Hotel Partners Africa
Founded in 2013, Hotel Partners Africa is an alliance of three leading hospitality consultancies - W Hospitality Group, Hotel Spec and Leisure Property Services – each with considerable expertise throughout Africa. With a particular focus on the Sub-Saharan territory, the company has a diverse portfolio of service offerings in the hotel development sector.
Hotel Partners Africa guides its clients through the development lifecycle of a hotel from conception to feasibility, development management to asset management. “We are a turnkey provider of services for hotel investment,” says Vernon Page, Chief Executive Officer, Hotel Partners Africa. “The only thing we don’t do is manage the hotels once they are in operation.”
Under its umbrella of expertise Hotel Partners Africa offers a raft of services to hotel developers and operating companies, providing crucial input and hands-on management throughout the planning, design, construction, renovation and refurbishment stages of new and existing hotels.
Despite being a fairly young business, HPA has been well received by the hotelier sector both in the region and on a global scale. The African hotel industry is one fraught with challenges, and as such industry professionals have welcomed the combined experience bought to the table by HPA. “We offer our clients stability and a pool of knowledge not found anywhere else,” says Page. “One of the biggest advantages for our clients is that they have a single point of contact throughout the lifecycle of a hotel development, meaning they do not have to search for various advisors and consultants. We provide a one-stop-shop service to developers and owners,” he says.
With close to 100 years of global hospitality knowledge between its partners, the company prides itself in offering a market-leading service. “A defining point for us is that in sub-Saharan Africa we are the only company to provide all these services,” says Page. “In five years we would have consolidated our position as the leading hospitality consultancy in the region. We know the competition is growing, as business in Africa continues on an upward trajectory, but we have an advantage by being on the ground. Added to that is our unfailing desire to advise our clients in their best interests.”
The impressive list of clients making up HPA’s portfolio is testament to its level of service and expertise. The consultancy has worked with the likes of Hilton, Holiday Inn, Radisson, Sheraton and InterContinental to name just a few and has earned industry wide respect for its proficiency in the planning, management and advisory of hotel developments.
A broad service offering
Hotel Partners Africa offers its clients a broad service offering – in fact, its impressive portfolio is one of its many unique selling points. Services offered include:
• Market and Financial Feasibility Studies: This is the very first step in the process, after securing the site. There are 5 main reasons to carry out a feasibility study. First, to ensure full understanding of the risks and rewards of the project; second, to determine the most appropriate facility provision for a given site and market; third, to brief the architect as to what the market requires in terms of facilities; fourth, to attract the attention of an operator and form the basis for contract registration and fifth, to support submissions to debt and equity providers.
• Operator Selection and Negotiation: The hotel operator should be engaged early on in the development process, in order that they have input to the concept and detailed design. In addition, sources of funding will want to know who is to operate the proposed hotel – some will not lend or invest unless an international operator has been engaged. The appointment of the correct operator to your project can enhance your financial returns and thus the value of your hotel. The owner / operator relationship is a long term one and needs to be effective and mutually beneficial. HPA have excellent relationships with all of the international and regional (African) hotel operators, and have worked with all of them on projects across the continent.
• Raising of Funding: It is virtually impossible to fund a development opportunity or hotel without suitable funding. HPA have unrivalled access to various sources of funding to buy or develop hotels, including: Equity
• Both minority or majority equity for development projects, new or partially completed;
• Additional equity for operational assets.
• Construction debt;
• Operational debt;
• Refinancing of existing debt;
• Mezzanine instruments.
• Development management: Complete hotel development management services, which includes advice, recommendations and negotiations with nominated professional team, project coordination, budget management, programme and quality assessment reporting, overall project monitoring to ensure coordination between operator requirements and all services, design and finishes, contractual conditions, budget evaluation to completion and hand over of operation. Working closely with the client’s architects, engineers and interior designers to ensure all the client’s and brand specific requirements are met. With the company’s experience of advising owners on developing and refurbishing hotels around the African continent and specific specialised knowledge of the workings and requirements of hotels it will ensure that all integrated systems such as IT, AV, MATV, PBX, security, life safety etc. are seamlessly integrated in order to create a cost efficient and correctly specified hotel operation. All back of house areas from receiving to waste management, housekeeping, stores, administration and kitchen operations are correctly specified and provided for to ensure a smooth operating environment, compliant with all local building, fire and safety regulations.
• Procurement: From sourcing products at the most competitive prices globally to ongoing co- ordination with the interior designer at all stages of the development, and management of budget. Furniture, fixtures and equipment is all custom-made to the specification of the design consultant in terms of material, colour, fabric, foam, size and design. Ongoing inspections and quality control management over all its manufacturers, ensures quality and suitably specified furniture is manufactured and delivered to the project. Kitchen, laundry, technical and back of house areas are all coordinated closely with the operator.
• Warehousing and logistics: Consolidation services and co-ordination of all logistical services from import/export, customs clearing, insurance and forwarding. With an average turnaround of between 60 to 80 40’ containers annually between Africa and the world, its automated tracking, inventorying, warehouse and freight management systems will ensure that all shipments arrive on site in line with the project program.
• Installation Services: The company’s Project Team on site receive all items of FF&E, OS&E and other equipment and position and install items of FF&E in in the correct location as per approved drawing specifications. Project Team services include:
• Inventory control and reporting of all goods received on site and reconciled to approved budget and official orders.
• The correct positioning of all FF&E items within the property according to the interior furniture lay-out drawings as issued.
• Hanging of all artworks and mirrors to the specification issued on the Interior Designers’ layout and elevation plans.
• Perform any minor repair work to FF&E, which after positioning in the property is found to be damaged or to return such goods to the manufacturer in the case of any goods found to have a manufacturing defect, which is covered by the manufacturer’s warrantee agreement.
• Where applicable, to commission all kitchens, IT, telephone, television and AV equipment, including the tuning and “burning-in” of all such equipment as required and to ensure sufficient training is provided to the hotel’s staff on the safe operation of such equipment.
• Individually bar code all items of FF&E once in place within the property and to build a detailed asset register of all FF&E items. The asset register shall include the following information: 1. Item description 2. Location within the property 3. Value at date of purchase
• Valuations: To secure finance it is essential to ensure that the project is sound and that is where a valuation becomes vital. Bank funding is usually predicated upon loan to value ratios and the ability to make scheduled repayments. At HPA we can provide formal secured lending valuations, stock market valuations and more informal internal valuations. Our team has carried out valuations for most Banks who are active in funding hotels. We even provide advice to the Royal Institution of Chartered Surveyors (the valuers governing body) on how hotel valuations should be carried out.
• Asset Management: The primary objectives of an asset manager are to act as an expert interface between the Owner and the operator (hotel chain and/or the management team), and at the same time to assist hotel owners to realize the full value of their assets through a continuous process of value creation and enhancement.
• Talent Acquisition: The importance of sourcing suitable, passionate, talented and experienced staff right from an executive and management level down who can add the most value to the business and its guests forms the basis upon which we approach our Talent Acquisition process, culture and attitude play a key role in the identification of these individuals, this coupled with working very closely with our clients to understand their objectives, company culture and environment so as to ensure a good staff morale, high level of service and low staff turnover.
• Brokerage: At some stage, it is likely every owner will consider disposing of even the finest hotel. We recommend early in the ownership process considering the likely program for disposal, to ensure the right strategies are put into place. HPA can provide comprehensive and strategic ownership advice, and, at the right moment, will help to dispose of the asset in the most productive way, to suit our client’s particular investment goals. Our team has an unrivalled track record of hotel disposals in Africa, generating exceptional sales prices from our comprehensive network of hotel investors from around the world.
Despite making strides in the industry, not all has been plain sailing for HPA. Doing business in Africa comes with a unique set of challenges including a lack of funding, the threat of terrorism additional concerns such as the recent Ebola crisis. “It can be hard to attract investors being a fairly volatile economy. That being said, business is moving to Africa, so even with the challenges, it is a fertile ground for hotel development. From our perspective, for the next 20 years there will be compounded growth in the industry,” says Page.
That growth is due to a number of factors. In the last decade Africa has discovered additional resources in the oil and gas sector, it is also an emerging economy, meaning investors and business people need hotels to stay in, which ultimately leads to a spike in development. Furthermore, tourism is constantly on the rise.
“A lot of the African hotels are achieving much higher room rates compared with anywhere else in the world. The Hilton in Abuja for example, is the most profitable Hilton worldwide and you pay more to stay there than you would in London or Paris. A good service provider with good security, high-end rooms, facilities and catering can charge what they want. Return on investment in Africa can be seen in three to five years, where as the global average is seven to 10 years,” explains Page.
Procurement and logistics also presents a challenge for the company. “Logistics in Africa are unreliable at best,” says Page. “Ports, rail and roads are almost non-existent so supply chain management and sourcing commodities can be tough.” In the hotel sector there are a lot of requirements from a goods perspective – from furniture to kitchenware, linen to lighting there are a lot of moving parts to consider.
So as Page explains, business in the region can be a “hard slog” at times, but the investment can pay dividends. “The challenges are all part of the fun,” he says.
Focusing on quality
HPA doesn’t only offer its clients logistics support, funding advice and project management expertise but also helps achieve standards of excellence from a quality perspective. “We advise developers to develop hotels in line with international standards,” says Page. “We work with the best architects, engineers, quantity surveyors, content managers, and other consultants from landscape architects, interior designers, acoustic specialists and fire and safety experts. A hotel is a complex animal.”
“Imagine a hotel with 250 rooms and how much water, electricity and heating you use, how much sewerage, and air conditioning - you cannot just open the yellow pages, you need specialists.”
“We work with our clients from day one, throughout the design and build process through to completion. We manage everything from air quality and temperature to fire and security. We also manage branding and maintain global standards of excellence,” he says.
Creating local opportunities
Quality is king at HPA, but its directors recognise that high standards will not be met without a good team of people behind the business. With this in mind, the company is dedicated to building quality relationships with global and local suppliers.
“We want to support local suppliers and develop local communities, which are very important to us. Where we can we source local artwork, furniture and employment to support community development,” says Page.
Marketing and growth
In its short lifetime, HPA has earned a reputation in the sector synonymous with quality and excellence and that is in part due to the combined experience of its founders. “We are all well respected and experienced consultants in the region, plus we all live and work here, which adds to our credibility. We speak at various conferences and events, and are recognised as experts in the field. In the next five years our goal is to be the first choice hotel service provider for developments throughout the continent,” Page concludes.