Global family-owned hospitality company Preferred Travel Group is “extremely bullish” about Africa, and is eyeing further expansion in the region.

During a visit to South Africa Saurabh Rai, Executive Vice President, Executive Vice President of South Asia, Middle East, and Africa, for the group shared some insights about the African market and trends the group is seeing in the hospitality industry.

Africa is a growth market

The Preferred Hotels group has over 1 000 luxury properties across its various sub-brands in 90 countries. Its model provides global infrastructure such as marketing, revenue management and technology to independently owned and operated properties.

“Africa is one of those places that never had any exaggerated, inflated curve even post-Covid that many markets have seen. If you look at the US, UK and Europe, these tourism economies have had such a hot run for the last couple of years, it’s practically impossible for them to sustain the same level of growth.”

Rai said the group had the “ambition to expand up to a suitable point” on the continent. In South Africa in particular, he said the group’s portfolio on the Garden Route was underdeveloped.

“We have some way to go and that excites us about Africa and South Africa,” he said.

Despite this, arrivals at partner hotels in South Africa are recording growth between 20 and 25%. He said socio-political circumstances in Nairobi were having some impact on the Kenyan market, but overall, their partner hotels on the continent were recording growth rates of between 10 and 15%.

Preferred Hotels and Resorts, one of the brands operated by the Group, recently announced a partnership bringing all nine of Virgin Limited’s properties into its Legend collection. Among the nine are two South African (Mont Rochelle in Franschhoek and Ulusaba in Sabi Sand), and two Kenyan properties (Mahali Mzuri in the Maasai Mara and Finch Hattons Luxury Safari Camp in the Tsavo National Park).

Luxury is here to stay

“From an international inbound perspective, the level of awareness about the destination and the unique experiences Africa and South Africa have to offer, is expanding beyond the typical, North American, luxury dollar,” Rai said.

The result is visible curiosity emerging out of some very capitally-able pockets of source markets. Rai cited India as one of these, with the amount of structured, luxury spending that’s coming out of India into Africa at an all-time high.

Domestic markets

Everyone discovered their backyards during COVID, and there is a recognition that domestic demand is here to stay,” Rai said.

Debbie-Lee Cockrell, General Manager of Erinvale Estate Hotel and Spa in Somerset West, a member of Preferred Hotels and Resorts, said this was also being observed in the South African market.

“It is a market that needs to grow but we saw a big increase over that time (COVID). You need to sustain it, look after it, and you need to nurture it,” she said.

Rai said the hotels who are able to communicate, customise and recognise what locals need and how they consume luxury, are the ones that will capture the price-sensitive South African market.

“Hotels that have curated their experiences for South Africans, are the ones who are going to see a higher level of sustenance in that demand,” he said.

Service as a differentiator

High occupancy rates in hotels across the globe have seen them unable to service properties in ways that they may have done pre-COVID. This means that even luxury properties are starting to show signs of wear and tear that don’t coincide with climbing luxury prices.

This means that service levels are the out-and-out differentiator in the luxury market, Rai said. This is however creating service fatigue which is being driven by two key trends globally.

The first, which is more visible in global markets than in South Africa, is the “paucity of talent” driven by people leaving hospitality to work in fields that pay better, and allow them to work less demanding hours. Secondly, the churn in staff has seen the training play-book of many hotel brands falling short, Rai concluded.