ADDIS ABABA | Access Resort hotel (Old Imperial hotel upgrade) | Planning
--------------------------------------------------------------------------------PTA Bank Nods Access Resorts Loan
The six million-dollar loan for renovation of the former Imperial Hotel also approved by central bank
The former Imperial Hotel has stood idle for the past year since its acquisition, awaiting financing for its planned renovation.
Access Resorts is hoping to secure a loan of six million dollars from the Common Market for Eastern & Southern Africa (COMESA) Bank, a.k.a. Preferential Trade Area (PTA) Bank, to pay for the renovation and upgrading of Imperial Hotel, Fortune learnt.
The loan request has already been approved by the PTA Bank, and won the blessing of the National Bank of Ethiopia (NBE), sources disclosed to Fortune.
Access Resorts, run by Ermyas Amelga, acquired the property from the family of Asfaw Tefera, which built the hotel in the mid 1990s and ran it for over 15 years. The 63-room hotel, lying on a 3,411sqm plot in the eastern part of the city, consumed 23 million Br during construction over five years until completion.
One of the early privately owned hotels to emerge in the post-Dergue era, Imperial was sold to the resort company for an undisclosed sum, in December 2010. Industry sources estimated that the hotel could have been offered to Access Resorts for over 60 million Br, the largest transaction in the hospitality industry in the past two decades. Access has also acquired over 90pc share in Safari Hotel, a property in Adama (Nazareth) town, 99Km east of Addis Abeba, for 27 million Br.
The new company, with several subsidiaries in the property investment business and real estate development, wants to reduce the number of rooms to 45 and transform the three-star property into a resort establishment, under the brand Access Resorts Hotel (ARH).
ARH’s loan request was endorsed by the central bank which is mandated to approve loan requests from foreign banks.
It was approved because it proved that it will be able to pay back the loan in foreign exchange, Alemayehu Kebede, director of Change Management and Communications at the central bank said.
Experts in the hospitality industry are baffled by the decision that Access’s management made in naming the property a resort.
“The area is a busy commercial zone,” An expert who studied hotels and tourism in the United States and has 25 years of hands-on experience in the hospitality industry in Ethiopia and abroad, told Fortune. “I do not think that it is a feasible idea.”
Sisaye Teklu, coordinator at the Ministry of Culture & Tourism’s Hotel Service Quality Assurance Directorate, agrees.
“A resort hotel usually has to be located outside the city centre, with natural resource sights along with hotel facilities providing service to specifically targeted clients,” he told Fortune. “However, if facilities are available, the location should not restrict developers to name it as they please.”
The new developer plans to incorporate an in-house swimming pool, one of the major amenities the property lacked under its former owners.
Access also plans to offer for time-share sale luxury rooms to interested buyers who would like to share keys. The primary target for this brand new product is Ethiopians living abroad, who will have to pay 3,000 dollars, up front, for a single room, while the three-bedroom executive suit apartment may cost 12,000 dollars.
This is an idea that the expert believes is “smart.”
“Considering how competitive the hospitality industry has become and with the coming of international brands to town, I guess they have made a wise decision,” he said.
The facelift is projected to reach four million dollars. The estimate surfaced after experts brought from Lebanon surveyed the hotel, following is acquisition.
Nevertheless, the property has remained closed for the past year, ever since the original owners handed it over to the developer. This was due to the long process of identifying and securing bank loans from foreign sources, according to industry observers.
Access Resorts has won the nod from PTA Bank, a sub-regional financial institution to soon be guided by Admassu Yilma, an Ethiopian national who was appointed to the position three weeks ago. Admassu is expected to take over the chief executive officer position by April 2012.
Headquartered in Bujumbura, Burundi, PTA was established in 1985 by 20 shareholding countries, including Ethiopia, which owns 12.3pc of shares in the Bank.
PTA Bank disbursed loans totalling 243 million dollars in 2010. Only nine per cent of this was disbursed to finance projects in the hotel industry.
Ethiopian Airlines was the only Ethiopian company that secured a (20 million dollar) payment facility from PTA Bank, in its bid to finance its purchase of Boeing 777s. This loan represented less than five per cent of the total loans and advances of the same year, while the largest portfolio (over 15pc) of any country went to companies in Kenya.