- Kenya Hotel Properties (KHP) is seeking a consultant to advise on change of business model for the hotel, which closed permanently in August last year.
- It is also open to selling or leasing the InterContinental hotel building to the government, which owns several buildings in the vicinity including Parliament, KICC and Sheria House.
- The permanent closure and the decision of global chain InterContinental Hotels Group (IHG) to stop running the Nairobi hotel has downgraded its value.
The owners of InterContinental Hotel, including allies of former president Daniel arap Moi, are considering leasing out the building or converting it into a mixed-used property, complicating the State’s efforts to sell its 33.8 percent stake in the five-star hotel.
Kenya Hotel Properties (KHP) is seeking a consultant to advise on change of business model for the hotel, which closed permanently in August last year, to include a mixed-use approach —signalling the hotel building could be converted to office blocks, shops and mini-hotels.
It is also open to selling or leasing the InterContinental hotel building to the government, which owns several buildings in the vicinity including Parliament, KICC and Sheria House.
The permanent closure and the decision of global chain InterContinental Hotels Group (IHG) to stop running the Nairobi hotel has downgraded its value.
“Define the various strategic options available for the company premises and adjacent parking silo to repurpose the property to ensure maximum returns on investment,” said KHP in a notice seeking consultants.
“To envision and evaluate a mixed-use approach to the premises together with the pros and cons associated therewith.”
This signals that KHP is keen on earning leasing fees from the 389-room InterContinental Hotel, whose sale of the government stake has dragged for more than a decade.
An investment banker close to the Moi-linked Sovereign Group told the Business Daily earlier that the firm had little interest in purchasing the government stake amid the slump in the travel sector and the exit of the anchor partner — the IHG.
“There is little value for Sovereign to run the hotel. The land where the hotel sits is more important compared to the hotel,” said the investment banker who requested not to be identified.
The Privatisation Commission was expected to start talks with Sovereign Group to buy the stake that the government holds in the hotel.
But the commission, which is in charge of sale of government firms, sad it had yet to receive offers from local or foreign buyers willing to acquire the stake in the hotel, which closed in August at the height of the Covid-19 crisis.
Sovereign Group is the largest individual local investor in the hotel with a 19.2 percent stake while Development Bank of Kenya has a 12.99 percent stake.
Joshua Kulei, former President Moi’s former private secretary, Rodger Kacou and Ahmed Jibril own a combined stake of less than one percent in the firm.
The Intercontinental Hotels Corporation Group, which is listed in both the UK and the USA, has a 33.8 percent stake in the hotel group.
InterContinental Hotel in August announced plans to end its lease agreements with KHP, the holding company for the five-star hotel, and shut down the facility amid the coronavirus economic fallout.
This had made Sovereign Group the likely candidate to acquire the 33.8 percent stake ahead of sale to outsiders.
The InterContinental Hotels Corporation has been running and managing the 389-room InterContinental Hotel Nairobi under a 99-year lease since April 1967.
Kenya lost over Sh100 billion in tourism revenue last year, when the number of foreign visitors fell by two thirds due to Covid-19.
The sector brought in the equivalent of Sh163.5 billion in 2018, and the government had initially expected that figure to grow one percent in 2020.
Analysts forecast that global travel will take more than three years to recover, cutting investors’ appetite for expansion in the sector.
Besides the effects of Covid-19 on the hotel industry, KHP is fretful of the impact of real estate developments near the InterContinental building, including the Nairobi Expressway and the soon to be opened bus park.
It wants the consultant to review if the building could be used by the government, signalling its open to sale or lease of the hotel building to the State.
“The analysis should review and advise on the potential strategic re-evaluations for hospitality and commercial real estate for utilisation by the government and private sector,” said the KHP notice.
The exit of InterContinental Hotels Group came amid financial struggles at the Nairobi facility.
InterContinental Hotel was already struggling before the pandemic and was last year declared technically insolvent since it could not service its debts that stood at Sh717 million. The debt was owed to Stanbic Bank.
Talk of an ownership shift at the hotel began in August 2011 when the then President Mwai Kibaki’s Cabinet gave the green light to the sale of the Tourism Finance Corporation’s (TFC’s) stake with pre-emptive rights to existing shareholders.
TFC, formerly known as Kenya Tourist Development Corporation, was offloading the shares in an exercise meant to transfer government-owned businesses, including underperforming sugar mills, to the private sector.
KQ resumes Mumbai flights after 4 months
- Kenya Airways will on Thursday resume flights to Mumbai, ending a four-month hiatus that was occasioned by increased cases of Covid-19 in the Asian state.
- The airline in a notice to its customers yesterday said it will resume its operations on the route on September 16, 2021 with the first flight departing Jomo Kenyatta International Airport at 7am to arrive in Mumbai at 3:45 pm.
Kenya Airways #ticker:KQ will on Thursday resume flights to Mumbai, ending a four-month hiatus that was occasioned by increased cases of Covid-19 in the Asian state.
The airline in a notice to its customers Monday said it will resume its operations on the route on September 16, 2021 with the first flight departing Jomo Kenyatta International Airport at 7am to arrive in Mumbai at 3:45 pm.
The airline will then resume full operations on the route on September 20, flying three times per week on the Indian route, which is one of the most lucrative destinations on its network.
Passengers on the route will part with Sh46,000 ($419) for one-way air ticket on economy class seats from Nairobi to Mumbai- prices that are relatively the same compared to what it was charging before the Covid-19 pandemic.
“Welcome back onboard! Fly from Nairobi to Mumbai starting Thursday 16th September with normal schedules resuming from Monday 20th September 2021,” said the airline in a notice to its customers yesterday.
KQ Suspended passenger flights to and from Mumbai on April 30 until further notice, following a government directive on travel between India and Kenya due to a Covid-19 crisis in that country.
The airline said on Friday that passengers who had booked tickets after May 1, the date of the last flight from Mumbai to Nairobi, will have to change their plans.
Affected passengers, KQ said, could also take vouchers for the value of their fare for future travel within 12 months.
India has seen soaring infection rates in the recent days, since the discovery of a new virus variant. Last month, India put on lockdown one of the states following a spike in cases of Covid-19.
Other countries that have banned flights to India include France, the UK Bangladesh, Oman and Hong Kong that have banned travel to and from India or asked their nationals coming from the Asian country to isolate themselves in government-approved hotels.
India has so far detected 33,264,175 corona virus cases with the number of deaths hitting 442,874 as at September 13.
A large number of patients from Kenya also travel to India every year for specialised medical treatment, especially cancer care, helping to drive medical tourism in the densely populated country that boasts affordable and easily accessible healthcare.
Lower import volumes push mitumba prices to new highs
- Traders paid Sh100,527 on average per tonne of the used clothes, popularly called mitumba, compared to Sh96,286 the previous year.
- Kenya Bureau of Standards (Kebs) banned importation of the clothes from late March through mid-August in a bid to contain the spread of the life-threatening coronavirus infections.
- Findings of the Economic Survey 2021 suggests dealers shipped in 121,778 tonnes of mitumba in 2020, a 34.02 percent fall compared with 2019 and the lowest volumes since 2015.
The average price of a tonne of second-hand clothing items imported into the country crossed the Sh100,000 mark for the first time last year on reduced volumes in the wake of safety protocols and guidelines to curb spread of coronavirus.
Traders paid Sh100,527 on average per tonne of the used clothes, popularly called mitumba, compared to Sh96,286 the previous year.
Kenya Bureau of Standards (Kebs) banned importation of the clothes from late March through mid-August in a bid to contain the spread of the life-threatening coronavirus infections.
Findings of the Economic Survey 2021 suggests dealers shipped in 121,778 tonnes of mitumba in 2020, a 34.02 percent fall compared with 2019 and the lowest volumes since 2015.
Last year’s drop was the first dip since 2011 when 76,533 tonnes were shipped in compared with 80,423 tonnes the previous year, the official data collated by the Kenya National Bureau of Statistics (KNBS) shows.
The import bill for the merchandise amounted to Sh12.24 billion, a drop of 31.11 percent, or Sh5.53 billion, year-on-year.
TIn imposing the temporary ban on used clothes, Kebs had applied a standard which prohibits buying second-hand clothes from countries experiencing epidemics to ensure disease-causing microorganisms are not imported into Kenya.
Higher quality and relatively lower prices for mitumba has continued to drive demand for used clothes at expense of locally-made products amid higher margins enjoyed by traders largely operating in informal markets.
The lucrative second-hand clothing market has seen traders from China —a key source market for the merchandise —open shops in Gikomba, Kenya’s largest informal market for mitumba, in recent years to cash in rising demand.
Earnings from exports of articles of apparel and clothing accessories fell 5.32 percent to Sh32.92 billion last year compared with 2019, data indicates.
Court backs Atwoli union in horticulture membership feud
- A trade union that is led by the long-serving Central Organisation of Trade Unions (Cotu) boss Francis Atwoli has survived an attempt to stop it from representing over 60,000 workers in the horticulture industry.
- Newly registered Kenya Export, Floriculture, Horticulture, and Allied Workers Union (Kefhau) had filed as a case in the Employment and Labour seeking to bar the Atwoli-led Kenya Plantation and Agricultural Workers Union (KPAWU) from representing workers in the industry.
A trade union that is led by the long-serving Central Organisation of Trade Unions (Cotu) boss Francis Atwoli has survived an attempt to stop it from representing over 60,000 workers in the horticulture industry.
Newly registered Kenya Export, Floriculture, Horticulture, and Allied Workers Union (Kefhau) had filed as a case in the Employment and Labour seeking to bar the Atwoli-led Kenya Plantation and Agricultural Workers Union (KPAWU) from representing workers in the industry.
Mr Atwoli is the secretary-general of KPAWU. The rival union claimed KPAWU had encroached on its area of workers’ representation.
Justice James Rika, however, dismissed the claim and ruled that the dispute should have been taken through conciliation, and was therefore presented in court prematurely.
He also stated that Kefhau must go beyond its registration and recruit sufficient members from the employers, to be granted recognition and organisational rights.
“Registration on its own, does not afford the claimant (Kefhau) recognition. Until there is proof that Kefhau has satisfied Section 54 of the Labour Relations Act, the status quo must be maintained,” said the judge.
“Kefhau must recruit at least 50 percent plus one, of the unionisable employees in the floriculture and horticulture industry, members of the Agricultural Employers Association to be considered for recognition,” he stated.
He noted that there is a Recognition Agreement and CBA, binding Mr Atwoli’s union and Agricultural Employers Association, affecting 73 Flower Growers Group of employers, and over 60,000 employees.
“It is objectionable for Kefhau to be allowed organisational rights, and the legitimacy to receive trade union dues and agency fees, from over 60,000 employees, just on the strength of registration as a trade union,” said the judge.
Kefhau wanted the court to declare that it is the sole trade union, which is allowed by its constitution to carry out activities in the export floriculture and vegetable industry, and an order restraining Mr Atwoli’s from representing workers in that area.