Until he recently made a statement with the purchase of the iconic 680 Hotel in Nairobi city center for an estimated 1.2 billion shillings, relatively little was known about billionaire Chris Musau on the capital’s business scene.
Even Mr Musau’s signature brand, Maanzoni Lodge in Machakos County, was sometimes associated with his brother-in-law and former minister Mutula Kilonzo, whose Kwa Kyelu ranch is a stone’s throw from Maanzoni.
Yet Mr. Musau’s entrepreneurial journey mirrors that of many Kenyan tycoons who prefer to operate under the radar.
He once made money by buying 10,000 acres through local moneylenders, his personal savings and family resources and selling most of the land, including to his late brother-in-law, Mr. Kilonzo.
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The billionaire launched his hotel brand as a hobby two years after selling his Nova supermarkets to retail giant Naivas.
The acquisition of 680 fulfills Mr. Musau’s dream of expanding his business beyond Machakos County. The 680 will join Maanzoni franchises, including the three-star lodge with 326 en-suite bedrooms situated on 28 acres of land in Lukenya, Machakos.
In 2019, it announced plans to build a 300-bed, 11-storey hotel with luxurious residential facilities in the town of Machakos.
It plans to change the name of the 680 built in 1972 to the Maanzoni brand and renovate a 10-storey hotel with 253 rooms, a main area consisting of the reception, lounge, cafe, conference rooms, restaurant and bar. .
Seventy percent of the hotel’s space has been rented out, leaving only 30% dedicated to the hotel, and he wants to reverse that trend.
The iconic hotel has leased space to several businesses, including Big Square fast food outlets.
The hotel has also leased space to a church. Customers leave reviews online complaining about religious outcry and weak Wi-Fi.
Mr Musau says he will spend the next 60 days renovating the building into a four-star hotel with top-notch facilities. He will, however, rent it out as a three-star hotel so that he can enter the market with a superior offer to create brand momentum.
“Over the next six months, we will renovate the company. We want to bring it back to the hotel model, rebrand it as Maanzoni and offer the best service to our guests at the standards of a four-star hotel, but renting it out as a three-star,” Mr. Musau said.
“We want to do this so we can break into the market.”
Mr Musau says he wants to focus on City Hall and will not be in the market for further expansion.
This is despite receiving offers for hotels in its preferred expansion sites – Nairobi, Mombasa, Maasai Mara and Amboseli.
“We have three offers for other hotels but we can’t take another hotel for a year,” he says.
680 is part of the Sentrim Hotel portfolio associated with billionaire investor Jagdesh Patel, who in 2018 tapped real estate firm Knight Frank to sell his eight hotels, including Boulevard Hotel, Castle Royal Hotel (Mombasa), Elementaita Lodge, Samburu Lodge , Sentrim Tsavo, Sentrim Amboseli and Sentrim Mara.
680, which takes its name from the number of beds it had when it first opened, is the group’s biggest moneymaker, raking in 213 million shillings a year in 2018.
Knight Frank argues that 680’s profit can be maximized either by renovating the building into an office block or by letting the three-star hotel continue to run smoothly. The hotel has reportedly attracted interest from local and foreign investors amid speculation that Vice President William Ruto had a stake in the facility.
Kenya’s tourism industry has started to emerge from its deep Covid-19-induced recession as local travelers take advantage of lower prices, but the number of foreign visitors is still well below pre-war levels. pandemic.
The country expects the sector, usually one of its biggest foreign exchange earners, to earn 173 billion shillings this year, up 18.5% from last year. Profits fell to 88.6 billion shillings due to Covid restrictions.
They rebounded to 146 billion shillings last year as the number of hotel nights occupied by Kenyan travelers doubled over the period.
ALSO READ: 680 hotels sold to Maanzoni in 1.2 billion shillings deal
A number of high-profile hotels including Hilton, InterContinental and Laico Regency in downtown Nairobi have ceased operations amid the economic fallout from Covid-19. Some hotels have changed hands.
Kasada Hospitality Fund, which is backed by the Qatar Investment Authority (QIA) – the country’s sovereign wealth fund – has fully acquired the Crowne Plaza Hotel for an estimated 4.6 billion shillings.
Saudi billionaire Prince Al-Waleed bin Talal sold his stake in The Norfolk and Fairmont Mara Safari Club to a Nepali tycoon for 2.8 billion shillings while City Lodge sold the Fairview Hotel, Town Lodge and City Lodge Two Rivers from Nairobi to property investor Actis for 1 shilling. billion.
Local resorts, which normally focus their marketing efforts on overseas tourists, have been forced to look to the domestic market by the pandemic, offering cut fares to lure vacationers.
The number of foreign visitors was still significantly below pre-pandemic levels, at just under 870,500 last year compared to two million in 2019. They are expected to reach 1.03 million this year.