Budgets and lifestyle will dominate accommodation choices in 2019
4 Feb 2019 - by Garnet Basson
In an election year and a tough economic environment, times are tough for everyone – and the hospitality industry is no different. We are all feeling the pinch and everyone wants ‘more bang for their buck’. Our corporate clients all want more value and want to pay less for it. At The Capital, we are fortunate that our business has been built on a philosophy of cutting out the extra frills you don’t need (eg. chocolates on your pillow, or porters hanging around). Cutting out unnecessary extras means we are able to keep our rates low and affordable.
Travel into Africa will see growth and, with that, so will accommodation. I feel that the continent is an attractive location, despite how it is portrayed sometimes. Leisure travellers have some of the best spots to visit, from safaris to beaches, and hotels have capitalised on this. For business travellers, in the hubs where the economies are stronger and growing we’ll see growth, particularly in Southern African and heading further north.
Apartments vs hotel rooms
Apartment-style hotel accommodation has many benefits for individual travellers and even families, especially if you are in a foreign country, where simple tasks such as getting your laundry done or eating food you know and like may be problematic.
From an investment point of view, developing an apartment-style hotel is far less risky for investors because of the relatively low costs associated with converting the asset into normal apartments later, which allows easy growth for this segment. We have seen this with much interest in our three hotels that have residents living in them alongside our hotel guests.
‘Traditional’ hotels are built on ego. They are built on frills and flash without much consideration for what modern day travellers really need nowadays. Granted, there are a handful of guests who have the luxury of travelling without having to consider tight budgets, and we think these guests will continue to stay in hotels that have expensive overheads and claim to cater for their every need. We design our hotels backwards and ask ourselves what are our clients prepared to pay (per room), and then design our hotels around that. Apartment-style hotels offer much more convenience but I think there will always be a market for traditional hotels that are part of bigger hotel groups and don’t always have to show a profit.
Work, play, stay
Travel budgets are being cut, which means guests want to ‘work, play and stay’ in the same place to avoid extra costs. Our unique concept of Business Resort hotels, like The Capital On The Park in Sandton and The Capital Pearls in Umhlanga, will probably become even more popular. Staying in a central location that has everything is very convenient, from modern meeting spaces to many eating options, like quick grab On-the-Go Deli or restaurant themed evenings; great after-work entertainment like jazz evenings or quiz nights; and the luxuries guests need to unwind, like a spa, unique fitness classes and lazy pool decks. For families who might want to join you on your trip, we have kids’ clubs and activities over the holidays to keep them busy while you work. Having all this on offer in one hotel makes staying with us and staying longer very attractive. We hope this trend will continue as we look for more great sites to make more Business Resorts.
Garnet Basson is the chief operating officer of The Capital Hotels and Apartments, a South African group of hotel apartment properties set on disrupting the market with its alternative corporate travel accommodation model. He joined the company as the general manager of The Capital Empire Executive Apartments and Hotel in 2014, and was promoted to his current role in 2015. Basson is responsible for generating revenue and achieving regional goals across the group’s nine properties, including budgeting, profit and loss, new business development, and new properties and projects. He also oversees the group’s entire human resources function for its 400+ staff, and provides leadership to all employees. Garnet joined The Capital Hotels and Apartments from his role as general manager at the Holiday Inn Sandton, and has also worked at the Three Cities Hotel Management Group, the Grande Roche Hotel Paarl, and Arabella South Africa Holdings (Pty) Ltd. He entered the hospitality industry via restaurants, starting out as manager of a Pavarotti’s franchise. Garnet holds a National Diploma in Human Resources Management from the Cape Technikon.