Nairobi tycoon Wahome Muotia's Nairobi Upper Hill Hotel has joined the list of other top hotels to be put up for auction over debts.
In a notice posted on local dailies on Monday, January 27, Garam Investment Auctioneers announced it would be auctioning the prime, four-storey hotel with an opening bid of Ksh10 million anticipated.
A report published by the Business Daily on Tuesday, January 28, indicates that the hotel at the moment has a Ksh5 million gross monthly income and its lease still has 76 years before expiry, but that the owner has not been able to foot debts owed to a major lender.
The hotel, which was valued at Ksh500 million in 2015, is set to be sold off on February 15, 2020.
Muotia's hotel came into existence in December 2012, after intense negotiations with top lending institutions to secure funding to start what he described as his life-long dream.
Speaking to the Daily Nation on December 4, 2012, Muhotia narrated that he had been torn between setting up a hotel or residential houses on his plot in 2007.
He, however, stated that he saw much potential in the tourism industry and took the initiative to start the hotel with the expectation that it would be profitable in five to seven years.
Muhotia, who worked in the energy sector for 25 years before starting the restaurant, narrated that he had a difficult time getting finances due to his relative inexperience in the hotel industry.
“One of the most difficult things I faced was convincing financiers to buy into my idea. Some think that you are out of your mind when you tell them that you want to invest in a hotel but you don’t have the experience. This makes it even more difficult to negotiate better interest rates,” he stated.
He, however, managed to secure 60% funding later on leading to what was the start of the Nairobi Upper Hill Hotel in 2012.
He had the foresight that tourism numbers would soar thus the need for more accommodation, a matter that played in his advantage given the meteoric rise of the hotel's stature to be valued at Ksh500 million in 2015, from the initial Ksh350 million invested as initial capital.
According to a report from The Standard on 27, January 2015, the hotel's bad run started due to expensive loans from several banks finally landing it in the bad books.
