Thursday 24 September 2015

SOUTH AFRICA: Legacy Hotels To Help African Sun

South Africa’s Legacy Hotels has been roped in to manage and refurbish city and resort hotels owned by African Sun in Zimbabwe at a cost of $60 million (R797m) with effect from next month.

Legacy Hotels will help African Sun manage the flagship Elephant Hills resort in Victoria Falls, the Troutbeck Inn in Inyanga, as well as three other hotels in Hwange, Victoria Falls and Harare.

African Sun, which has divested its west African operations, operates hotels under the Holiday Inn brand and mainly competes with rival operator, Meikles, which has hotel properties in major urban areas.

Bart Dorrestein, the chairman of Legacy Hotels, confirmed that the company had entered into a management partnership with African Sun to run five of its Zimbabwean hotels. He said the company was positioning itself for an expected recovery in the Zimbabwean economy, hence the decision to enter into the arrangement with African Sun.

“The past months of negotiations, as well as our constructive interaction with government has convinced us that Zimbabwe is on the road to recovery. While building confidence in any market takes time, we believe all the ingredients are in place to track the process,” Dorrestein said.

African Sun is looking to reshape its model in to a hotel investment company, outsourcing management of operations to other firms such as Legacy Hotels.

Meanwhile, hotel and other hospitality industry operators in Zimbabwe are in a pickle over a 15 percent VAT that could lead to a rise in prices.

Industry executives say this will affect potential arrivals, especially those from neighbouring South Africa, where the rand continues to slip, making Zimbabwe – which uses multiple currencies – an expensive destination for those tourists.

Analysts at Lynton Edwards Stockbrokers said yesterday that the “the agreement between the two parties provided for the management, refurbishment and expansion of the group’s strategic assets as a minimum cost of $60m” over the next two years.

Hebert Nkala, the chairman of African Sun, said the company was exiting its management and investment in Ghana’s Amber Hotel in Accra. It is also planning to divest from its Nigerian operations.

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