The government is yet to decide on the fate of the site hosting the iconic Hilton Hotel as shareholders explore strategic alternatives after the operator exited.
Hilton Hotel revealed earlier in April that it will close its doors indefinitely in December and fire an unspecified number of workers, underlining the troubles of hotels in the wake of the Covid-19 travel slump.
The hotel, which the State partly owns, has pointed to other factors beyond Covid-19 for the planned closure after more than 50 years of operation from its location at the heart of the central business district in Nairobi.
“We have not decided on the strategic options. Plans to engage other parties have not started. We have to have engagement with the other shareholder to agree on the way forward,” Kenya Development Corporation (KDC) interim director-general Christopher Huka told the Business Daily. The government holds its stake in Hilton through the KDC.
The corporation is an offshoot of a merger of Industrial and Commercial Development Corporation, Tourism Finance Corporation, and Industrial Development Bank Capital Ltd.
The government has in the past decade struggled to offload its ownership in three luxury hotels, including Hilton.
The State has a 40.57 percent shareholding in International Hotels Kenya Limited, which owns the Hilton. It also held a 33.83 percent stake in Kenya Hotel Properties Limited, the operator of the InterContinental Hotel, which also shut down in August 2020.
The State has been hesitant to pump money into the two luxury hotels, in what has seen other shareholders hold back. Besides InterContinental Hotel, several top hotels, including Laico Regency stopped operations amid the coronavirus economic fallout.
The Hilton Group of Hotels owns 59.42 percent of the Hilton Hotel through International Hotels Limited.
Kenya has been trying to sell its stake for over a decade and the Cabinet in 2013 approved the sale of its shareholding in Hilton Hotel (40.57 per cent), InterContinental Hotel (33.83 per cent) and Mountain Lodge Limited (39.1 per cent).
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The government has over the past decade struggled to offload its ownership in three luxury hotels, including Hilton.
Kenya’s tourism industry has started to pull out of its deep Covid-19-induced slump as local travellers take advantage of lower prices, but foreign visitor numbers are still well below pre-pandemic levels.
The country expects the sector, typically one of its top sources of foreign exchange, to earn Sh173 billion this year, up 18.5 percent from last year, the government said.