While the 2010 FIFA World Cup was unquestionably a coup for the country, it fell short of expectations in certain business sectors, hospitality not least among them.
Many disappointed home-owners, guest houses and hoteliers who had hoped to cash in on the influx of international tourists – and earn what must be said were massively inflated fees in some instances – were left with empty beds and empty pockets, and nothing much to show for the capital investment made in the run-up to World Cup fever.
But there were those in the industry who triumphed, and a great deal can be learned from how they did it. Extrabold is one such example. Its experience of a successful World Cup is largely a lesson in meticulous planning, sticking to what you do best and the importance of establishing mutually beneficial partnerships.
A specialised model
A dedicated and specialised hotel management company, Extrabold is somewhat unique in the local hospitality industry in that it focuses solely on the strategic management and operations of a variety of different hotel and resort brands.
“The traditional model is for one company to own, manage and market one or a group of hotels. However, best international practice is moving more towards a model like ours that splits these different areas of responsibility, so you have a different hotel owner, hotel operator and hotel branding company,” says Xander Nijnens, managing director of Extrabold, adding, “When it comes to managing a diverse portfolio of properties one size certainly does not fit all and this model takes that into account.”
Building on relationships
The company manages a portfolio of nine hotels across a wide range of brands. And while Nijnens admits that the hotels located in non-core World Cup cities experienced varying rates of success, the company’s three large properties enjoyed 100% occupancy for the duration of the competition.
Relationships were unquestionably a key success factor in this regard. “We were successful in securing large pre-committed and guaranteed accommodation through our relationships with tour operators,” Nijnens explains.
These deals, sealed in 2008, negotiated that there would be no release of room stock. In other words, rooms booked were guaranteed to be paid for. This protected Extrabold’s properties from the problems many other operators experienced when rooms that couldn’t be filled by their partners were released back to the establishments, frequently too late in the day to be filled by the hotels themselves.
Extrabold was obviously in a strong enough position to negotiate deals of this nature, no doubt thanks in part to the long-term relationships it had with tour operators. But Nijnens also points out that cost played an important role. “We were careful not to get greedy, and we negotiated reasonable rates,” he says.
Spot-on planning, logistics and training
While catering to the needs of international and VIP visitors is very much part of Extrabold’s core business, planning for the World Cup called for extra attention. “We were dealing with the very specific needs of different clients, and to cater to each of these effectively, we developed an operation plan for every single day of the World Cup.
This meant every person involved knew what was required of them at any given point,” says Nijnens. Many VIP client-specific needs related to security and the company implemented specific security protocols to deal with this important issue.
Extrabold also had the forethought to negotiate with suppliers up-front. “One can never be sure how supply and logistics issues will play themselves out during a big event like this, or whether suppliers will hike up their prices during peak demand periods.
To mitigate against this risk, we got commitments from our suppliers up-front on price and to secure supply,” Nijnens explains. Finally, the company invested in additional staff training, as Nijnens outlines: “Our staff are trained to deal with international and VIP guests as a matter of course, but we needed to train the additional casual staff required, and we also ran training to familiarise our staff with the brands and companies we were hosting.
This empowered them to respond to guests’ needs in a more personalised way, and from an informed position.” By tapping into their staff’s natural enthusiasm for the World Cup and willingness to engage visitors on local topics, Extrabold was able to provide guests with a richer and more authentic South African experience.
Sharing lessons
Nijnens strongly believes that the World Cup will continue to benefit the South African tourism industry long after visitors have left. “If nothing else, it has allowed the country to showcase its tourism gems and undo the negative perceptions that many foreigners held about South Africa.”
He concludes by offering insight into his formula for success in what is a highly competitive industry: “Consistently deliver an excellent experience to guests. Recruit, recognise, develop and nurture the talent you bring into your organisation – they are responsible for delivering that experience. And when you are doing your numbers, make sure you can afford to put an experienced and expert management team in place.”
Extrabold
Player: Xander Nijnens
Est: 2001
Contact: +27 11 994 6350
www.extrabold.co.za