Durban's iconic Golden Mile could undergo significant changes if the eThekwini municipality decides not to renew the leases of two renowned hotels – the Elangeni and Maharani hotels.
The Southern Sun group, which operates these hotels, faces an uncertain future as their long-standing lease agreements with the municipality are set to expire at the end of 2025. The group has expressed its willingness to relocate its operations to new premises if the leases are not renewed. The potential loss of these two hotels is seen as a significant blow to the Durban beachfront.
A consequence of such a scenario would be job losses for employees who have dedicated their careers, and sometimes generations, to these establishments. The community, particularly families relying on income from the employment of "Indian waiters, chefs, and Sammies," would bear the brunt of these changes.
The eThekwini municipality has recently initiated a public tender to seek new bids from interested parties to manage the buildings, as negotiations with Southern Sun have reached an impasse. While the City owns the land and charges a monthly rental of R1250 to the hotels, Southern Sun contends that it has built and paid for the hotel buildings in 1973 and 1983.
Candy Tothill, representing the Southern Sun group, emphasized the significant investments made over the past five decades in these hotels and others along Durban's beachfront. Tothill noted the group's role as the largest hotel operator in South Africa, with its major shareholder being Hosken Consolidated Investments (HCI), controlled by the South African Clothing and Textile Workers Union (SACTWU).
In response to the municipality's move, Thapelo Mmusinyane, Head of Real Estate, highlighted the requirement for a fair, equitable, and transparent process in accordance with the Municipal Act and Constitution. Mmusinyane clarified that any municipal lease expiring must follow due process, involving a tender for the redevelopment of the property.
Addressing speculation about the hotels being repurposed for student accommodation, Mmusinyane clarified that the tender specifically seeks an international hotel operator with four or five-star hotels in their existing portfolio. Proposals failing to meet these criteria will be automatically disqualified.
The tender process, initiated on November 10, is scheduled to conclude in March 2024. Mmusinyane underscored the municipality's commitment to revitalizing the beachfront, emphasizing the need for modernization and new developments to enhance the city's appeal to tourists and investors.
The Elangeni, opened in 1971 by hotel magnate Sol Kerzner, holds historical significance, standing on the land where the old Torquay Hotel and Carnavon Court once stood. The unfolding developments in the tender process will determine the future landscape of these iconic hotels and the Durban beachfront.