South Africa’s Peermont Hotels Limited has terminated its 10-year management contract midway through the agreement, leaving Malawi Government with the task to identify new managers for Umodzi Park which includes Bingu International Convention Centre (Bicc).
In an interview yesterday, Umodzi Park Holdings chief executive officer Master Maliro confirmed the development, saying Peermont is not only opting out of a franchise management agreement in Malawi but with all agreements in southern African countries.
He said: “What has happened is that Peermont Hotels Limited board of directors in South Africa has made a decision to stop managing other hotels in southern Africa, including Malawi on franchise. They have stopped here in Malawi, Kruger Park in South Africa and another one in Botswana, just to mention a few.
“So, it’s the decision they have made and they will be leaving at the end of this month [June].
“The hotel was operating smoothly with good business outcome. There will be no serious operational implications because we have agreed that the termination should be amicable.”
Maliro said Umodzi Park, which encompasses Bicc, The President’s Hotel and Presidential Villas in Lilongwe, will work with Peermont in the transition period to ensure that there are no disruptions in the operations of the business.
He said Umodzi Park will soon hire a general manager to run the hotel until the Malawi Government maps the way forward on whether to franchise or find another management company.
Ministry of Industry, Trade and Tourism Principal Secretary Ken Ndala also said Peermont communicated its decision to Malawi Government last week.
He said: “The Peermont decision to pull out is not only affecting Malawi, but the entire Southern African region. That is what they told us last week when they came to tell us about their decision.
“The advantage is that they are not charging us anything as government because they are the ones who have made a decision to pull out of the contract. ”
Despite the termination of contract, Ndala said The President’s Hotel, the country’s first five-star hotel, will continue using the Peermont franchise name for six months.
There was no immediate comment from Peermont Hotels Limited.
Umodzi Park was built using a $100 million loan from the government of China.
Peermont signed the 10-year management contract agreement with Umodzi Holdings in October 2014 and has since been managing the facility for about five years now.
The President Walmont Hotel comprises 130 rooms and suites, with 60 classic King rooms, 60 classic twin rooms, a special assistance room and 10 presidential suites.
Additionally, there are 14 Presidential Villas—a short drive from Umodzi Park—offering a private clubhouse and relaxation and sporting facilities.
Prior to awarding of the contract to Peermont in 2014, the Umodzi Park had been a centre of controversy with government having difficulties to choose the preferred bidder between Peermont Limited and Legacy Holdings. Legacy Holdings had threatened to sue Umodzi Holdings.