Sport and Wealth: Ethiopian legend who ran his way to fortune
Four years ago, sitting with Haile Gebrselassie in his eighth floor office at Alem Building, we enjoyed an uninhibited view of Addis Ababa.
Alem Building, named after the running legend’s wife, is the headquarters of the couple’s business empire, Haile and Alem International PLC, and is one of the most prominent structures in Addis.
Making a return visit to Haile’s office earlier this week was a totally different experience.
The view from the former world marathon record holder’s office has changed quite a bit, with mushrooming, gigantic new structures dotting the skyline and obscuring the erstwhile breathtaking view of the Ethiopian capital.
There’s obviously quite some activity in the Addis construction business.
Strategic address for travellers
One of the buildings sprouting up is the four-star Kenenisa Bekele Grand Hotel, being built by world and Olympic champion, Kenenisa Bekele, at the upmarket Bole Medhane area.
The hotel was designed by Italian architect Carlo Stronati and its proximity to the Bole International Airport, just four minutes’ drive away, definitely makes it a strategic address for travellers.
Addis Ababa’s complexion has been dramatically transformed, thanks to investments from the diaspora coupled with massive construction projects by Ethiopia’s world-beating distance runners.
Most of the athletes have ventured into real estate, and among them is former multiple world champion Tirunesh Dibaba and her husband Sileshi Sihine, also a world class athlete, world 5,000 metres champion Meseret Defar, Ethiopia’s pioneer Olympic women’s track gold medallist Derartu Tulu, marathon runner Gete Wami and Worku Bikila.
But it’s Gebrselassie’s investments that by far eclipse those of fellow track stars. Little wonder the holder of 27 world distance running records easily made it to Ethiopia’s “Top 40 under 40” list recently compiled by lifestyle magazine Addis Life.
The list includes Alfa Demellash, the founder of the New Jersey-based Rising Tide Capital, which was last year cited by United States President Barack Obama as “an example of successful ways to stimulate economic growth in American cities.”
Also on the list is Marcus Samuelson, an Ethiopian-Swedish-American New York City restaurateur who prepared the first State Dinner for President Obama.
Gebrselassie is cited on the list for his influential role in the Ethiopian private sector.
The crown jewel in his investments is obviously the Haile Resort, a five-star hotel constructed on 7.5 acres on Lake Hawassa, some 270 kilometres from Addis.
Haile Resort has 120 rooms and suites, swimming pools, gyms, a mini-golf course, 600-metre running train with other outdoor activities including horse-riding and lawn tennis.
The resort — that Gebrselassie calls his “28th world record” — also boasts Ethiopia’s second-biggest discotheque after the one at the Addis Sheraton. It took the 38-year-old Gebrselassie two-and-a-half years to build the resort.
Through his firm, Marathon Motors, Gebrselassie is also Ethiopia’s sole importer of Hyundai vehicles and is working on setting up a Hyundai assembly plant in the country.
He also runs the thriving Alem Cinemas.
His four-storey residence in the exclusive Top View Megenagna area of Addis Ababa cost him $1.5 million (Sh135 million).
The Ethiopian legend’s fortune is said to have topped $50 million (Sh4.5 billion), although “His Excellency Haile,” as his admirers refer to him, is quick to downplay his immense wealth.
“It’s good to be a role model,” he says.
“When you start something, others follow. When I started my real estate business, others followed suit and this makes me proud.
“I have five buildings in Addis and four more outside Addis, including the hotel in Hawassa. I also have two schools,” he said.
The father of three daughters, Eden, 14, Melat, 12, Batiy 10, and a son, Nathan, 5, started his business empire in 2005 and says, unlike Kenya where farming is a lucrative field for athletes to invest in, real estate is the way to go in his country.
“Sports is good business if you can invest your earnings in small businesses, these businesses can then become bigger, which is great,” he said.
Gebrselassie’s hotel business was inspired by Worku Bikila, one of Ethiopia’s finest runners who set up his empire in Dukem town, about 40 kilometres from Addis in the Oromiya region.
Besides the Sh32 billion (six million Birr) Worku Bikila Hotel that employs almost 100 workers, Bikila also runs the successful Worku Bikila Well Drilling Limited.
“Worku did not earn a lot from his career but he has been very successful,” says Gebrselassie.
“I always advise Ethiopian athletes not to invest unless they get a return on their investments — when you invest, you must make sure the money comes back with profit,” he said.
Ethiopian athletes invest an estimated $15 million (Sh1.35 billion) annually in their country’s economy.
Besides Gebrselassie, Kenenisa Bekele is the other major investor.
After building two hotels, one in his hometown of Bekoji and the second, a larger, three-star one in Assela, Gebrselassie’s birthplace, Bekele’s four-star flagship hotel is fast taking shape in Addis.
Out of action with a calf injury for most of 2010 and 2011, Bekele earned approximately $1.2 million (About Sh100 million) from a successful 2009 season that saw him clinch a 5,000m/10,000m double at the World Championships in Berlin.
Over half of that amount was from prize money and endorsements from his shoe sponsors, Nike.
Besides the hotel chain, Bekele is also building a sports centre, complete with a tartan running track, only the second in Ethiopia after the overused one at the Addis National Stadium.
Several of Ethiopia’s top athletes, including Bekele and Tirunesh Dibaba, have been impeded by calf injuries attributed to the extremely hard surface of the National Stadium tartan.
“That’s one of the reasons why Bekele has decided to put up a better tartan track at the athletics centre he is building so that athletes don’t get injured all too frequently,” his manager, Dutchman Jos Hermens of Global Sports, who also manages Gebrselassie and several top Kenyan runners, including Eliud Kipchoge, Moses Mosop and Brimin Kipruto, said in an interview at his Nijmegen headquarters in The Netherlands last month.
“These two projects (hotel and athletics centre) need a total investment of about $15 million (Sh1.35 billion) and my prize money will go towards that,” Bekele said in a recent interview.
For Bekele and Gebrselassie, the biggest satisfaction they get out of their businesses is that they have been able to create jobs for Ethiopians.
Bikila employs 80 people in his hotel while Gebrselassie’s workforce exceeds 600, with the Haile Resort alone employing 250 and his real estate interests 120 more.
“My second biggest interest after the hotel is the schools which employ about 180 people,” Gebrselassie says.
The running legend does not see why Kenyan athletes, at least most of them, are not as successful in their business ventures.
“Kenyan athletes earn double what Ethiopian runners earn and, in terms of numbers, Kenyans win most of the marathons in the world.
“But they need to know what business to get involved in because many of them come from the countryside where they simply know how to run but little about business,” he said.
Ermias Ayele, the general manager of the Great Ethiopian Run, Africa’s biggest race whose 2011 edition last Sunday attracted a record 36,000 runners, has seen the country’s distance running stars rise from rags to riches.
“After Haile, there has been a lot of change because in the past, going back to the days of Abebe Bikila and Mirtus Yifter there was no money,” Ayele says.
“Haile has been a pioneer in business and now Kenenisa is also building a hotel while Derartu Tulu and Gete Wami also have hotels.
“The biggest challenge has been how the athletes can get to invest the money they earn but Haile and Kenenisa have set the ball rolling and Ethiopian athletes are now investing well,” he says.
Unlike American and Jamaican track stars, Ethiopian runners prefer to drive modest cars.
Gebrselassie still adores the Mercedes Benz he won in a competition 18 years ago while Bekele drives an ageing Hyundai 4×4.
“Instead of having 10 big cars, it’s better to just have one and invest the rest of the money. Maintaining the other nine cars could be quite expensive,” he says.
“I have personally helped a lot of Ethiopian athletes who misused their money and fell on hard times.
“When we start living life in the fast lane, our needs also rise and the problem is that when our performance goes down, then everything goes wrong,” Gebrselassie said.
His parting shot? “People want to be with you when you are doing well, and everyone likes you. But you must be careful when things go wrong. We need to learn from others, not from ourselves. You can’t learn from yourself when the damage is done,” he said.
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