convenience and low cost of the rail service. They say at this time of the year bed occupancy rate usually oscillates between 40-50 percent but currently the situation is much better.
Hoteliers have petitioned the county government of Mombasa to shelve the proposed Local Tourism Fund deductions in order to spare them additional levies.
The Mombasa County Local Tourism Bill 2017, proposes the establishment of Local Tourism Fund which will collect levies and fees from players in the hospitality industry.
In late May, President Uhuru Kenyatta commissioned the first passenger train on the Standard Gauge Railway from the coastal city to the capital.
The cost of a ride on the economy class of the train plying the Standard Gauge Railway between Nairobi and Mombasa is Ksh 700.
The intercity train operates between Nairobi and Mombasa while the county one makes stops at the intermediate stations of Mariakani, Maiseny, Voi, Mtito Andei, Kibwezi, Emali and Athi River.