Hotelier signs Sh2b loan deal with Proparco

Claude Periou director general Proparco (left) and Mahmud Jan Mohamed managing director Serena Hotels when TPS Eastern Africa Limited and Serena Hotels and PROPARCO a subsidiary of the French development agency signed a USD 20 million loan agreement taken on 24th August 2015

NAIROBI: Tourism sector has received a major boost after TPS Eastern Africa signed a Sh2 billion loan agreement with French development institution Proparco to expand its services.

The company, which operates a chain of luxury hotels, lodges and tented camps across East Africa under the brand name Serena entered into an eight year tenure partnership with Proparco that will see a portfolio of facilities developed in the next two years starting in 2016.

Nairobi’s Serena Hotel will be among the hotels that will undergo redevelopment and refurbishment with the first phase commencing in 2016. This project will include a new 500 capacity conference hall and banqueting facilities as well as a car park.

TPS Eastern Africa Director Mahmud Manji said the deal is a declaration of faith in the tourism sector that has been unstable for the last four years. “TPS Serena has been in the country for more than 50 years. We understand the market ... we are not afraid to invest more in the sector,” said Manji at the Nairobi Serena Hotel after signing the agreement.

Proparco is also the financier for the re-development of Nile Hotel in Kampala, Uganda which is now Kampala Serena Hotel with a second phase expected later in the year.

Manji assured customers that the exercise will take place with very minimal disruptions: “We expect better services and high quality hospitality standards afterwards that will attract more customers.” Manji lauded the government’s efforts in reviving the sector but acknowledged that a lot is still expected especially in infrastructure and promotion of East Africa as a major tourism destination: “However, the private sector should step in to realise quick achievement this.”

Already East Africa Affairs, Commerce and Tourism Cabinet Secretary Phyllis Kandie has confirmed that Kenya is in talks with East Africa counterparts to create regional clusters in order to position the region a major tourist attraction. Democratic Republic of Congo and Ghana are some of the countries that have expressed interest in joining the cluster.

Kenya’s tourism industry is recovering from a slowdown triggered by attacks blamed on al Shabaab militants from neighbouring Somalia that led to warnings against non-essential travel to the coast by Western governments.

Britain, the source of more than half the country’s tourists, lifted a travel advisory covering most of the coast in June, boosting chances of a recovery. Bookings to coastal resorts have improved over the past few months.

Visitor arrivals to east Africa’s largest economy fell by a quarter in the first five months of this year, to 284,313 from 381,278 in the same period last year, data from the Kenya Tourism Board showed.

TPS Eastern Africa swung posted a loss of Sh139 million in the six months through June, compared with a profit of Sh58 million in the same period of 2014.