Redefining hospitality

Expanding its portfolio at a rapid pace, Providence Hospitality leans on its seasoned staff to provide world-class hotel management in boutique and niche properties in South Africa and the UK

When Providence Hospitality was launched four years ago, the hospitality management company had identified a gap in the market for hotel operators, whose area of expertise covers smaller, boutique-type properties. Backed by Fairtree Capital, who, approximately at the same time established an investment fund that would focus specifically on hospitality real estate, Providence Hospitality occupied that niche. Today, it manages a total of 16 properties – six in South Africa and ten in the UK, promising that this is just the beginning.

In fact, eight of the ten hotels located on British territory have been added to the company’s portfolio in the last year with staff quadrupling in just six months; a growth that is described by co-founder Joe Bester, as both “exciting and unbelievable”. What is more, Providence Hospitality is currently in discussions with the owners of another two hotels, which it hopes to take the management of, by the end of 2018 or early next year.

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 properties, and we try to make the most of the various strengths they possess.

“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 a specific development strategy, as these properties are so different from one another.”

Market opportunities
Having proven its capabilities for more than three years, Fairtree, in 2017, was able to secure a £19 million investment from NatWest that helped the investment fund purchase six hotels in just over a year, now managed by Providence Hospitality. “Fairtree has been building a good relationship with NatWest over a number of years and, after seeing what we are doing and how we are doing it, the bank was happy to provide us with a funding package. I believe they trusted us, because they were convinced by the robustness and the potential of the assets we buy, and of having a strong team and partner in Providence looking after the businesses. Fairtree looks for hotels with a good track record, and, naturally, a good location, to develop further and take to a higher level and creating value for its investors,” he maintains.

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 favourable for the business to extend its market share in the years to come. “The UK has an enormously fragmented hotel market. There are hundreds of independent hotels, either family-owned or owned by small groups of individuals, that will at some point need to have management of the kind we can provide. We can see that new buyers are trying to enter the market, willing to acquire hotels and have them managed by a 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 in the sector and from seasoned owners wanting to take a step back.”

The economic situation in the UK also favours the prospects ahead of the hospitality business. “The uncertainties around Brexit have weakened the pound, making it harder for travellers to go abroad, instead shifting their focus to more local travelling, and this is a positive trend for us, and for the tourism industry, as a whole,” 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 five years. “We aim to be very well-represented countrywide and establish a reputation of one of the top hotel managers in the UK and Europe. As a result of our 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 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 37hospitality service, and a strong financial discipline to make our hotels look and feel fantastic, while achieving strong financial results for their investors.”