State in search of new Hilton tower tenant as hotel exits CBD

At inception, Hilton Hotel was the tallest building in Nairobi and a popular base for international tourists. [Boniface Okendo, Standard]

The future of the towering landmark building housing the exiting Hilton Hotel remains in the hands of the State, with owners yet to find strategic alternatives for its use.

This is with only 52 days left for Nairobi's iconic Hilton Hotel - which is owned 40.57 per cent by the government - to shut its operations for good in the central business district (CBD) after over 50 years.

A Hilton spokesperson confirmed yesterday in an interview that the hotel will close seven days before Christmas.

"Hilton Nairobi has welcomed guests for more than 50 years, and we are proud of the legacy of hospitality delivered over the last five decades," a Hilton spokesperson told Real Estate in an interview.

"The last day of operations will be December 18, 2022. We remain committed to Nairobi as an East African destination for both business and leisure travel and have development resources dedicated to growing our portfolio in Kenya."

A spot-check by Real Estate yesterday revealed that business was operating as usual ahead of the planned final exit of the hotel giant chain.

No new operator has, however, been identified for the building. Hilton and State officials interviewed said the exit left the future of the building in limbo.

"We continue to look for alternative placement opportunities for the remaining Hilton Nairobi team members," said the Hilton spokesperson.

"This is an ongoing process and we are unable to share specific numbers. The hotel ownership is reviewing options regarding the future of the site, and related questions on the future of the hotel can be directed to the owners."

Workers who spoke on condition of anonymity said they were anxious about their future as Hilton is yet to communicate on their terms of exit with time ticking.

The government holds its stake in Hilton through the Kenya Development Corporation (KDC). KDC officials were non-committal on the future of the iconic Hilton building when reached for comment.

"The matter is with the Privatisation Commission (PC) and following President William Ruto's pronouncement to have the PC Act reviewed with a view to creating efficiency in the privatisation process," KDC interim Director-General Christopher Huka told Real Estate on the remaining strategic options for the hotel when reached for comment. "Once the process moves to the PC, we have very little control."
Transaction advisor

KDC had earlier said that it had received no offers yet on potential new operators of the hotel building. The PC had earlier told The Standard that it is not involved in the exit plan for Hilton International.

It had, however, said that it "has retained the services of a transaction advisor to advise on the sale of KDC (formerly ICDC) shares in the International Hotels Kenya Ltd which owns the Hilton Hotel."

The commission separately said that it held a consultative meeting on the review of the Privatisation Act, 2005.

PC Chairman Faisal Abass said the commission is looking at ways to unlock the bottlenecks in the process to get privatisations moving again. The facility had earlier blamed other unnamed factors beyond Covid-19 for the planned closure.

It had announced that it would redeploy some staff to hotels within its Hilton portfolio in Nairobi and lay off an unspecified number. "We are all in the dark," one employee told Real Estate. Hilton CBD began operations in Nairobi on December 17, 1969, and was officially opened by Kenya's founding president Jomo Kenyatta.

At inception, the hotel was the tallest building in Nairobi and a popular base for international tourists.

The hotel promised tourists unique city views from its high-rise tower rooms and was a popular hangout for wealthy businessmen and tourists. It has 287 rooms - 45 twins, 185 doubles, seven suites, 22 pool rooms and 27 executive rooms.

The government has in the past decade struggled to offload its ownership in three luxury hotels, including Hilton.

The State has a 40.57 per cent shareholding in International Hotels Kenya Ltd, which owns the Hilton. It also held a 33.83 per cent stake in Kenya Hotel Properties Ltd, the operator of the InterContinental Hotel, which also shut down in August 2020.

The State has been hesitant to pump money into the two luxury hotels, which has seen other shareholders hold back.

Besides InterContinental Hotel, several top hotels, including Laico Regency stopped operations owing to the coronavirus economic fallout.