Kigali Serena Hotel says business has slowed down with hotel occupancy dropping by at least 10 percent last year on account of external shocks of the global financial downturn, forcing travelers and tourists to cut back their spending.
“The financial crises affected Serena as much as they affected other industries as many people and organizations cut business and tourism travel to only the very necessary. That saw our occupancies drop by 10 percentage points in 2009,” Mugo Maringa, the General Manager Serena Kigali told Business Times in an email interview.
Kigali and Kivu Serena have a total of 214 rooms respectively yet Rwanda needs about 6,000 rooms by 2012 to accommodate the increasing number of tourists.
Statistics from the tourism office in the Rwanda Development Board (RDB) show that the country has 4,225 hotel rooms compared to 3,438 registered at the end of last year, representing a record of 23 percent increase in the number of hotel rooms.
While the global economy appears to have recovered with the International Monetary Fund (IMF) recently upgrading world output forecasts to 4.6 percent from 4.2 percent, previously raising optimism for business, Serena Hotels maintains that business is yet to return to “business as usual”.
“This year is even more challenging, and we are seeing occupancy levels that are likely to be another 8 to 10 percentage points below last year. We also see the reasons as varied; ranging from the hangover of last year’s financial crises as many people and organizations budgeted for 2010 with the difficult 2009 in mind,” Maringa said.
The Official also mentioned that their business prospects could be affected by the volcanic ash issue in Iceland earlier this year and the fact that some European countries are still experiencing economic difficulties.
“We remain positive and confident that Serena and Rwanda will grow this year, though not in leaps and bounds,”
Government expects to generate $206 million from tourism this year; up from $174 million last year on account of increased spending in the service sector.
However the slowdown has not affected TPS Eastern Africa Limited (which owns and operates Serena Hotels)’s investment plans in the country whose current portfolio is estimated over Rwf5.7 billion.
“The driver (for aggressive entry and expansion) is the good leadership that has created a brilliant environment for investment and doing business,” the official observed.
Recently the Hotel’s management announced that the second and final phase of renovating of Kigali Serena Hotel would begin last month.
This follows completion of the first phase which saw the addition of an ultra modern new wing comprising of a total of 44 guest rooms and a two-storey state of the art Maisha Spa facility with a contemporary swimming pool at a cost of $18.7 million.
The second phase of the program will involve alterations, extensions and refurbishment of various facilities including the old bedroom block, public areas, lifts, business center, meeting rooms, existing shops, offices and the reception area at a cost of $ 4.2 million.
TPS also announced that the construction of the luxury Kinigi Serena Lodge will commence during the third quarter of this year, following complete renovation of Kigali Serena Hotel.
“Our aim is to play a pivotal role in boosting the tourism sector which is at the heart of Rwanda’s overall economic development strategy,” said Serena Hotels’ Managing Director- Mahmud Janmohamed announcing the developments recently.
The new luxury facility estimated at a cost of $8 million will be located in the Northern Province close to the Volcano National Park which is the natural habitat for mountain gorillas.
The objective of the investment Maringa said, is to create an up-market facility in Kinigi and also as a step towards Serena creating a complete tourist circuit in Rwanda.
“We plan to have facilities in Akagera and other corners of Rwanda to enable a Serena client stay up to 14 days or more enjoying the beauty and various tourist attractions in the country,” the official said.
Serena’s portfolio currently comprises a total of 23 luxury hotels, resorts, safari lodges and tented camps in Kenya, Tanzania, Zanzibar, Mozambique, Uganda and Rwanda.