Hotel & Restaurant News Kenya: Why Do Hotels & Restaurants Fail?
As Hotel Consultants in Kenya, we are passionate about meaningful, successful and sustainable hospitality, through our daily life, we come across hotels, restaurants and other such hospitality establishments, that close prematurely, on the fast lane to failure, or simply open but not just making it, and it certainly pains us to see the potential available and opportunity lost. Which leads us to why do hotels fail? Some Hotels & Restaurant establishment still open for business have actually retired, and some of these are known to you, think about it! when the hotel /restaurant doors opened, everyone seemed to notice it, and most likely you visited and experienced some services, or products and or you heard about it, but what happened, it no longer has the enticing feel in fact, now that you think of some of these former seemingly well to do establishments, it surprises you that you don’t even remember the last time someone mentioned to meet up there or spend the night. Your kids used to nag you to take them to that popular hotel or restaurant, today you all forgot about it, you can’t even go back there to refresh old sweet memories, This reminds you of some of those that opened and shut down, bought out or leased out, only memories remain. But why? Is it because the founding owner is absent? or operates behind the scene and unaware of the real issues? Did the competition swallow it? Did they stop marketing? Or did their standards just drop or did they have any standards to operate by? Was it because of a fire? Maybe it’s the economy? Or they couldn’t keep up with changing times? Someone said the staff drained it to the ground? The questions and theories are just many, the facts are real and surprisingly most of these hotels and restaurant failures were avoidable. The Hotel Industry in Kenya and as well in East Africa has been said to be highly profitable, to some however, it has been short lived or a dream waiting to come true, yet some under the same economic conditions have thrived through the years and still common household names. It’s astounding that a hotel is not making profits? The average cost to turn over a room, to keep it operational per day, is between 400/- and 2,000 Kes depending on Category and size. Let’s talk of the budget hotel scenario, If you’re paying 3,000 Kes a night, the approximate cost to turnover that room runs close to 400 Kes. That 400 Kes turnover cost includes cleaning supplies, electricity, and hourly wages for housekeepers, minibar attendants, front desk agents, and all other employees needed to operate a room as well as the cost of laundering the sheets.. Now compare that with an average room rate, and you can see why it’s a profitable business. The same applies to restaurants if you take the allowed % cost standards to revenue not making profits is unreal, so why do many fail anyway. To understand how to open a hotel or restaurant in Kenya / East Africa and keep it vibrant, with sustainable growth, it’s good research why many fail unreasonably. We have done this research for you taking one of the highest Hotel & Restaurant Population and leading in the highest tourism % in the world for this purpose ;- According to a post reference: Statistics by Wikipedia as quoted below “90% of new restaurants fail in their first year,”,[1] was an interesting statement made by Chef Rocco of a reality show called ‘The Restaurant.’ The number is very intimidating, yes, but hardly factual. “After the first year 27% of restaurant startups failed; after three years, 50% of those restaurants were no longer in business; and after five years 60% had gone south. It was reported by Dr. H.G. Parsa, Ohio State University. His research is titled “Why Restaurants Fail?” was published in the Cornell Quarterly (2005). At the end of 10 years, 70% of the restaurants that had opened for business a decade before had failed,”.[2] Although these numbers are still alarming, they are not as appalling as those stated by Rocco. The top six reasons why restaurants fail include no unique selling point, too large of a menu, all talent but no brains, poor pricing strategy, no marketing skill, and bad negotiation skills,.[3] This is where a Hospitality Consultant comes in to play. Another extract reads ; – American Express has estimated that 90% of restaurants fail in the first year. A study by Parsa, Self, King and Njite (2005) showed that the restaurant failures are in fact under 30% during the first year of operation, and although individual failure rates may rise by the third year of operation, they do not achieve the levels 3 reported by American Express. Other studies by Self (2004) using data from California have shown that restaurant failures are also less than 30%. The National Restaurant Association of US recognizes a 30% failure rate as the norm in the restaurant industry. Even the well established and commonly accepted 30% failure rate during the first year of operations is still unacceptable as it has significant economic impact. Restaurants are a significant part of American life. According to the National Restaurant Association (2009), total revenues for the restaurant industry exceed $580 billion with nearly 1,000,000 operating restaurants in the US; providing jobs for over 13 million people. The sizeable economic impact of the restaurant industry can be measured by the 4% contribution it makes to the Gross Domestic Product in the United States. In addition, the restaurant industry has been expanding at a steady rate of 2 to 4 % over the past three decade. In Kenya According to WTTC report on tourism in Kenya, The direct contribution of Travel & Tourism to GDP was KES183.4bn (4.8% of total GDP) in 2013, and is forecast to rise by 2.9% in 2014, and to rise by 5.2% pa, from 2014-2024, to KES314.1bn (4.7% of total GDP) in 2024. The total contribution
Tourism & Hotel Industry News Kenya: World Travel Awards
Embracing Tourism Growth Kenya Agenda, is our responsibility and recognizing great performers is also an encouragement to the participants efforts and contribution to Kenya’s GDP and Africa. World Travel Awards was established in 1993 to acknowledge, reward and celebrate excellence across all sectors of the tourism industry. Kenya Tourism Board has successfully defended its title as Africa’s Leading Tourist Board as World Travel Awards winners in Africa & Indian Ocean are revealed. The organisation was among the most successful entrants at the 2014 awards, taking the prize for the third consecutive year, while South African Airways took the trophy for Africa’s Leading Airline. World Travel Awards President Graham Cook added: “Each of our winners is a deserving champion. They will now move forward to the World Travel Awards Grand Final, which will this year take place in the stunning destination of Marrakech, Morocco. I look forward to welcoming them there.” “With tourism growing in importance all the time in both Africa and the Indian Ocean, it is an honour to bestow our prizes on some exceptional organisations”.Graham Cook’ The prestigious title of Africa’s Leading Game Reserve Brand was awarded to &Beyond, while voters recognised Mantis Collection as Africa’s Leading Boutique Hotel Brand, and Leopard Beach Resort & Spa, Kenya capturing the award for Africa’s Leading Spa Resort. Other well known winners were Kenya 2014 Africa’s Leading Tourist Board Kenya Tourism Board Africa’s Leading Airline – Business Class Kenya Airways Kenya’s Leading Beach Resort Leopard Beach Resort & Spa Kenya’s Leading Business Hotel Sarova Panafric Kenya’s Leading Car Rental Company Avis Kenya Kenya’s Leading Domestic Safari Carrier AirKenya Kenya’s Leading Hotel The Sarova Stanley Kenya’s Leading Hotel Brand Sarova Hotels, Resorts and Game Lodges Kenya’s Leading Hotel Suite Presidential Suite @ Villa Rosa Kempinski Nairobi Kenya’s Leading Inbound Tour Operator Twiga Tours Kenya’s Leading Resort Leopard Beach Resort & Spa Kenya’s Leading Safari Camp Brand Heritage Hotels Kenya’s Leading Safari Lodge Ol Tukai Lodge Kenya’s Leading Spa Resort Enashipai Resort and Spa Kenya’s Leading Tented Safari Camp Encounter Mara Kenya’s Leading Travel Agency Carlson Wagonlit Travel Kenya’s Leading Travel Management Company Carlson Wagonlit Travel Africa’s Leading Eco Hotel Sarova Whitesands Beach Resort & Spa, Kenya Africa’s Leading Eco-Lodge Sarova Shaba Game Lodge Africa’s Leading Beach Destination Diani Beach, Kenya World Travel Awards celebrates its 22nd anniversary in 2015 Winners will now move forward to the World Travel Awards Grand Final, which will this year take place in the stunning destination of Marrakech, Morocco. Are you in Hospitality You Can enroll your company see http://www.worldtravelawards.com/nominate . 4 days left. Seven Generations Management congratulates year 2014 Winners and nominees, Tourism growth in Kenya and East Africa is our responsibility for future generations, lets make the best at every opportunity. Lets promote tourism in Kenya and other East Africa regions : Kenya & East Africa Vote Today Hotels, Airlines, Travel http://www.worldtravelawards.com/vote
“Kenya You’ve Done Us Proud”
Seven Generations Management & Hotel Consultants, congratulates Kenya Tourism Sector After being Ranked second best country in Africa, showcasing tourism products after Rwanda which scooped the Top Award Globally, this took place at the just concluded International Tourism Bourse (ITB) in Berlin, Germany. Other top 10 African countries include Namibia, Ethiopia, Mauritius, Gambia and Seychelles. Kenya received 2 awards; Best Booth Africa: 2nd position, & Best Booth Design: 6th position This year’s ITB attracted 186 countries and nearly 200,000 people. Kenya was positioned at the sixth best slot in the world. (KTB) Managing Director Muriithi Ndegwa was happy when receiving the Award and said “This is indeed a major boost that will positively go a long way in propelling the country’s image globally as a tourism destination; we thank the tourism industry for their immense contribution towards this achievements,”. Ndegwa exuded confidence that the campaigns and reassurance messages that have been put in motion would help in restoring back the sector whose performance dropped by 21 per cent last year compared to 2013. Mr Ndegwa also disclosed that over the last two years, the national tourism marketing agency has embarked on impressive successful implementation of the products diversification strategy, adoption of new promotion strategies and increased sustainable efforts in collaboration with the private sector. “This award is an outstanding endorsement on the investment we have made in positioning Kenya as the premier tourism destination in Africa, and a worthy competitor in the global platform” he added. Kenya has been a leading destination for tourists from both the East and West, leading to the development of many facilities. The country’s relative political and economic stability over the years have also made it a favourite of the majority of incoming tourists to Africa. The 49th world’s largest travel trade show edition that took place from 4th to 8th March 2015, recorded more than 10,000 exhibitors from around 190 countries and regions, attracting over 100,000 trade visitors. Seven Generations believes that such efforts from KTB & other Stake Holders in the Tourism sector, Indeed boosts our countries image and puts Kenya on the road to sustainable Tourism growth, as well encouraging Hotel Investors
Hotel Mystery Shopper
“Where & What is The Problem???” Seven Generation Hotel Consultants Kenya, is among the only Hotel Consultant Service Provider, is providing this unique Hotel/restaurant Mystery Shopper Service in Kenya. Our mystery shopper approach of audit is one of the few mystery shopping services in Kenya and East Africa today, designed for Hotels, Restaurant, Guest Houses & Service apartment establishments. The Guest and most importantly the ‘Happy Guest’ is the key to opening and operating a successful Hotel and Restaurant establishment, it is therefore imperative to regard highly their perspective and experience. It’s important to note that, it’s easier to retain an existing Guest than to try and win a new Guest. Unfortunately a dissatisfied Guest walks away and tells others about the bad service they experienced whereas a satisfied Guest becomes loyal and his mention to anyone is more influential than your marketing efforts as the guests word of a personal experience is taken more seriously, than your marketing efforts, this is true of hotels or restaurants that rank highly on Guest personal review sites such as Trip advisors in comparison with those with low ranking due to negative reviews. As Hospitality Specialists in Kenya, we understand the guest needs and as well your primary purpose as the investor. Apart from our expertise, we have the great advantage of understanding the current and ever changing market as a Hotel and Restaurant Management Company based in Kenya and East Africa. We consult with the client to assist in accurately making the right changes to improve and ultimately exceed guest expectations in his/her Hotel or Restaurant. We are glad to be of service in Kenya and East Africa providing Hotels and Restaurants’ the unique consultant services, the motivation being ensuring that our clients business meets and or exceeds the Guests expectations and that we create Moments of truth that wow our Guests. “Build Lasting Relationships with Your Guests – Bring in The Experts”