Biz.Travel Q&A with Theo Cromhout

As we put winter behind us, how has Cape Town's luxury hotel sector dealt with massive increase of five-star hotel beds?

It has been a very difficult winter. Any hotel that says they've done well is probably fibbing. Over the last 12 to 18 months, there are about 1300 new beds in the five-star market; the majority of them are in the CBD. It has undoubtedly had an impact. Some of the new hotels along with The Taj are The Pepper Club, 15 on Orange, The One & Only, Coral International, Upper East Side and Crystal Towers.

Did the World Cup work for Taj Cape Town?

Well, we weren't as hard hit as those who contracted to Match. Match may have done a lot of things right but the few things they did wrong impacted on the industry. They didn't do themselves any favours by the way they communicated with the trade - they would have known what the pick-up was long before they notified the industry.

In July 2009 we decided we'd manage our inventory ourselves. We ended with a very good rate and occupancy during the world cup. Even though we were selling only between 50% and 60% we achieved high rates. Now we're suffering from a World Cup hangover. The city is experiencing low occupancy.

Surely a new hotel budgets for a quiet period until it can be established?

We've been open eight months and our business plan didn't expect high occupancies in the short term. Occupancies from May to August have been around 40%.

Many hoteliers complain about Cape winter but isn't it true that the Americans tend to come here during winter?

All hotels' rates take a dive in winter so it is more affordable to travel here. The Americans do tend to travel here in winter as opposed to the Europeans who come for the sun. Our biggest markets are still from UK, Germany and Netherlands.

I think Taj Cape Town is the best business hotel in Cape Town. Have corporates responded well to the hotel?

Anyone who knows the Taj brand or has visited our hotel will know the high standards to which we aspire. Unfortunately the market for corporate travel is much smaller in Cape Town than it is in Johannesburg. Even though feedback from the US is that the global outlook is positive, there is still pressure on corporate travellers to fly at the back of the plane and stay at four-star and three-star properties. I really believe that customers remember quality long after they've forgotten the price. We're very proud of the Taj brand and know it stands for certain levels of luxury and service.

You've been instrumental in forming the St George's Mall Forum with your neighbours. What are you busy with?

With our partners at Euro Cape who are also passionate about the city centre, we are considering a brand that we can collectively promote. We're discussing if we call it The Old City, The Historical Precinct or another name so that in time it will be a recognised area in the way TRIBECA and Soho are. There are also plans for events that drive developments like a St George's Food Market.

Are you bullish for the 2010/2011 season?

We're not bullish, not arrogant but cautiously optimistic. We have a few things that we can hang our hat on. We can proudly associate ourselves with Ritz Carlton and Four Seasons in terms of what the Taj brand stands for and our product is extraordinary - people sense the history and heritage of these buildings. Also, when we connected with 1000 travel agents at Virtuosa, there is a definite demand for a quality, luxury property that is not in the Waterfront. We believe we are it.