Worry over leases for Durban beachfront hotels

Worry over leases for Durban beachfront hotels

Durban – The largest hotel operator in the country, Southern Sun, says the potential departure of its Elangeni and Maharani hotels from the Durban beachfront would have a significant impact on the area.

The hotel operator was commenting on the process being undertaken by the eThekwini Municipality. The municipality owns the land on which the hotels operate and Elangeni and Maharani’s lease agreements will expire in 2025.

The leases have been put out to tender by the municipality, Southern Sun said.

Asked about the issue this week, eThekwini Municipality’s spokesperson Gugu Sisilana said that the current leases were expiring in 2025 with no right of renewal.

“The Constitution and the law does not allow for leases’ renewal as that process would be deemed not to be fair, equitable and competitive.”

Sisilana added that the municipality acts according to the Constitution when contracting for goods or services.

“Section 217 (1) states that: ‘When an organ of state in the national, provincial or local sphere of government, or any other institution identified in national legislation, contracts for goods or services, it must do so in accordance with a system which is fair, equitable, transparent, competitive and cost-effective.’

”As prescribed by the Constitution, this is the process that the municipality will be following and will be finalised by june 30, 2024.”

Sisilana said members of the public should not be concerned as the process would not affect the coming festive season.

“The process the municipality is undertaking will not affect any operations during the festive season as indicated.”

Southern Sun said it hoped to renew its land leases for the hotels.

“Over the last five decades, Southern Sun has invested considerably in these two hotels as well as in its others that line Durban’s beachfront. In the past 12 years alone, the group joined and upgraded the Southern Sun Elangeni and Maharani hotels, undertook the large-scale expansion of Suncoast Casino, renovated the Marine Parade and South Beach Garden Court hotels and rescued the Edward hotel.”

It added that it was one of the City’s largest ratepayers.

“Southern Sun looks forward to participating in the lease renewal process to avoid having to strip these two iconic hotels and move its operations to new premises. The group is convinced that the loss of the Southern Sun Elangeni and Maharani hotels would be extremely detrimental to the Durban beachfront.”

Opposition parties also weighed in on the matter saying there were a number of factors that had to be considered.

IFP councillor Mdu Nkosi said he believed that the municipality should negotiate another lease with Southern Sun.

“We have to think of the staff of Southern Sun hotels who may be left unemployed if the lease is not renewed. We also need to look at tourism. This will have a huge impact as these are two of the biggest hotels in Durban.”

DA councillor Thabani Mthethwa said the current economic climate was volatile.

“We have to think that if Southern Sun’s lease is not renewed this is going to affect business. It is going to be a sad day if Southern Sun leaves the city. I also feel that the city does not have concrete plans for the Durban beachfront revamp.”

Themba Mvubu, EFF eThekwini councillor, said that the city needed to ensure that tourism and hospitality was not affected.

“The truth is that we can’t force the city to renew the lease if they don’t want to. However, what they need to do is ensure that when the lease expires in 2025, everything is set in motion so that tourism and hospitality is not affected.”

ActionSA councillor Zwakele Mncwango said the latest move came after the closure of Fun World on the beachfront. “Where is the plan to attract investment to the city? If they allow the hotels to close, more jobs will be lost. We can’t let what happened to the beautiful Hilton Hotel happen to other hotels.”

THE MERCURY