Little-known billionaire rolls out rebrand plan for Nairobi's iconic 680 hotel – Business Daily
Until he recently made a statement with the purchase of the iconic 680 Hotel in Nairobi’s city centre for an estimated Sh1.2 billion, relatively little was known about billionaire Chris Musau on the capital’s corporate scene.
Even Mr Musau’s signature brand Maanzoni Lodge in Machakos County was sometimes associated with his brother-in-law and the former Cabinet minister Mutula Kilonzo, whose Kwa Kyelu ranch is a stone’s throw from Maanzoni.
Yet Mr Musau’s entrepreneurship journey mirrors that of many of Kenya’s tycoons who prefer to go about their business under the radar.
He once made some money from buying 10,000 acres through local lenders, personal savings and family resources and selling off most of the land, including to his late brother-in-law Mr Kilonzo.
ALSO READ: CAK okays sale of 680 Hotel, Crowne Plaza
The billionaire started his hotel brand as a pastime two years after he sold his Nova Supermarkets to retail giant Naivas.
The acquisition of 680 brings to reality Mr Musau’s dream to expand his business expire beyond Machakos County. The 680 will join the Maanzoni franchises, including the three-star lodge with 326 ensuite rooms located on a 28-acre plot in Lukenya, Machakos.
In 2019 he announced plans to build an 11-storey 300-bed hotel with luxurious residential facilities in Machakos town.
He plans to change the name of the 680 built in 1972 to the Maanzoni brand and renovate 10-storey hotel with 253 rooms, a main guest area consisting of the reception, lounge area, coffee shop, conference facilities, restaurant and bar.
Seventy percent of the hotel space has been leased out leaving only 30 per cent dedicated to the hotel, and he wants to reverse that.
The iconic hotel has leased out space to several businesses, including boutiques fast food outlet Big Square.
The hotel has also let out space to a church. Guests leave online reviews complaining of the religious clamour and weak Wi-Fi.
Mr Musau says he will spend the next 60 days renovating the building into a four-star hotel with top-range facilities. He will, however, hire it out as a three-star hotel so that he can penetrate the market with a superior offer to build brand momentum.
“Over the next six months, we will be renovating the business. We want to return it to the hotel model, rebrand it to Maanzoni and offer the best service to our customers at four-star hotel standards but leasing it as a three-star,” Mr Musau says.
“We want to do that so that we can penetrate the market.”
Mr Musau says he wants to focus on the city hotel and will not be in the market for further expansion.
And this despite having received offers for hotels on his preferred expansion locations — Nairobi, Mombasa, Maasai Mara and Amboseli.
“We have got three offers for other hotels but we are not able to take another hotel for another year,” he says.
680 is part of the Sentrim Hotel portfolio associated with billionaire investor Jagdesh Patel, who in 2018 tapped property firm Knight Frank to sell his eight hotels, including Boulevard Hotel, Castle Royal Hotel (Mombasa), Elementaita Lodge, Samburu Lodge, Sentrim Tsavo, Sentrim Amboseli and Sentrim Mara.
680, which got its name from the number of beds it had when its doors opened, is the biggest moneymaker for the group, raking in Sh213 million annually in 2018.
Knight Frank holds that profit from 680 can either be maximised either by renovating the building into an office block or letting the three-star hotel continue its good run. The hotel is said to have attracted interest from both local and foreign investors amid speculation that Deputy President William Ruto had an interest in the facility.
Kenya’s tourism industry has started to pull out of its deep Covid-19-induced slump as local travellers take advantage of lower prices, but foreign visitor numbers are still well below pre-pandemic levels.
The country expects the sector, typically one of its top sources of foreign exchange, to earn Sh173 billion this year, up 18.5 percent from last year. Earnings slumped to Sh88.6 billion due to Covid restrictions.
They bounced back to Sh146 billion last year, with the number of hotel nights occupied by Kenyan travellers doubling during the period.
ALSO READ: 680 Hotel sold to Maanzoni in Sh1.2bn deal
A number of top hotels, including Hilton, InterContinental, and Laico Regency in Nairobi’s city centre, stopped operations amid the Covid-19 economic fallout. Some hotels changed hands.
Kasada Hospitality Fund, which is backed by the Qatar Investment Authority (QIA) — the country’s sovereign wealth fund—has fully acquired Crowne Plaza Hotel for an estimated Sh4.6 billion.
Saudi billionaire Prince Al-Waleed bin Talal sold his stake in The Norfolk and Fairmont Mara Safari Club to a Nepalese tycoon for Sh2.8 billion while City Lodge offloaded Nairobi’s Fairview Hotel, Town Lodge and City Lodge Two Rivers to real estate investor Actis for Sh1 billion.
Local resorts, which normally concentrate their marketing efforts on foreign tourists, were forced to turn to the domestic market by the pandemic, offering cut-price rates to entice holidaymakers.
Foreign visitor numbers were still sharply lower than pre-pandemic levels, at just under 870,500 last year against two million in 2019. They are forecast to reach 1.03 million this year.
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