@Pesa nane please post the balance sheet. Will be intetesting to see the level of loans

[quote=VituVingiSana]The expansion would have necessitated the increase in debt but the debt load isn't onerous vs the potential benefits. Of course, a PEV like 2007-8 [seems the 2017 results will be fought in court and not in the streets] or a GFC [Global Financial Crisis] or some other event [terrorist attack] can disrupt their business.

@Sparkly - Aga Khan firms [DTB, TPSEA] are known for Rights Issues as they expand. TPSEA has Jubilee as a shareholder and can always tap into the larger AKFED network to cover any shortfall from "other" investors.

Whereas one cannot ascertain the operating future, the past has been a good indicator of the Management's strength and weaknesses. I believe TPSEA should judiciously pick up more properties, at a fair price, in other African countries from AKFED using shares as currency. There is Serena Kigali, Serena Polana (Maputo), etc.

I have waited for someone to say this. Right on point. As long as they do not render Airbnb irrelevant then the results will keep stinking.

TPSEA has only one "city hotel" in Nairobi i.e. Nairobi Serena so the fortunes of the entire group including multiple lodges doesn't depend on Nairobi Serena. That said, there is competition and Serena needs to look at lower cost options that provide a good hotel without "frills" for business folk.

These budget hotels have no need for a pool, maisha club, etc but put in a decent restaurant, nightclub, conferencing facilities and a business center.

A business that is seasonal is very volatile in its performance.This group must try a way to bridge the gap between on season and off season.They are very exposed kutegemea tu wazungu na waafrika wenye pesa mingi.Thats not sustainable in the next 100 years.

Hmmm, did you want them to expand like KQ did using lots and lots of debt?

Getting a building (on lease) is the easy part. Operations (& cash) is where the rubber meets the road.

The "brands" we see are operators not owners eg the Simba Colt guys own Villa Rosa Kempinski, etc.

Serena/TPSEA needs to run/own/lease properties that earn the best ROI rather than where they are located. With the erratic nature of tourism, can TPSEA afford to take on much more debt to expand?

Are returns ex-Kenya better?
Are return ex-Nairobi better?
Does it make sense for TPS to wait to see if one of new units (chains) fail? The resulting outcome could be a cheaper entry point. Look at malls and offices.

As Nakumatt closes its stores or is evicted, Tuskys and Naivas can move in rather than competing with Nakumatt for space.