Q&A: Minor Hotels – Acquiring the Sun

Minor Hotels made a big statement on the continent when it purchased the majority of Sun International’s African assets in mid-2014, giving the group an additional five African properties. Minor Hotels now has nine properties in Africa, covering Botswana, Lesotho, Mozambique, Namibia and Zambia, and recently acquired full ownership of the Royal Livingstone Hotel. Sir Richard Hawkins, Regional Director Hotel Operations – Africa, offers some insight into the deal.

Q: What’s the Minor Hotel Group view on Africa?

A: Our founder, William (Bill) Heinecke has a passion for extending the horizons of our great company. In his view, Africa is a continent that is ready for further development in various industries, and that in itself offers the foreign investor a multitude of opportunities. This, coupled with some of its natural assets, provides us as Minor Hotels with the perfect platform to enter the hospitality market.

Q: Was the acquisition of the majority of Sun International’s African assets an attempt to get a foothold on the African continent?

A: The sole intention of acquiring the Sun International assets was to secure a foothold on the African continent. This now provides us with the opportunity to acquire local expertise in management and a springboard to further investment, which we are actively doing.

Q: How have these properties performed since Minor Hotels assumed control of them?

A: The hotels have seen good growth in their hospitality revenues, and with the skills that have been imported from within the group, the results have been fantastic.

Q: Have you made any structural changes to these properties?

A: To date we have not made big structural changes to the properties, apart from rebranding all the hotels under the AVANI brand. We did complete the comprehensive refurbishment of the AVANI Victoria Falls Hotel and Resort, previously Zambezi Sun. In the coming months we will commence the refurbishment of the AVANI Gaborone Resort and Casino, previously Gaborone Sun Hotel & Casino, and the AVANI Maseru Hotel, previously the Maseru Sun Hotel.

Q: Now that Minor Hotels has an African presence, what’s the next step?

A: We now have a platform from which to expand and we are actively looking for new opportunities on the continent. We would like to see expansion in South Africa, as there are some interesting opportunities there, and in West Africa Nigeria cannot be ignored as an economic powerhouse on the continent.

Q: You currently have a presence in Zambia, Egypt, Mozambique, Tanzania, Botswana, Namibia, Kenya, Seychelles and Lesotho. Where next for Minor Hotels?

A: As we said above, we are looking in South Africa, Nigeria and the likes of Ivory Coast.

Q: Please explain the different Minor Hotels ownership models, in terms of those properties that are owned, those that are joint ventures, management hotels etc?

A: We offer a hybrid of investment models to our owners, co-owners and joint venture partners. We will in some jurisdictions co-invest in an asset, where we will be equity partners – generally it is a minority investor, and we take the management contract. This give the co-investor comfort that we are prepared to place some of our equity at “risk”, so to speak, and work with them on the project.  We will also enter into a joint venture with an investor – this will be where we will take the entire operation, including the management contract in the project, together with our partner, and share management and equity. This is for investments such as Elewana in Tanzania and Kenya.  The final option is a pure management contract arrangement where we are only the operator. This is for hotels that the owner will rather have 100% of the asset and give the management agreement to an operator such as ourselves. Then one can negotiate with our partner in a mix of the above.

Q: Africa is currently exposed to the Anantara, AVANI, Elewana Collection and PER AQUUM brands. Can we expect any other Minor Hotels brands in the future?

A: There will always be an opportunity to bring our other brands to Africa. At present we have not taken this further than what we have mentioned.

Q: Minor Hotels has both leisure and business travel-focused properties in its portfolio. Is it a challenge to remain focused on the different needs of these two types of properties?

A: No, the two sectors invariably complement each other. Corporates have leisure requirements and vice versa. Our sales team are well versed in understanding the needs of our customers and cater for these. We do have specialists in each area, but the crossover is substantial and works well for our business model.

Q: What do you believe you need to get right at your business travel-focused properties, in order to meet the needs of the African business traveller?

A: We need to ensure that the African business traveller is able to connect at our properties, as this is a huge requirement for this market. We must be able to stay relevant with our corporate offerings, while consistently delivering effective and efficient business solutions.

Previous articleZambia
Next articleAvis introduces non-cancellation fee