Don's new head confident of turnaround

THE Don Group's new ceo and chairman, Thabiso Tlelai, says he is very positive about the group's future growth prospects following last week's announcement that ownership of the group had been handed over to him for R1. Tlelai has confirmed that negotiations had reached an advanced stage with US hospitality group Mariott International, in terms of which all 13 Don Suite Hotels in Gauteng and Cape Town would be franchised to operate under the Ramada International Hotels and Resorts brand. "The Don agreement is the latest development in on-going discussions with Mariott to bring them to South Africa and to take advantage of opportunities to open new concepts of lodging in the region. On conclusion of the transaction, Ramada will assist with the re-branding programme as well as gaining wide access to Mariott's international reservations network. The advent of international branding has raised the prospect of more foreign guests while black ownership could open the door to wider support from government and corporates," says Tlelai. "Ramada is confident that there is the opportunity to do that with up to 40 hotels in sub-Saharan Africa and we hope to roll out the brand fairly quickly." According to the agreement, the holding company, Grolman Consortium, will retain a 49 percent stake, giving Tlelai an effective 30,1 percent ownership of Don, but more than 50 percent of the voting rights. Says former ceo, Errol Grolman: " The plans Tlelai has assembled, and the support he is recruiting to turn around Don into the successful chain it deserves to be, has the full support of the former controlling consortium." He added that his consortium was handing over a well-managed hotel group, which in the face of adverse trading conditions last year, had raised its average room rates instead of discounting, increased its overall level of occupancies above the industry average, gained market share and reduced losses significantly. Tlelai has also said that negotiations with two financial organisations are "well down the road" to re-finance and restructure the Don properties and to assist in growth plans. "The group is solvent," added Tlelai, "with assets exceeding liabilities." It is expected that the advent of international branding will raise the prospect of more foreign guests while black ownership could open the door wider to support from government, parastatals and corporates. "Both these advantages could give occupancies a healthy boost, especially when coupled with interest rates being at a new low, the economy on an upturn and the active steps being taken to market SA abroad as a tourist destination of choice." Tlelai has been in the hotel business for five years and owns the 60 room Langau Hotel in Bloemfontein and operates the 55-room Lakeside Hotel in neighbouring Lesotho. (Miguel da Sousa)