Johannesburg – Hotel group The Capital Hotels and Apartments is on an aggressive expansion plan, bucking the trend in the Covid- 19-hit hospitality sector.
The group is in pole position to snap up the iconic Fairmont Zimbali Resort for R240 million after it was announced as the preferred bidder for the troubled asset.
The five-star hotel in KwaZulu-Natal’s eThekwini region was placed in business rescue in September and appointed Pierre Berrange as the business rescue practitioner.
This after the group could not shrug off the effects of Covid-19 on the hospitality sector. Marc Wachsberger, the MD of The Capital Hotels and Apartments, said the mooted acquisition of Fairmont Zimbali is a start of the group’s massive expansion plans, which will see it open two hotels a year for the next five years.
“The Capital Hotels and Apartments has built its portfolio of hotels by investing in the market at times when others would not, by identifying suitable distressed properties to add depth and value to our mix of business and leisure offerings,” said Wachsberger.
“We are looking forward to welcoming guests to the property in September once the roll-out of Covid-19 vaccines has made domestic travel more appealing, and the country is beyond the anticipated third wave of the pandemic.”
The Capital Hotels and Apartments owns several high-end establishments in Gauteng including The Capital Empire.
The company also owns The Capital Mirage in Cape Town and The Capital Pearls in Durban. Wachsberger said that the company will invest R30-million in an extensive renovation and refurbishment project, including transforming suites into the flexible apartment-style accommodation that has become synonymous with the group.
Business rescue and bankruptcies in the hospitality industry mean this could be the right time to buy. Wachsberger had already indicated his company’s intention to capitalise on distressed hotel assets.
The Fairmont Zimbali Resort is one of the biggest foreign investments on the North Coast of KZN and has been a major role player in the South African hospitality industry with usage from local and national government, local tourism, as well as international visitors.
Workers in the hospitality and entertainment industry such as hotels, guest houses, restaurants, wedding venues and casinos have faced reduced working hours and earnings due to the absence of international tourists and limited intra- country movements.
The latest data from Statistics South Africa show that income from accommodation decreased by 66.8% year on year in November 2020, the result of a 52.7% decrease in the number of stay unit nights sold and a 29.7% decrease in the average income per stay unit sold.
The largest decline in income was reported by hotels, down 69.6%.
Follow @SundayWorldZA on Twitter and @sundayworldza on Instagram, or like our Facebook Page, Sunday World, by clicking here for the latest breaking news in South Africa. To Subscribe to Sunday World, click here.
Sunday World
