France-born South African Pierre Delfau is no stranger to the hospitality industry with more than 30 years of experience in the field. Starting out with Tsogo Sun at the age of 18, he says that joining the operator was “one of the best decisions” he made.
Delfau remained with the company for 12 years, after which he joined Sun International, and then later on Westcliff Hotel in Johannesburg. He re-joined Tsogo Sun in 2006 and has been with the company since.
He credits the change in management style that motivated him to return and stay with the operator. He says: “We moved from being a rigid, autocratic style management to a more engaging and empowering one. This style of management really suited me quite well and I really felt good working for a group that believes in employees as its key assets. All in all, I have to say that throughout my entire career, this is the best style of management I have come across.”
As the general manager of the only Tsogo Sun property in the Middle East, Southern Sun Abu Dhabi, he is quite vocal about the declining room rates and the heavy discounting at food and beverage outlets that he says are impacting profitability and lowering quality standards.
The four-star property has 353 rooms and six F&B outlets, and according to Delfau it “maintains a standard above its competitors” giving five-star properties in the area a run for their money in terms of the room sizes, décor, and design of the hotel.
He says: “We position ourselves in the city above our competitors and we watch them closely and try to always have a differentiator in our rates. We offer a very different product in the city; we believe that there is a price to pay for this product, and are focused on trying to ensure that we always stay above our competitors.”
Delfau says that Abu Dhabi’s hotel sector is obsessed with occupancy which is negatively affecting the RevPAR of hotels. He worries that the declining room rates will give way to low service levels and hamper the progress of high quality standards.
He also points out how it’s impacting Southern Sun’s bottom line: “The unfortunate thing that has been happening in Abu Dhabi is our competitors have been heavily discounting their rates; whilst we understand there is a differentiator between us, when it becomes too deep, it becomes a threat to our property and from time to time we have had adapt to that by unfortunately lowering our rates too. Because at the end of the day, if our RGI grows because of our action then we’ve made a positive impact on the bottom line.”
So far, 2017 has been a better year for the Southern Sun hotel, with visitor arrivals to the city in the first five months of the year increasing by 4% compared to the same period last year. Delfau notes: “Our property has performed better than in 2016 and it’s the type of strategies that we employ such as closely looking at demand in the city, what are our competitors are doing, and reacting quickly to any threat in order to protect our business. But again, I have to reiterate, we are still ensuring that we charge a fair price for our product, because it’s required. There were many instances where we said no to business, because it made absolutely no financial sense.”
Delfau tells Hotelier Middle East that he believes that 2018 could be a challenge for the hospitality industry as the sector witnesses a slowdown. “Unfortunately, all the indicators we have at the moment from various sources show a further decline for RevPAR for 2018 in Abu Dhabi.
“We have far fewer city-wide events in 2018 at the moment in the calendar compared to 2017, so we are preparing for ‘letting off’ next year. We certainly want to build on 2017, but we are realistic about the current conditions: more inventory is coming online especially in the top end market which will create further pressure on rates for four-star hotels. We believe that next year will be a challenging year for us in terms of business levels, we are conscious of that,” he states.
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