Banks are currently adopting a cautious approach to financing hospitality institutions and are inclined towards funding green hotel buildings.

This was one of the issues that emerged at the Provident Hospitality Forum held at the Wanderers in Johannesburg last week.

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According to Wayne Godwin, Senior VP of hospitality advisory group, JLL Hotels and Hospitality, the banks are being “careful” about supporting the hotel industry at the moment, however for hotels seeking funding, the potential lies in attracting ESG-focused (environmental, social and corporate governance) capital.

“Green buildings attract a green bond,” said Godwin, referring to debt securities designated to finance environmentally friendly projects. He added that having shed many jobs, the sector now needed to be strategic about attracting investment and recycling capital.

The panel discussion on the current situation in the local hotel industry identified new trends. These included:

  • the corporate sector’s hybrid model of working having a strong negative impact on revenue in the sector;
  • guests are looking for specific experiences, as well as for unique pricing structures and have very different expectations compared with pre-COVID;
  • a massive uptake in exploring technology and finding the most profitable business system;
  • travellers are including families in bleisure travel and extending their stays.

The panel also identified opportunities in the industry for products that provide a wide variety of accommodation options. Godwin said opportunities were present in the huge domestic travelling market, plus there was more potential regionally and in Africa. He said the current market in South Africa was low-growth, with scope for products that offered a range of accommodation and dining options.

Theresa Prins, Founder of revenue optimisation agency Revenue Resolutions, said the trend of on-demand pricing from the UK was being accepted in local hotels and tour operators were focusing on that.

Looking at how attitudes to training have changed in the industry, Stephen Hickmore, Director of the Swiss Hotel School South Africa, said Gen Z saw a lot of potential in going to hotel school, as the sector was now open to expressions of individuality and offering authentic travel experiences more than ever before.

by Marita Nortje

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