Q and A: Making Good Progress

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Three Cities is a South African hospitality group formed in 1988. Today the group manages and markets over 30 tourism and leisure properties, and its portfolio includes city hotels, resorts, ‘exceptional safaris’ and the ‘Exceptional Collection’, as well as three campuses of The International Hotel School. Editor Dylan Rogers sat down with CEO Mike Lambert to get a better sense of what the Three Cities strategy is, going forward.

Q: What is the Three Cities African strategy, with regards countries outside of South Africa, and how much progress have you made?

A: We are currently represented in Zimbabwe, Zambia and more recently Tanzania and Zanzibar. We have made good progress this year with our expansion plans into the rest of Africa. We currently have a 50-bedroom lodge opening adjacent to the Ngorongoro Crater in November, with a pipeline of another five hotels planned to open in 2014.

Q: In an interview with Business Traveller Africa two years ago, you talked about demand for accommodation in North, West and East Africa outstripping supply. Is that still the case and where the opportunity is?

A: In our case, the demand for accommodation is evident in West and East Africa. We have nothing in the North at present. For us, the immediate development opportunities lie in East Africa. So, Tanzania and Kenya.

Q: In what segment, or star grading category, are you seeing the most demand? 5-star, mid-market, budget?

A: It seems that there is much less development in the 4-star and economy segment, which is where we are witnessing the most demand.

Q: Are these demands specific to certain African countries?

A: No. Whilst there seems to be a large amount of hotel developments planned and under way, this takes time due to logistical and legal constraints. Having said this, we are seeing demand from Nigeria, Ghana, Tanzania, Kenya and Mozambique.

Q: Three Cities started and now runs its own hotel school. Is that because you believed there was a lack of skilled people entering the hospitality industry in South Africa?

A: The International Hotel School was established 22 years ago, due to a lack of qualified and skilled people wanting to enter the industry. Today it has approximately 1500 full-time students and trainees, and is the largest hospitality education and training company in Southern Africa. This certainly is illustrative of the demand. We are also opening two more campuses in South Africa next year, with negotiations under way for expansion into Botswana, Angola, Nigeria and Tanzania.

Q: What do you believe you need to have or implement in your hotels to ensure you get a good slice of the business travel pie?

A: A consistent and reliable product with exceptional brand standards. However, one also requires a strong sales force, with the right relationships with industry suppliers. The South African market is quite tightly-controlled. In addition, the online side of our business has shown tremendous growth over the past two years, and I believe will eventually outstrip traditional sales channels.

Q: Do you offer complimentary Wi-Fi in your hotels?

A: Absolutely. We started doing this two years ago.

Q: How important is it to have a comprehensive meeting/conferencing offering in your hotels?

A: The conferencing business makes up a large segment of our revenue stream, and is a great enabler of room nights. So, in a nutshell, it’s very important for most business hotels.

Q: How has hoteling changed in the last 20 years?

A: It has become a lot more competitive and sophisticated, although the craft has not changed much.

Q: What are your thoughts on responsible hospitality?

A: Responsible business is now a necessity for long-term survival. Consumers have become much more savvy and sophisticated, and will use this as a benchmark to decide on whether or not to use your company.

Q: Are you concerned that African hotel groups are having their lunch eaten by international hotel groups entering or beefing up their presence in the African market?

A: I believe that we are now beginning to witness this. International brands have become much more aggressive over the past three years and have the international currency to pay key money for sites when bidding. This has become a challenging issue for us, and has forced us to become more creative in negotiating. Having said this, they are much more rigid in their approach to closing deals and do not really understand the ‘African way’. As Africans, we are better equipped to deal with our neighbours on the continent. But, we had better start moving faster, if we wish to gain our fair share.