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Friday 18 January 2019
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The secrets of Windhoek Country Club and Resort

On 23 October 2018, the Windhoek Country Club and Resort paid dividend of NAD 6million to its sole shareholder, the Government of the Republic of Namibia.
The Windhoek Country Club is one of the few State- Owned Enterprises which regularly pay dividends to Government.
The Windhoek Country Club and Resort operates in the same economic environment as the Namibia Wildlife Resorts.
When is the Namibia Wildlife Resorts going to declare a dividend to Government!
Sven Thieme, the chairman of the Board of Windhoek Country Club, stated that the Resort was able to maintain a high performance which yielded good results.
He stressed that the company was able to grow its assets base from NAD 174 million in 2004 to over NAD 329 million in 2017. He also announced that the Resort holds NAD 20 million in reserve.
The Windhoek Country Club Resort was built by Stock and Stock Namibia in 1995.
It was built with money borrowed from the Government Institutions Pension Fund (GIPF). The money was guaranteed by the Government of the Republic of Namibia. By 2003 the Resort found itself in financial difficulties. It could not pay back the loan.
GIPF called on the Government to honour its guarantee. In addition, the Resort was built on the land owed by another entity. Government had to honour the GIPF loan and buy the land on which the hotel was built.
Government took over the hotel and appointed the Board led by Sven Thieme.
A number of options were put on table for the Government to consider.
These included the selling off the Resort; handing over the Resort to Namibia Wildlife Resorts or find a management company to manage the Resort.
Government decided to negotiate with Legacy Hotels and Resorts management company to run the Resort on its behalf. A Management Agreement was agreed upon between the Government and Legacy which stipulated the number of years Legacy will manage the Resort; performance guarantees; paying of management fees, among others.
Today, the Resort is providing services, employment and making money for Government.
The secret of the Windhoek Country Club and Resort’s success is in the type of its Board and management. Clearly the Board has been performing its stewardship functions very well.
Management has been honouring its Management Agreement and running the business of the Resort professionally and competently.
Could the Namibia Wildlife Resorts be turned around in a similar manner! Under the current circumstances, the answer is “probably not”.
First, the Board of that company is made up of members who seem not to know how the hospitality industry works.
The Board instead of being a steward it operates more like a policeman.
Politicians and civil servants are not business people. Their mentality is shaped by the notion of control not stewardship. Similarly, management operates in the mode of civil service.
In civil service people work for salaries.
In business people work for profit. In business results matter. Currently Namibia Wildlife Resorts is like a social safety net: it provides employment and salaries at the end of a month. The assets of the Resorts are dead assets.
There is no return on investment. The workers operate in the atmosphere of non- existing owner.
The Resorts are viewed as “common good” belonging to an undefined owner. William Foster Lloyd’s (1833) notion of the tragedy of the commons seems to be the operational culture of Namibia Wildlife Resorts.
To address such a culture Government as a sole shareholder should think of other strategies if the Resorts are going to be turned around. One option is to unbundle the company. Currently, Namibia Wildlife Resorts owns close to twenty establishments. Some of these establishments are of premium quality. Government spent money to renovate them at high cost.
Sadly, there is no return on that investment. This state of affairs puts government in a bad light: public assets are not being managed prudently for the benefit of the country.
By unbundling the Namibia Wildlife Resorts the shareholder should enable each resort to operate as an independent company. Government shall have an option to enter into management agreements with private companies to run any resort.
The resorts shall now be managed according to business principles.
The Windhoek Country Club and Resort experience can inform the way and manner of making the national resorts currently under the Namibia Wildlife control profit making ventures.
Government does not need to beg the private sector to do more. Government has a big portfolio of productive assets.
If such assets could be put into good use government will contribute to economic growth and employment creation.
The other options is for Government to enter into Public-Private Partnership along the arrangement Government has with MTC and NAMDEB. Government may also consider privatising non-core establishment within the Namibia Wildlife portfolio.
What is important is that the assets of the Namibia Wildlife Resorts should contribute to the growth of the national cake for the benefit of the nation as a whole.




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