Balala cautions on hotel sale

September 14, 2009
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, NAIROBI, Kenya, Sept 14 – Tourism Minister Najib Balala urged the Treasury on Monday to review the planned privatisation of 13 hotels and ensure it does not disrupt progress being made in the tourism industry.

Mr Balala said while privatising the hotels would help raise hospitality standards in the country, the process ought to be done in a manner that ensures the government reaps maximum value from the sale.

“As the Ministry of Tourism with equity in some of these hotels we are concerned. If we do not improve the standards in theses hotels then we stand to lose out to competition,” he said and added skepticism that disposing off the hotels was a solution to the hotels’ managerial weaknesses.

He said strategic partners ought to be brought on board to manage the hotels until such a time that the hotels could be highly priced.

“We should instead invite partners, strategically, to manage the hotels on behalf of government until such a time we are ready to sell them,” he said.

He added: “I am always surprised how government properties are run down, (yet) when run by the private sector (they become) more efficient.”

While the Ministry of Finance is carrying out the sale of the hotels, the minister said his ministry should have overriding influence in selecting the order in which to sell while awaiting cabinet approval.

“We will be doing recommendations to the privatisation commission for what is our opinion about these hotels.”

According to Mr Balala only two hotels, the Hilton (40 percent share) and the Intercontinental hotel (33.8 percent), are ready for sale.

Other hotels that have been short listed for sale include Voi Safari Lodge, Mombasa Beach Hotel, Ngulla safari lodge and Golf hotel in Kakamega among others.

However, plans by the Kenya Tourist Development Corporation to sell the hotels as a block are said to be also slowing down the process. Some players in the tourism sector say selling the hotels as a block will greatly devalue the hotels.

At the same time, Mr Balala said the government had improved its system of governance, which could also be passed on to the management of the hotel to improve their profitability making them more attractive to investors.

He was speaking during the opening of the Hotels and Restaurants Classification Course at the Utalli College, as part of the East African Community Standards and Classification Criteria for Hotels and Restaurants.

The classification criterion is part of the East African Community’s goals of marketing the region as a single tourist destination.

“The hotel industry is changing rapidly. Furthermore classifications no longer focus on quantity but more on quality. A hotel may have few numbers of facilities and rooms but could be above the five stars ranking,” he said.

The Minister also revealed that the East African Community secretariat was working on creating one visa to the five East African countries.

“If that happens, this destination will be very completive and (would) benefit our economies,” he highlighted.

Mr Balala allayed any fears that such a marketing strategy would make Kenya lose out to other member states.

“What people fear is they might have to lose business. But the bigger perspective is its going to make the whole region highly competitive to attract as many tourists as possible.”

The standard classification is aimed at attracting as many tourists to the region.

Key areas the team will be focusing on will be how hotels incorporate technology and architectural designs to their hotels.

“For example, any hotel looking for any thing above three star ranking should have credit card facilities available to their guests. Gone are the days having a carpet at your hotel would guarantee you five star ranking,” he remarked.

The classification of hotels restaurants, lodges and other tourist facilities across the region is expected to begin next year.

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