FLASHBACK: Lesson from first half of 2002 – focus

“At the risk of being accused of repetition, Hotel & Restaurant believes, as we said at the end of last year, hoteliers and restaurateurs who wish to survive should look closely at the local and African markets in the short term,” said editor Andrew Moth.

He was responding to the general belief held at the time that the collapse of the rand would mean floods of international tourists. Instead, it pushed up the price of imported goods and local producers soon starting looking to export their goods or charge the prices they could get overseas.

Moth also examined the industry’s last minute approach to marketing prevalent at the time: “Do the hotel and restaurant industries know where they are going? What are you, as a professional, going to achieve this year? … If conclusions can be drawn from some interesting conversations at the end of 2001, there are many businessmen who have set no goals at all.”

Japie Swanepoel of WildNet Africa said of the importance of the internet: “Improvements in technology as well as the accessibility of the internet now allow for numerous different uses. Among those which are particularly important for the hospitality industry includes communication; sales; and management and administration.”

At that time, Swanepoel noted there were still people who “believe that the internet is pretty useless but have a website because marketing and sales tells them to have one.”

That sentiment is unthinkable today, as the internet, mobile and digital world in general and all of their various platform-specific features are considered indispensible to the way the hospitality industry does business.

Proving that you can do your research, follow trends, spot a gap in the market, base your decisions on decades of experience but still get it wrong, the Steers group (later renamed Famous Brands), with Kevin Hedderwick as chief operating officer of franchising, launched the US-based Church’s Chicken in South Africa. It all made perfect sense: KFC had proven that battered, deep-fried chicken was hugely popular locally, the chicken market was reporting phenomenal growth, and Steers had (and still has) a solid track record with the financial and marketing muscle to launch new brands. Why the South African public decided that they simply did not connect with the brand and product is a quick service restaurant case study. After opening around 12 outlets, the brand later admitted defeat and focused its attention on other, more profitable ventures.

The Three Ships restaurant, a legendary fine-dining restaurant at The Carlton Hotel, moved to Gold Reef City Casino and was managed by the Three Cities group. It was an exact replica of the original, down to the overall layout, carpets, wood panelling and tableware. With a strong heritage and history, the restaurant continued to offer live piano music, silver service and a menu developed with input from some of the country’s top chefs. However, it simply couldn’t attract the numbers it served in its heyday, and eventually quietly closed down.

Restaurateur Alan Pick remains the “king of consistency”, as the cover feature article in April 2002 was entitled. He continues to rule the Nelson Mandela Square restaurant scene, serving some of the best steaks in town at The Butcher Shop & Grill. He notes: “Anyone can make a good steak. Consistency means making a perfect steak every time.”

Pick’s mantra is that the customer is not always right and he is more than happy to tell them so: “The restaurant industry has allowed a situation to evolve where the tail wags the dog.

“This is a menu, not a guideline. It tells you what it is we do. It’s not a question of being accommodating or not. People think when you’re not accommodating you’re giving them bad service. But they need to remember that on the whole, catering is not a profession in this country. More staff are taken at grassroots level and trained into their positions. They are good at what they do but it means there can be little flexibility in the kitchen.

“Our obligations are to provide the best possible food and the best possible service, within the given parameters as stated on the menu. The menu indicates the norm. To come into this restaurant is a tacit acceptance of these rules,” Pick maintained.

“If we do someone a favour today, they will expect it every time. This is why we have to be rigid and stick to the menu. We are rigid in the interests of professional validity, not to be difficult. The industry needs to get more respect for itself. We can service our customers to the best of our ability without having to subject ourselves to customer abuse.”

Strong views but they seem to have stood him in good stead.

And in case you thought hoteliers were getting soft, Andrew Moth came out in defence of the hotel industry’s increase in rack rates. Consumers had complained, and Moth set them straight:

1.    “Hotels are businesses and entitled to make profits.

2.    They must make sufficient money during the good times to ensure they can survive the bad times and maintain their establishments and furniture, fittings, equipment and serviced at levels guests expect.

3.    South African labour laws make employees in 24-hour businesses very expensive.

4.    The brain and skills drain makes it difficult for employers to hold onto good managers unless they pay them well.

5.    Most guests staying in hotels pay much less than the public tariff or rack rate.

6.    Luxury South African hotels are competing with luxury resort hotels all over the world for the same business and spend a fortune on marketing in the global environment.

7.    Some of their costs, such as those incurred through global distribution systems, are dollar-based.

8.    Hotels are entitled to select the market from which they draw customers. In this case: the market is business travellers (corporate) and foreign independent travellers (FITs).

9.    Customers in this market choose to stay in these hotels because they will have similar likes and dislikes to the other guests.

10.  Hotels subtly discourage Onslow Ebagoomand Basildon Man and their families by having rates they would not want to pay.

11.  These hotels will soon find out if their rates are too high because guests will stop staying in them.

12.  A hotel is like justice, open to anyone who can afford it. Or is it the other way round?”

This is just a taste of how the year began. Later the industry successfully hosted the 2002 World Summit on Sustainable Development, among other major developments. Those will be covered in a subsequent Flashback article, so keep an eye out!


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