Name ID 1529

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East Africa Hospitality Management Limited
Extract Date: 2000 June 15

Delay in sale of TAHI Hotels increases industry fears

� 2000 - East Africa Hospitality Management Limited.

It came as no surprise to many industry analysts when it was announced that the sale of the TAHI lodges and Hotels would not go ahead at the end of June as originally announced. In fact, most would be surprised to see if the delay of 90 days is going to be enough to effect hand-over to the successful bidders for the properties that include:

Novotel Mount Meru

Lake Manyara Hotel

Ngorongoro Wildlife Lodge

Seronera Wildlife Lodge

Lobo Wildlife Lodge

Mafia Island Lodge

In the meantime, all of the Hotels are suffering a decline in usage by the major tour operators because of policy decisions running up to the sale. From the first of May, all tour companies were required to pre-pay for services at the Hotels.

'We used to bring over 1,000 clients a month to Novotel for Lunch,' comments one of the country's largest tour operators. 'How can you write a cheque every time you want to serve lunch. It is ridiculous.'

That company and scores of others have moved their lunch business to places like the Impala Hotel - boasting an all new standard of food service with their new chef - and the new Redds African Grill House.

In a bid to win back some of the lost business, TAHI dumped rates for June to as low as $18.00 per person half-board. Service concerns and the prepayment issue still kept tour operators steering their business to Sopa and Serena. It ended up with a situation where these competing lodges did not have enough space to accommodate the demand.

In the meantime, tour operators are worried that things will only get worse as the 'slow month of June' slips by and we run into our busiest season. And it does not end there. Accor, the French management firm, is scheduled to withdraw management from the Hotels on 30 June. Then, this ship that is already sailing over rocky waters will have no experienced captain at the helm.

Extract ID: 1528

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The East African
Extract Author: Peter Munaita
Extract Date: 2000 July 14

$20m Required to Upgrade Six Tanzania Lodges for Tourism

via www.AllAfrica.com

A substantial investment estimated at $20 million will be required to upgrade six Tanzanian leisure lodges, which were privatised recently, to world class standards.

Industry sources say the sum is needed following years of neglect by the government-owned Tanzania Hotels Investment Ltd (TAHI), on whose behalf the hotels were being managed by the Accor Group of France.

The lodges were last week awarded to Mauritius-based Hotels and Lodges Ltd, which placed a top bid of $28 million, ahead of other leading international hotel groups. The Presidential Parastatal Sector Reform Commission chairman, Mr. John Rubambe, has confirmed the offer to Hotels and Lodges on behalf of the Tanzanian government.

The six hotels - Mt Meru, Ngorongoro Wildlife Lodge, Seronera Wildlife Lodge, Lobo Wildlife Lodge, Lake Manyara Lodge and Mafia Island Lodge - have a total bed capacity of 1,500.

They will give the new owners a 90 per cent market share of Tanzania's growing upmarket tourism sector.

TAHI has divested from the hotels under an ambitious privatisation exercise that will see the government cede interest in 395 enterprises. At the end of 1998, 270 ventures had been sold off, with the remainder targeted for the end of this year.

Bids for the hotels were floated in February and the exercise was supervised by a foreign financial consultant, HSBC Equator Bank plc, in order to enforce transparency. Previous privatisation programmes have been handled internally.

Out of 68 interested suitors, only 18 were prequalified on the basis of a solid track record in hotel management, sound financial position and environmental concerns.

Hotels and Lodges led four other firms that were eventually invited to bid, including Soba Management Ltd ($9.2 million for four properties), Coastal Travels ($1.2 million), World Wide Leisure Group ($2 million for two properties) and East African Holdings Ltd, associated with the Madhvani Group of Uganda, ($9.85 million for four properties).

Kenya's Tourist Promotion Services, who own the Serena hotels, opted out of the deal after being short-listed. Other contenders who fell by the wayside included Accor, Club Med, Conservation Group of South Africa and Golden Tulip Worldwide.

Hotels and Lodges is a sister company of Gulf Africa Petroleum Company (Gapco) of Mauritius, which took over the operations of Esso and Caltex in the region a few years ago, gaining access to 750 petrol stations and a vast storage network.

Gapco took over the operations of Agip in Sudan last year after the previous operators pulled out. The conglomerate has a presence in Tanzania, Kenya, Uganda, Zambia, Malawi, Mauritius and Sudan and is owned by the Kotak brothers, Dhiren and Yogish, Mauritian oil magnates.

Extract ID: 1516