Simba Corp, which has interest in five star Hotel Kempinski- Europe’s oldest luxury hotel group, is thrusting into the gamble of investing in mid-range hotels. The firm is currently setting up two four-star hotels under the “Acacia Premier” brand for budget tourists with rates of $123 per night. A similar number of two-star hotels “Acacia Express” priced at $62 per night will seek to capture the lower middle market, a report by local news service Business Daily Africa claimed.
The average hotel prices in Kenya range from $89 to $97.
The family owned business says it is lining up
the investments, which are to be located in Nairobi, Kisumu and Naivasha, in a bid to attract mid-sized entrepreneurs and local holiday makers who are in search of affordable hotels.
In an interview last week Simba Corp Chief Executive, Adil Popat, said there is a relatively high demand for hotel rooms in the mid and lower middle market segments due to increased intra-country business and holiday travels.
“We see a lot of growth potential in the hospitality market as seen by growing tourist numbers and increased travels in the region, especially intra-Africa and regionally,” said Mr Popat. “Our main clientele is local businessmen and travellers. There is huge demand for hotel, accommodation and conference facilities.” The investments are to be funded through a mix of debt and equity.
The developments indicate that the Popat family is moving to cut reliance on the auto dealership business where it holds exclusive franchises for brands such as Mitsubishi, BMW, Mahindra, Renault and Geely.
The additional hotel investments add to Simba’s hospitality records that already feature the five-star 200-room “Villa Rosa” Kempinski in Nairobi and the “Olare Mara”, a 12-tent luxury camp in the Maasai Mara national reserve, managed by Kempinski Europe’s oldest luxury hotel group.
Simba has, however, decided to manage the upcoming four hotels on its own, using the Acacia brand. Acacia Premier Kisumu, featuring 94 rooms, three spa rooms, poolside deck, restaurants and a coffee shop is set to open in December.
Mr Adil said the company has leased the building and has invested $4 million in fit-out and refurbishment of the four-star hotel located in the leafy Milimani suburb which offers a view of Lake Victoria. Construction of the 168-room Acacia Premier Nairobi, to be located along Mpaka Road in Westlands, will commence next year. The 10-storey hotel will cost about $20 million and feature five restaurants, a club and a conference centre.
Simba Corp acquired a two-acre piece of land in Naivasha near the upcoming Buffalo Mall where it will set up a 72-key two-star hotel. A similar two-star hotel under the Express model will also be built in Nairobi’s Westlands district along Muthithi Road.
“The design is ready and we’re about to begin construction,” said Mr Popat. The Acacia Express Naivasha will be set up at a cost of $3.5 million.
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