Ask a room full of entrepreneurs what the inspiration was for their business and you will doubtless receive a variety of answers. For Samuel Nassimov, his own unique life experiences gave him the insight he needed to start up a hugely successful chain of hotels known as Premier Hotels and Resorts.
Born and raised in Russia, Nassimov left the country aged just 17, having completed his studies, to travel and explore the world, including a 6 year stay in Israel. Along the way, one thing struck him, as the founder and Managing Director of the hotel chain explains:
“When you go to places you see and learn a lot and the best thing I found was to give value for money – to give more for less in a way.
“I arrived in South Africa in 1987 and with experience within the hospitality industry – I had always wanted to manage a hotel but had acquired my experience more in the food and beverage area and as a chef.
“In 1991, I saw an opportunity when an old hotel in East London came up for auction and I took the chance to purchase the property and redeveloped it into well respected hotel with conference facilities and restaurants.”
A succession of further opportunities quickly presented themselves to the young entrepreneur and his next venture was to purchase land and construct a 175-room beach front hotel and conference centre in East London, followed by hotels in Cape Town and Pretoria.
Along the way, Nassimov took the significant step of bringing the Premier brand to his portfolio, as he began to build a national presence.
Today the business, which has its head office in East London but sales and marketing operations in Johannesburg, comprises of 12 hotels and conference facilities across South Africa, providing mid-range luxury, with four-plus star service at affordable rates.
“There is a big trend for luxury brand hotels and also for the budget variety which offer limited services to price-conscious clientele,” Nassimov explains. “South Africa is a market where people like products and services and want good hotels – but the market place is extremely competitive and you need to adapt to give people what they want at a reasonable rate. I think this is something I brought with me when I launched the business.”
The company operates 2 flagship hotels: The Premier Hotel ELICC, in East London, is a 260 bedroom, 4 star hotel located on the beachfront. It boasts 110 suites. The Premier Hotel Oliver Tambo is a 275 bedroom hotel which opened just 2 years ago at the busy airport.
Customer demographics vary from each hotel, with some in prime locations to attract business travelers, while other hotels cater more for the tourist crowd, as Nassimov outlines:
“Every (hotel) location is key and it is the first thing you have to look at, to determine the purpose of the hotel before opening.
“East London is a coastal city and people want to be on the beachfront, while Cape Town is more business and tourist-oriented you need to be situated within close proximity of tourism attractions which is the reason our hotel is centrally situated within a few minutes from the well renowned V&A Waterfront, and boasts views of the mountains. Pretoria is more of a business centre, with lots of embassies attracting international visitors – our hotel is located opposite to the iconic Union Building.
“We like to have a spread of revenue streams without concentrating on one segment and roughly 35-40 per cent of our income is derived from conferences, 35 per cent is purely business travelers, 15-20 per cent is national and international tourists – who frequent the properties on tour coaches and the remainder is focused on niche markets for each hotel (like the international business generated from the nearby embassies in Pretoria).
“In recent times the business travelers have provided us with the best growth potential and our hotels are perfectly suited to their needs. There has been a particular growth in the “Black Diamond Business” which has seen emerging local entrepreneurs come to the fore; they like good properties and standards and also like to spend money,” he continues.
Maintaining those standards of course falls to the group’s 950 permanent employees, to which another 150-200 temporary employees are added at busy times and big events. However, with competition in the hotelier trade fierce in South Africa, finding the right skills and retaining staff is always a challenge, as Nassimov can testify:
“In South Africa it is still difficult to get fully qualified personnel and lots of skilled staff are poached by the cruise liners and hotels in Dubai, so we are always short of professionals. Premier Hotels is affiliated with an academic college in East London, which operates a number of SETA-approved courses on topics such as food and hotel management.
“We also have agreements in place with other hotel schools around the country and identify trainees and employ them accordingly. We have set a goal that by 2016 every employee should have a professional hospitality qualification and by constant training we hope to retain our staff.”
Another consideration when it comes to recruitment and training is the company’s Black Economic Empowerment initiative. The company has a good rating and has in recent years looked to encourage local entrepreneurs through its procurement policy, whilst looking to provide management training to young people.
The company’s diverse range of customers is a big help during the seasons, helping to provide a fairly level revenue flow during the course of the calendar year.
“We tend to have far fewer business travelers during the school holidays, with December and January our quiet months for this demographic. Conversely, whilst the business district hotels are quieter then, the resort hotels are much busier as people take their vacations,” says Nassimov.
“We try to carry out maintenance and hotel upgrades during the off season periods and for the bigger projects, like our Pinetown hotel in Durban, where we have just carried out a R14 million complete refurbishment including plumbing, re-tiling, new carpets and furniture in every room, we will block off areas of the hotel or entire floors, so as not to disturb guests.
“We are currently upgrading our Cape Town hotel and adding a further 32 rooms to the building; this started a month ago and should be completed by the end of the year.”
The upgrades help to maintain standards in the face of growing industry rivalry, but that in itself is not always a bad thing:
“We like competition, it keeps us on our toes and our approach is to give more for less and unless you provide a good product and reasonable price, it is tough to survive in South Africa.
“We are enjoying growth and opened our new R65 million hotel in Midrand at the beginning of July. This is a 114-room, four star hotel and comes complete with a conference centre. We were able to create 120 permanent jobs.
“We are now designing a 160-room hotel in Umhlanga, Durban and we hope to start construction in November, with the hotel due to open about 18 months later. We are also looking to expand our footprint into Port Elizabeth and Bloemfontein in the coming year, while we recently acquired further land around OR Tambo and intend to build a convention centre next to our existing hotel.”
For Samuel Nassimov, his one-time dream to manage a hotel has been replaced with much grander designs.