Birchwood Hotel & OR Tambo Conference Centre is currently not where it should be, performance-wise, according to director and original owner Kevin Clarence. But Clarence is also confident that he can turn one of South Africa’s largest conference facilities around, as explained over coffee to editor Dylan Rogers in Johannesburg.
Don’t’ get Kevin Clarence wrong – Birchwood Hotel & OR Tambo Conference Centre is not in any sort of trouble. In fact, it remains one of South Africa’s most successful conference facilities, with its impressive offering of over 60 venues across 52 hectares and 665 accommodation rooms, as well as its convenient location in close proximity to South Africa’s main airport.
But, Birchwood is arguably a victim of its own success in the conference market, after starting life as an 83-room hotel back in 1998, with little or no focus on anything other than being a well-located corporate hotel with a simple offering.
“The idea was to go the City Lodge route,” says Clarence. “No frills.”
But that model – or rather Clarence’s average room rate – didn’t work, and at the same time Birchwood started receiving heaps of conferencing requests, to the extent that their 40-seater conference room was permanently booked out. Clarence and co promptly turned a R3.5-million ($281,000) loss in their first year into a R5-million ($402,000) profit in year two. The rest, as they say, is history, with Birchwood acquiring more and more land and building more and more rooms and facilities, until we arrive at what is today’s conferencing behemoth.
But 80% of Birchwood’s business is generated by conferencing, and in building this impressive offering, Clarence believes they’ve taken their eye off the ball and neglected the business traveller – both the individual and the small corporate group that is looking for a quiet space to meet.
“With all of the growth and the large conference groups we were handling, it was impossible to mix that with the individual traveller,” says Clarence. “We weren’t that worried because conferencing created our occupancy for us. For 15 years, conferencing got us above 70% occupancy. But it’s not doing it anymore.”
In the midst of all this growth came the 2006 75% selling off of Birchwood’s assets to the Hospitality Property Fund (HPF) and that change of ownership hasn’t been without incident, although Clarence is currently happy with the relationship.
“I’ve fixed the HPF problem and I have a good relationship with the guys there,” he says. “HPF have been very accommodating.”
February saw the launch of Birchwood’s Silverbirch product – a dedicated business travel-focused facility with its own rooms, breakfast space, fine dining, complimentary high-speed wi-fi, check-in etc, in its own section on the Birchwood property. This was also the cue for Clarence to step back into a more hands-on role, having retreated when Lindiwe Sangweni-Siddo was appointed CEO a couple of years ago.
“Silverbirch has been the catalyst for me to get back in front of the corporate clients,” says Clarence. “If I was trying to sell Birchwood, it would be a difficult sell. The perception of Birchwood and its reputation has been tarnished. Silverbirch gives me the opportunity to get in front of customers again and tell them what’s happened, and it’s really working.”
In fact, Silverbirch has been so well received that Clarence is expanding the current 153 rooms by another 80, with those rooms – a more premium 5-star product says Clarence – expected to be available in July.
That’s not all, though, as Clarence believes that something more than the launch of Silverbirch is needed to return Birchwood to its glory days.
“I’m in the process of restructuring and resolving some internal issues,” he says. “From a performance point of view, there’s a major focus on top line again. And hopefully that’ll bring it back to where it should be. But it’s a process. These things don’t turn around in a day, and it’s probably going to take a couple of months.”
What is clear, though, is that Clarence has clarity in his own mind about what needs to be done.
“It’s not about making friends,” he says. “Every business, every now and then, needs a complete clean up. It’s hard, but we as CEOs have a responsibility to do what’s right for the business.”
“If there’s anyone capable of fixing it, it’s me.”