Companies

InterCon shuts Kenya hotel, sends home all employees

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Summary

  • The hotel’s general manager Oliver Geyer told employees in a notice the firm has declared all workers redundant and it would terminate its Nairobi hotel lease.
  • Kenya has lost Sh80 billion so far in tourism revenue, about half of last year’s total, due to the coronavirus crisis.
  • But InterContinental Hotel was already struggling before the pandemic outbreak and last year was declared technically insolvent since it could not service its debts that stood at Sh717 million.

InterContinental Hotel has sacked all employees and ended its Kenya operations amid the coronavirus economic fallout.

The hotel’s general manager Oliver Geyer told employees in a notice the firm has declared all workers redundant and it would terminate its Nairobi hotel lease.

Kenya has lost Sh80 billion so far in tourism revenue, about half of last year’s total, due to the coronavirus crisis.

But InterContinental Hotel was already struggling before the pandemic outbreak and last year was declared technically insolvent since it could not service its debts that stood at Sh717 million.

“InterContinental Hotels Corporation Limited is for operational reasons, considering a permanent closure of the Intercontinental Nairobi and winding up all its operations in the Republic of Kenya,” read the notice.

The InterContinental Hotels Corporation has been running and managing the 389-room InterContinental Hotel Nairobi under a 99-year lease since April 1967.

Intercontinental Hotels Corporation Ltd and the Kenya government each own 33.83 percent of Kenya Hotel Properties (KHP), the holding company that owns InterCon, as it is popularly known.

The termination of the lease means that KHP would seek another operator to run the strategically located five-star hotel.

The termination notice comes a few weeks after Norfolk closed its door in a similar fashion.

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.

The Norfolk management retracted the redundancy notice after employees’ threatened legal action.