SA hotel chain acquires Holiday Inn

Southern Sun Hotels will take over Nairobi’s Holiday Inn from next month for an undisclosed fee as South African firms seek a presence in Kenya’s tourism sector.

The hotel group will from August 1 assume ownership of the city hotel and re-brand it Southern Sun Mayfair Nairobi, highlighting the growing interest by South African firms to enter the East African market with Kenya as their gateway.

This should be the first major acquisition by a South African firm in the hotel industry as they have previously focused their attention on banking, telecoms and manufacturing where they have made a number of acquisitions.

Other firms have entered East Africa’s largest economy in a bid to explore growth opportunities.

Many have been facing saturation in their home markets and are expanding.

Holiday Inn is part of global hotel chain known as InterContinental Group of Hotels which runs Nairobi’s InterContinental and manages the newly opened Crowne Plaza in Nairobi.

However, the local Holiday Inn has for the last 15 years been managed by &Beyond whose lease ends this week.

Southern Sun, which was founded in 1969, is one of the leading hotel groups in South Africa and has been expanding its presence in the region and beyond.

It has hotels in Zambia, Nigeria, Seychelles, Tanzania, Mozambique as well as in Dubai.

The firm follows in the steps of South Africa’s Protea Group of Hotels which was brought in by Greenhills Investment to manage the Tribe Hotel in Gigiri through a management contract under its African Pride brand.

Holiday Inn, formerly known as Mayfair Court Hotel, is one of the leading establishments in the city, mainly attracting the conference niche.

Built in the 1940s, the hotel has managed to attract both domestic and international conference tourists especially those with interests at the UN Complex in Gigiri.

Conference tourism has been a major forex earner for the sector and its growth has led to a rise in bed capacity that has attracted major investors in the sector.

Today, international brands like Crowne Plaza and Radisson have moved into the market.

Crowne opened its doors earlier this year while the Radisson hopes to open early 2012 in Nairobi’s upper hill.

Other investors such as Sankara in Westlands, Simba Group on Waiyaki Way and Red Court are also expected to open up new hotels in the city.

Tourism has been on a recovery path following the post-election violence of 2008 and the global financial crisis that hit the sector hard.

Tourist arrivals released by Kenya Tourist Board (KTB) for 2010 show that the sector will surpass its 2007 peak numbers, the industry’s best performing year.

Sector players are optimistic that tourist numbers this year will be the best ever recorded with earnings expected to be positive.

“All things being equal, this year should see a record performance and set the stage for a fresh growth trajectory similar to the period between 2003 and 2007, seeing that the arrivals have overtaken the 2007 benchmark year,” said Jake Grieves-Cook, KTB chairman, in a previous interview.

Players have in the past two years invested heavily in reassuring tourists that Kenya is safe and have rolled out extensive marketing campaigns in the source and new markets.