BON Hotels CEO, Guy Stehlik, has called on South Africa’s overtraded and marginally successful home-grown hotel industry to put its egos aside and to consolidate in the face of increased competition from big international brands.

“There is not enough space for all of us. If you are a small/medium-size local operator there is a good chance that you are going to become a whole lot less relevant in the next couple of years,” he told the Tourism, Hotel Investment & Networking Conference (THINC) Africa 2017 in Cape Town.

“It’s going to get a whole lot tougher if you are a regional player as international hotel groups with considerable resources and their multi-brand approach enter the mid-market hotel segment and start to consolidate their positions here,” he warned.  

He said South Africa’s hotel industry already comprised 78 hotel groups and 984 hotels and lodges, more than half of which are operated by the five largest operators – City Lodge, Marriott/Protea, Tsogo, Legacy and Sun International. “The rest of us are affectionately known as ‘the rats and mice’ who are all fending each other off, struggling along, all doing more or less the same stuff, with no game breakers, very little differentiation; and all achieving only marginal financial success.”

The answer, he said, lay in consolidation, which would bring increased buying power with corporates and intermediaries, improved commission structures, greater opportunity to develop direct relationships with guests through loyalty and reward programmes, greater negotiating power with car-rental companies, airlines and travel procurement professionals, and BEE status and transformation credibility. “What’s stopping us? Let’s put our egos aside and let’s seriously consider this!” he urged.