Banks threaten to auction hotels in rwanda
The Rwanda Hotel Group Members are begging the financial institutions to extend a grace period of about one year to the members that acquire loans before they commence the repayment process. The Rwanda Hotel Group is an association that unites the medium sized hotels in Rwanda some of which offer accommodation to the Rwanda gorilla safari undertakers.
Unfortunately, this sounds like impossibility since the banks have already issued notices for auctioning of the properties of the defaulting members out to the Medias for the property to be sold. A range of the members of Rwanda Hotel Group are working tooth and nail to ensure that their investments are not taken off cheaply like that to the highest bidders while the Banks are trying hard to recover their range of billions of francs that are caught up in the non-performing loans in possession of these hotel establishments among which are overnight spots for the travelers on gorilla safaris in Rwanda
The Private Sector Foundation is in between the two parties all of which are its members and intends to bring them to table and discuss the perfect way forward putting in consideration of its interest in seeing the business succeed and not fail. Mr. Ruzibiza Stephen who is the Chief Executive Officer of the Private Sector Foundation affirmed the arrangement and noted that there are 20 hotels appealing to be spared from auctioning.
Among the Hotels being auctioned includes the Eldorado whose owner is also the leader of the Rwanda Hotel Group Mr. Mupenda. The Hotel is positioned at 27 KG Street along 8th Avenue behind the Rwanda Development Board – the body that overlooks Rwanda safaris including gorilla trekking safaris in Rwanda. The Eldorado Hotel features 17 workers whose jobs are now at stake as they are not assured of being retained when the new management comes in. The Hotel that is estimated to be valued at Rwf350 million including the land and building is being auctioned off at Rwf200m to get back the loan amount of Rwf260 million which was acquired from GroFin about ten years back when the proprietor was upgrading the facility from an apartment to a hotel to accommodate the range of guests including those on gorilla safari in Rwanda.
Another facility is the Alpha – Palace which is a three star hotel featuring a considerable level of comfort and design. Though the facility is valued at Rwf2 billion but is apparently troubled with the Rwf500 million credit facility that was acquired from the Bank of Kigali to upgrade the facility ahead of Rwanda Development’s Board Hotel Classification exercise. Though the Hotel managed to secure the stars they have not yet transformed in to the business to bail the facility from the credit scandal. The failure of the hotel is blamed on the reduced clientele arising from the stiff competition in the neighborhood.
This move is seen as an unfortunate encounter for the home owned enterprises that are starting to develop in the still young tourism and hospital industry of Rwanda