49 years later, the sun finally sets on Sunset Hotel

The Sunset Hotel. The State-owned hotel closed yesterday after more than 40 years. [Denish Ochieng, Standard]

The sun set on Kisumu’s oldest hotel yesterday.

And as fate would have it, it was called Sunset Hotel.

The closure of Sunset Hotel brings to an end a silent but vicious battle for control of one of the oldest pillars in the Western Kenya tourist circuit, one that has been standing for 49 years.

Opened by former President Daniel arap Moi in the 1970s, the hotel has hosted the who-is-who in Kenya’s history.

But not anymore.

The hotel shut its gates yesterday, marking the end of an era as the more than 50 employees bid goodbye to a facility they had called their second home for years.

Co-owned by the Tourism Finance Corporation (formerly Kenya  Tourist Development Corporation) and the county, the hotel sits on a scenic nine acres on the shores of Lake Victoria.

Overlooking Impala Park Sanctuary, home to impalas, the rare Sitatunga antelope as well as big cats and buffaloes, the two-star hotel offered a spectacular view of the lake to its guests.

But behind its white and brown facade lies a tumultuous history.

Faltered sale

To begin with, the hotel ought to have been sold more than ten years ago. But the sale faltered for unknown reasons.

In 2017, Auditor General Edward Ouko declared it a bad investment. By then, it had accumulated losses amounting to Sh117 million.

And with other five-star hotels blossoming around it, the sun was setting on Sunset Hotel.

“Sunset Hotel was set to fail a long time ago. Maybe the plan was to lower its value and sell it off at a throwaway price,” says Tom Onchiri, a Nairobi-based valuer.

Still, both the county and the national governments had a chance to salvage the hotel.

They did not.

Early this year, Tourism Cabinet Secretary Najib Balala visited the hotel and announced grand plans to rescue it.

According to Mr Balala, the hotel would be turned into a convention centre.

“We are thinking of coming up with a big convention centre capable of seating up to 10,000 delegates,” he said.

Another proposal was to turn the facility into a tourism training college, akin to the iconic Utalii College.

But all these ideas came to naught.

According to Balala, the future of Sunset Hotel depended on the majority shareholders’ position.

And the hotel’s ownership was the elephant in the room.

“We know the governor also claims stake of the hotel, but they have an equity holding of 5 per cent. 95 per cent is owned by the Government,” said Balala. At the time, Balala denied claims that the hotel was due to be put up for auction due to the  heavy debts.

Earlier, the county assembly had allowed Governor Anyang’ Nyong’ o to spend Sh40 million to buy a stake in the hotel and give the county a say in its future development.

All this has gone down the drain.

When The Standard team visited the facility yesterday, the dejected employees were reporting for the their last call of duty.

According to the hotel’s General Manager, Joseph Oduor, the closure came after 15 years of financial woes that saw the facility record back to back losses.

“We have not been able to pay salaries since November last year, and business has been going down,” he said.

According to Oduor, the hotel was simply overtaken by time.

“Since it was set up in the early 1970s, it has not lived up to the fast-changing standards, making it lose clients,” he said.

The hotel’s fall came as Kisumu rapidly becomes a popular destination for conference tourism. According to records from Kisumu County Tourism department, conference tourism makes up to 80 per cent of the tourism revenue.

But someone either wanted the sun to set on Sunset Hotel or simply did not plan ahead.

“We have not had any proper renovations and improvement of facilities to match the demands of the fast-changing market,” said Oduor.

Some of the workers who spoke to The Standard on condition of anonymity accused the county government of playing a role in the death of the hotel.

“Kisumu county government alone holds over 10 conference events in a week, and all these are hosted in private hotels, instead of giving that business to this hotel where they have a stake,” said one employee.

Counting losses

It is not just employees who are counting losses. The fall of the hotel will be felt beyond its white facade.

By yesterday, suppliers were holed up in meetings how millions of shillings owed to them will be paid.

Peter Ouko claimed the hotel owes him more than Sh900,000.

He is not certain of getting the money for potatoes supplied since 2014.

“Last month, I was paid Sh20,000 and told to come for the rest later only to learn from some workers that the hotel is shutting down,” he said.

Celestine Nombi, who supplies vegetables and fruits, also claimed that the hotel owed her almost Sh1 million.

The closure of the hotel caught her by surprise. 

“I even made my last supply last week, and was not told about the impending closure,” she said.

But Oduor, the hotel’s last manager, promised that all the debts would be settled.

“We have a lot of debts with the Government agencies like Kenya Revenue Authority, Kenya Power, and many others. We also owe suppliers of goods and services, and all that will be handled by the board,” he said.

Kisumu County Director for Tourism Thomas Ouko said the closure was not permanent and that the hotel would be refurbished and restructured.

“A lot of money has been going to operational costs such as salaries. So we will take the workers based on need basis, but we first had to pay off the current workers,” he said.

Still, the drama behind the hotel may not be ending anytime soon.

Last year, the Tourist Finance Corporation warned investors against bidding for development of the hotel citing a tussle with the county government.