Dar es Salaam. Owners of Dar es Salaam’s Grand Villa Hotel are struggling to stop the auction of their property, which is located at Kijitonyama area in the city, after failing to repay a mortgage loan.
One of the directors, who did not wish his name to be mentioned, told The Citizen on Tuesday that they took the mortgage from TIB Development Bank to construct the two-storey building, but it was now becoming hard to repay the loan since the business was not performing well.
“We have not repaid the amount to the bank since 2016 when the government prohibited its officers from conducting seminars in hotels,” the source said.
He said the hotel largely depended on seminars and meetings by government departments, officials and agencies for its survival.
“We are currently getting fewer customers as you can see (pointing to the bedrooms). The hotel is not busy although it is early in the day,” he added.
With dwindling revenues, the hotel’s board of directors wrote to the TIB Development Bank management last year, asking to be allowed to reduce the amount in loan repayment each month.
“We asked the bank to help us by reducing the amount that we pay each month by 50 per cent,” the source said.
However, the proposal did not go through.
According to the source, the remaining debt was not huge, noting that they could repay it if they were to be given a second chance.
“The debt could be cleared in the coming two years. That is why we are still talking with the bank to find out if we can prevent it from being auctioned,” the source revealed.
The TIB development Bank has advertised the sale of the Grand Villa Hotel property located on plots number 245 and 247 Block 45c at Kijitonyama, measuring the size of 4697 square metres at a minimum price of Sh1.59 billion.