Business Daily (Nairobi)
Wangui Maina
10 June 2008
Tourism Promotional Services of East Africa is set to roll out an expansion plan that will see it open new units in Kenya and Tanzania.
TPS, which runs Serena Hotels, will open the top end units near Lake Nakuru and Laikipia as well as two luxury units in southern Tanzania. The move is part of the company's strategy to strengthen its safari business in the region and to offer tourists a bigger choice of products.
Plans are under way to put up a tented camp at Soysambu Conservancy, which lies between Lake Elementaita and Lake Nakuru, as well as a luxury tented camp in Ol Pajeta in Laikipia. The company will lease the land in both conservancies with construction expected to begin in the third quarter for both units.
The capital intensive projects are expected to cost $12 million (Sh744 million) to put up the facilities in Kenya, TPS's managing director, Mr Mahmud Jan Mohamed, told Business Daily.
He said the company was looking for the right vehicles to help them raise the capital needed for this expansion plan.
"We are looking at all ways to raise the needed capital , which may include a rights issue as well as self generated funds," he said.
Part of the funds raised will be used in expanding the Nairobi Serena Hotel.
In the first phase, the Nairobi unit is expected to boast a new underground parking lot and bigger banquet facilities.
Last year, the hotel did soft refurbishments to help improve its profile and revenue stream.
TPS is in talks with the Tanzanian authorities to finalise leases to put up two lodges of 20 units each, in Southern Tanzania. The two lodges are expected to further strengthen Serena's presence in the country where it has eight hotels and lodges in the Northern region and Zanzibar.
"In completion of all these units, Serena will have strengthened its presence and footprint in East Africa and will be able to offer clients an even wider choice of holiday destinations," Mr Jan Mohamed said.
The upgrade will also cover rehabilitation of bedrooms especially in the lodges.
Last year, the company upgraded some of its units including opening the Spa facility at Serena Beach Hotel in Mombasa.
The expansion plans are being undertaken as the company grapples with the negligible number of tourists trickling into the country following the slump in the tourism sector.
During the release of its performance results earlier in the year, TPS forecast reduced performance during the first half of the year.
However, the hospitality sector could be on the rebound as bookings for July-December are being received, a testimony of the vigorous marketing by players to rejuvenate tourism.
The group's units in Tanzania and Uganda are expected to boost TPS's income this financial year.
TPS increased its profits before tax by 24 per cent to Sh617 million in the financial year ending December 2007 with the climb being attributed to the good performance of the sector last year. Turnover for the group also grew by 12 per cent to Sh3.67 billion in 2007.
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