By Muluken Yewondwossen
Hilton Worldwide conducts an evaluation about the future of Hitlon Addis Ababa, its inaugural brand in Africa, which debuted more than fifty years ago.
Hilton Hotel, a renowned hospitality brand, is in charge of the facility, which debuted in 1969 with cutting-edge architectural design in the center of Addis Ababa, in accordance with a 50-year management contract with the government.
Although the hotel’s rating was reduced from five stars to three stars by the regulatory body a few years ago, Capital discovered that the hotel is still run by the international luxury brand after the contract time expired.
When the management contract was about to expire, the government started searching for other options, such as investing more money with other partners or selling the historic site, in which a number of businesses, including well-known domestic and foreign investors, had expressed interest.
The hotel is now one of the strategic state companies under Ethiopian Investment Holdings, a sovereign wealth fund (SWF) that was established in late 2021 with the goal of maximizing the potential of significant and strategically important public assets for the sake of the general people and the economy.
In accordance with the plan, EIH has also been searching for ways to increase the benefits of the site close to the National Palace, the Economic Commission for Africa, and the Menelik II Palace, which serves as the office of the prime minister.
The CEO of EIH, Abdurehman Eid Tahir, told Capital that following a conversation with the current hotel management, the international chain had decided to evaluate the future of the Hilton Addis Ababa, which has 372 guest rooms and apartments spread over 60,000 square meters.
“With regards to Hilton, it’s in good shape, but the Ministry of Tourism downgraded its standard rating to three stars a few years ago due to its downgraded service,” Abdurehman stated, adding, “However, in the last two years, we have improved its service and advancements are still being carried out, but it needs huge investment.”
“So we are looking for investors to take advantage of the opportunity that Ethiopia’s first international chain hotel has to offer,” the CEO explained.
Abdurehman went on to say that Hilton International is collaborating with SWF to find a solution for the facility’s future.
“They are expected to come with the report by the end of this month whether the investment continues with them or other partners,” cited the management, which has now engaged a consultant to identify prospects and potential solutions.
In the event that Hilton Worldwide is unable to operate the hotel, he said, they have pledged to make it easier to carry out future development with alternative partners.
Opened by Emperor Hailesilase on November 3, 1969, Hilton has been a prominent hotel and popular destination in the city. Until the opening of Sheraton Addis in early 1998, it was the only international chain hotel in the country.
This led to a hotel boom as more people sought lodging to meet the increasing demand of visitors and conference goers traveling to the continental capital.
At the time, the Hilton Addis Ababa was the first hotel for the global brand on the continent. To the larger extent, Hilton Worldwide is a global hotel chain based in the United States that operates a large number of hotels and resorts via franchise agreements.
An investment policy that guides the SWF’s commercial expansion and partnerships with prospective private sector actors, including international investors, was ratified by EIH around a year ago.
The eight procedures outlined in the policy will determine how the investment will be handled moving forward and how it will strategically benefit the nation.
Additionally, it has established the requirements for conducting due diligence on businesses interested in collaborating with EIH on Greenfield projects or already-existing 26 public enterprises totaling 2.4 trillion birr in assets.
The CEO clarified, “Up until now, the Ethiopian Investment Commission has created the nation’s investment policies; our policy is created for investments that we will handle.”
He said, “With regard to future development, we have chosen a few public enterprises to search for partners to revitalize their capacity.”
Some public businesses already have partners, while others are in the process of finding new ones. One of the companies chosen to do investment work in tandem with a skilled investor, which may be local or foreign, is the hospitality portfolio.
“We are seeking investors for all of our investments in hospitality,” stated Abdurehman, adding, “The only thing that would be different is that all types of clients would be included in the Spa Service Enterprise (Fil Wuha) that EIH needs.”
“Serving more than two million patrons in the previous year demonstrates the facility’s appeal to everybody. We want it to keep helping everyone in society as a result,” he said.
“In any other case, we’re hoping to build more, high-end hotels that are at least five stars. For example, we are aiming to make a large investment on this premise at Genet Hotel since it is an asset in a prominent location that is close to the African Union by foot.”
The second major possibility that EIH is looking for is investors to help expand the facility at Gihon, which is well-known for its garden, conveniently located right next to the National Palace in the center of the city.
