Fortune News | Dec 10,2018
A former department head at Kuriftu Resort & Spa hopes to replicate the success of a water amusement park in one of the oldest hotels in Addis Abeba.
Biniam Worku, general manager of Ghion Hotel, and his management team want to see hydrotherapy and waterpark facilities nestled in the prime location of the capital. They see Kuriftu's water park in Bishoftu, which opened three years ago, as a model to emulate.
Found in the partially operational Kuriftu Cultural Village, the water park features rides and pools and has grown into a popular venue for concerts. It accommodates close to 2,000 visitors and takes up 1.2 million litres of water to fill up.
With Tadios Belete as a major shareholder, Kuriftu Resort & Spa operates resorts and hotels in Bishoftu, Bahir Dar, Semera and Adama.
Biniam had worked at Kuriftu's flagship location in Bishoftu for seven years after graduating from a tourism and hotel management programme at Hawassa University. He left last year after landing the top job at the state-owned Ghion Hotel under the Public Enterprises & Administration Agency. He manages more than 500 staff.
The Hotel's management reviews submissions from five consultants to conduct a feasibility study on the construction of hydrotherapy and waterpark facilities.
“We'll implement the project next year,” said Kelem Ermias, marketing manager.
Ghion Hotel was established in 1958 on a 12hct plot at the centre of Addis Abeba. A prime real estate on Ras Desta Damtew Street, neighbouring the Jubilee Palace on the north, the Hotel features 191 rooms and seven conference halls. It has a reputation for having vast open spaces used for weddings and an Olympic size swimming pool.
The government has been attempting to privatise the Hotel over the past decade, to no avail.
Ghion Hotel was put up for a joint venture in 2010 after Dnknesh Vermogenveravltung (DV) GmbH, a company registered in German, signed a memorandum of understanding with federal officials. The agreement would have seen the government hold on to a 20pc share of 320 million dollars in equity. It was meant to usher in an expansion project valued at over eight billion Birr. It did not pan out.
The Hotel was up for full private ownership two years later. Despite lowering the asking price, the attempt floundered.
Ghion Hotel was delisted from companies up for privatisation in 2014.
Two years ago, the Hotel's management tried their hand at boosting revenues, leasing 5,000sqm of space to Das Engineering & Innovation Plc, a company co-founded by filmmaker Tewodros Teshome. However, the arrangement was cut short after disagreements over lease payments ended in court.
The Hotel had been under the supervision of the Agency until recently, when the newly-formed Ethiopian Investment Holdings (EIH) took over. Established earlier this year with an authorised capital of 100 billion Br, EIH is the country's first sovereign wealth fund.
"[The Hotel] was established for profit," said Mamo Mihretu, founding chief executive officer (CEO) of the state-owned investment firm. "The management should find ways to boost its revenue generation capacity."
Abenet Belay, a senior investment consultant at MPE Business & Investment Consultancy, says adding hydrotherapy and waterpark facilities might add value to the property and make it more appealing to visitors. However, the expert has worries about the management's ability to undertake the projects.
"Outsourcing the management, like what's done at the Hilton Hotel, is necessary," he said.
Having opened its doors in 1969, the Hilton Hotel has been managed on a 50-year contract with Hilton Worldwide, with options to renew every decade. Under its flagship brand, Hilton Hotels & Resorts, Hilton Worldwide operates 575 hotels.
Despite its location in a prime area, Abenet says the value of Ghion has declined over the past decade.
"Returning it to its former glory requires major renovation works," he said.
Mamo disclosed the Holding Company would look into the projects after the transfer from the Agency was finalised. Thirty-six public enterprises are under the purview of the Agency, including the Ethiopian Railway Corporation (ERC), the Ethiopian Electric Power (EEP) and the Land Bank & Development Corporation (LBDC), falling under its supervision in 2021.
PUBLISHED ON
Jun 11,2022 [ VOL
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