BY EMEKA IHUMEZIE (MR HORECAN)
Hospitality in Africa will bounce back but only the strong ones will be successful By Ronald Stilting (CEO) Zebra Hospitality
After listening to a good number of webinars with experts and key brand officials, reading and analyzing numerous articles and interviews, the key message remains: Hospitality in Africa is -still- full of potential
There are plenty of blank spots where supply is poor, either qualitatively or quantitatively, and surely the “big boys” are not or insufficiently represented in many locations. Secondary cities are becoming increasingly in demand. AHIF 2019 and the annual WHospitality report on the pipeline in Africa showed great plans and that has not substantially changed, delayed in some cases at most. These figures only consider the chain pipelines whilst most likely almost the same number of rooms were on their way by local owners/investors.
COVID19 is only slowing down the development
Post-COVID19 projects are delayed for simple technical reasons as materials and workers have difficulties reaching the construction sites, and signing of new contracts is somewhat more cumbersome as travelling for inspections & negotiations is more difficult, though despite several chains did manage to sign new contracts. The already difficult capital market for hospitality projects has become, for the time being, more difficult.
Markets will get more demanding
I also expect that a substantial number of mostly sub-standard and poorly financed hospitality properties will most likely disappear or come up for sale. That does open opportunities for investors to acquire distressed properties with potential well below value and play the “long-term game” which is the only way to look at hospitality and investment in general.
Owners & investors must change strategy
Owners & investors whose core-activity is not hospitality and who have been able to operate with some level of success until the pandemic are now facing tremendous challenges. They realize what hospitality specialists like myself knew all along, operating a hotel or resort involves serious hard work and is not quite that easy. Those owners feel the pain that running a hotel is no longer a “sure bank”. They are also faced with the hard truth that hospitality doesn’t have a fast ROI compared to their usual trading activity where a warehouse that has been sold out means that the bank account is filled up.
For many of them, hospitality will just become an alibi add-on to increase the value of their real estate, but the coin has flipped as poorly performing hotels means the real estate dramatically loses value.
„TTWWADI“ no longer works”
“That’s the Way We Always Did It”
The hospitality market is being reshuffled but hospitality, if done right, will continue to be a profitable business. Guests, especially Millennial and younger, are more demanding and require faster, often personalized, action and more efficient operations. The current situation also provides unique opportunities to “leap-frog” for those who recognize the potential and are willing to adapt or better; INNOVATE.
Those who adapt and innovate will be successful
Numerous independent hotels previously got away with providing an “average” product and engaged in a price-driven market where there are, long-term, no winners. Going branded is an option for those who comply with the hard and high-quality standards of the brands or signing up with the “soft-brands” with softer criteria will still give the benefit some advantage of brand-affiliation (mainly distribution system and some reputation).
The third option for an independent hotel-owner who does not want the “tight jacket” and cost of a brand affiliation is to develop a strong own “brand”, as successful independent hotels have been doing for years. ALL relevant aspects need to be addressed no corners cut. The demands of consumers will need to be considered and
Innovate and embrace continuous change
Zebra Hospitality offers a truly African Contemporary Innovative Hospitality concept that addresses key-areas and will ensure that a property will be long-term successful and profitable. These are (besides the basics):
Strong truly African brand identity
• Corporate Culture
• Innovative marketing
• Contemporary view on Human Capital