The South African business sector, Cape Town in particular, has a short memory with regard to the oversupply of hotels and/or accommodation in our prime CBD locations – cast your mind back to over a year ago when we were not nearly so upbeat and most hoteliers were concerned about low occupancy rates.
How quickly we forget! At present there are six new projects earmarked for the City over the next two years, dangerously flirting with a repeat of the ‘oversupply’ scenario of the past eight years (granted, it was also during the recession). Whilst we are optimistic about the present opportunities, we still remain cautious.
The banks, having learnt from their past mistakes, have made significant changes to their lending standards. There are signs that they are financing hotel developments once again, but funding has become even more brand-focused, as the growing interest among major international hotel companies is gaining a presence here. On a positive note, this continues to generate international exposure for South Africa and endorses us as a destination. But is the appeal then not more to the corporate traveller, and is the savvy tourist of late not looking for a more exceptional experience – a truly African one?
While it is appealing to consider developing new properties, BON’s strategy is firstly, to look at protecting our existing collateral – to rejuvenate local hotels, and secondly, to maximize the international opportunities by presenting BON Hotels as an option to manage franchised properties by incorporating our vision and BON Blueprints into their culture, and ultimately making the most of these prospects.
There are plenty of existing opportunities out there – we have uncovered amazing properties that simply require renewed expertise and some good thinking – this is where we are focusing our efforts.