Echoes on Ghana’s Hotel Operations: A Company Conceived- Unlocking Opportunities
This installment takes us back to the 1990s when Ghana’s divestiture program ushered in the privatization of state-owned hotels and resthouses, many of which had suffered from years of neglect. Hospitality Associates, founded by Yawa-Attah and Mr. Aanani, were offering hotel consultancy services at the time.
The company faced significant initial challenges, including securing approval for its business name and handling delayed payments for services rendered. Furthermore, skepticism from the private sector compelled them to work diligently to build credibility by focusing on corporate clientele.
During this time, hotels grappled with operational difficulties such as inefficient management, undertrained staff, low morale, financial constraints, and the absence of structured operational systems.
One of their landmark projects involved assisting a Ghanaian investor in establishing a hotel chain with consistent standards across Kumasi and Tamale. The 2008 African Cup of Nations created new training opportunities, as Ghana’s hospitality industry geared up to meet international standards and showcase tourism offerings alongside football. Hospitality Associates played a crucial role in advancing the industry during this transformative period.
The Case of Kunta Hotels Part 1
Yawa-Attah couldn’t believe the transaction they were entering after barely two years in operation. Hospitality Associates was in discussions with a multinational company established to support African entrepreneurs in preparing and securing funding for their business projects.
Their letter read:
…. We are writing to assign you a consultancy project for Kunta Hotels, a Ghanaian entrepreneur who has acquired two state-owned hotels under the divestiture program in Ghana. As a multinational company, ACDP is committed to supporting local businesses and has partnered with Kunta Hotels to facilitate their growth.
Kunta Hotels is seeking funding to renovate and expand the facilities, and we require a comprehensive feasibility report to inform our investment decision. We have selected Hospitality Associates for this project due to your expertise in the hospitality industry and your understanding of the local market.
The scope of work for this project includes:
1. The Company: Provide an overview of Kunta Hotels, including its management structure, business model, and objectives.
2. Historical Performance: Analyze the financial and operational performance of the hotels, including revenue trends, occupancy rates, and customer satisfaction.
3. The Project: Describe the renovation and expansion plans, including the scope of work, timelines, and milestones.
4. The Market: Conduct a market analysis, including an assessment of the competitive landscape, target market segments, and potential demand.
5. Project Cost and Financing: Estimate the total project cost, including renovation, expansion, and working capital requirements. Identify potential funding sources and financing options.
6. Financial Projections and Analysis: Develop financial projections, including income statements, balance sheets, and cash flow statements. Conduct sensitivity analysis and scenario planning to assess potential risks and opportunities.
7. Project Justification and Conclusion: Provide a summary of the project’s viability, including potential returns on investment, risks, and recommendations.
We expect your report to be comprehensive, well-researched, and insightful. Your findings will inform our investment decision and help us determine the feasibility of the project.
Please submit your report within six months and feel free to contact us if you have any questions or require further clarification.
Thank you for your expertise and support.
She read it several times, poking questions and giving her interpretations to each line of the letter.
As she re-read, Yawa-Attah’s eyes widened with a mix of excitement and trepidation. Shefelt a sense of pride and accomplishment, knowing that their hard work had caught the attention of a reputable multinational company. Yet, she couldn’t shake off the feeling of being overwhelmed by the enormity of the opportunity. As a relatively young entrepreneur, she looked up to Mr. Aanani’s experience and guidance, and she wondered what he would say about this development.
Her mind racing with possibilities, Yawa-Attah’s thoughts oscillated between euphoria and doubt. She felt grateful for Mr. Aanani’s mentorship, which had helped her navigate the challenges of entrepreneurship. As she pondered the letter’s implications, she couldn’t help but feel a sense of responsibility to live up to the expectations of their new partner.
Mr. Aanani’s face lit up with a warm smile as Yawa-Attah shared the letter. “What do you make of this?” she asked, her eyes sparkling with excitement.
“Ah, this is incredible news!” Mr. Aanani exclaimed, his eyes scanning the letter. “We’ve certainly come a long way. What are your thoughts on their requirements?”
Yawa-Attah leaned in, her brow furrowed in concentration. “I’m not sure about the project cost and financing plan. Do you think we can meet their expectations?”
Mr. Aanani nodded thoughtfully. “We’ll need to review our numbers carefully. We should consider professionals like an architect/designer to provide input on renovation and expansion plans, ensuring feasibility and compliance with local regulations, an engineer to assess infrastructure requirements, identify potential technical challenges, and provide solutions. Perhaps an environmental consultant could evaluate the environmental impact and ensure compliance with local regulations. Additionally, a regulatory expert might be necessary to provide guidance on local laws, regulations, and permits. However, I think we have a good chance.”
Look out for how the conversation develops in next week’s instalment.
Disclaimer: This story is a work of fiction. Any resemblance to real persons, living or dead, or actual events is purely coincidental.