Q: What impact has the World Cup had on IHG’s South African properties?
The InterContinental properties are participating and have contracted rooms to MATCH, but not the others. All of our other hotels are fully booked for the World Cup. The World Cup put additional stress on the hotels under development so that they will be completed in time. The timeline for building has been accelerated.
Q: Do you think once the World Cup is over, South Africa will have an oversupply of hotel rooms?
People don’t build hotels just for one event. But the World Cup has been a catalyst for developers to get development approval. It is difficult to forecast. There are markets that are oversupplied. For example, there have been a number of new five-star hotels opening in Cape Town, but those which are well located and have a strong brand will do well. I think there will be an increase in tourism arrivals after the event, and business people who have delayed travel because of the World Cup will also up demand after the event. That being said, supply has definitely grown faster than demand, so occupancies have decreased. This in turn puts pressure on the room rates.
Q: What are some of the new IHG developments in South Africa?
Last year the Rosebank hotel was rebranded to become a Crowne Plaza. And we just opened the new Holiday Inn Rosebank. We are also opening the Holiday Inn Express Pretoria in Sunny Park, and another in Umhlanga. We will make some exciting announcements in the coming months, but these will include opening two Holiday Inns in other key markets in South Africa. There is also scope for expansion for the InterContinental and Crowne Plaza brands in Cape Town and for Crowne Plaza in Pretoria.
Q: What is the group’s strategy going forward for South Africa?
All the Holiday Inns have already been rebranded in the country, and this is ahead of most other countries in the rest of the world. We want to expand the Holiday Inn and Holiday Inn Express brand in other South African cities.
Q: And what about the rest of Africa?
We have some robust development in the pipeline. Hotels are already under construction in Libya and Dakar. In Lagos, we are building an InterContinental in Victoria Island and a Holiday Inn offering 400 rooms, and a Crowne Plaza offering 275 at Lagos airport. An InterContinental is also being developed in Luanda and a Crowne Plaza in Nairobi.
Q: Why the huge amount of development on one continent?
Africa has enormous potential for us to grown our brands. In South Africa we can grow the Holiday Inn Express brand because it is a mature market. There is also potential for us to introduce the boutique brand, Hotel Indigo, in Cape Town and Johannesburg. It is an exciting marketplace. IHG is interested in South Africa and the rest of the continent as the potential for both markets is strong.
Q: Have you had any difficulty expanding in Africa?
IHG has a heritage in Africa of more than 30 years, as it saw the opening of one of the first-ever InterContinental hotels. The brand is familiar and most diplomats and officials from various embassies have stayed in an InterContinental, so they know the properties give substance to the country. They know it can host conferences as it has good facilities and the service is conducive to business.
Q: How important is the corporate market for you?
Holiday Inn and Holiday Inn Express are driven by the corporate market, but it all depends on the location of the hotel.
Q: And, finally, what exactly is the difference between a Holiday Inn and a Holiday Inn Express?
A person chooses to stay at a Holiday Inn because of the services offered from room service to banqueting. At a Holiday Inn Express there is limited service, no room service, and there are smaller rooms. The well-travelled seek out Holiday Inn Express as they don’t necessarily need the extras, and look for value-for-money.