When Providence Hospitality was launched in 2014, they had identified a massive gap in the market for “disrupter” hotel operators whose area of expertise covered smaller boutique-type properties. Backed by Fairtree Capital who at approximately the same time established an investment fund that would focus specifically on hospitality real estate. Today Providence Hospitality occupies that niche and currently manages 14 properties with 6 in South Africa and 8 in the UK.
In fact, the majority of the hotels located on British territory have been added to the company’s portfolio in the last 24-months with staff quadrupling in just six months; a growth that is described by co-founder Joe Bester, as both “exciting and unbelievable and this is just the beginning”. What is more, Providence Hospitality is currently in discussions with many South African owners who will join the portfolio going forward under management agreement and an accelerated growth strategy for the UK which will see multiple properties entering the portfolio in the next 12-months.
A growth of such proportions may well turn into a burden for a lot of businesses, but not even a shade of doubt is cast on Joe’s confidence, as he stresses his belief in the vast experience, intelligence, and versatility of his team. “It is our colleagues’ diverse background that makes us unique. Some of our people have managed bigger hotels, while others have been involved in smaller boutique properties, and we try to make the most of the various skill sets we possess within.
“We have from chartered accountants working in our Finance team, to people who have been managing some of the biggest hotels in South Africa for nearly 50 years. Mixing these experienced individuals with a group of young, technologically-savvy colleagues, who really understand how technology works and have the ability to stay on top of the constant developments in the digital sphere, has determined our success,” he elaborates on the importance of working with bright professionals who know their way around. “We need to be very agile and multidimensional in our approach because for every hotel we manage we have to develop an individual revenue generation and product development strategy as these properties are so diverse.”
Electing to operate within the niche and boutique-style segments of the hospitality market has brought sensational success for Providence Hospitality, and to Joe, the conditions remain favorable for the business to extend its market share in the years to come. “South Africa and the UK have enormously fragmented hotel markets. There are hundreds of independent hotels, either family-owned or owned by small groups of individuals, that will at some point need to have professional management of which we can provide. We can see that new buyers are entering both markets, willing to acquire hotels, resorts, lodges, guest houses and B&B’s and have them managed by a dynamic company like ours. I would admit, we are proud of the amount of interest we continue to generate as a hotel manager, from investors who want to make their first steps into the sector to seasoned owners wanting to take a step back.”
The economic situation in the UK also favors the prospects ahead of the hospitality business. “The uncertainties around Brexit have weakened the pound, making it harder for travelers to go abroad, instead shifting their focus to more local travelling. It’s been recorded that more than 50 billion pounds has been spent by British tourists visiting Europe over the past 3-years! This is astounding and even if a fraction of that can be spent on regional and domestic travel then Providence Hospitality needs to partake. This is a positive trend for us, and for the tourism industry, as a whole,”.
South Africa is also seeing a positive trend towards more domestic travel within our niche sector and we are gearing up for this going forward by providing domestic and international visitors with authentic quality experiences within our hotels,” Joe explains.
Encouraged by the strong opportunities the market presents, he sets the bar high for the company, not shying away from chasing an even faster and more ambitious development for Providence Hospitality in the next three years. “We aim to be very well-represented within South Africa and the UK and establish a reputation as one of the top hotel managers in the UK, Europe and South Africa.
As a result of rapid growth, we will also get the exciting opportunity to expand our team, making ourselves more competitive, because, the bigger the team gets, the more services we will be able to introduce and offer to our clients on a more cost-effective basis. We want to be seen as a dynamic and innovative hotel management company, who brings a level of integrity that is beyond reproach, and who can be trusted to manage a wide range of assets. Our vision is to combine forward thinking in the use of technology with proper quality service, and a strong financial discipline to make our hotels look and feel fantastic, while achieving strong financial results for their owners and investors.”
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