Identifier
Created
Classification
Origin
08ASMARA401
2008-08-13 12:13:00
CONFIDENTIAL
Embassy Asmara
Cable title:
ASMARA'S INTERCONTINENTAL HOTEL TOLD TO CLOSE
how-toVZCZCXRO9496 RR RUEHROV DE RUEHAE #0401 2261213 ZNY CCCCC ZZH R 131213Z AUG 08 FM AMEMBASSY ASMARA TO RUEHC/SECSTATE WASHDC 9839 INFO RUCNIAD/IGAD COLLECTIVE RUEAIIA/CIA WASHDC RUEPADJ/CJTF-HOA J2X CAMP LEMONIER DJ RUEKDIA/DIA WASHINGTON DC RHMFISS/HQ USAFRICOM STUTTGART GE RHEHNSC/NSC WASHDC RHRMDAB/COMUSNAVCENT RUEKJCS/SECDEF WASHDC RHMFISS/CDR USCENTCOM MACDILL AFB FL RUMICEA/JICCENT MACDILL AFB FL
C O N F I D E N T I A L ASMARA 000401
SIPDIS
DEPARTMENT FOR AF/E AND AF/EX
LONDON AND PARIS FOR AFRICA WATCHERS
E.O. 12958: DECL: 08/12/2018
TAGS: ECON BEXP PGOV ER
SUBJECT: ASMARA'S INTERCONTINENTAL HOTEL TOLD TO CLOSE
REF: ASMARA 0359
Classified By: Ambassador Ronald K. McMullen for reason 1.4 (d)
C O N F I D E N T I A L ASMARA 000401
SIPDIS
DEPARTMENT FOR AF/E AND AF/EX
LONDON AND PARIS FOR AFRICA WATCHERS
E.O. 12958: DECL: 08/12/2018
TAGS: ECON BEXP PGOV ER
SUBJECT: ASMARA'S INTERCONTINENTAL HOTEL TOLD TO CLOSE
REF: ASMARA 0359
Classified By: Ambassador Ronald K. McMullen for reason 1.4 (d)
1. (C) TWO MONTHS TO PACK AND GO: The Amcit manager of
Asmara's Intercontinental Hotel (strictly protect) told the
ambassador August 8 that the government of Eritrea had
abrogated Intercontinental's management contract of the
country's best hotel; the company was given until October 5
to clear out. Intercontinental had a valid contract until
2014; the manager believes Eritrea acted illegally in
terminating the contract six years prematurely.
2. (C) WE WANT MORE MONEY: No specific reason was given for
the breach of contract, although the GSE official told the
manager the government was disappointed with revenue flows
from this state-owned asset. Intercontinental gets a
management fee plus a percentage of monthly profits, if any.
Occupancy of the hotel has been around 20% in recent months.
The manager complained that Eritrean policies have severely
stunted the number of business and tourist travelers, the
hotel's main target clientele. He also mentioned that
Intercontinental owed the state about a million dollars for
unspecified goods or services. A month ago the authorities
rejected payment in Nakfa or Euros, demanding U.S. dollars.
Last week they contacted the manager and said they'd take any
currency, but they needed the cash immediately. The manager
took this to indicate severe governmental cash-flow problems.
3. (C) KNOCK-ON EFFECTS: The Intercontinental's biggest
customer is Lufthansa, whose crews from the thrice-weekly
flights from Frankfurt regularly stay at the Intercon, the
only hotel in Eritrea meeting international standards.
Lufthansa's Eritrea manager said the hotel's closure could
jeopardize Lufthansa flights to Eritrea, as the pilot and
flight attendants' unions may object to their members
overnighting in any of Asmara's other (rather seedy) hotels.
The Intercontinental manager said that the government might
seek to re-open the hotel under local management or that of a
regional hotelier. Neither of these options, he commented,
would come close to providing the level of service
Intercontinental currently offers and that Lufthansa's crews
expect. He also added that potential investors in Eritrea
will overlook the Eritrean government's disregard for valid
contracts at their peril.
MCMULLEN
SIPDIS
DEPARTMENT FOR AF/E AND AF/EX
LONDON AND PARIS FOR AFRICA WATCHERS
E.O. 12958: DECL: 08/12/2018
TAGS: ECON BEXP PGOV ER
SUBJECT: ASMARA'S INTERCONTINENTAL HOTEL TOLD TO CLOSE
REF: ASMARA 0359
Classified By: Ambassador Ronald K. McMullen for reason 1.4 (d)
1. (C) TWO MONTHS TO PACK AND GO: The Amcit manager of
Asmara's Intercontinental Hotel (strictly protect) told the
ambassador August 8 that the government of Eritrea had
abrogated Intercontinental's management contract of the
country's best hotel; the company was given until October 5
to clear out. Intercontinental had a valid contract until
2014; the manager believes Eritrea acted illegally in
terminating the contract six years prematurely.
2. (C) WE WANT MORE MONEY: No specific reason was given for
the breach of contract, although the GSE official told the
manager the government was disappointed with revenue flows
from this state-owned asset. Intercontinental gets a
management fee plus a percentage of monthly profits, if any.
Occupancy of the hotel has been around 20% in recent months.
The manager complained that Eritrean policies have severely
stunted the number of business and tourist travelers, the
hotel's main target clientele. He also mentioned that
Intercontinental owed the state about a million dollars for
unspecified goods or services. A month ago the authorities
rejected payment in Nakfa or Euros, demanding U.S. dollars.
Last week they contacted the manager and said they'd take any
currency, but they needed the cash immediately. The manager
took this to indicate severe governmental cash-flow problems.
3. (C) KNOCK-ON EFFECTS: The Intercontinental's biggest
customer is Lufthansa, whose crews from the thrice-weekly
flights from Frankfurt regularly stay at the Intercon, the
only hotel in Eritrea meeting international standards.
Lufthansa's Eritrea manager said the hotel's closure could
jeopardize Lufthansa flights to Eritrea, as the pilot and
flight attendants' unions may object to their members
overnighting in any of Asmara's other (rather seedy) hotels.
The Intercontinental manager said that the government might
seek to re-open the hotel under local management or that of a
regional hotelier. Neither of these options, he commented,
would come close to providing the level of service
Intercontinental currently offers and that Lufthansa's crews
expect. He also added that potential investors in Eritrea
will overlook the Eritrean government's disregard for valid
contracts at their peril.
MCMULLEN