Rwanda Development Board (RDB) has officially announced the sale of Umubano Hotel, as part of the government's plan to divest state-owned assets and companies to the private sector.
The government is marketing Umubano, currently managed by Agaciro Development Fund, to investors as a luxury hotel and considered one of the best in Rwanda.
RDB is seeking investors who can buy the property in a fair and transparent competitive bidding process, the investment promotion agency said in a notice dated August 5.
"The purpose of this tender notice is to identify potential companies and/or consortiums with the requisite technical and financial capacity to purchase and operate the hotel," it said.
One of the key factors for an investor who will take over the Kacyiru-based hotel facility is to turn it into a five-star hotel within the shortest time possible, according to the Prospectus.
RDB said it will work with the new investor to turn the hotel into a flagship that will meet various local and international environmental sustainable standards to attract local and international clients.
Umubano, one of the oldest hotels in Rwanda, had been acquired by Madhvani Group at a tune of $13 million (about Rwf11 billion) in April 2017 after years under liquidation.
It's not publicly clear when and why Madhvani Group, a Ugandan-based conglomerate, exited Umubano which they acquired barely three years ago, but the main issue even with previous investors, has always been failure to make the requisite investment to expand the hotel.
The hotel has been in the hands of several other investors, including the Libyan government-affiliated LAP Investments which operated it under Laico Hotels brand.
It has also previously been managed by global hotel brands including Novotel, Meridian and Accord.
Meanwhile, the Government has set September 11 as the closing date for submission of applications from potential bidders.
The sale of Umubano hotel comes as hospitality stakeholders are struggling to keep up with business amid the Covid-19 pandemic, which has kept clients and visitors away.
In the first two months of the pandemic, hotels counted Rwf13 billion in losses, and that loss may have gone up as government restricted movement and implemented a lockdown.
W Hospitality Group estimated in June that half of the scheduled hotel development projects in Africa in 2020 will not open due to the novel Coronavirus outbreak.
In Rwanda, hotels have been allowed to reopen provided they put in place minimum health safety measures to keep customers safe.
The Government also set up an Rwf100 billion recovery fund that hard-hit businesses, like those in the hospitality and tourism sectors, can benefit from to revive their operations.