Hoteliers in Africa warn against alienating guests
Hoteliers in Africa warn against alienating guests
21 SEPTEMBER 2020 7:54 AM

Reopening hotels in Africa is complicated by concerns with energy supply and less government support, but hoteliers active there warn it is a mistake to wait too long or to be too strict with guests regarding requirements.

REPORT FROM AFRICA—The hotel experience has to be better than ever when the industry gears closer to full reopening, as guests will not tolerate moving from the safety and comfort of their homes into a space where they feel they are being policed, sources said.

Speaking on a recent “Hotel Club” online webinar titled “Hotel reopening strategies and lessons learned” organized by HTI Consulting, Samantha Annandale, regional operations director of owner-operator Onomo Hotels, said, “Social distancing is something humans are not good at, and (hoteliers) do not want to create that environment in the long term.”

Appropriate conduct is required from guests and hoteliers in regard to COVID-19, but adults should be allowed to be adults, sources added, or hotels run the risk of alienating demand.

Some panelists hinted governments often have muddied the waters, even though they understand the pressures officials are under.

Euan McGlashan, owner of hotel-development and -management firm Valor Hospitality Partners, which has nine hotels in South Africa, said annual deaths in the country from tuberculosis outnumber those from COVID-19 so far.

“We need experiences and not things that just scream COVID-19. Create a welcome, and some place some onus on the guests. The whole world is wearing masks. I am also surprised airlines are not saying they are the safest places to be,” McGlashan said, adding that on the other side, many do not recognize the crisis, and countries are sliding slowly back.

Panelists said most branded hotels in Africa have reopened, but how they reopened differed. South Africa’s government plans to reopen its borders on 1 October.

They added the conversations between operators, owners and supply-chain providers have largely been heartening.

William McIntyre, regional director for Africa at Radisson Hotel Group, said circumstances and government decrees also directed reopenings.

“Our financial exercise was the cost of closure. What are the fixed costs? Apart from four hotels that closed at the owners’ requests, we decided to keep all our hotels open. In every situation we managed to mitigate the loss that the hotel would have had if they had closed,” he said. “We think the strategy was right, but it was not fun. Someone said it was 10% more work for 10% less revenue, but we learned some lessons, and we cemented some new relationships.”

Craig Erasmus, VP of operations in sub-Saharan Africa for Accor, said having the right discussion on staffing levels and owners’ appetite to reopen were both necessary.

Jan van der Putten, VP for Africa and Indian Ocean at Hilton, said each market is different.

“We looked at each market’s demand, and if there was an opportunity that was a clear decision-maker, as well as cash flow. There is no one recipe for all,” Van der Putten said.

Annandale said her firm’s focus is on break-even occupancy levels.

“If we had run at a loss, we would have remained closed. … But if you are too risk-averse for too long, you will lose market share. Another question was if we have a portfolio of hotels in one region, do we open all doors, or do we prioritize?” she said.

Osbourne Majuru, COO and group head of treasury at Masawara Zimbabwe, said operational gearing and hotel location topped his list of reopening criteria. His company is a conglomerate with interests in mining, financial services and hotels, notably its owned-and-operated Cresta Hotels brand.

“We saw no value in opening hotels in the city outskirts. In Gabarone, (the capital of) Botswana, we have three properties, and it is really not possible to open them all. In Zambia, lockdown never was that strict, but even there we did not open all,” he said, adding Tanzania has now declared itself COVID 19-free.

“Do not be the last in the market to reopen,” McGlashan added.

Any hotels in the continent have to generate their own energy and treat their own water and sewage, and help from the government on these expensive considerations has been negligible, further complicating reopening, panelists said.

Doing right
Panelists said cutting costs to break even at lower occupancy is not always the best solution.

Erasmus said his hotels are reporting between 20% and 40% occupancy, and significant exercises in restructuring teams have allowed the break-even point to be reached quicker, but decreasing staff solely to reach numbers that make the accountants happy can be a false road.

“Profitability by just culling staff and leaving them behind is not the right way to go on,” Erasmus said. “It is our duty and responsibility, and we have done well.”

Majuru added mental-health issues of staff and management cannot be ignored, both now and when they return to the hotel and office.

“We have sought mental-health advice and professional help. As for staffing, I wonder where the balance lies as we have seen we can do well with fewer staff, but does that work in the long term?” he said.

Even with small victories, it’s difficult to celebrate with fewer staff on board, McIntyre said.

“In one hotel, 8% occupancy saw break-even, and we were celebrating, but then we quickly realized that was achieved with eight to nine staff, with the other 200 stuck at home and awaiting benefits,” McIntyre said.

Onomo’s Annandale said one encouraging aspect of the pandemic is that relationships with service partnerships have flourished.

“It is wonderful to see them meeting us halfway, as we know they are hurting, too. There is real tenacity and resilience in the industry, which I do not believe we have seen for a while,” she said.

Guests, too, have helped in the process of reopening, not just due to their spending.

“Guests at Easter served dinner and tended the garden, and for all the bad things of COVID-19, there are warm, human stories,” McIntyre said.

Other good news for the panelists’ firms include bookings of 168 Norwegians needing to quarantine for two weeks before going to an offshore oil rig and the first international movie crew to be permitted into South Africa.

“We are on a hard road of strange things, but there are green shoots. By the middle of next year, I think we will see a lot of activity,” McGlashan said.

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