We’ve cut costs to remain competitive – Loxley, DGM, Southern Sun Ikoyi

By Emeka Anokwuru

Mark Loxley is the general manager of Southern Sun Ikoyi, Lagos, a luxury business hotel, which, for close to a decade, has serviced the hospitality market and waxing stronger. In this interview with Daily Sun, he talks about the operations and prospects of the hotel as well as the challenging business environment.

How has the economic situation affected the occupancy level of the hotel?
We all know that within the last 18 months the economic climate has become pretty harsh. So, the occupancy level, obviously, has been affected in the last year, but I think what is important, like any other business, is that you’ve got to make changes tactically. It’s important not to allow the downturn affect any standard or the identity of the hotel. We’ve had to adjust like everybody else, our occupancy declined over the last year like it would have happened to many other hotels. What happens during a time like this is that hotels become more competitive, they lower their rates, they try to retain their market share, which is a typical business strategy. I think we’ve definitely adopted an approach where we’ve kept our relationship with our customers strong and we have protected our rate integrity as a four star business hotel.

What have you done to equip your staff to be more efficient so as to retain your market share?
In terms of staffing, we have actually focused, as we always did, on training opportunities, promotion from within, we’ve finished the major training interventions in terms of customer service over the last two months.
We will continue with different training as this year progresses and, in terms of occupancy, we have been fluctuating between 45 and 55 per cent or thereabouts. It’s really about keeping your relationship with your clientele and your company strong, keep the morale of the staff in place; thankfully, in the last 18 months, we have not been involved in any retrenchment of staff.
We provided staff increment this year and I think it’s important that the staff have some feeling of certainty and security because, once there is peace of mind, they can focus on the job, and that is what we have done our best to achieve. Cutting cost expenses, protecting our clientele base, and, obviously, making sure that our staffing level remains motivated and we protect the identity in terms of the reputation of the hotel.

What are some of the challenges facing hospitality business in Nigeria?
You know, we’ve had domestic inflation beyond 18 per cent now back down to 16.1 but still very high. There are issues with availability of foreign currency and working within the parameters of the parallel market, the CBN rates have been very difficult for a lot of businesses, including the hotel industry, because certain products that you need for your business are imported.
I think, with domestic inflation, a lot of items have gone up, so we have had to raise some of our prices in the hotel, to accommodate those increases and then you also need to remain competitive in your market sector. So, every month, every quarter, we analyse where we are in relation to the market so that we remain competitive.
Everybody has to stay in business and so that is really what we have been focusing on. Last year, we did not indulge in all the sporting sponsorship activities of the hotel purely because of the cost implications and the economic climate issue. I think it has been better in the last few months as we’ve seen slight improvement in terms of business levels. I am talking about hotel occupancy and I am generalising too but specifically for us and definitely the upper three and four star market, business is slightly getting better.
I think that has come about because of certain government initiatives, the private sector is still continuing certain projects and at the end of the day we need to all move forward and get back to as much businesses as possible.
So we are engaging with local stakeholders, we are engaging with our own corporate plans, renegotiating rate where necessary but still trying to look for new business because there is always a new business coming into Nigeria and Nigeria is a very vast country.

How would you describe the Nigerian market?
It is not a simple industry, it’s a complex environment, a complex economy and you have to look at the challenges and the business opportunities all the time and in terms of sales and marketing; you have to sometimes change your tactics to ensure you maintain and keep what belongs to you as market share and, obviously, as any responsible business will look for new business coming into the environment. So, that’s the basic outline of what we’ve been doing.

What are the future plans of the hotel?
In terms of future goals, again, to grow the business differently, we will look towards continuing to upgrade the hotel’s facilities. We’ve definitely got a very good location, an excellent location. If you look beyond three blocks or four blocks parameters of this hotel, there is nothing less than six new office complexes going up.
Some of them have started opening up already, so in the next two to three years, once everything comes on ground, we are going to benefit by having at least six new office complexes in our environment, and those will all be mostly corporate and we will always engage with those people and do our best to get them into our environment because, currently, we are still the largest hotel in Ikoyi; in terms of rooms, we have 195 rooms.

What effect would you say competition has had on your operations?
There is always competition directly or indirectly and I think, because of the economic situation, a lot of the projects (hotel development) that were started, basically, some of them have come to a stop, we don’t expect anything major in terms of competitors to come on ground in the next two to three years.
I think all competitors directly or indirectly, irrespective of the size, need to be respected and then you need to tactically protect your market share, that’s really what it is about because every business has a natural instinct in terms of wanting to survive.

What lessons have you learnt in the Nigerian market?
When we talk about lessons, idiosyncrasies, difficulties in the environment, I think it’s important for any service industry, and this is a typical example of a service industry, hotels, it is a live wire as we call it, 24 hours a day, it never goes to sleep, so we need responsible people in the environment and in upscaling, transfer of skills, training, promotions from within, all of these attributes.
But it is very true, training is the cornerstone of any good management practice, it’s important to keep a level of stimulation and to make sure that you practice job flexibility, provide the training, the upscaling, so that people can progress and also keep the business strong as well.
In terms of power generation, procurement, all the identities of the business approach in Lagos, I think we’ve successfully embraced those. What we’ve also done in the last 18 months is that we have actually gravitated towards supporting more local businesses in terms of the restriction of foreign currency available. We’ve focused a lot more about procurement from local businesses to support local businesses and also to manage our personal expenses in the environment as well.

How well would you say the hotel has met the expectations of its clientele?
What we have done based on clients’ expectation is that we have in the last 18 months, to be precise, from October last year and November, we’ve created a new 60 square metres meeting room and we’ve done that to bring in more business to the hotel. Not just private events but to bring more groups and residential groups. We have a boardroom, which can accommodate 12 to 14 people and we still have our main function hall, which is 120 square metres.
Then, also within the next 18 months, we plan on starting with our rooms’ refurbishment project. We are basically nine years old and typically between seven and nine years and depending on the type of hotel, you know refurbishment project needs to be approached.

Why has the expansion of the Southern Sun brand over the years not materialised despite the earlier plan?
I think that plan or aspiration has always been there for any brand or any hotel group. The focus of this particular property is to first of all upgrade the existing facilities when the time is appropriate and then I think when the economy improves, you know we look at viable opportunities, that would be done through our head office. We put a development team in place and, if there is any feasible project, we will actually look into it.
We have existing hotels in Mozambique, Kenya and Zambia. We also have hotels in the Middle East (Abu Dhabi), and we have two hotels offshore, that’s the offshore division, as we call it.

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