New South African hotel management group launched to revolutionise the industry BON Hotels’ founders Guy Stehlik and John Saliba have opened many hotels throughout their careers. Guy, now aged 42, has been exposed to the hotel environment all his life: at the age of eight he was doing holiday and weekend work as a pageboy at the Heerengracht Hotel. Stehlik is also the owner of a very successful hotel in Cape Town which was officially opened in October 2011. The hotel has enjoyed an incredibly successful first year of trading, with exceptionally happy guests and healthy finances.
Stehlik says that, right now, despite an encouraging increase in foreign tourism (up 11,3% last year, with Asian visitors up 24% and domestic tourism up 8,3%), the South African hotel sector is going through quite exceptionally tough times. The latest estimates are that over 20% of South African hotels are non-profitable and a large number are in various stages of distress. “Game lodges, many 5 star boutique-type hotels and remote country inns appear to be the worst affected,” says Stehlik. “The value for money perception guests have of a property will impact on whether they return, or recommend the hotel. Today our guests are savvy and more street-wise and will vote with their feet if they detect a rip-off.”
“In the current circumstances,” he says, “a management company such as BON Hotels could travel the country and quite easily pick up contracts. This, in fact, was the tactic adopted during better economic times by certain hotel groups that today are either embattled or no longer exist – they took literally anything they could get. BON Hotels, however, will not adopt that strategy: our intention is to take on only those hotels for whom we are absolutely convinced we can add real value to the hotel guest and hotel owner. This may mean that our growth is relatively slow (the group has, in fact, published no initial target schedules), but that does not worry us. We have the resources, the income stream and the financial backing to operate at the pace we choose and we will be careful about signing new deals.
BON Hotels’ offering, clearly set out in their brochure, comes in three main packages: a 100% management engagement, a marketing and sales management engagement and a business rescue engagement. This last is aimed specifically at hotels in ‘transitional and distressed circumstances’ and includes financial arrangements for satisfying creditors and debtors.
BON Hotels relationship with its hotel clients is defined by a new concept in the hotel sector, the Owner’s Bill of Rights.
“Our Owner’s Bill of Rights will ensure not only that the owner is kept informed and involved but also that he is consulted on every vital issue. Our owners are our clients and we want to ensure and maintain the very best relationship with them – relationships that are sound, respectful and mutually beneficial.
“Similarly,” says Stehlik, “the fee structure will be different from most traditionally adopted by hotel management companies, some of which,” he says, “simply cream off 10% to 20% of the revenue, no matter what the hotel’s financial circumstances. A large portion of BON Hotels’ fee structure will be performance-based, typically upon the achievement of pre-set targets – REVPAR in particular.”
“Our fee arrangements will be a hybrid of three of the more usual contracts,” says Stehlik. “It can and will include a management fee, a marketing fee and an incentive fee – but if the returns are not satisfactory and targets are not achieved, the fee will automatically be much reduced.”
Drawing on their experience, the BON Hotels team has compiled six BON Business Blueprints covering every aspect of their hotel in fine detail. They include: Owner-Operator, Marketing, Sales & Communication, ‘Best of BON, BON People, Financial & Expense Management and Asset. These have been meticulously put together, tried, tested, and are available to any hotel operation thinking of joining up with BON Hotels.
“BON Hotels’ slogan is ‘Good people. Good thinking. Good feeling’”, says Stehlik. “I believe that being staffed by people who have lived and worked in the hotel industry all their lives, we are in a very good position to help nourish and revive hotel partners, not only here but at a later stage in our development in Africa and overseas as well.”