Q&A: BON Hotels

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BON Hotels is growing steadily throughout Africa, with projects in the south, west and east of the continent. Guy Stehlik, CEO of BON Hotels, comes from a well-known hospitality family and has spent the majority of his working life in and out of hotels across Africa. As a result, he has some interesting insight into the African hotel industry, including where the opportunity might be – something that he was happy to share with Business Traveller Africa.

Q: What’s your view on the state of the South African hotel industry?

A: We know that tourism markets are up from last year, but 2015 came with a multitude of challenges, so to be boasting that numbers are up isn’t a true reflection and, to be honest, not a great benchmark. We should be shooting the lights out in South Africa, with the quality of our offering and the favourable exchange rate – South Africa should be on any traveller’s agenda.

Q: As you are pursuing opportunities in East and West Africa, do you believe there is more hotel potential outside of SA’s borders?

A: There is definitely potential here in South Africa, once again depending on what you are pursuing. The big corporate four- and five-star city centre hotels will continue to be the doyennes of the mega hotel groups, which forces regional operators to look outside our borders for opportunities. We believe that prime opportunities for expansion are outside our borders, but we still want to cover our bases in cities and major town in South Africa.

Q: What’s the latest on your proposed openings in Nigeria and the concept you are rolling out there?

A: We officially launching our brand on 27 October, but we have been operating in Nigeria for many years, albeit in different forms and guises. The fundamental concept behind all of our hotels is: can we add value? If the answer is positive, then the deal is on.

Q: How has the slowdown in the Nigerian economy affected your business?

A: Definitely. The devaluation of the Naira has had a significant effect, especially on the oil-rich regions, which are dependent on oil related trade. We believe that it is certainly a temporary slow-down. Nigeria has a very strong corporate market, very loyal to our hotels. There certainly is pressure on the rate and we have noticed that people’s propensity for recreational travel throughout Nigeria has waned, possibly as a result of the challenges of less disposable income.

Q: Your more recent announcements seem to suggest you’ve shifted focus from West to East Africa. Is that the case?

A: Not at all! We believe that our exponential growth is one of the most dangerous traps that hotel groups can fall into. So we are meticulous in our selection process and stick firmly to our ‘add value’ concept.

Q: How would you compare the East African and West African hotel markets?

A: It’s dangerous to draw a broad comparison, but in simplify terms, the East African hospitality market has a very mature leisure support. Kenya and Tanzania enjoy visitors specifically from Europe, while Ethiopia, Rwanda and Uganda have less mature leisure markets that are awakening very quickly to the fact that it can’t be all about corporate travel. Nigeria has a bit more work to do on the leisure tourism opportunities. We have noted that it is still very regionally corporate-focused and Nigeria could benefit from the leisure corporate market if it were to open up to it.

Q: What do you make of the recent Marriott acquisition of Starwood?

A: We are going to be seeing a lot more of this merger activity within the hotel space, where not only regional players are snapped up by the international mega groups for their regional knowledge and expertise, but also from a scale point of view. For the mega companies to be buying out other big players gives them a lot more scale and after all one of the key factors is the fact that we are in a scale business.

Q: What else is in the BON Hotels development pipeline?

A: We are busy covering our bases in South Africa, but most of our future growth will be outside our borders in the next five to 10 years. We will soon be the hotel group of choice in Nigeria and that should carry over to other East African countries

Q: Do you believe there is greater opportunity in the five-star or in the mid-market hotel range in Africa?

A: It depends on who you are asking because if I put my customer’s hat on, the five-star market is already very well served throughout the major cities of Africa. Major international hotel groups would far rather consider a mega 500 bedroomed hotel project in the city centres than sporadic 60 or 70 bedroomed properties making up the numbers in those countries. From a customer’s point of view, the five-star market is well served; the mid-market is where the opportunity lies – in particular the sexy, three-star hotels, masquerading as four-star hotels, which is our forte.