MEIKLES Hotel is no longer a five-star hotel by international standards owing to its failure to secure US$15 million towards refurbishing the iconic establishment.
BY TATIRA ZWINOIRA
The disposal of Meikles Hotel was announced last month by Meikles Limited, the holding company, to ASB Hospitality (Zimbabwe) Private Limited a subsidiary of the Dubai-based Albwardy Investment with links to the United Arab Emirates government.
This came after international investors shunned Meikles initial asking price of between US$50 million and US$70 million for the hotel with the holding company settling for US$20 million from ASB Hospitality.
“In terms of our Zimbabwean standard, the hotel is still a five star. Those with a status of a five star is given by a national association. In fact, its given by the Zimbabwe Tourism Authority. The hotel is a five-star at the movement,” Meikles chief finance officer Thempson Muzvagwandoga, said responding to questions from NewsDay Business at a media briefing, yesterday.
“But obviously, if you travel around the region and compare this to a five-star in those markets you will notice some discrepancies so yes (it has lost its international five-star rating).”
Meikles executive chairman, John Moxon added that the loss of the five-star international rating is only physical as he believes that it still being run on “international standards”.
Hotel ratings are often used to classify hotels according to their quality with the objective being to bring into focus the hotel experience.
As as far as Meikles is concerned, low occupancy rates, rising hotel charges against shrinking disposable incomes left the group unable to afford maintaining an internationally approved five-star rating.
“One has got to look forward and say in two or three years’ time will there be change in demand for the hotel here that we should spend that sort of sum ourselves if we can’t raise it? The Albwardy group is a big group it can take that risk and we can’t, but at the same time the money which we are getting is being spent on other group companies,” Moxon said.
Muzvagwandoga added that if Meikles had kept the hotel it would have had to pay US$15 million on improving the backbone infrastructure of the hotel which would be difficult to source in the current economic environment.
From the proceeds of the US$20 million sale US$8,5 million will go to Meikles Tanganda Business and US$10 million will be invested in the Victoria Falls Hotel of which Meikles owns half. Hospitality firm, African Sun Limited, owns the other half.
The balance of the sale proceeds will go to taxes.
Moxon said the approval for the sale of Meikles Hotel is now in the hands of the Reserve Bank of Zimbabwe after the group’s shareholders approved the sale last Friday.