How Birchwood was founded
Johannesburg - Kevin Clarence, founder and director of Birchwood Hotel and OR Tambo Conference Centre chats with IOL about how he got into the hospitality business.
1: Is Birchwood Hotel your first startup?
2. What gave you the idea?
I worked for Grinaker building for several years and was involved in the construction of the two Holiday Inn Garden Courts in Sandton. Liberty Life was the client and Southern Sun were the operators. Part of my responsibility was to hand over each and every room in a state acceptable to the operator. Through this position, I gained access to the operators managers reports which provided information on occupancy and average daily room rates. I obviously knew what the Hotel had cost to build and I obtained the information regarding the terms of the lease agreement between Liberty and Southern Sun. From this information, one was able to understand the business model and the potential returns from the investment.
3. How is it doing?
Birchwood has been an unbelievable success story. We have been in operation for 17 years now and I have seen the Hotel grow from a relatively small 85 bedroom Hotel into a hospitality business that now has 665 room, in excess of 60 conference facilities, numerous restaurants, an aviation theme bar, a Spa, several vehicles to provide complimentary transfers etc. etc. Having said this, the economic climate is the toughest it’s ever been and we have needed to take a critical look at the business and re-engineer the business. This brought about the launch of Silverbirch, a product designed to meet the demands of the more discerning corporate traveller and the launch of ValuStay, a product designed to meet the demands of the more price sensitive client wanting a value for money stay in close proximity to O R Tambo. I am pleased to say that Silverbirch has been a resounding success and the corporate market is returning thick and fast. ValuStay is still new but from early feedback we have no doubt that it will service a market that is much in demand. Essentially the Birchwood is now three products appealing to three different market segments. Birchwood continues to service the large groups conference business, Silverbirch caters for the corporate market in both individual travellers and smaller conference groups and ValuStay caters for the price sensitive, no frills individual traveller. I am pleased to say that occupancies are on the rise and Birchwood is a new product!
4. Did you always want to be an entrepreneur?
I knew I always wanted to try something on my own. I don’t think you ever know where the entrepreneurial flair will take you in terms of the growth of your business. I never set out to be the richest guy in the world but what I did want to do was grow a business through people based on the right values. If your business is run on good value principals such as honesty, reliability, consistency, punctuality, respect, confidentiality etc etc and your staff are felt to belong and are cared for, the business automatically grows. If you get this wrong, you have no chance in the Hospitality sector.
5. What made you choose this career path?
Purely my experience at Grinaker coupled with the experience that my late Father had in property. He gained his property experience through JH Isaacs and then was instrumental in the listing of Pangbourne Properties in the late 1980s. My knowledge, coupled with his property experience was the catalyst to starting a Hotel as opposed to another shopping centre or office park.
6. What's next on your list?
To focus on the Birchwood and ensure we maximise profits through high occupancies with good average rooms rates whilst achieving the highest level of customer satisfaction.
7. What would you say to someone who wants to be an entrepreneur?
Follow your gut based on a good idea. Make sure you have done intensive market research and know without a doubt that your idea will work.
8. Would you say you need a degree to get started?
Not at all. Obviously a degree would assist in making a more informed decision. More importantly, be prepared to work hard and invest in good people.