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Profitable Hotel - Kenya E Coast Great Lake Region

R114,750,000Pretoria - CenturionListing: #14461

Pretoria - Centurion businesses for sale 


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About this business for sale

Profitable Hotel - Kenya E Coast Great Lake Region

The hotel started nearly three years as a newly opened 5-STAR hotel aiming to offer unprecedented luxury and quality in Kenya.

The hotel has beautiful architecture, spacious setup and lush gardens, reflecting a beautiful and peaceful environment for business and leisure travellers alike.

Kenya as a country is a rising star and being rated as one of the top Eastern Africa community countries. Economic growth has been an excellent 6.2% during the second quarter of 2016. Growth in the tourism sector during the first four months of 2016 has been 14% and tourism in now the second largest source of foreign exchange.

The area is adjacent to the lakeside and is home to a number of similar, high-end hotels and large homes. The area is referred to as the great lake region or the Lake Victoria Basin and strategically positioned to take advantage of this promising emerging market. Its proximity to the lake coupled with the convenience of available amenities like the Kenya Wildlife Impala Park makes the Hotel ideal for holiday-makers, tourists and business travellers.

Accommodation facilities consist of 31 standard rooms, 1 presidential suite and 3 apartments.

Other major facilities consist of the following:

 Main restaurant, serves a mixture of Continental, African and Asian
 Dedicated within the main restaurant Japanese cuisines are served;
 Small café - serving pastries, breads and specialty coffees;
 Bar;
 4 x conference facilities suitable for both business and formal meetings;
 Conference hall with seating capacity of 150 people;
 High-end conference hall with a seating capacity of 75 people;
 Garden and the poolside terrace;
 Auxiliary services such as airport pick-ups, laundry,
 Catering for events and event-planning services;
 Health club with gym, massage and spa.
Rooms are equipped with modern amenities, spacious, balcony and furnished with high quality furniture and fabrics.

Visitors targeted consist mainly of corporate clients visiting for business assignments and therefore caters primarily to high-end guests and it has already hosted a variety of VIPs, both local and international and it’s often the preferred location for a number of NGOs. The Hotel’s wide variety of customers has enabled it to enjoy a relatively consistent and high room occupancy rate year round. Room occupancy rates remain at 70% in the year 2015 to 2025 projection periods. However, the average room rates are expected continue growing by 10% p.a. from 2015 to 2025.

Initiatives aimed at growing East African tourist visits to Kenya are by connecting the town within the East African region due to its close proximity to the Kenyan, Ugandan and the Northern Tanzanian border.

The Hotel caters to a high-end clientele, primarily made up of visitors from the West, with a small blend of local tourists. The Hotel has also hosted several VIPs, both local and international, since its opening. In all it will remain a top tier hotel within the region through its unique service provision, competitive pricing and aggressive marketing strategies.

The asking price of US$ 8,500m consists of +/- US$7,1 million for the immovable property (land and buildings), based on a valuation and +/- US$0,9 million for other assets i.e. a total tangible asset value of +/- US$8,0 million.
The hotel also has very feasible and viable expansion opportunities. The hotel has planning permission for another floor and is constructed so that a further 25 rooms can be accommodated. This will lead to an expansion of market share. Chain hotels or individuals can also expand their market share through acquisition.

Reason for selling is that the owners feel they have achieved what they planned and now want to pursue other business opportunities. The owners are now looking at diversification.

The Department of Tourism in Kenya is playing a major role to reinforce the local Tourism Industry as a high quality service sector to be able to improve and reach the following strategies:
 - Initiatives aimed at growing East African tourist visits to Kenya are by
connecting the town within the East African region due to its close
proximity to the Kenyan, Ugandan and the Northern Tanzanian border;
 - As an initial tax free business and no income tax until the investment is
redeemed by an act passed by the Kenyan Parliament

Actual Sales revenue for the hotel has grown by 18% and 21% year on year since inception which is a combination of growth based on a good track record, reputation and client retention enabling an excellent upward adjustment in rates being charged. For 2018 the sales projection growth is 61% higher compared to 2015

Sellers Discretionary Earnings, also known as EBPITD (Earnings before Proprietors Compensation, Interest, Tax and Depreciation) based on historical trading have also grown on a healthy basis. Return on Investment %(ROI) versus asking price has started off on a small positive basis being typical for a new business and the ratio has improved with time with better utilization of fixed expenses compared to sales. Projections indicate that the ROI will improve significantly within the next three years. There is exponential economic growth in the area seen by the completion of the 2017 railway and the potential growth of the city.

This is an extraordinary opportunity to acquire a well-operated 5 star hotel with a strong foundation set and a solid business model in place makes this is a highly lucrative platform for a new buyer looking to manage a successful hotel business.

This business offers good opportunities being tax free with excellent growth prospects to build on the success and footprint already achieved. The added benefit is the future growth in the property value. Kenya is one of the better developed countries in Africa with a very young population, stable political climate and fairly good economic growth. The World Bank is seeing Kenya as having made significant structural and economic reforms that have contributed to sustained economic growth in the past decade with good future and economic growth. Kenya is world renowned for its nature and wildlife.

This is a great real life time opportunity for an entrepreneur to make a life style change.

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084 682 3179

Fiona Singh