FEBC InternationalAfrica - Hotel Re-Opening Strategies

Africa – Hotel Re-Opening Strategies

27 Jan Africa – Hotel Re-Opening Strategies

Africa Hotels Re-opening Strategies

Covid-19 brought life and most businesses to an unprecedented standstill. The immediate halt of travel and tourism brought the hospitality sector to its knees. 

The impact of the pandemic, lockdown, and closing of international borders on the African hospitality industry has been overwhelming. Data provided by STR Global shows that the hotel occupancy rates from January to July 2020 fell a staggering 79.2% to 16.9% across Africa, ADR declined 9.8% to  $ 93.98 whilst RevPar decreased 75.8% to $ 15.91. 

In the past months, some international borders have reopened, flights to African destinations have resumed, and most branded hotels across East, West, and Southern Africa are back in business. Though, the current situation continues to negatively affect travel and tourism businesses from airline companies to independent hotel owners. The responses have mainly been directed towards short-term survival however, as the crisis continues, the industry is recognizing key strategies to facilitate recovery. The following hotel brands across Africa show different factors that played a role when deciding to re-open:

Onomo hotel group has 3-star corporate and hotels close to airports. The group focused on the breakeven parameters, lockdown regulations, assessing the overall ‘appetite for travel’ and the long-term risk of losing market share if doors were to remain closed for too long. 

Hilton hotels established that demand and opportunity were deciding factors for the group to reopen hotels. Ultimately, cash flow and the owner’s agreement concerning the reopening of certain locations was a requirement for the group. 

Accor hotels also share light on the owner’s agreement being an important factor. The group also highlights certain aspects such as safety, sanitization, and ensuring properties were entirely prepared in implementing the new hygiene standards and requirements. Twenty-eight out of sixty-four Accor hotels across the African region continue to remain closed. 

Radisson in South Africa is the approach was formed based upon analysing the ‘cost of closure’. Apart from hotels closed at the owner’s request, hotels were open to service stranded foreign nationals, essential services personnel, and staff from emergency call centres. 

Cresta hotels group owns and leases properties in Zimbabwe, Zambia, and Botswana handled the situation on a country by country basis. The recovery strategy varied for individual properties even those within the same market depending on the type of demand attracted by the hotel (domestic or international travellers) and the severity of lockdown protocols in different countries. Zambia had less stringent lockdown rules therefore certain areas of the hotel were open while in Botswana, one of the properties was open due to high reliance on local business. 

According to Tim Cordon, vice president of Radisson declares that hospitality in emerging markets has tackled the COVID-19 pandemic “a bit better” than developed markets. For the reason that hotels play a “much more integrated role” in emerging markets than in the West. In the West, individuals wouldn’t consider going to city-centre business hotels for a meal while in emerging markets hotels play a larger role in the community. 

The current crisis is a turning point in the industry and reopening efforts have not been easy. But as markets will eventually ease off travel restrictions, the 4 points below are for hotel owners and operators to take note as they look towards re-opening post-pandemic:

·       Hotels and restaurants need to become aware of how to manage future revenues and costs. Creativity can play a role when dealing with operational costs such as partnerships between hoteliers to create cost synergies like shared housekeeping or food outlets. 

·       Reopening under new conditions; travellers will become more cautious in the post-crisis period. Health regulations will need to be implemented which could call for additional resources (financial, HR, time). One must consider if it is worth putting in place the new measures at the cost of reduced earnings – some restaurants are better off doing takeaway and home delivery than reopening with 50% fewer tables available.

·       Hoteliers must consider intensifying digital solutions in their business by decreasing human touchpoints while increasing service efficiency and experiences such as virtual menus and automated check-ins. 

·       Identify a core team that includes a few employees who are equipped with experience and skill in various departments or operational tasks for the functioning of the hotel.

While preparing for the comeback, hospitality professionals must not forget one fundamental rule that built their past success: knowing their customer’s needs and wants, adapting operational processes to new market requirements and building a competitive advantage around them.