SEIZING THE MOMENTS

Since opening its first hotel in 1985, City Lodge has become one of the most admired brands in the South African hotel industry with occupancy levels that are envied by everyone. CEO Clifford Ross spoke to Susan Reynard about the hotel group and key industry issues.

Buoyed by success and excited about the future, Clifford Ross, CEO of City Lodge Hotels, looks at the coming season and where the opportunities lie for the group. He also highlights some key issues and challenges facing the industry.

The peak season for the industry
I think that it's going to be a good season, certainly from looking at the forward bookings coming in from international tour operators. For us it's always difficult to say how the South African consumer is going to move about, certainly over the December/January period, as it's always very last minute.
The majority of our hotels are in Johannesburg where we know business dies completely, but the coastal hotels normally pick up very nicely over that period.

The year so far has been good.
Our results for the year to June showed occupancies for the group were 79% - the highest in a decade. Even though there is a view that there will be more interest rate increases, we still see the economy as buoyant.

We're also very excited about the billions of rands' which government is looking to spend on infrastructure leading up to 2010.

Expansion for City Lodge in the run-up to 2010
We would like to build between three and five hotels per annum and hopefully we will be able to do that through to 2010. We are always looking at the product to see how it can be tweaked to keep up with the expectations of the travelling public. There are going to be quite a few new things.

We have brands from one-star to four-star: Road Lodge, Town Lodge, City Lodge and Courtyard. For marketing purposes we still have the Town Lodge properties as a two-star proposition but they qualify for three-stars. Town Lodge George and Town Lodge Polokwane have been graded three-star.

Town Lodge George is a hotel that attracts a lot of international guests, so we're very happy to have that as a three-star.

We have believed for many years that East London requires one of our hotels. There may be more in the pipeline but we'd like to start off with a one-star Road Lodge and are going to create a new market. We're not where the traditional hotels are on the beachfront; we're in the suburbs on the main road coming into East London.

We struggled for 18 years to find a beachfront property and had all the frustrations of other hoteliers putting in objections for any of our product to actually go into those areas.

The cost impact of delays caused by red tape
Regarding the development of new hotels, we still have the age-old red tape and bureaucracy, which frustrates anyone's ability to actually grow at the rate and the pace which they believe is necessary.

When it comes to zoning approval and those types of things, it is frustrating. There is a waiting period of up to two years at the moment for plans to be approved in the Pretoria area. We have our Road Lodge in Centurion, which we announced nearly two years ago but still have not dug the first sod because of red tape.

Building costs are going up at around 12% to 15% a year. All the construction companies have so much work that they don't have the capacity. And they don't have the skills where they can take on any more work because everybody has been stretched to the absolute limit.

So at any given point in time there are a couple of dozen sites we are working on. Some of them we have been working on for years and we've got to do that in order to develop those hotels we say we're going to develop each year.

All of the frustrations of finding the necessary sites and getting the approvals has lead us to relook at our current portfolio and extend existing properties.

Finding and developing staff for the future
It's very difficult to find skilled staff. Theta is a problem but this is being addressed. I don't believe that the right people understand the problems and frustrations that we're going through as an industry.

I have heard that there are 50 000 graduates that are unemployed, yet when we try to find one graduate - or one person - to fill vacant positions we cannot find anybody. If there are 50 000 people coming out each year, we'd love to know who they are, so that when we try to develop the skills necessary for particular positions that we can choose from a pool of people who are half-way there already with regard to their tertiary education.

We also don't have enough people who have graduated from hotel schools and management schools to take up the senior positions in our industry.

Young people tend to see the hotel industry as a stepping-stone, certainly at receptionist level. They need to earn some money so they become a receptionist, work for a year or two and then go globetrotting.
The other thing is the poaching of good frontline staff from other service industries like banks and insurance companies. They steal our staff almost on a daily basis.

The affects of crime on the hotel business and the industry
In Gauteng one of the biggest issues is attacks on international guests. They are followed from the airport and attacked and mugged and robbed either before they get to the hotel or when they stop in front of the hotel.

Somebody has got to look at the modus operandi: it's always international people, coming from the airport, who have either hired cars or are taking a particular taxi company - it all starts at one point.

The other issue is laptop theft in hotels. It's something that everybody is aware of and trying their level best to be vigilant about, but it does happen. Again, it seems to be syndicates that are doing it and the victims are usually foreigners.

We have our own internal communication if anything happens, whether it's a bilker or fraudulent cheques or other types of fraud. The latest thing is producing a guaranteed prepaid deposit letter using a company letterhead. Criminals are forever coming up with new innovations to rip off hoteliers.

We have to be alert on every front and that is why we have policies and procedures in place, which are so important. If you followed the policy, you won't land up with a situation like that and if you do, it's normally caught and nipped in the bud early, before it starts costing the company big money.

Getting ready for 2010
From our side, and what everybody needs to understand when it comes to 2010, is we've got to do our job. Our job as hoteliers is to make sure that when visitors arrive they get a clean room and friendly service.

We've got to make sure the coffee is hot and that we have sufficient stocks of everything, so we must speak to our suppliers. That's what hoteliers have got to do. We can't be responsible for security, or transport, or the state of the roads and the infrastructure.

For 2010 we've started a training programme "On top of our game", which focuses on service excellence and has a sporting theme. It's about positive messages and creating fans by being on top of our game, for City Lodge and South Africa.

We're in for exciting times. 2010 is a catalyst for a lot of things that are going to happen. We've seen the involvement of the deputy president focusing on our industry, coming with a genuine: 'You tell us where the problems are and we'll do something about it'. Airlift and Theta are big issues, but one of these days we're going to get it right. We just have to persevere.