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24.08.2005 Gossips

Hotel Kufuor: Business Plan

Others Hotel Kufuor: Business Plan
AUG 24, 2005 GOSSIPS

-- Security Gate picture betrays the President's involvement 'The Ghana Palaver' has laid hands on a copy of the Business Plan prepared for the 'Golden Tree Hotel', christened “Hotel Kufuor” by the media, and it confirms many of the facts already put out by the paper about the Hotel – its owners, Directors, shareholders, investment capital and other details.

The Business Plan, dated December 2003, was prepared by Avtol Consultants International (D&J Hospitality Consultants) of Mauritius for Airport West Hospitality Company Limited, and was prepared to “raise additional financing to complete the development of the existing Hotel structure”, in the words of the Business Plan.

On completion, the “Golden Tree Hotel” is to be managed by AVTOL Consultants, described as “an International Hotel Management Company” in the Business Plan.

The Business Plan describes the Airport West Hospitality Company Limited owners of the “Golden Tree Hotel” aka “Hotel Kufuor”, as a company incorporated on September 23, 2002, with Incorporation Number CA 3234.

Its Date of Commencement of Business is October 2, 2002 with Commencement Number CA 3224 and Taxpayer Identification Number TIN 424V004752.

The business of the Company is Hotel Operator, Restaurant Operator, Real Estate Development, Tourism, General Trading and Import/Export Services.

The Company is capitalised at ¢10 million.

The Director/Chief Executive Officer of the Company are John Addo Kufuor (son of President Kufuor) and Ms. Nana Ama Kufuor (daughter of President Kufuor). The Company Secretary is John Addo Kufuor.

The Hotel is described at page 6 of the Business Plan as situated at 91,Kloty Crescent, Labone, Accra, P. O. Box 16390, KIA, Accra, even though at page 2 of the same Business Plan. it is described as being “located on TWO plots NUMBERED 237 and 238 in the Airport West Residential Area”.

It is designed to be classified as “a high standard 3 Star Business Hotel consisting of 99 Rooms, 2 Restaurants, 2 Bars, Conferencing Facilities and a Swimming Pool”.

The Business Plan envisages that the existing Car Park would be converted to a highly profitable Conference and Banqueting facility of an International Standard. Significantly, the Business Plan also states at page 7 that “there also exists a possibility of Expansion via the acquisition of a neighbouring Plot of land.

According to the Business Plan, the total financing required for the Project is US$8.8 million with a debt-equity ratio of 80%-20%. The current structure is about 70%-80% complete.

The total manpower required for the first five years is 110 persons, and it was expected to be operational by December 2004.

The general Financing Plan of the “Golden Tree Hotel” aka “Hotel Kufuor” is summarised in the Business Plan as above.

With 56 pages of Appendices and 8 pages of photographs, the Business Plan looks impressive, but for the slightly misleading bits and pieces of information such as its supposed location at Labone and the statement about the possibility of acquiring a neighbouring plot of land without identifying the address of the plot or the owner of the plot.

By far the most intriguing page of the Business Plan is the page titled “Security Gate View – Golden Tree Hotel (Ghana)”, which clearly shows the Security Gate of President Kufuor's private house as the Security Gate to the “Golden Tree Hotel” aka “Hotel Kufuor”. The Presidential and State Protocol vehicles as well as the dispatch riders' motorbike can all be seen in the foreground.

The question is: Why such an obviously misleading photograph in the Business Plan? Why present the Security Gate of the President's house as the Security Gate of the “Golden Tree Hotel” aka “Hotel Kufuor”? Financial Plan of “Golden Tree Hotel” aka “Hotel Kufuor”

Loans US$7.0

Repayment of Loan Period 7 Years

Interest on Loan 10%

Debt-Equity Ratio 80%-20%

Corporation Tax 25%

% Occupancy (1st Year) 65%

Average Room Rate (1st Year) US$58

No. of Rooms 99

Total Revenue (1st Year) US$3.6m

Breakeven Period 3rd Year

Manpower Headcount 110