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The Development Bank of Namibia (DBN) has announced that it is financing a new 54 room hotel in Swakopmund, which is being built by the Gondwana Group.
Speaking about the project, DBN Head of Lending John Mbango said, “Tourism is one of the areas where DBN expects to make an impact, as noted in its 5-year strategic plan till 2018. The hotel in Swakopmund exemplifies the type of project that DBN seeks to finance.”
Talking about the development benefits, Mbango said, “The hotel is expected to create 32 permanent jobs, but the development benefits extend further than this. Immediately during the construction phase, the hotel will create employment opportunities in the construction industry, as well as income generating opportunities for enterprises which support the contractor, and additional associated employment benefits.”
“There is severe pressure on accommodation in Swakopmund during the international tourism high season in the second two quarters of the year, and the sustainability of an accommodation establishment of this nature is also supported by high regional demand for beds during December and over Easter,” Mbango said.
“In the long run, the hotel will require goods and services required to provide accommodation, so that also improves opportunities for enterprise.”
“Once fully operational, the hotel will bring the benefits directly associated with tourism, which includes opportunities for tour operators in Namibia and activity operators and hospitality and retail outlets at the coast. The additional beds in Swakopmund will give greater certainty to tour operators who need accommodation in Swakopmund to ensure their own operations in other parts of the country as well,” he added.
This supplemental approach is echoed in a statement by Alain Noirfalise, Operations Director of the Gondwana Group, in which he explains why the hotel will offer breakfast only. “There are so many good restaurants in walking distance that we decided against offering dinner,” he says.
According to the Economic Outlook Report for July 2014, published by the Bank of Namibia, the outlook for tourism in the 2014 tourism season is currently weak due to uncertainty in Namibia’s main tourism markets, but is expected to improve during 2015. This dovetails with the projected completion of the new hotel.
Mbango went on to say, “The Bank particularly wants to see more proposals from conservancies. We are aware that a number of public private partnerships (PPPs) have been extremely successful, not only in developing and running lodges, but also in making major development gains for the communities involved in the lodges. This extends to gains in employment, community infrastructure and sustainability of the environment.”
“The Bank understands that PPPs can have complex requirements, but has experience in tailoring finance packages to fulfill the requirements of multiple stakeholders and shareholders. DBN has a facility for PPPs in the realm of the public sector. This is currently geared to local authorities for infrastructure, but this can also be tailored to conservancies which operate as community authorities,” Mbango said.
“In addition to the PPP facility, the Bank has a number of facilities that offer asset finance, operating capital, as well as buyouts in favour of previously disadvantaged Namibians. All of these can be bought into play to strengthen tourism operations.”
Talking about future development of tourism, Mbango said, “We are aware of the growth of conservancies as well as the need for and development of new routes to diversify Namibia’s tourism offering. We foresee significant growth in the coming years, and have aligned our target balance sheet approach to reflect this in the strategic plan for the coming five years. Tourism will be a beneficiary.”
“DBN has a sound track record in finance for tourism, which ranges from finance for large and small accommodation enterprises to assets for operators. Our additional focus on women and youth entrepreneurs also opens avenues of opportunity for smaller enterprises, if not as tour operators and activity operators, then as industries that support tourism.”
“We actively encourage the tourism industry to make use of our open door policy, find out how we can help with finance and what our requirements are,” Mbango concluded.