Location and Timing Are Everything, Says PHG’s Danny Bryer

 

As hotel groups heave a collective sigh of relief that occupancy levels in South Africa have shown a full year of recovery, one can strategically look at possible expansion says Danny Bryer, Director of Sales, Marketing and Revenue for the Protea Hospitality Group.

Bryer was commenting after the announcement earlier this month that a new Protea Hotel Fire & Ice! is being built in Menlyn, Pretoria. It will open in 2014.

“STR figures have shown for a full year now that we seem to be slowly back in business. I don’t know anyone who isn’t relieved that occupancy levels have been steadily rising, but it’s not a situation we should take for granted.

“The traditional inbound market is still problematic with the Euro zone in dire straits and the global economic situation also mitigates absolute faith that that executive travel market and incentive groups has recovered, even though we’re seeing encouraging stats.”

Bryer says before any decisions are taken about expansion in South Africa, hoteliers should pause to consider the hard lessons learnt from the manic construction phase that preceded the 2010 World Cup.

“It’s a price we’re still paying in many areas of South Africa. Cape Town is a prime example of where hospitality companies should consider carefully before expanding in the short to medium term.

“Like other centres, occupancy levels in the city may be showing a slow but progressive recovery curve, but the Average Daily Rates (ADR) lag demonstrates clearly that hotels need greater focus on growing both rate and occupancy in order to drive revenue. If we don’t get that right first, recovery is not sustainable in the long term”

A report released mid-year by PriceWaterhouseCoopers projected that steady growth in tourism would fuel growth in the accommodation industry in the next five years and that the number of visitors to the country would rise to 16.86 million by 2016.

Bryer agrees that it’s possible, but says for that scenario to play out favourably hoteliers need to understand the lie of the land in South Africa.

“We don’t want to plunge our industry into another phase of drastic oversupply and there is a very real danger of that happening if as a hotelier you don’t intimately know the local landscape.

“We should be conducting studies to identify the regions where growth is possible.”

Bryer is cautiously optimistic about the next year.

“If those occupancy numbers keep growing, we’ll all do reasonably well in 2013. That’s of course if we don’t shoot ourselves in the foot by jumping on the build cycle bandwagon without thoroughly considering where and when we’re going to build.

 

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For more information contact

Samantha Bartlett

Senior Account Director Irvine Bartlett

 

(+27) 21 424-5594

 

083 3177 062

 

sam@irvinebartlett.co.za

 

 

About Protea Hotels

 

Protea Hotels is Africa’s largest and leading hotel group and has a footprint of more than 120 properties throughout South Africa and seven other African countries, including Zambia, Nigeria, Namibia and Kenya amongst others. Each hotel is uniquely different in character and the collection ranges from urban accommodation to country retreats, all in the 3 and 4-star markets. Protea Hotels is the winner of 2 World Travel Awards for Best Hotel Group in Africa, winner of 3 Sunday Times Markinor Top Hotel Brand Awards and the winner of 2 Coolest Hotel Group awards in the Sunday Times Generation Next surveys.

The hotel group became a wholly owned South African company again in April 2009 after a consortium comprising Protea Hotels management, its BEE shareholders and Investec Private Equity bought back the 74 percent stake the hotel group sold to Australian-based Stella Hospitality Group three years ago.

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For more information, please visit www.proteahotels.com