Hotel ownership change hands as Covid walls off hospitality
After a two-year shut down, hotels are picking up enough dust for their owners to consider turning them into offices and apartments or just selling them off.
Hotel restructuring is pushing multibillion deals in what could change ownership of leading chains struggling to survive the Covid-19 economic fallout.
Nairobi’s Fairview Hotel, Town Lodge and City Lodge Two Rivers are being sold by the South African owner City Lodge Hotel Group to real estate investor Actis for Kes 1 billion.
This is the second big deal after Saudi Prince Al-Waleed bin Talal struck a deal to sell off his stake in two five-star hotels in Kenya, including Fairmont Norfolk to a Nepalese Chaudhary Group owned by billionaire Binod Chaudhary.
InterContinental Hotel shut doors in August last year with the operator and foreign shareholder, InterContinental Hotel, ending its lease.
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Its owners’ Kenya Hotel Properties (KHP) are seeking a consultant to advise on change of the business model into mixed use offices for lease.
The deals come at a time Covid-19 has ravaged the hospitality industry mainly through hotel closures and booking cancelations.
Some hotels initially made some money as part of isolation centres for residents returning home from abroad but are now going through long periods of no new clients.
Hasnain S Noorani is the Group MD, PrideInn Hotels & Conferencing wrote in BusinessDaily they had to adapt using data and creativity to target customers.
He said more than ever in the last year, guests needed a quiet space to work, an escape from everyday life and simply a real experience as soon as quarantine measures started to relax.
Some have downgraded their offers targeting local tourists but with lower local consumption the thin revenues have failed to meet mounting expenses.
City Lodge for instance says the East Africa units were lossmaking to the tune of Kes 2 billion as at the end of last year.
Some hotels chose to fire workers to cut expenses like the Fairmont Norfolk, an iconic hotel in Nairobi, said it was closing its doors indefinitely and sacked all employees in a row sparked by the coronavirus pandemic. It later recanted the notice.
