Q5: Xander Nijnens tells us what’s happening with hotels [interview]
by Carey Finn (@carey_finn) Xander Nijnens, JLL South Africa head of hotels and hospitality, talks growth, regulations and changing consumer trends in the local accommodation sector. Close to R7bn in investment is expected to go into new hotels over the next three years.
Q5: What are the key growth areas for hotels and other accommodation providers in South Africa?
Xander Nijnens: We are seeing a high level of supply growth in the prime nodes of Sandton, Rosebank, Umhlanga and Cape Town, especially around key transport and commercial growth nodes. The highest growth segment is the budget and mid-market segments. Operators and developers recognise that consumers and businesses are under pressure and are looking for better-value products, while they do not want to compromise on location.
Q5: What impact is Airbnb, and current initiatives to regulate it, expected to have on the hotel industry over the next 1236 months?
XN: Airbnb has traditionally competed in the leisure segment, yet increasingly they are targeting business travellers who are, in turn, more in tune with the sharing economy. The proposed regulations will need further clarity as they develop, yet from a hotel sector perspective it is positive as the playing field is being levelled (as hotels are highly regulated). While this is the case, the hotel sector needs to recognise that Airbnb is catering to clear demand from consumers and the sector needs to innovate and cater to the desires from these guests.
Q5: How are consumer needs changing? What are consumers looking for in local hotels?
XN: For several years, hotels across all segments have increasingly become more “lifestyle”-oriented, which means they are more in tune with their neighbourhoods, provide an exciting and authentic guest experience, offer more-distinctive restaurant options, and connect better with guests throughout their stay. Within this, we are seeing an increasing blend between live, work, and play — and hotel lobbies are becoming places to meet, work and socialise. Hotels are investing more in their public areas (where you are now spending most of your time), while rooms are getting smaller.
Technology is, of course, creating many opportunities to innovate the guest experience while disrupting traditional business models. The impact of technology advancement and adoption ranges all the way from how you book to how you check in, your hotel stay, how you pay, and how you continue to engage with the hotel after you leave.
Q5: What are current consumer trends in researching and booking accommodation?
XN: Peer reviews have taken over as the primary quality indicator for hotels, and being proactive and genuinely responsive to guest feedback is more important than ever. Marketing hotels as the [leaders] in their class without having the peer-review credibility just does not work anymore. Aggregators and online travel agencies like Expedia and Booking.com have already had a big impact on hotels (which they are struggling to effectively counter) and they are increasingly targeting consumers through offering their own loyalty programme[s] and linking in many other services and benefits.
Q5: What can legacy hotels do to retain market position, and how can new hotels make themselves competitive?
XN: The starting point is to really understand your current and future guests, their desired guest journey from booking to departure, and critically evaluating how you can innovate in the highest-impact areas. While there are plenty of exciting concepts in every segment all over the world, hotels in SA need to adopt this and adapt it to local consumer needs. SA has produced some of the best hoteliers in the world, and I have no doubt that they will be able to transform if they recognise that the industry is going through change.
- Follow Xander on Twitter: @xanderjhb
Carey Finn (@carey_finn) is a writer and editor with a decade and a half of industry experience, having covered everything from ethical sushi in Japan to the technicalities of roofing, agriculture, medical stuff and more. She’s also taught English and journalism, and dabbled in various other communications ventures along the way, including risk reporting. As a contributing writer to MarkLives.com, her new regular column “Q5” aims to hone in on strategic insights, analysis and data through punchy interviews with experts in media, marketing and design.