As part of a privatization drive to cut the country’s budget deficit, the government of Morocco is looking to sell its stake in La Mamounia, regarded as one of the most famous hotels in Africa.
The move comes as the government is targeting growth in tourism to support its economy.
Morocco’s state-run National Railway Office owns 60 percent of La Mamounia, with the state-owned investment management fund Caisse de Depot and Gestion, and the city council of Marrakech each owning 20 percent. It is thought the hotel could sell for more than $300 million when bids are sought next year.
Built in 1923, the hotel was renovated in 2009 by designer Jacques Garcia and earlier this year was named one of the seven “most significant” in the world by Architectural Digest. Past guests have included Winston Churchill, Charles de Gaulle and Elton John.
Last month saw the government forecast Morocco’s deficit next year would narrow to 3.3 percent of GDP, down from the 3.8 percent expected in 2018. Driving this will be privatization and improving governance of public companies, which the government’s draft budget said would raise $842.85 million.
In addition to La Mamounia, other assets being considered for sale are a stake in Maroc Telecom, the country’s largest telecom operator, and a power plant.
In 2010, the country’s department of tourism released its “Vision 2020” strategy to make the country one of the world’s top-20 tourist destinations and “a model of sustainability in the Mediterranean destinations.” As part of the effort, the government has encouraged hotel development and has lifted visa restrictions on countries such as China. It also has worked to welcome investment by European and Chinese firms, along with those in sub-Saharan Africa, to boost the economy
A total of 4.1 million tourists visited Morocco between January and May this year, up 9 percent compared to the year-ago period, according to the country’s Tourism Observatory. Total overnight stays in tourist-accommodation establishments increased by 7 percent during the first five months of 2018, with Marrakech and Agadir generating 60 percent of the total overnight stays.
According to the World Bank, the first half of the year saw tourism receipts and remittances rising by 15.2 percent and 8.6 percent, respectively.
The brands have noted the growth in overall travel and the expansion in high-end travel in particular. Last month saw Marriott International announce the planned debut of its St. Regis brand in the country, with the St. Regis Resort Tamuda Bay on the northern coastline due to open in 2020.
Marriott International’s President and Managing Director for the Middle East and Africa, Alex Kyriakidis, said: “The rich heritage and cultural and historic legacy of Morocco has long been alluring to the luxury traveler. The St. Regis Tamuda Bay represents an exciting moment for St. Regis as the brand continues to grow globally in destinations welcoming a new generation of luxury travelers.”
The beginning of November also saw construction start in Rabat on what will be Africa’s tallest tower to include a luxury hotel, with an operator yet to be confirmed. The laying of the first stone came as French President Emmanuel Macron and Morocco's King Mohammed VI inaugurated Morocco's first high-speed rail line—the first such line in Africa. The train will connect the economic hubs of Tangier and Casablanca in two hours, 10 minutes instead of the five hours a standard train would take.
Likely, the government also is hoping it can keep growth on track with the sale of La Mamounia.
Katherine Doggrell is an editor at Hotel Analyst, the U.K.-based news analysis service for hotel investors.