South Africa’s dalliance with an Emirati sheikh once wooed by the government as a strategic investor has backfired royally amid a string of shuttered hotels, unpaid municipal bills, and legal battles with international hospitality giants.
This has emerged after global hotel group Hilton informed guests last week their reservations would not be honoured as the Bin Otaiba Hotels (BOH) group headquartered in the United Arab Emirates (UAE) — the owner of the former five-star Hilton hotel in Durban — had abruptly ended its operational contract.
BOH is chaired by Sheikh Khalaf Ahmed Khalaf Al Otaiba, who in 2019 was hauled over the coals for alleged animal-welfare violations at a game reserve he purchased in the Eastern Cape.
Following a much-anticipated reopening in September 2024 — after the eThekwini municipality threatened to seize the hotel to recover millions in outstanding debt — the iconic 16-floor hotel was a ghost town this week, with staff informing visitors it was undergoing renovations and would be operating again next month.
It was a case of hospitality déjà vu after BOH shuttered other hotels in its R3.5bn portfolio — including the Radisson Blu Le Vendome in Sea Point, the Radisson Park Inn in Sandton, the Hyatt Regency in Rosebank, and the historic King Edward Hotel in Gqeberha — and made similar promises about reopenings.
While the other hotels have been left to decay, the Hyatt Regency in Rosebank was relaunched under BOH subsidiary Royal Majestic in December 2025.
Tourism and hospitality [are] supposed to generate income and create jobs, not create an eyesore in prime locations throughout the country.
— Anonymous hotelier
This came after its former owners — the JSE-listed Burstone Group, which sold the hotel to another BOH subsidiary, Georgia Avenue Investments — went to court to recoup millions when the hotel group stopped paying its municipal rates, taxes and levies. Burstone manages The Firs, a high-end shopping, business and dining complex adjoining the hotel.
Royal Majestic staff told the Sunday Times the hotel group’s executive manager, Walid Mahmoud, was in Durban this week to rebrand the Hilton under the Royal Majestic banner.
Neither he nor BOH responded to queries about the group’s operations in South Africa or its parting of ways with Hilton, said to be because of millions in management fees it owed the hotel group.
A Hilton spokesperson said: “Despite our continued efforts to maintain a constructive partnership, the management agreement between Hilton and African American Properties Hotel (a subsidiary of the BOH group and the owning company of Hilton Durban) came to an end on February 5. As a result, the property no longer operates under the Hilton Hotels & Resorts brand and is no longer part of the Hilton portfolio.
“While this closure concludes nearly three decades of Hilton’s presence at this landmark property, it does not diminish the exceptional legacy of hospitality delivered there.”
Hilton did not respond to queries about outstanding fees.
As with many international hotel chains, Hilton hotels are owned by independent companies and investors. While Hilton owns the brand, intellectual property and reservation systems, most of its properties are franchised or managed.
Tourism experts are sceptical about the Durban hotel’s future.
A hotelier who asked not to be named said the hotels were “shells of their former selves”, and that the repercussions of BOH’s “arrogance in the South African hospitality market [are] just devastating”.
“They have been allowed to rack up millions in debt to municipalities and hotel groups and not be held accountable. This is an injustice to the economy. Tourism and hospitality [are] supposed to generate income and create jobs, not create an eyesore in prime locations throughout the country. Some of these hotels are icons, and more pressure should have been put on the group.
“The government courted these partners to invest in our country, and most definitely dangled financial carrots, but now this has backfired — and yet no action is taken because of political repercussions.”
In December 2021, former tourism minister Lindiwe Sisulu wooed strategic partners during an investment drive in the UAE directed at members of the Gulf Co-operation Council, including Otaiba and chair of the Emirates Group His Highness Sheikh Ahmed bin Saeed Al Makhtoum.
At the time, the ministry said some BOH-owned hotels in South Africa had closed owing to the impact of Covid-19 and local government factors.
Tourism minister Patricia de Lille’s spokesperson Aldrin Sampear said: “The minister has no knowledge of this. It was before her time. She will consult the department to see if there are any records from [the period of] the tenure of her predecessor.”
Anton Gillis, a hotel asset management company expert, said there were no winners with the closure of the Hilton Durban. He said that typically, hospitality management contracts were long term — in the region of 25 years — and mutually beneficial.
There have been many overtures to the owners to take it off their hands, to no [avail]. It’s really sad for the industry and has legal ramifications. We have a bold and confident owner who has crossed several international global hotel brands
— Anton Gillis, hotel asset management company expert
“Clearly, there was a breakdown [in the Hilton case], and there are a number of reasons why this could have happened, including a breakdown in trust, fundamental disagreements in principle, or breach of contract.
“What has happened with the Radisson Blu Le Vendome in Sea Point is appalling. You have a beautiful property in a prime location, but it has been left to [go to rack and ruin] for several years, and it will take huge capital to restore it.
“There have been many overtures to the owners to take it off their hands, to no [avail]. It’s really sad for the industry and has legal ramifications. We have a bold and confident owner who has crossed several international global hotel brands.”
The 85-year-old sheikh also bought Blaauwbosch Private Game Reserve in Kleinpoort, near Gqeberha, and Thaba Manzi Game Farm, near Humansdorp. In 2019, the Kariega branch of the SPCA and the South African office of British wildlife conservation group the Aspinall Foundation swooped on the reserve, under the direction of the authorities, to care for and relocate scores of animals suffering from a lack of water and grazing.
In October 2022 the high court in Gqeberha ordered the sheikh’s company to pay the two organisations more than R700,000 to compensate them for a massive animal translocation involving 19 buffaloes, 29 wildebeest, five giraffes and 11 elephants.
In the same region, the King Edward Hotel, the jewel in the crown of Nelson Mandela Bay heritage buildings, was ransacked and vandalised after BOH closed it in November 2018.
In 2017 blue-chip Eastern Cape hospitality group Lion Roars Hotels & Lodges pulled out of an agreement to manage the hotel, saying the owner had failed to provide enough funding for planned renovation work.
In 2019 property management company Africorp said it had been appointed to run the hotel and would spend “considerable funds” on returning it to its former glory. While Africorp injected a substantial amount into repairs and renovations to counter a scourge of vandalism at the location, the hotel has been closed for several years.
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