This archive report was first published on 15 June 2020.
On June 15, 2020, investment banker Jimnah Mbaru proposed a solution to save Kenya's struggling hotel industry from collapse.
With borders closed since late March, hotels are facing severe challenges, including potential staff layoffs and significant revenue losses.
According to Mbaru, chairman of Dyer & Blair Investment Bank, the government should issue an asset-backed infrastructure bond, dubbed the 'Hospitality Bond,' to buy and lease back assets of distressed hotels.
The bond would be collateralized, with the government acting as guarantor, making it a self-liquidating borrowing.
Upon completion of lease payments, the hotels' assets would revert to their owners, thereby saving the industry and many jobs.
As an example, Fairmont Hotels had initially planned to sack staff but later reversed the decision after the government questioned the process.
Hotels and resorts in the Maasai Mara Game Reserve are currently empty, and the Kenya Wildlife Service is expected to see an 80% decline in revenue due to the lack of tourists.
