Capital Ethiopia Newspaper

Shangri-La bids for Hilton takeover

Shangri-La Hotels and Resorts potentially want to partner with the government to run the hospitality business in Ethiopia when the current international partner Hilton Worldwide concludes its association in the next couple of years.

The Asian multinational hospitality giant has already expressed its interest to the government, according to reliable sources.

Even though the company is a likely potential partner for the state operated hotel the government is expected to float a bid in the coming few months to select interested international hotel  management companies to work with the government.

Sources said that Shangri-La has an interest in managing the current Hilton Addis with a local brand name since the facility will not go with its standard. “However, it has tabled a proposal to build a new hotel of the standard of Shangri-La or another brands that it manages,” sources said.

The government of Ethiopia and Hilton Worldwide have agreed to annul the half century management deal which was the first international franchisee hotel in Ethiopia.

Hilton Addis is located at the heart of the Capital within walking distance of the National Palace, Economic Commission for Africa and other ministry offices including the PM office was downgraded during the recent hotel rating to three star from its five star level that it use to have because of its  international Hilton brand.

Experts said that the hotel needs significant renovation work to return to its former level. But the government is not happy with the cost estimated to renovate it, so it wanted to transfer it to another manager.

Some local hotel developers are also interested in managing the hotel since the government is interested in transferring the management via auction.

Local hotel developers and the Diaspora are also interested in managing the hotel under the name of Hilton or other brands under Hilton Worldwide. But the agreement between the government and Hilton hotel brand says that under the name of Hilton or others under it are not allowed to be operated in the capital city.

Recently Sunshine Group has agreed with Hilton Worldwide for the management of the hotel called Hilton Hawassa, located in the emerging capital city of SNNP 275km south of Addis.

Capital has tried to get details about the negotiation between the government and Shangri-La from Hilton Addis board chairman, Yinager Dessie (PhD), head of the National Planning Commission, but was not successful.

Wondafrash Assefa, public relations head of Ministry of Public Enterprises, told Capital that he does not have information about the negotiation between the Hong Kong multinational hotel management and the government. “Even though our Ministry is following Hilton Addis it is managed by separately by foreign management,” he added.

Shangri-La Hotels and Resorts is a Hong Kong-based multinational hospitality company. Founded in 1971 has 99 hotels and resorts with over 38,000 rooms in Asia, Europe, Middle East, North America, Oceania and Africa.

If Shangri-La agrees with the government it would be the first Asian based hotel management in Ethiopia. The booming international hotel brands in Ethiopia are dominated by Western companies.