The Southern Sun Mayfair Hotel in Nairobi on Thursday, January 9 announced plans to wind up its operations and terminate contracts for all its employees.
In a story by Business Daily, South African hospitality group, Tsogo Sun, which owns the company, indicated that the decision to close the hotel was reached after a long period of hard economic times.
“Tsogo Sun Hotels confirm that the Southern Sun Mayfair Nairobi in Kenya will not renew its lease and will officially cease operations on January 31, 2020,” the company indicated as quoted by Business Daily.
The hotel further confirmed that all employees have already received their termination letters.
“Employee contracts have been terminated after due consultation. All staff members have been provided with the necessary support aligned with the labour laws.
“The 171-room hotel has faced increased competition over the past decade as the hospitality industry has witnessed the entry of new players and expansion by established brands,” further wrote the publication.
The establishment opened its Nairobi doors in 2010, anticipating a growth of its brand in the East African region.
The hotel’s entrance into the country came in a major way as it started off with 2,000 rooms aiming to tap into the high number of tourists visiting Kenya and the region.
A 2019 report by Pricewaterhouse Coopers (PWC) indicated that available rooms in Kenya's hospitality industry increased by 5.2 per cent to 20,100 in 2018.
In 2017, the number of available rooms in Kenya grew to 19,000 recording the highest growth in five years.
The report further indicated that an additional 3,700 rooms were expected to come into the market from a number of hotels that anticipate opening in the country.
However, the average daily rate in the sector continued to drop, the report indicating that the rates had dropped from Ksh13,500 to Ksh13,000.
Hotel room income was also expected to drop marginally in 2020 compared to 2019.
