There’s something very special about being the ‘small guy’. I mean, though we of course aspire to box in the heavyweight division, at the moment, the featherweight ring is where the exciting stuff is happening!
What has become very apparent, and clearly an integral part of the current thinking of hotel owners, is the assumption that the larger, well-established or even the biggest international brands are the ones to whom to award hotel management contracts. This naturally results in the ‘big guys’ having what is perceived as the better deals, the big city hotels. This means that smaller companies such as BON Hotels begin to look further afield for opportunities, into the smaller cities and remote towns of South Africa.
It would seem that these smaller opportunities are less inviting. To the contrary: having done due diligence in obscure places, we see that while these smaller deals seem to be shrouded in difficulty, there are a number of positives with these properties that the heavyweights overlook. Interestingly, though, if you look back into the evolution of the bigger hotel groups, many of them first took on some rather ‘unsexy’ opportunities, and in fact, this is where many of them proved their worth and made their name.
As part of our mid-market strategy, we recently traipsed our team up to a little ‘dorp’ called De Aar. Now what could seem less glamourous, but as we did the maths, this De Aar property became more attractive by the minute. The opportunities in these small towns are exciting. Invariably, as in the case of De Aar, you are going to be one of very few accommodations, if not the only hotel in the area, so you are first to market. We were well aware of the huge industry and commercial significance of the solar power project in the area, but had no idea of the viable impact it would have on accommodation providers. What started off as a ‘featherweight’ project in De Aar, turned into a no-brainer for us overnight.
Being hungry for new business, this new small market has got me savouring more. We now have a task team (headed by myself) searching out similar opportunities in places like Secunda, Umtata and Saldanha Bay. The recipe is the same: small town + big commercial prospects on the way = demand for accommodation & demand for a hotel management company to ensure that a property reaches its true potential and profitability.
These investigations are taking up a heck of a lot of my time, but I’m thoroughly enjoying it. I’ve got a good feel for identifying opportunities, and BON Hotels is nimble enough to respond quickly and unpack value where others don’t have the energy or desire to do so. We are very happy to take on the ‘featherweights’ that the bigger groups have turned down, as long as we believe we can add value.
Besides, what better excuse to travel into the gramadoelas and be reminded of this beautiful country of ours.
