Global hotel franchise, Hilton Hotel, last week announced its debut into the Rwandan market by adding Ubumwe Grand Hotel to its franchise. Hilton Group will operate the facility under Doubletree brand joining other global brands in the market including Radisson Blu, Park Inn, The Marriott, Serena Hotel and Golden Tulip. However, the management of the hotel chain say that they are not done investing in the country and they are shopping for a second facility outside the city. The New Times’ Collins Mwai caught up with Patrick Fitzgibbon, the Senior Vice President, Development, Europe, Middle East and Africa for insights into their strategy, the controversy surrounding the recent deal and their plans for Rwanda.
Below are excerpts:
What made you consider adding Ubumwe Grand to your franchise as you enter the Rwandan market?
It was a new hotel in the market, it did not have any affiliation to any form of international chain. We toured the hotel, it is wonderfully built and we wanted to find the opportunity to put it our system. We spoke to them under the DoubleTree brand, spent some time showing them how it works and they liked it. We agreed to convert it to a DoubleTree by Hilton. They will continue to run it themselves, it is a franchise agreement. There is little work to be done in terms of the hotel itself before opening up in March or April next year.
What are some of the features and characteristics of DoubleTree by Hilton brand?
DoubleTree are upscale, full scale hotels. It is a bit flexible in that it does not need to have all the facilities that you would have in a Hilton. The way they have developed this hotel we think we will attract a market of travelers looking for services we offer today. It has great rooms, nice public areas, bars, among others.
What are your projections on profitability of your latest addition in Kigali?
Our objective is to be the first choice for the world’s travelers. We would like our guests all around the world to know that we have products in all the major markets. If you look at Kigali as a city, we absolutely should have something in Rwanda. We have had a long term presence in East Africa; in Nairobi, Addis Ababa, Dar es Salaam and we have been looking for property in Kampala and Kigali. We know we have demand, that is why we have been working to find a partner who can deliver.
You said that there is some additional work to be done before you can rebrand DoubleTree by Hilton. What does it entail?
There is not an enormous task to do. Most of the work will be technology, which clients do not get to see but get to experience. Things like the ability to have guests check in and choose their rooms before they get to the hotel.
From next year, they will be able to use their phones to access their rooms.
How much is this likely to cost?
I am not sure how much it is likely to cost, a majority of investment went into developing the hotel. This is significantly less but enables us to plug the hotel into a global distribution system.
Last year, you mentioned that you would be looking at having more than one facility in the country. Are you shopping for a second facility in Rwanda? What do you have in mind?
We are shopping for another facility in Rwanda. We would like something that is resort based, environment conservation related. Something close to the gorillas because that is something that people would like to see. We would like to work with an existing facility, and covert it to one of our brands.
Among the common comments by players in this market is the shortage of qualified staff to work in their establishments. How do you plan to navigate this?
That is something that we have done for decades. If you look at some of our traditional hotels, you find that staff are trained and stay for a very long time.
If you go to places like the Nairobi Hilton, you find that some of the staff working there, their parents worked there as well. It is about how you look after the staff and how you develop their skills over time. Training in hospitality is something that we have spent time doing both at the hotel and in working with local hotels institutions. The good thing is that people here have a culture that makes them easy to train because of their attitudes.
I think you would be surprised on the number of qualified staff you have in this market. It is largely about attitudes and aptitudes which are present here.
As you debut on the Rwandan market, what are some of the opportunities for local businesses looking to work with you on various aspects of the value chain?
When you talk about the number of jobs or opportunities created in travel and tourism, it is beyond the hotel or the facility. It is in transport, supplies, among other components. In the country, there has been great work by the government to develop the travel and tourism sector along with support capacities. It brings in lots of jobs and business opportunities into the market. In the long term, it will bring investments in the market and drive sustainability in the market. Rwanda has played a good role to develop the sector to ensuring that it has a role in the economy.
The market has quite a number of international brands, Marriot, Golden Tulip, Radisson Blu, Park Inn and Serena, among others. How do you plan to get an edge over them?
What I would describe our edge as is to be the first choice for the world’s travelers, you can only be that if you have products in all the markets people want to travel to.
When I look at our performance in hotels around the world in terms of numbers, profitability feedback, they all rank quite high. We have been to many new markets and have performed fairly well.
What is your take on the supporting infrastructure that you require to run your enterprise?
I think you only need to look at the developments in Rwanda in the recent years, if you are an investor. Rwanda is not only a safe environment it has adequate infrastructure, from the airport to other support infrastructure.
For investors looking to work with brands such as Hilton in coming days, what can they do to make sure that they are in position to partner or franchise with you in the future? How can they ensure that their hotels can franchise with the group?
The growth initiative we are talking about is taking over existing hotels after they have been built. The most important thing I would say to people seeking to enter the hotel business is talk to people who understand the hotel business.
Why would you build something that will not be relevant? The first thing we do is talk to investors before they put a spade into the ground. If you are going to build a hotel, talk to us first and understand what we would be looking for.
How long is the contract?
The contract in Ubumwe is 20 years.
When looking at franchises or hotel management, we have seen one such agreement cut short largely due to misunderstandings between the investor and the international brand. Going forward, what is the best way to ensure that such partnerships are successful?
The most important thing when we come in to franchise in a hotel is making sure that we take the time to ensure each party understands what the other is doing. The investors need to understand what the franchise is doing. It is a bit like a marriage, if you take time to understand each other, you are better placed to succeed.
Any projections on when you are likely to break even?
Because it is a franchise, it will depend on how the owners run it. We are not privy to those numbers.
What has been the role of government as you enter the market?
The government has put up necessary infrastructure from the airport, to road network and other things that the city and the country have. These are things that, as investors, we are usually looking out for.
What do you make of the competition from the other brands?
Everywhere we work in the world we have competition, it is good for business, and its good for customers as it gives them choice and keeps everybody on their toes.
Rwanda has a target of generating about $800m from the tourism sector by 2024. As a stakeholder in the sector, what needs to be done right to ensure it is achieved?
I think that everything that the government is doing should continue being done. Keep making it easy to travel to Rwanda and giving visitors great experiences and keep them coming back. When travelers come to Rwanda, it is important that they say they would like to come back. That can be achieved by giving them great experiences.