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Mombasa Beach Hotel set for Sh200 million cash injection upgrade

Sections of Mombasa Beach Hotel in Mombasa County. [Photo: Maarufu Mohamed,Standard]

One of Mombasa’s oldest tourist facilities, Mombasa Beach Hotel, is set for a Sh200 million refurbishment.

Making the announcement in Mombasa, Tourism Finance Corporation (TFC) Managing Director Jonah Orumoi said after years of neglect, the hotel will undergo a major upgrade that will be carried out in phases.

The 151-room establishment is the flagship hotel under the Kenya Safari Lodges and Hotels (KSLH), which has several facilities around the country.

In the Coastal tourism circuit, KSLH also owns Voi Safari Lodge in Tsavo East National Park and the Ngulia Lodge in Tsavo West National Park.

“We have made some initial cash injections towards refurbishing and expect work to be completed in the next two years,’’ said Mr Orumoi.

TFC has recruited veteran hotelier Victor Shitaka from the Tamarind Group to steer the Coast properties to profitability, he added.

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The Government agency has already disbursed Sh30 million to the hotel where a new standby generator has been installed. “Hotel kitchen upgrades and installation of new air condition units has also started, with plans to start room upgrades in the pipeline,’’ said the MD.

Meet loan criteria

In the meantime, investors in the tourism industry have until June this year to take up loans amounting to Sh800 million being doled out by TFC.

Mr Orumoi said during a recent stakeholder forum that the cash is a kitty for hoteliers to improve and upgrade facilities across the country.

“We have put in place criteria that all applicants must meet before disbursement.

TFC has developed the criteria for sustainable funding of the sector to drive an agenda for new innovative products that will spearhead increase in length of stay in hotels and add to the guest volumes as well,’’ he said.

The loan facility is meant to help recovery programmes for the tourism industry, which has been hit hard by insecurity fears linked to Al Shabaab militant group.

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“We have about Sh800 million at our disposal to lend to investors in the tourism sector but we have proposals of about Sh5 billion. That is why we need to work with the private sector so that they can make investments and get returns,” said Mr Orumoi.

The loans are priced at nine per cent. “We want to support the industry again but we will be looking at innovative and eco-friendly projects in the industry,” he said.

He said facilities such as amusement and water parks, cruise boats in Mombasa and Kisumu, open-top tour buses and floating restaurants are some of the  innovative ventures hoteliers should look into.

Tourism Principal Secretary Fatma Hirsi, who was the chief guest at the forum, said TFC has been able to offer loans to more than 200 investors in the sector.

“The ministry is working with TFC to mobilise resources which can assist to meet the ever–growing demand to finance the tourism sector,” she said.

TFC Board Chairman Patrick Osero said there is great opportunity for investment in the sector since Kenya is one of the largest leisure tourism markets in Africa and has a long history in beach and safari tourism.

Kenya Association of Hotelkeepers and Caterers (Kahc) Coast Branch Executive Officer Sam Ikwaye said the recent changes in the banking sector and the prevailing political environment have raised costs and many hoteliers, especially small investors, face challenges in accessing loans.

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“TFC’s mandate thus becomes significant to the sector. However, it is worth to note that the Sh800 million kitty is too little for the entire sector.

There are pending applications from 2015 and we think TFC should demonstrate ability to fulfill their mandate by may be focusing on Mombasa Beach Hotel,’’ he said.

He challenged TFC to lead by example and ensure that the hotel is transformed to match private investments and uplift the region’s profile.

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