CT's Upper Eastside hotel to go global

02 Nov 2012

The Upper Eastside, a 4 Star Boutique Hotel located in Woodstock, Cape Town will soon rebrand and open as DoubleTree by Hilton Cape Town Upper Eastside.

Accommodation includes executive rooms and suites as well as a number of two storey duplex loft rooms located on the top floor with views of some of Cape Town’s best known landmarks.

The newly branded hotel will offer amenities including a business centre, fitness centre, eight meeting rooms, a 300 capacity function room as well as a bar, restaurant and a coffee shop.

Accommodation includes executive rooms and suites as well as a number of two storey duplex loft rooms located on the top floor with views of some of Cape Town’s best known landmarks.

Francois Steyn, general manager of the Upper Eastside, says they have signed a franchise agreement with Hilton for the 4 Star equivalen DoubleTree by Hilton

The property, owned by Spear Properties, will have a management agreement with Redefine International Hotels.

He explains that the franchise agreement entails that the hotel will benefit from the worldwide Hilton brand’s exposure to their world-class guest reward program, Hilton HHonours ® for loyalty members and their corporate and group leisure clientele.

“We will fall under their brand where we will be represented and marketed as a DoubleTree by Hilton Hotel.”

This also means we will live up to the brand's ethos and maintain the standards set by the brand, which is known by the loyalty base that they have built up over the years of existence, says Steyn.

DoubleTree by Hilton

Hilton Worldwide made the announcement of signing of the new deal with local operator Upper Eastside Hotel (Pty) Ltd – making this the group’s fifth property in South Africa and its second in Cape Town.

Hilton Worldwide is a leading global hospitality company spanning the lodging sector from luxurious full-service hotels and resorts to extended-stay suites and mid-priced hotels.

Hilton Worldwide made the announcement of signing of the new deal with local operator Upper Eastside Hotel (Pty) Ltd – making this the group’s fifth property in South Africa and its second in Cape Town.

The 183 hotel property is located in the redeveloped district of Woodstock north of the city.

A former industrial location, Woodstock has undergone a radical transformation from dull to trendy, attractive node.

Commenting on the announcement, Joop Demes, chief executive officer of Pam Golding Hospitality, says one can argue that that the quality and standard of the Upper Eastside Hotel for Woodstock is a few years ahead of time.

“The current owners, however, have in my mind, made an excellent decision to get one of the global leading hotel groups to manage their property as Hilton will have the ability to attract the right guest at the right price,” says Demes.

DoubleTree by Hilton is now the fastest growing hotel brand in the upscale, full service hotel category with more than 300 hotels in 24 countries.

These hotels tend to be smaller than Hilton properties, they are intimate with a home away from home feel, explains Maggie Giddens, director, global brand public relations at DoubleTree by Hilton.

She says also due to size, DoubleTree by Hilton hotels are found in secondary and tertiary markets that wouldn’t be able to support a bigger Hilton Hotel, but you can also find them in major markets too - Cape Town being a prime example.

“DoubleTree by Hilton isn’t a cookie cutter brand (even though you are presented with one at every check-in),  rather it varies and tends to take on a bit of a feel for the location it’s in,” says Giddens.

For example, she explains that in the US, these tend to be hotels that have been converted from another hotel brand and usually with a renovation or property improvements plan attached to the conversion in order to bring the hotel up to DoubleTree by Hilton standards.

In Asia Pacific, these hotels tend to be new property builds, while in Europe it varies by country, but probably more heavily, conversions.

PricewaterhouseCoopers expects 4 Star hotels to benefit more from the increase in tourism than 3 Star hotels and project revenues to grow at a 9.0 percent compound annual rate to R5.2 billion in 2016 from R3.4 billion in 2011.

 “We are still new in Africa but obviously the Upper Eastside hotel in Cape Town is a conversion.

“These are not hard and fast rules, but rather are tendencies.”

In other African countries, DoubleTree by Hilton hotels exist in Tanzania Dar es Salaam Oyster Bay and Zanzibar Nungwi.

Planned hotel openings include DoubleTree by Hilton Cape Town Upper Eastside (end of 2012), DoubleTree by Hilton Seyechelles, Allamanda Resort and Spa (early 2013), DoubleTree by Hilton Zanzibar Stone Town (Q2 2013) and DoubleTree by Hilton Bujumbura (early 2014), she says.

The first DoubleTree Hotel opened in Scottdale, Arizona in the USA in 1969 and its portfolio has grown by more than 40 percent since 2000.

What makes this brand even more unique is its cookie concept – it was in 1986 in February that DoubleTree developed and introduced the brand’s current signature recipe of freshly-baked chocolate chip cookies to welcome guests at check-in.

If like me, you absolutely love chocolate and cookies (best served with milk), I suggest you book your stay at the Upper Eastside once it’s been rebranded for your dose of the legendary chocolate chip cookie.

The Upper Eastside Hotel, which recently scooped the award for Luxury Business Hotel in the World Luxury Hotel Awards 2012 in the country winners’ category has once again, ticked all the right boxes to attract Hilton Worldwide.

Click here to read the article.

It is one of the two hotels in Woodstock and DoubleTree by Hilton hotels are distinctively designed properties that provide true comfort to today’s business and leisure travellers.

A sharp increase in the Cape Town 5 Star room inventory in the years leading up to the 2010 Fifa World Cup has led to considerable discounting in the Mother City especially by the new 5 Star hotels and the after effect of this in 2012 is reflected in the STR report that reflects a small 5 Star rate decline in the first nine months of 2012, according to Joop Demes, chief executive officer of Pam Golding Hospitality.

In a media statement following the deal announcement, Patrick Fitzgibbon, senior vice president, development at Hilton Worldwide Europe & Africa, says the property perfectly complements their first property in Cape Town.

“The deal represents Hilton Worldwide’s 20th pipeline property in Africa and contributes perfectly to our multi-brand growth strategy dedicated to providing our guests with a range of choices in the most important cities in Africa.”

DoubleTree by Hilton global head, Rob Palleschi says signing of DoubleTree by Hilton Cape Town Upper Eastside brings the total of the brand’s hotels in Africa to six and is an important step in growing the brand’s global footprint.

Heather Shaw, senior director, corporate communications for Middle East and Africa Hilton Worldwide, explains that they operate in 12 countries (including the Indian Ocean and Egypt) and in South Africa, operations include Hilton Durban, Hilton Sandton and the Hilton Cape Town City Centre. Conrad Pezula if scheduled for reflagging this month. 

The hotel property market

Asked about the hotel property there are only two hotels in Woodstock - the Upper Eastside and the Garden Court Nelson Mandela Boulevard (previously Eastern Boulevard) – this area is seen as a focal growth point within the city

“Cape Town is growing its perimeter and Woodstock lies on this earmarked border.”

He says transformation has been planned and progress in the urban renewal of the area is seen on a daily basis.

Cape Town on the other hand is very competitive in terms of accommodation offerings and one constantly has to think out of the box to maintain a competitive edge over the rest of the city, he notes.

However, he points out that being competitive is not only about offering a better rate, but also offering refined service that appeals to all senses of comfort expected by discerning guests.

According to Demes, the STR Global report RevPAR (revenue per available room), figures for the 4 Star star market in the first nine months of 2012 are up by 11.8 percent compared to the same period in 2011, with 8.0 percent contributed by growth in occupancy and 3.5 percent contributed by rate growth.

Cape Town will still take a few years to grow back to levels of six years ago.

The oversupply of hotels needs to be negated by the increased influx of both leisure and corporate travellers from abroad and this will only be achieved by a constant improvement of the perception of South Africa and Cape Town in specific, he says.

Furthermore, he says hotel property market in Cape Town is very dependent on the status quo in the country – South Africa’s image is very important and would-be visitors and investors should see the positives that will influence their decision to choose the country as a preferred destination above all the affordable destinations worldwide.

He says any bad publicity in the country has a ripple effect on the industry.

“South African Tourism has a huge task ahead in order to promote Cape Town over and above an abundance of international destinations.” 

Steyn says the Upper Eastside property was purpose built as a 4 star hotel, always bearing in mind that it needs to comply with international standards in order to give it the ability to easily convert into an international branded hotel.

Cape Town has definitely had and currently has an oversupply of hotels rooms, regardless of the star rating.

“The growth in the number of rooms in the city has definitely exceeded the growth in demand and we would like to see the supply and demand curve even out before more hotels are built,” he says.    

While 2.5 million foreigners are expected to visit Johannesburg this year, Cape Town will have 185 000 visitors from London and they are expected to spend US$361 million, 127 500 travellers from Dubai spending US$118 million and 76 000 visitors from Amsterdam spending US$68 million.

Commenting on the announcement, Joop Demes, chief executive officer of Pam Golding Hospitality, says one can argue that that the quality and standard of the Upper Eastside Hotel for Woodstock is a few years ahead of time.

This is according to the MasterCard Global Destination Cities Index, which ranks 132 global cities by their total international visitors to understand the global economy and dynamic flow of commerce around the world.

Read the article here.

The July 2012 PricewaterhouseCoopers Hospitality Outlook publication reveals that China named Cape Town the most preferred tourist attraction for the Chinese in 2011.

Boutique hotels in Cape Town led the list for TripAdvisor Travellers’ Choice Awards Best Hotels, according to the report.

Four star hotels comprised 28 percent of hotel rooms and stay units in 2011 and 36 percent of hotel room revenue, according to the report.

The average room rate for 4 Star hotels was 26 percent higher than the overall hotel average in 2011 – the average room rate fell 12.3 percent in 2011 and revenues declined 9.6 percent.

PricewaterhouseCoopers expects 4 Star hotels to benefit more from the increase in tourism than 3 Star hotels and project revenues to grow at a 9.0 percent compound annual rate to R5.2 billion in 2016 from R3.4 billion in 2011.

The occupancy rate in the 4 Star hotel market is expected to increase from 54.1 percent in 2011 to 64.2 percent in 2016 although this is still below the 2007 and 2008 occupancy rates of 74.9 and 70 percent respectively, according to the report.

According to Demes, the STR Global report RevPAR (revenue per available room), figures for the 4 Star market in the first nine months of 2012 are up by 11.8 percent compared to the same period in 2011, with 8.0 percent contributed by growth in occupancy and 3.5 percent contributed by rate growth.

The same report, however, reflects an increase of only 7.5 percent for RevPAR for the 4 Star hotel market in Cape Town during the first nine months of 2012 compared to the same period in 2011, with 5.6 percent contributed by growth in occupancy and only 1.8 percent contributed by rate growth, he notes.

The newly branded hotel will offer amenities including a business centre, fitness centre, eight meeting rooms, a 300 capacity function room as well as a bar, restaurant and a coffee shop.

Demes says a sharp increase in the Cape Town 5 Star room inventory in the years leading up to the 2010 Fifa World Cup has led to considerable discounting in the Mother City especially by the new 5 Star hotels and the after effect of this in 2012 is reflected in the STR report that reflects a small 5 Star rate decline in the first nine months of 2012.

“Occupancy for 5 Star hotel properties in Cape Town is however up with 15.2 percent for the first nine months of 2012 as certain 5 Star hotels continue to steal 4 Star business.”

This has resulted in many four star hotels that continue to discount to effectively the 3 Star customers.

Demes says the overall discounting in Cape Town has made the average 2012 price of a 4 Star room cheaper compared to a 4 Star room in Johannesburg.

Asked if hoteliers are concerned about discounting, he says for guests, this is obviously good news and they can now ‘buy up’ the value proposition and get a ‘fancier’ room at the cost of a lower positioned product.

“There is still some value for money packages in South Africa and I advise holidaymakers to shop around in places such as Cape Town, Port Elizabeth and Durban.”

Demes points out that the level of demand at national level with increasing occupancies in the major cities reflects a 2012 recovery that appears to be sustainable and it will be a matter of time that this will bring along supply and demand related price optimisation opportunities.

“This will be welcome news for South African hotel owners and I expect overall rate growth that will be similar or slightly ahead of CPI for 2013,” he says.

Looking ahead, he says the hotel market in South Africa continues to compare favourably with international hotel markets.

Tourism arrival figures released by the Department of Tourism confirmed a 10.5 percent increase in international arrivals during the first six months of 2012 compared to the same period last year.

Demes notes that this is an impressive achievement with high double digit growth manifesting itself from our BRICS (Brazil, Russia, India, China, South Africa) counterparts and more than double the global tourism growth despite the European recession.

In South Africa, overall RevPAR (revenue per available room) figures for the first nine months of 2012 are up by 11.4 percent compared to the same period in 2011, with 7.4 percent contributed by growth in occupancy and 3.8 percent contributed by rate growth.

Forward bookings from an international leisure point of view are looking strong for Cape Town and lead times for hotel bookings that have become a lot shorter combined with the favourable exchange rate for foreigners will without doubt translate into even more bed nights, he adds. – Denise Mhlanga

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