Marriott hotels go to Tsogo Sun

GOOD FIT: ‘THESE ARE THREE GREAT HOTELS’

Marriott International terminates management agreement with Edward, Mount Grace and Protea in wake of Covid-19 fallout.

JSE-listed hospitality giant Tsogo Sun Hotels has stepped in to prevent the permanent closure of the historic Edward Hotel on Durban’s beachfront and Mount Grace Country House and Spa in Magaliesburg, as well as the Protea Hotel by Marriott Hazyview in Mpumalanga.

This comes after global hotel management group Marriott International announced on Friday last week that it would “cease operating” the properties, due to the “unprecedented” impact of “Covid-19 on the hospitality industry”.

The hotels are owned by JSE-listed Hospitality Property Fund (HPF), which is majority owned by Tsogo Sun Hotels.

However, the announcement by Marriott saw a flurry of comments on social media over the weekend, with many alarmed that the three hotels would close permanently.

Tsogo Sun Hotels, which was unbundled from Tsogo Sun Holdings last year to create separate hotel and gaming groups, put out a statement on Saturday last week clarifying that, as the majority owner of the properties, it has no plans to close down the hotels permanently.

The group said that it is “committed” to the “long-term sustainability” of The Edward, Mount Grace and Hazyview hotels.

It plans to take over management of the hotels.

However, the reopening of the properties will take place as part of a “phased reactivation” of its full portfolio over the next “12 to 18 months”.

“Tsogo Sun Hotels via its subsidiary HPF owns a controlling stake in the three hotels, which Marriott is terminating its relationship with.

“We remain committed to these properties and have full faith in their viability post the Covid-19 pandemic and are delighted that we will be able to bring them under the Tsogo management portfolio and fully integrate them into our distribution and management network once the conditions for their reactivation are achieved,” it noted.

The bosses at Tsogo Sun Hotels believe that the properties affected by the Marriott move, have potential and will fit in well within the group’s hotel management side.

Group chief executive Marcel von Aulock said: “These are three great hotels…

“The Mount Grace in Magaliesburg was developed by the Brand family and was the sister hotel to The Grace in Rosebank, which we acquired and restored in 2015, and now operate as 54 on Bath.

“Magaliesburg is a beautiful area and has great domestic and international tourism potential, as well as strong demand for conferencing, weddings and shorter family getaways with its close proximity to Johannesburg.”

He added: “The Edward is a landmark on the Durban beachfront where we already have a strong presence.

“The [Edward] hotel has a 111-year history, beautiful facilities and will add something different to our portfolio in that node.

“Lastly, Hazyview is on the key tourist route through Mpumalanga on the doorstep of the Kruger National Park.”

Tsogo Sun Hotels’ chief operating officer Ravi Nadasen told Moneyweb that, considering the history and legacy of the Edward and Mount Grace, both hotels will likely fit into the group’s luxury independent hotels segment.

Asked how many staff members would be affected by the temporary closure of the properties, Nadasen said he was unsure as Marriott managed the properties.

He said more clarity was expected after the handover of the hotels.

Marriott did not comment on potential job losses related to its exit from managing the properties.