Bankrupt Sunset Hotel sends employees packing

Sunset Hotel in Kisumu, one of the oldest hospitality facilities in Western region, has sent home all its staff following prolonged financial difficulties.

More than 50 employees who were still hanging on the financially struggling hotel have been declared redundant, effective today, as the management revealed that it has been unable to sustain the venture for over a decade.

The decision to render the workers jobless has thrown into confusion tens of the hotel’s suppliers owed dues running into millions of shillings.

The national and county governments own the 40-year-old hotel located in the leafy suburbs of Milimani estate.

In a letter sent to the Ministry of Labour on Friday, the hotel management said it is rendering workers redundant due to “constant reduction in flow of business”.

UPGRADE

Mr Joseph Oduor, the general manager, said the facility has been making losses for over 15 years. “The hotel has been struggling for quite a while. We have not paid our workers salary since November last year,” Mr Oduor said Friday.

However, he insisted that the hotel was not closing down, only stating that it had failed to upgrade to current market standards.

In October last year, Auditor General Edward Ouko declared the facility technically bankrupt, having accumulated losses amounting to over Sh117 million at the end of June 2017.

Mr Ouko also indicated a negative working capital of Sh27 million. It was also cited for being in breach of Section 41(1) of the Public Audit Act after failing to pay audit fees for the last 13 years, failing to remit statutory deductions to various bodies, among other breaches.

Mr Oduor cited failure to upgrade the hotel to current standards in the hospitality industry as the root cause for its downfall.

SUPPLIERS OWED

Many clients, he said, prefer visiting modern hotels which meet their demands. “How do you run a hotel without refurbishment? This hotel was built in the 1970s, which means the quality of standards has gone down making clients disappear,” he said.

Suppliers said they feared losing their dues. Mr Peter Ouko, who has been supplying Irish potatoes to the hotel for more than 10 years, said he is owed Sh900,000.

But Mr Oduor assured suppliers and workers that they will get all their dues. “The hotel is both a national and government entity, so they should not worry. They will be paid all their dues but it will be done in bits,” he said.

INFRASTRUCTURE

Last Thursday, Devolution Cabinet Secretary Eugene Wamalwa revealed plans to put up an international conference centre in the county to host the 9th edition of AfriCities Summit in 2021.

The facility will have capacity for more than 6,000. Speaking during the launch of preparations for the event, Mr Wamalwa said the government is committed to investing in Kisumu's infrastructural development.

“The event, which is expected to bring over 8,000 delegates from all over the world to our third largest city, will greatly enhance the economic activities not only in Kisumu but the entire region,” he said.