Back in 1983, the liquor industry was going through a series of price wars. Editor of then named Hotelier & Caterer (now Hotel & Restaurant), Bruce Heilbuth, reported on Fedhasa’s suggestion of minimum mark-ups.
Heilbuth said in his Viewpoint: “Earlier this year, Fedhasa made repeated appeals to licensed liquor traders to heed the lessons of the past and try to reach consensus with their colleagues to maintain mark-ups at an acceptable level to stay out of the red.
“The warnings appear to have fallen on deaf ears and the lunacy of price wars continues in many parts of the country, especially urban areas.
“Aggravated by falling demand for most categories of liquor and the new predictions that the South African economy may not improve at all in 1984, a situation has arisen in which many retailers seem to have no thought for the long-term future of their businesses or for the basic tenets of responsible trading.
“Sadly, it appears that price wars will continue to rage for as long as the recession lasts. Elsewhere in this issue an analysis of liquor advertisements in Durban indicates that the value of the total selling price of the liquor surveyed was 5.5 per cent lower than the listed cost price of the items sold. It is noted, however that not only retailers give discounts. Suppliers, it would seem, are equally eager to try to keep volumes buoyant, in spite of past experience which has shown that the choice of a price route has seldom, if ever, increased volume turnover in any meaningful way.
“Mr Les Marcow, a Fedhasa management board member, who is also quoted in this issue, suggests that the time has come for legislation to prescribe a minimum mark-up – cost plus 11 per cent – to stabilise the trade and protect the interests of the smaller businessman. Representations to the authorities to this effect may, according to Fedhasa, be worth considering.”
These are points to ponder as the industry currently grapples with price wars across a number of fronts.
The big news in November 1983 was the promotion of the young, energetic, entrepreneurially minded and popular Hans Enderle to MD of Holiday Inns, which he had worked for since 1970. Enderle is one of the country’s top hoteliers and has enjoyed a varied and successful career.
In this interview, Enderle was asked was his strategy as MD would be. He said: “What has happened with roadside inns in this part of the world is a repeate of what happened in the US. We started out with roadside inns in places like Ermelo, Pietersburg and Oudtshoorn to fulfil the needs of both business and holiday travellers. However, the trend over the last five or so years has been that hotel rooms in the main centres are the ones that have been generating the most profits. So we found ourselves changing strategy in midstream and developing downtown hotels more aggressively than the roadside ones. In fact, the only small town hotel we have constructed of late is in Welkom.
“As a result, a gap has developed in terms of the style of hotel. The question of different product segment also comes into it. So it will be Holiday Inns’ job in years to come not to let the two different kinds of hotels drift apart by way of corporate image and the product offered to the customer.
“We need to upgrade our roadside Holiday Inns. We need to first look at the insides – the refurbishment of rooms and restaurants, and then the exterior of the buildings. We are very aware that we have to put make-up on the outside of our hotels, specifically our roadside inns.
Enderle was also said in what was a comprehensive interview: “I’m confident that Holiday Inns in its new format will go from strength to strength. We are now a true hotel company and will spend all our resources on managing the basics of hotelkeeping, which involves taking care of guests and providing good services and clean, well-maintained hotels.
“Perhaps over the last few years Holiday Inns has concentrated to a certain extent on the major profit-earning centres, which largely involve casinos. A lot of our managerial time and efforts went in that direction. Now it’s back to hotelkeeping and, as a hotelier who has come through the ranks, I will certainly enjoy that a great deal.”
This sound understanding of what makes a great hotel and hotelier is what has kept Enderle top of his game throughout his career.
The Cape Sun, a Southern Sun hotel, opened that year at a cost of R40-million. At that time it was the largest hotel to have been built in Cape Town and was completed in a record time of 34-months. It had 364-rooms on 32-floors.
A news report entitled “Be prepared to accommodate blacks” alerted hoteliers to the fact that the country was changing and they needed to change with it. The article said: “Hoteliers should gear themselves to accommodate the masses, especially blacks, says Dr Wynand Pretorius, the president of Fedhasa.”
Pretorius is quoted as saying: “Can the industry accommodate double the amount of people we are accommodating today within 20 years? I must stress that what we have done over the last 300 years we are now expected to do in the next 20 years. The hour is late.
“The vast increase in numbers and growth will be with the black population. These people will enter the scene. We must also create job opportunities for them and not just bring in staff from overseas.
“Blacks are not using our facilities at the moment but we must prove to the government that we can handle a multiracial situation.”
While the use of language reflects the age, Pretorius’s stance at that time was considered brave and forward thinking, as he urged the hospitality industry to embrace change, broaden their target market and get cracking with skills development.
So much has changed since these sentiments were uttered in 1983. Transformation is clearly not new, and has been on the minds of the industry for nearly 30 years.
Another article focused on attracting more people of Indian descent into the industry: “What we must do is assess a man’s potential, train him to that full potential and give him the opportunities to achieve increased productivity and then pay him what he is worth.”
The eye-catching cylindrical Braamfontein Hotel was currently being converted from a 23-storey apartment block into a 308-suite hotel to open in 1984 at a cost of R25-million. It was reported that “all suites will be equipped with fridges for storing drinks. This will be a useful facility for businessmen in terms of saving time.”
The hotel, now called the Protea Hotel Parktonian, has stood the test of time and remains a popular destination, having maintained its offering with regular renovations and upgrade of facilities.
In November 1983, an overview of the beer market was published, which was essentially a history of SAB. The opening paragraphs read: “In the South African context, South African Breweries is a remarkable organisation, representing one of the country’s oldest industries and a history of eight decades of enduring success. It has been challenged over the years, but it has never been ‘beaten’, nor has it ever failed to pay an annual dividend.
“Rival brewers have come and gone. The group’s status as a monopoly, which the Competition Board report this year described as ‘not ideal, but there is not much that can be done about it’, is simply a consequence of it being consistently better than its rivals, says SAB.”
The opportunities which box wines can offer the retailer, particularly in on-consumption outlets, was examined.
An extensive feature illustrated the marvellous variety of spirits, liqueurs and wine gift packs available in the lead up to Christmas. Many would serve as collector’s items.
Technology and its increased use in all areas of the hospitality business was discussed.
An exhibition provided a whole host of new equipment on the market that made producing burgers, toast and hotdogs, among many other items, that much easier.
The Ranch Hotel in now-named Polokwane and covered recently in the April 2011 issue of Hotel & Restaurant, was already proving that its owners were astute businessmen. A feature looked at how the hotel “20km south of Pietersburg on the N1 to Beitbridge, had to literally adapt or die as events during and since Rhodesia’s transition to Zimbabwe resulted in the drying up of cross-border holiday traffic.” The hotel spent R1-million on development and has continued to profitability, to this day.
Tom Shearer, son of the original owner Basil Shearer, said at the time: “We had a start. At least we had a good hotel with a good name – all we had to do was force ourselves back into the marketplace. I submitted a document to my father shortly before he became ill proposing what courses we could embark on and warning that we should be prepared to spend at least R1-million to achieve our ends. He was convinced and we started work.”
And the rest, as they say, is history. After revamping the hotel, its name, the signage and overall offering then and many times since, The Ranch Hotel has remained a popular destination in Polokwane.
Shearer, always ahead of his time as an entrepreneur, added: “We’ve brought in a number of little ‘extras’ which have proved popular, such as goodnight chocolates on pillows, bubble bath, sewing kits and a R2 free drink voucher for every guest each night he or she stays. Obviously these things have been built into the tariff, but they are meant as gestures.”
He concluded: “You have to compete or you just don’t get anywhere. We’ve been incredibly surprised at what developing the hotel has done for our occupancy, which underlines the fact that today, people want quality.”
Those are wise words from one of the country’s top hoteliers, Tom Shearer, and worth heeding today for businesses finding their traditional market has fizzled out for one reason or another.
The ongoing challenges of pest control was tackled, with large and somewhat ghastly pictures of cockroaches and how to combat them covering two pages. The solution then as today is “regular ongoing preventative pest control programme”.
South West Africa, now Namibia, held its first Salon Culinaire, in which participants displayed high standards of craftsmanship with ornate creations.
A new invention in the Products & Services section was the “Snap-a-Skirt” banquet skirts or frills, used to cover banquet and buffet tables. These involved a fitted top onto which the skirt could be adhered quickly and easily with no need for pins or clips to keep it in place. The idea was for a quick change mid-service if the original skirt was soiled from spillage.
I wonder what ever happened to that clever concept…? The most recent conference I attended had rows of the traditional pins attaching the skirt to the table top cloth, which eventually worked themselves loose, as they do during the course of any event, and got my attention with a yelp when they eventually stabbed into my unsuspecting arm.
In this column we have also included the Hotel School’s annual prize-giving ceremony (look at the images and text in the slide show above). See how many people you can recognise and if you are in those photographs, do drop us a line below and let us know how you are doing.