Pieter Prinsloo, chief executive of listed property giant Hyprop which owns the building, said the hotel has been hard hit by a decline in foreign and local visitors, as well as a contraction in the corporate travel industry.
He said because of financial losses, Hyprop has no option but to cancel its lease with African Sun Hotels and close the hotel on August 31.
He said the Johannesburg hotel industry in particular remains under pressure and, with low room tariffs, rising operating costs and an oversupply of rooms, the hotel has been unable to keep its head above water in the downswing in the hospitality sector.
He said Hyprop is however keeping its options open and having discussions with other major hotel managers who might be interested in taking over management of the hotel.
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