Out of the Rough

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Peermont Hotels, Casinos & Resorts is a hospitality and gaming company, with nine properties in South Africa and five in Botswana. Emperors Palace in Johannesburg serves as the flagship South African property, whilst The Grand Palm is arguably the biggest name of the five Botswana hotels. Mark Jakins is the Chief Marketing and Customer Officer, and he has an interesting take on the current state of the African hospitality industry.

Jakins likes a round of golf and a good yarn. But, get him onto the subject of the African hotel market and those eyes of his light up. Jakins believes that despite all the talk of over-supply and saturation, there are still a number of African countries very interested in the 5-star or ‘badge’ market, as he likes to call it. But, when it comes to the business travel market, the opportunity, he believes, is elsewhere.

“The 3-star market is growing in Africa, off a relatively low base, and I think what business travellers are looking for is a reliable brand that offers consistent operating standards throughout Africa, that they know and trust,” says Jakins.

Naturally, Jakins is punting Peermont’s Metcourt and Mondior brands in this space, and with the likes of Lonrho Hotels and Tsogo Sun Hotels recently dipping down from their 5-star properties to get themselves a more ‘budget’ offering, could we see Peermont going this route as well? Doesn’t seem so, with Jakins providing only a small glimpse into what the Peermont strategy is.

“We said last year that we were quite serious about hotel management contracts,” says Jakins. “It’s not a case of just looking for new builds – it’s also taking what’s existing and looking at turning that into an opportunity, with partnerships with property owners who don’t have the appetite for continuing to guts it out during these tough times.”

Now that Peermont have ‘guts’ed it out, you may think that their priority would be increasing their non-South African presence, adding to their SA/Botswana portfolio. Not entirely says Jakins.

“We’re also focused on increasing our capacity and presence in key source markets within South Africa,” he says. “We are looking for management opportunities in primary business destinations – I call it the ‘Golden Triangle’: Johannesburg, Sandton, Durban and Cape Town, and major secondary cities, such as Port Elizabeth, East London, Bloemfontein and other destinations that business travellers are attracted to, particularly for that bread-and-butter midweek market, which can also attract their fair share of conferences.”

So, expect to see the Peermont name out there in South Africa, building on their already strong presence.

For the last word, though, Jakins doesn’t pull his punches.

“The whole market place has to recover from this culture of special offers and driving occupancies at all costs, with trying to get back to offering hotel rates that are sane, and are giving hotel operators a decent return on investment, yet still offering good value for money for the business traveller. There’s no doubt that this culture of cost-cutting by government departments and blue-chip corporates cannot sustain itself. We have to start realising rates that are showing inflationary growth. The laws of supply and demand have just got to come back into it, as business confidence returns.”

Dylan Rogers