At the recent THINC Africa Hotel Investment Conference in Cape Town, BON Hotels CEO Guy Stehlik called for South African Hotel Management companies to consolidate. “There’s not enough room at the Inn,” says Stehlik. There are approximately 78 hotel management groups in Southern Africa, who operate about 984 hotels and lodges. “Of the 78 companies, only 12 have a footprint of 8 or more hotels. To make matters worse, the 4 largest operators, City Lodge, Marriott, Tsogo and Sun International operate just over half the 984 properties themselves,” says Stehlik.

Stehlik believes that the local hotel industry has become threatened over the last decade with the entry of international players. “International hotel groups are buying out local groups through mergers and acquisitions. Local operators are all fighting for a diminishing share of management contracts, franchise agreements, representation agreements, and new hotel projects,” says Stehlik.

He believes that South African hotel management companies should consolidate. “Imagine if just 30 of the 78 Hotel Groups joined forces into an alliance partnership and consolidated into one powerful hotel management company, similar to what travel consortia got right many years ago.” Guy says that this will improve buying and spending power, BBBEE status, increase footprint and offer more diversity of product. Ultimately this would mean that a local operator could be a strong contender on the South African hospitality scene.

“We need to save our local industry and stand together, merging our companies, our expertise and especially our local advantage, forming a strong South African brand once again. We can only take back our industry by becoming a part of this new ‘sharing economy’,” concluded Stehlik.

*Image supplied by Photography by Pixel Place.

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