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Send  Share  RSS  Twitter  28 Jul 2009

HOSPITALITY: Don's Bigger Foothold In Cape


Recent Western Cape Business News

JOBURG-based hotel operator, the Don Group, has bought control of Cape Town-based inbound tour operator, Ikapa Tours & Travel.

Last month Don announced it has taken a 51% stake in Ikapa for R7.2 million.

Ikapa offers an incorporated tourism service - including flights and accommodation, car hire and long distance tours throughout South Africa as well as neighbouring countries like Botswana, Namibia, Zambia and Zimbabwe. Ikapa, which owns a 20 strong bus fleet, also provides day tours in Cape Town.

The deal is rather surprising, as Don has specialised in hotel accommodation with a sizeable presence in Johannesburg and Pretoria. Don operates only one hotel in Cape Town, the Don Beach Road in Sea Point.

Don’s directors, however, believed Ikapa would be beneficial in facilitating an increase in the occupancy rates by way of direct access to Ikapa’s clientele.

The immediate benefit is that The Don’s suite hotels obtain marketing exposure, especially to organised tour group customers, internationally and domestically which had not previously existed.” The vendors of the Ikapa stake were the Nonki Twana Family Trust, Impepho Travel Corporation, Louwrens Smit, Desmond Windt and the Ikapa Tours & Travel Employee Share Incentive Scheme Trust.

Impepho’s prime movers include Blacky Komani (a former Tourvest director) and Alan Norman (a former director of IFA Hotels and Resorts).

Don’s deal with Ikapa may well prove inspired in years to come –and even prompt Don to increase its presence in Cape Town with another hotel or two.

But indications are that specialist tourism operators in Cape Town are not exactly having an easy time of late.

In results recently released by tourism group Cullinan it appeared that Cape-based touring and travelling icon, Hylton Ross Tours, took some strain.

The drop in inbound tourism hit Hylton Ross, which enjoys a major market share in the Western Cape, and meant profits were marginally down on last year.

Naturally, the medium-term potential of Western Cape-based tourism-aligned businesses may still be attractive.

Significantly, empowerment heavyweights HCI and Mvelaphanda have put their weight behind hotel groups with sizeable Western Cape interests (as previously reported in CBN).

HCI holds a 51% stake in the Cullinan Hotel on the Foreshore, while Mvelaphanda owns a strategic stake in Queensgate – which owns the five star Radisson in Granger Bay as well as the Cape Town Hollow on the Square and Park Inn.

HCI’s direct exposure to the local hotel and leisure sector has also increased markedly with the recent acquisition of the Caledon Hotel casino and spa. While HCI’s focus over the last few years has largely been on casinos (Tsogo Sun), CBN wonders whether the empowerment group will not look at complementary deals by investing in hotel and leisure assets in the Western Cape.

Interestingly, Queensgate’s decision to add a health spa at the Radisson Hotel – under the OneWellness brand – appears to have paid off.

Queensgate recently reported that OneWellness performed profitably in the year to end February 2009. It has also opted to continue to increase its Western Cape footprint by concluding a deal that secured a management contract with the owners of a hotel in Shelley Point on the West Coast.

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