Utalii Hotel Comeback as State Launches Major Revamp

The government has announced plans to refurbish the iconic Utalii Hotel, signaling a long-awaited comeback for the prestigious facility.

Speaking during the 49th graduation ceremony at the Kenya Utalii College, Tourism and Wildlife Cabinet Secretary Rebecca Miano revealed that funds have already been set aside to uplift the hotel, which has suffered years of neglect.

“The government has reflected on this matter over time, and I am here today to announce that we have set aside funds to refurbish the Utalii Hotel. The work will commence immediately,” said Miano.

She further noted that the refurbishment plan will include the construction of a new hostel under the government’s housing initiative.

“Utalii will be upgraded to meet globally accepted standards. We will transform this institution into what it is meant to be. I am convinced that nothing should stop Utalii from becoming Africa's undisputed Centre of Excellence in hospitality training,” she added.

As part of ongoing reforms, the college also commissioned its new ultra-modern, state-of-the-art Individual Training Kitchen.

The Utalii Hotel was closed indefinitely in 2020 due to economic non-viability. A letter dated April 20 from the then Tourism Principal Secretary Safina Kwekwe Tsungu stated that the hotel had become a liability, failing to generate revenue while depleting the institution’s resources through overhead costs.

“Following submissions made by your office, it was noted that it is not viable for the institution to operate the Kenya Utalii Hotel as it does not generate revenue and yet depletes the institution’s resources in covering overhead costs,” Kwekwe wrote to the principal at the time.

The closure of the hotel and its two satellite campuses followed years of recommendations by the Auditor General, who had repeatedly flagged their economic unsustainability.

In 2017, then Auditor General Edward Ouko raised concern after the college posted a Sh410.5 million loss.

“The college is technically insolvent, and its continued existence as a going concern is dependent on financial support from the government and its creditors,” Ouko said in a report tabled in Parliament.

At the time, the college reported a deficit of Sh410.6 million, down from Sh452.6 million in 2016. Current liabilities stood at Sh3.4 billion, far exceeding current assets of Sh537.1 million, resulting in a negative working capital of Sh2.8 billion as of June 30, 2017.

Ouko further cited non-compliance with a loan agreement between the college and the government for a Sh140 million loan advanced in February 1996 to refurbish the hotel. By June 30, 2017, only Sh13 million had been repaid, while accumulated interest had ballooned to Sh2.9 billion.

“Although the previous year’s financial statements indicated that the college had entered negotiations with the government to have the loan and accumulated interest written off, no meaningful progress had been recorded,” he stated in a qualified audit opinion dated August 17, 2018.

Ouko warned that the college’s operations could grind to a halt unless the government intervened with financial support.