By Yared Tsegaye
Industrial Project Services (IPS), a state-owned consultant, has finalised and submitted the first round of asset valuation report of Hilton Addis Hotel to the Ministry of Public Enterprises (MoPE).
IPS, of the Ethiopian Investment Commission (EIC), has been conducting the assessment report for two weeks and had tendered the report to MoPE three weeks ago.
Experts from investment administration and privatisation directorate of the Ministry are currently cross-checking the report with the assets of the hotel, according to Asebe Kebede, the assistant director of corporate communications at the Ministry.
Both IPS and MoPE declined to disclose the value, stating the confidentiality of the agreement between them. However, the hotel would be worth close to 4.5 billion Br to five billion Birr, according to experts. The experts estimated the price range based on the hotel’s 130,000 dollars cost per room and 50,000 Br per square meter for the plot of land it rests on.
In 1969 Ethiopia’s government and Hilton Worldwide signed a 50-year management contract to run the property of Hilton Addis located in the capital. The contract, to be renewed every decade, gives Hilton Worldwide a 20pc share of revenues and restricts the global company from managing another property in the country under its brand.
Lying on close to 60,000sqm plot of land, Hilton Addis has a 12-storey main building – alongside a Garden Wing extension built in 1987 – possessing the largest number of rooms, about 400.
However, a decision to privatise the Hotel was made a year ago by the Prime Minister’s Office. The decision was communicated to the hotel’s board chaired by Yinager Dessie (PhD), commissioner of Planning Commission, to prepare the property for auction.
The recently switched minister of Public enterprises, Girma Amente (PhD) confirmed that the hotel would be auctioned off for privatisation. He confirmed during his presentation of the nine months performance report of the Ministry to the parliament.
Since the announcement of the privatisation of the Hotel, various international companies have been showing interest including the Dubai-based giant Albwardy Investment Group. The Dubai-based company engages in food distribution, retail, construction, shipyards, hospitality and hotel ownership.
Two years ago experts from the Ministry of Culture & Tourism (MoCT) rated the Hotel three-stars, lower than the expectation of the management of the company.
Whoever will manage the hotel has to have an extended strategic plan, as the Hotel needs significant innovative work, according to Neway Birhanu, managing director of Calibra Hospitality Management & Consultancy. Calibra has been serving the hotel for over a decade in various positions.
“It needs a complete renovation as the rooms are cracking down, affecting the grace of the hotel,” Neway said.
Although Hilton was the pioneer in the franchise hotel trend in Ethiopia, more hotels are currently operating in the country. Hotels like Sheraton, Marriott, Radisson Blu, Golden Tulip and Ramada. Furthermore, the management agreements of close to three dozen were signed, with the projects at different stages.