In a controversial move aimed at enhancing profitability and efficiency, the Kenyan government, through the Privatisation Authority, has embarked on a mission to privatise several state-owned hotels.
The decision, spearheaded by President William Ruto’s Cabinet, targets an array of hospitality establishments under the management of the Kenya Development Corporation (KDC).
Privatization of loss-making government entities has been top of Ruto’s agenda, with speculation being that their disposal is one of IMF’s funding conditions.
A public notice published Tuesday in the local dailies, stipulated the government’s plan to seek qualified transaction advisory services for the privatisation process.
This initiative, the notice states, marks a proactive step towards revitalising the tourism sector, which has shown signs of robust recovery, partly thanks to policy reforms such as the Visa-Free entry scheme.
The process will touch a variety of hotels, including Golf Hotel Limited, Sunset Hotel Limited, Mt Elgon Lodge Limited, and Kabarnet Hotel Limited. Additional establishments involved in this privatisation include Mombasa Beach Hotel, Ngulia Safari Lodge, and Voi Safari Lodge, all of which are affiliated with Kenya Safari Lodges and Hotels Limited.
As detailed in the KDC’s Investment Prospectus Report, these hotels are poised for a significant transformation from private investors, a strategic shift that became particularly evident in the wake of the challenges posed by the COVID-19 pandemic, which severely impacted the tourism and hospitality sectors globally.
The privatisation strategy not only aims to rejuvenate these hotels but also to leverage the growing momentum within the tourism sector, promising enhanced employment and business prospects.
For instance, the Golf Hotel in Kakamega, partly owned by the Kakamega County Government, currently employs 47 individuals full-time and is valued at Ksh160 million. Meanwhile, Sunset Boulevard in Kisumu maintains a workforce comprising one full-time employee and approximately 16 casual laborers, with Mombasa Beach Hotel boasting a staff of 150 employees.
This initiative is part of a broader government effort to privatise 11 state corporations, a decision that was formalised by President Ruto’s Cabinet towards the end of last year.
The controversial move has been greeted with mixed feelings, particularly when it comes to the Kenyatta International Conference Center and the Kenya Pipeline Authority.
